[House Report 108-339]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    108-339

======================================================================



 
     OVERSEAS PRIVATE INVESTMENT CORPORATION AMENDMENTS ACT OF 2003

                                _______
                                

November 4, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hyde, from the Committee on International Relations, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3145]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on International Relations, to whom was 
referred the bill (H.R. 3145) to amend the Foreign Assistance 
Act of 1961 to reauthorize the Overseas Private Investment 
Corporation, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Overseas Private Investment 
Corporation Amendments Act of 2003''.

SEC. 2. ISSUING AUTHORITY.

  Section 235(a)(2) of the Foreign Assistance Act of 1961 (22 U.S.C. 
2195(a)(2)) is amended by striking ``November 1, 2000'' and inserting 
``2007''.

SEC. 3. TECHNICAL CORRECTIONS.

  (a) Administrative Costs.--Section 235(a)(1)(B) of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2195(a)(1)(B)) is amended by striking 
``subsidy cost'' and inserting ``subsidy and administrative costs''.
  (b) Noncredit Account Revolving Fund.--Section 235(c) of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2195(c)) is amended--
          (1) in the first sentence--
                  (A) by striking ``an insurance and guaranty fund, 
                which shall have separate accounts to be known as the 
                Insurance Reserve and the Guaranty Reserve, which 
                reserves'' and inserting ``a noncredit account 
                revolving fund, which''; and
                  (B) by striking ``such reserves have'' and inserting 
                ``of the fund has'';
          (2) by striking the third sentence; and
          (3) in the last sentence, by striking ``reserves'' and 
        inserting ``fund''.
  (c) Payments to Discharge Liabilities.--Section 235(d) of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2195(d)) is amended--
          (1) in the first sentence, by striking ``Insurance Reserve, 
        as long as such reserve'' and inserting ``noncredit account 
        revolving fund, as long as such fund''; and
          (2) in the second sentence, by striking ``or under similar 
        predecessor guaranty authority'' and all that follows through 
        ``subsection (f) of this section'' and inserting ``or 234(c) 
        shall be paid in accordance with the Federal Credit Reform Act 
        of 1990''.
  (d) Authorization of Appropriations.--Section 235(f) of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2195(f)) is amended--
          (1) in the first sentence, by striking ``insurance and 
        guaranty fund'' and inserting ``noncredit account revolving 
        fund''; and
          (2) by striking ``Insurance Reserve'' each place it appears 
        and inserting ``noncredit account revolving fund''.
  (e) Board of Directors.--Section 233(b) of the Foreign Assistance Act 
of 1961 (22 U.S.C. 2193(b)) is amended in the second paragraph--
          (1) by striking ``officials'' and inserting ``principal 
        officers'';
          (2) by inserting ``whose duties relate to the programs of the 
        Corporation'' after ``Government of the United States''; and
          (3) by striking ``an official'' and inserting ``one such 
        officer''.

SEC. 4. INVESTMENT INSURANCE.

  (a) Expropriation or Confiscation.--Section 234(a)(1)(B) of the 
Foreign Assistance Act of 1961 (22 U.S.C. 2194(a)(1)(B)) is amended by 
inserting ``or any political subdivision thereof'' after 
``government''.
  (b) Definition of Expropriation.--Section 238(b) of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2198(b)) is amended by inserting ``, 
a political subdivision of a foreign government, or a corporation owned 
or controlled by a foreign government,'' after ``government''.

SEC. 5. LOCAL CURRENCY GUARANTY.

  (a) Local Currency Guaranty.--Section 234 of the Foreign Assistance 
Act of 1961 (22 U.S.C. 2194) is amended by adding at the end the 
following:
  ``(h) Local Currency Guaranties for Eligible Investors.--To issue 
to--
          ``(1) eligible investors, or
          ``(2) local financial institutions,
guaranties, denominated in currencies other than United States dollars, 
of loans and other investments made to projects sponsored by or 
significantly involving eligible investors, assuring against loss due 
to such risks and upon such terms and conditions as the Corporation may 
determine, for projects that the Corporation determines to have 
significant developmental effects or as the Corporation determines to 
be necessary or appropriate to carry out the purposes of this title.''.
  (b) Definition of Local Financial Institution.--Section 238 of the 
Foreign Assistance Act of 1961 (22 U.S.C. 2198) is amended--
          (1) in subsection (d), by striking ``and'' after the 
        semicolon;
          (2) in subsection (f), by striking the period at the end and 
        inserting ``; and''; and
          (3) by adding at the end the following:
          ``(g) the term `local financial institution'--
                  ``(1) means any bank or financial institution that is 
                organized under the laws of any country or area in 
                which the Corporation operates; but
                  ``(2) does not include a branch, however organized, 
                of a bank or other financial institution that is 
                organized under the laws of a country in which the 
                Corporation does not operate.''.

SEC. 6. OUTREACH TO MINORITY- AND WOMEN-OWNED BUSINESSES.

  (a) In General.--Section 240 of the Foreign Assistance Act of 1961 
(22 U.S.C. 2200) is amended--
          (1) in the first sentence, by striking ``The Corporation'' 
        and inserting
  ``(a) In General.--The Corporation''; and
          (2) by adding at the end the following:
  ``(b) Outreach to Minority-Owned and Women-Owned Businesses.--The 
Corporation shall collect data on the involvement of minority- and 
women-owned businesses in projects supported by the Corporation, 
including--
          ``(1) the amount of insurance and financing provided by the 
        Corporation to such businesses in connection with projects 
        supported by the Corporation; and
          ``(2) to the extent such information is available, the 
        involvement of such businesses in procurement activities 
        conducted or supported by the Corporation.
The Corporation shall include, it its annual report submitted to the 
Congress under section 240A, the aggregate data collected under this 
paragraph, in such form as to quantify the effectiveness of the 
Corporation's outreach activities to minority- and women-owned 
businesses.''.

                          Purpose and Summary

    The bill reauthorizes the Overseas Private Investment 
Corporation through September 30, 2007, makes several technical 
and perfecting amendments to its underlying statute, provides 
the Corporation with modest enhancements in its investment 
insurance and local currency guaranty programs and directs the 
Corporation to collect data on the amount of insurance and 
financing provided to minority and women-owned businesses. 
OPIC's authorization expired on September 30, 2003, and has 
been extended through October in the continuing resolution.
    OPIC is a self-sustaining, independent government agency 
providing political risk insurance and project finance to U.S. 
businesses in over 150 emerging markets and developing 
countries. Its operations and activities have supported over 
250,000 U.S. jobs and produced $64 billion of U.S. exports 
while generating $4.4 billion in reserves. Over the past 30 
years, it has created close to 670,000 host country jobs and 
supported $145 billion of investments overseas. Nearly 70 
percent of suppliers to OPIC-backed projects are U.S. small 
businesses.

                Background and Need for the Legislation

    OPIC's programs grew out of the Marshall Plan, which 
enlisted private sector investment to assist in rebuilding war-
torn Europe after World War II. In 1971, OPIC was established 
as an independent government corporation by Congress to help 
American businesses compete overseas and to promote economic 
development in key host countries.
    Over the past several years, OPIC Chairman and CEO Peter 
Watson has focused his agency's programs and activities on 
helping to rebuild the economies of front-line states such as 
Afghanistan, Pakistan and potentially in Iraq, where the 
Administration is seeking authority to operate its programs and 
fund(s). He is also to be commended for his efforts to refocus 
OPIC on the Administration's overall development priorities, 
particularly in sub-Saharan Africa where new project approvals 
over the past two years now amount to $750 million. They are 
focused on the housing and health sectors, promoting projects 
and activities in South Africa that meet the challenges of HIV/
AIDS, and providing clean drinking water to countries in West 
and East Africa.
    OPIC and its outreach efforts--The Committee commends the 
recent efforts of OPIC to outreach to NGOs and the labor 
community on issues relating to accountability, transparency, 
environmental and labor standards, human rights and corruption. 
The Committee expects OPIC to continue a regular dialogue with 
all stakeholders and the goal of making reforms and process 
improvements with respect to issues such as accountability, 
transparency, environmental, social/labor and worker rights 
protections.
    OPIC and an accountability mechanism and a transparency 
initiative--The Committee is aware of the establishment in 
recent years of various mechanisms within multilateral and 
bilateral financial and export-promotion institutions to 
increase accountability and transparency of those institutions. 
These institutions include: the World Bank, the International 
Finance Corporation, the Asian Development Bank, the Inter-
American Development Bank, the Multilateral Investment 
Guarantee Agency, the European Bank for Reconstruction and 
Development, the International Monetary Fund, the Export 
Development Corporation of Canada, and the Japan Bank for 
International Cooperation. The Committee encourages OPIC to 
follow the example of the best practices of these institutions 
and work with all stakeholders to establish an accountability 
mechanism and continue its ``transparency initiative.''
    An accountability mechanism should: evaluate and report on 
OPIC compliance with environmental, social, labor, human 
rights, and transparency standards consistent with OPIC 
statutory mandates; provide a forum for resolving concerns 
regarding the impacts of specific OPIC-supported projects with 
respect to such issues; and provide advice regarding OPIC 
projects, policies and practices. Such a mechanism should also: 
be transparent in its operations and outputs, and be responsive 
to stakeholders' considerations on environmental and social 
concerns, including labor, human rights and corruption 
concerns; be accessible to project-affected parties; and insure 
the independence and integrity of the evaluations and advice 
provided by the accountability mechanism. With respect to the 
independence of the accountability mechanism, the Committee 
urges the Corporation to follow the model of several 
international financial institutions by providing the mechanism 
the ability to report directly to the Corporation's Board of 
Directors.
    The Committee commends OPIC's efforts to convene a dialogue 
with stakeholders on a transparency initiative and encourages 
OPIC to continue this dialogue. The Committee believes a 
transparency initiative should heighten transparency and 
information disclosure concerning OPIC's projects and internal 
mechanisms, consistent with existing statutes and laws. 
Interested stakeholders, including NGOs, environmental and 
labor organizations, and the business/investor community, 
should play an active role in this process and provide 
recommendations on how it should be used to strengthen OPIC's 
programs and policies.
    The Committee will use its oversight function to monitor 
OPIC's performance and progress toward achieving these goals, 
and expects a fulsome briefing by OPIC on such progress and 
performance six months after enactment of this Act, and 
annually thereafter for the duration of the authorization 
contained in this bill.
    OPIC and labor rights--While our overall policy toward 
internationally recognized worker rights needs to be debated 
and shaped in other fora and by committees with jurisdiction 
over our principal trade policy agency, the Committee 
recognizes that OPIC has its own statutory obligations which 
must be fully implemented.
    The Committee also commends the efforts of OPIC in ensuring 
that there are no losses of U.S. jobs as a result of OPIC-
supported projects. OPIC should continue to work, in 
consultation with all its stakeholders, to ensure that: OPIC-
supported projects do not result in significant job loss or 
substantially reduce positive trade benefits for the U.S.; 
investors provide detailed information on jobs created or 
supported by an OPIC-supported project; due diligence, 
reporting, and monitoring procedures provide detailed, accurate 
and timely information on U.S. effects; and enforcement 
procedures are comprehensive, effective, and transparent.
    The Committee will use its oversight function to monitor 
OPIC's performance and progress toward achieving these goals 
and expects a fulsome briefing by OPIC on such progress and 
performance six months after enactment of this Act, and 
annually thereafter for the duration of the authorization 
contained in this bill.
    OPIC and the Baku-Tblisi-Ceyhan Pipeline--The Committee 
understands that OPIC hasunder consideration an application for 
political risk insurance in connection with construction of the so-
called Baku-Tblisi-Ceyhan pipeline, which is planned to carry Caspian 
oil from the eastern Azerbaijani port of Baku to the Turkish 
Mediterranean port of Ceyhan, through parts of the Republic of Georgia. 
This pipeline route has the advantage of bringing Caspian oil to market 
without having to rely on Iran's cooperation or providing that country 
with significant economic benefit. It also avoids further congestion in 
the Turkish Straits.
    The diversification of energy sources is imperative to U.S. 
national security interests. Indeed, the development of energy 
resources in previously under-developed or undeveloped regions 
has the potential to serve not only as an important means of 
providing the U.S. with alternative sources of fuel, but also 
as a means of engagement on environmental, rule-of-law, 
transparency, and social development issues.
    OPIC and minority-business outreach--The Committee commends 
OPIC for its minority-owned business outreach efforts and 
encourages the Corporation to continue its activities and to 
work with other U.S. Government trade, development and finance 
agencies in promoting economic opportunities for small and 
minority-owned businesses in developing countries.
    OPIC and small business--The Committee commends OPIC's 
efforts in support of U.S. Small- and Medium-sized Enterprises 
(SMEs). The Committee notes that many of these firms, 
particularly those with annual revenues of less than $35 
million, could substantially increase their exports to the 
extent that they secure access to OPIC financing and investment 
support. The Committee is supportive of recent efforts by the 
Corporation to establish a Small Business Center, to create a 
Small Business Initiative in coordination with the Small 
Business Administration, to launch a SME shared-risk loan 
guaranty program in partnership with the private sector, and to 
create a new Small and Medium Enterprise Department to 
implement and oversee SME activities.

                                Hearings

    The Committee held a hearing on H.R. 3145 on June 10, 2003. 
Testimony was received from: The Honorable Peter S. Watson, 
President and Chief Executive Officer of the Overseas Private 
Investment Corporation; Elizabeth J. Drake, International 
Policy Analyst, American Federation of Labor and Congress of 
Industrial Organizations; Theodore H. Moran, Professor of 
International Business and Finance, Georgetown University; 
Bruce Rich, Senior Attorney and Director for International 
Programs, Environmental Defense and Edmund Rice, President of 
the Coalition for Employment through Exports, and also 
representing the National Foreign Trade Council. Additional 
material was submitted by several individuals and 
organizations.

                        Committee Consideration

    On September 25, 2003, the International Relations 
Committee marked up the bill, pursuant to notice, in open 
session. Rep. Lee offered an amendment which added a section 
regarding minority-and women-owned businesses. The amendment 
was agreed to. The Committee agreed to a motion offered by 
Chairman Hyde to favorably report the bill, as amended, to the 
House of Representatives, by a voice vote, a quorum being 
present.

                             Rollcall Votes

    Clause (3)(b) of rule XIII of the Rules of the House of 
Representatives requires that the results of each record vote 
on an amendment or motion to report, together with the names of 
those voting for or against, be printed in the Committee 
Report. There were no record votes during consideration of H.R. 
3145.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House Rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 3145 the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 30, 2003.
Hon. Henry J. Hyde,
Chairman, Committee on International Relations,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3145, the Overseas 
Private Investment Corporation Amendments Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Joseph C. 
Whitehill.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 3145--Overseas Private Investment Corporation Amendments Act of 
        2003

    Summary: H.R. 3145 would extend through 2007 the authority 
of the Overseas Private Investment Corporation (OPIC) to issue 
political risk insurance and to finance investments in 
developing countries and emerging market economies. The bill 
would clarify that the term ``expropriation'' would include 
actions by political subdivisions or a foreign government or 
corporations owned by or controlled by foreign governments. It 
also would authorize OPIC to issue guarantees in local 
currencies, and it would require OPIC to report to Congress on 
the effectiveness of its activities to reach businesses owned 
by women and minorities. OPIC's authority would be limited to 
such amounts as may be provided in advance in appropriations 
acts. CBO estimates that implementing the bill would cost $146 
million over the 2004-2008 period, assuming the appropriation 
of the necessary funds. The bill would not affect direct 
spending or receipts.
    OPIC is a government corporation authorized to encourage 
private-sector investment in developing countries and emerging 
market economies. It insures investments against the risk of 
losses due to expropriation, inconvertability of currencies, 
and war or political violence. In addition, OPIC finances 
investments through guaranteed and direct loans. OPIC is 
largely self-financing. Its noncredit program earns income from 
investments in government securities and insurance operations.
    H.R. 3145 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 3145 is shown in the following table. 
The estimate assumes that the bill will be enacted near the 
start of fiscal year 2004, that funds and authority will be 
provided in annual appropriation acts near the start of each 
fiscal year over the 2004-2007 period, and that outlays will 
follow historical spending patterns. The costs of this 
legislation fall within budget function 150 (international 
affairs).

----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, 2004 in millions of dollars--
                                                           -----------------------------------------------------
                                                              2003     2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for OPIC:
    Estimated Authorization Level \1\.....................     -209     -233     -245     -266     -282     -297
    Estimated Outlays.....................................     -213     -218     -232     -257     -277     -294
Proposed Changes:
    Estimated Authorization Level \2\.....................        0       27       35       47       58       36
    Estimated Outlays.....................................        0        3       14       31       46       53
Spending Under H.R. 3145 for OPIC:
    Estimated Authorization Level \1\.....................     -209     -206     -210     -219     -224     -261
    Estimated Outlays.....................................     -213     -215     -218     -226     -231     -241
----------------------------------------------------------------------------------------------------------------
OPIC = Overseas Private Investment Corporation.
\1\ The 2003 level is the amount appropriated for that year plus the estimated amount of offsetting collections
  in OPIC's noncredit account.
\2\ The estimated authorization level assumes the 2003 funding level adjusted for inflation through 2007.
  Funding at the 2003 level over that period would lower outlays by $21 million over the 2004-2008 period.

    Basis of estimate: In 2003, OPIC received appropriations of 
$40 million for administrative expenses and $24 million for the 
cost of credit as defined by the Federal Credit Reform Act. The 
estimated spending under current law assumes that OPIC 
continues to service its outstanding insurance and credits and 
to receive collections on its investments in U.S. securities, 
but that it issues no new insurance or finances no new 
investments after September 30, 2003. (Interest on existing 
securities brings in collections of more than $230 million a 
year to the OPIC account; but those collections are offset by 
interest paid elsewhere in the federal budget.) CBO assumes 
that administrative expenses under current law would be 
gradually reduced to a minimum rate necessary to service 
outstanding insurance and credits.
    CBO assumes that under H.R. 3145 OPIC would continue to 
issue insurance over the 2004-2007 period and that funding for 
administrative expenses and the cost of credit would be 
provided in annual appropriations acts at the 2003 level 
adjusted for inflation through 2007. Based on information from 
OPIC, CBO estimates that the new reporting requirement and 
local-currency guarantees would not significantly affect the 
costs of OPIC's operations. Thus, enacting the bill would 
continue the policies that are assumed in CBO's baseline 
through 2007. Because the bill would extend OPIC's authorities 
through 2007 only, we estimate that funding in 2008 would only 
be needed for the administrative expenses of servicing 
outstanding insurance and credits.
    Intergovernmental and private-sector impact: H.R. 3145 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Joseph C. Whitehill; 
Impact on State, Local, and Tribal Governments: Melissa 
Merrell; and Impact on the Private Sector: Jean Talarico.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                    Performance Goals and Objectives

    The bill will provide the Overseas Private Investment 
Corporation with the authorities needed to fulfill its foreign 
economic mandates through 2007.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8 of the Constitution.

                      Section-by-Section Analysis

    Sec. 1--Short Title. This section provides that the Bill 
may be cited as the ``Overseas Private Investment Corporation 
Amendment Act of 2003''.
    Sec. 2--Issuing Authority. This section extends the 
authority of OPIC to issue investment insurance and guaranties 
until September 30, 2007.
    Sec. 3--Technical Corrections. This section makes technical 
and conforming corrections to OPIC's statute and makes certain 
limitations on the power of the President to appoint public 
sector members of OPIC's Board of Directors.
    Sec. 4--Investment Insurance. In view of the fact that 
governmental functions, especially those relating to 
infrastructure development and operations, are performed to an 
increasing degree through entities owned or controlled by 
governments rather than by agencies of the governments, this 
section clarifies the definition of expropriation to include 
explicitly acts of an entity owned or controlled by a foreign 
government.
    Sec. 5--Local Currency Guaranty. While OPIC currently has 
the authority to make loans in local currencies, it lacks the 
specific authority to provide a guaranty of local currency 
loans to projects sponsored by eligible investors. This section 
provides this authority. It should be implemented fully 
consistent with the other authorities of Section 234, including 
the limitations of Section 234(b).
    Sec. 6--Outreach to Minority and Women-owned Businesses. 
This section directs OPIC to collect data on the amount of 
insurance and financing provided by the Corporation to minority 
and women-owned businesses in OPIC-supported projects and, to 
the extent information is available, on the involvement of such 
businesses in procurement activities conducted or supported by 
the Corporation.

                              Agency Views

    The Administration supports the bill.

                        New Advisory Committees

    H.R. 3145 does not establish or authorize any new advisory 
committees.

                    Congressional Accountability Act

    H.R. 3145 does not apply to the legislative branch.

                            Federal Mandates

    H.R. 3145 provides no Federal mandates.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

FOREIGN ASSISTANCE ACT OF 1961

           *       *       *       *       *       *       *



PART I

           *       *       *       *       *       *       *



Chapter 2--Other Programs

           *       *       *       *       *       *       *



Title IV--Overseas Private Investment Corporation

           *       *       *       *       *       *       *


  Sec. 233. Organization and Management.--(a) * * *
  (b) Board of Directors.--All powers of the Corporation shall 
vest in and be exercised by or under the authority of its Board 
of Directors (``the Board'') which shall consist of fifteen 
Directors, including the Chairman, with eight Directors 
constituting a quorum for the transaction of business. Eight 
Directors shall be appointed by the President of the United 
States, by and with the advice and consent of the Senate, and 
shall not be officials or employees of the Government of the 
United States. At least two of the eight Directors appointed 
under the preceding sentence shall be experienced in small 
business, one in organized labor, and one in cooperatives. Each 
such Director shall be appointed for a term of no more than 
three years. The terms of no more than three such Directors 
shall expire in any one year. Such Directors shall serve until 
their successors are appointed and qualified and may be 
reappointed.
  The other Directors shall be [officials] principal officers 
of the Government of the United States whose duties relate to 
the programs of the Corporation, including the President of the 
Corporation, the Administrator of the Agency for International 
Development, the United States Trade Representative, and [an 
official] one such officer of the Department of Labor, 
designated by and serving at the pleasure of the President of 
the United States. The United States Trade Representative may 
designate a Deputy United States Trade Representative to serve 
on the Board in place of the United States Trade 
Representative.

           *       *       *       *       *       *       *

  Sec. 234. Investment Insurance and Other Programs.--The 
Corporation is hereby authorized to do the following:
  (a) Investment Insurance.--(1) To issue insurance, upon such 
terms and conditions as the Corporation may determine, to 
eligible investors assuring protection in whole or in part 
against any or all of the following risks with respect to 
projects which the Corporation has approved--
          (A) * * *
          (B) loss of investment, in whole or in part, in the 
        approved project due to expropriation or confiscation 
        by action of a foreign government or any political 
        subdivision thereof;

           *       *       *       *       *       *       *

  (h) Local Currency Guaranties for Eligible Investors.--To 
issue to--
          (1) eligible investors, or
          (2) local financial institutions,
guaranties, denominated in currencies other than United States 
dollars, of loans and other investments made to projects 
sponsored by or significantly involving eligible investors, 
assuring against loss due to such risks and upon such terms and 
conditions as the Corporation may determine, for projects that 
the Corporation determines to have significant developmental 
effects or as the Corporation determines to be necessary or 
appropriate to carry out the purposes of this title.

           *       *       *       *       *       *       *

  Sec. 235. Issuing Authority, Direct Investment Authority and 
Reserves.--
  (a)  Issuing Authority.--
          (1) Insurance and financing.--(A) * * *
          (B) Subject to spending authority provided in 
        appropriations Acts pursuant to section 504(b) of the 
        Federal Credit Reform Act of 1990, the Corporation is 
        authorized to transfer such sums as are necessary from 
        its noncredit activities to pay for the [subsidy cost] 
        subsidy and administrative costs of the investment 
        guaranties and direct loan programs under subsections 
        (b) and (c) of section 234.
          (2) Termination of authority.--The authority of 
        subsections (a), (b), and (c) of section 234 shall 
        continue until September 30, [November 1, 2000] 2007.
  (c) There shall be established in the Treasury of the United 
States [an insurance and guaranty fund, which shall have 
separate accounts to be known as the Insurance Reserve and the 
Guaranty Reserve, which reserves] a noncredit account revolving 
fund, which shall be available for discharge of liabilities, as 
provided in subsection (d) of this section  until such time as 
all such liabilities have been discharged or have expired or 
until all [such reserves have] of the fund has been expended in 
accordance with the provisions of this section. Such fund shall 
be funded by: (1) the funds heretofore available to discharge 
liabilities under predecessor guaranty authority (including 
housing guaranty authorities), less both the amount made 
available for housing guaranty programs pursuant to section 
223(b) and the amount made available to the Corporation 
pursuant to subsection (e) of this section  and (2) such sums 
as shall be appropriated pursuant to subsection (f) of this 
section for such purposes. [The allocation of such funds to 
each such reserve shall be determined by the Board after 
consultation with the Secretary of the Treasury.] Additional 
amounts may thereafter be transferred to such [reserves] fund 
pursuant to section 236.
  (d) Any payment made to discharge liabilities under 
investment insurance or reinsurance issued under section 234  
under similar predecessor guaranty authority or under section 
234A, shall be paid first out of the [Insurance Reserve, as 
long as such reserve] noncredit account revolving fund, as long 
as such fund remains available, and thereafter out of funds 
made available pursuant to subsection (f) of this section. Any 
payments made to discharge liabilities under guaranties issued 
under section 234(b) [or under similar predecessor guaranty 
authority shall be paid first out of the Guaranty Reserve as 
long as such reserve remains available, and thereafter out of 
funds made available pursuant to subsection (f) of this 
section] or 234(c) shall be paid in accordance with the Federal 
Credit Reform Act of 1990.

           *       *       *       *       *       *       *

  (f) There are authorized to be appropriated to the 
Corporation, to remain available until expended, such amounts 
as may be necessary from time to time to replenish or increase 
the [insurance and guaranty fund] noncredit account revolving 
fund, to discharge the liabilities under insurance, 
reinsurance, or guaranties issued by the Corporation or issued 
under predecessor guaranty authority, or to discharge 
obligations of the Corporation purchased by the Secretary of 
the Treasury pursuant to this subsection. However, no 
appropriations shall be made to augment the [Insurance Reserve] 
noncredit account revolving fund until the amount of funds in 
the [Insurance Reserve] noncredit account revolving fund is 
less than $25,000,000. Any appropriations to augment the 
[Insurance Reserve] noncredit account revolving fund shall then 
only be made either pursuant to specific authorization enacted 
after the date of enactment of the Overseas Private Investment 
Corporation Amendments Act of 1974, or to satisfy the full 
faith and credit provision of section 237(c). In order to 
discharge liabilities under investment insurance or 
reinsurance, the Corporation is authorized to issue from time 
to time for purchase by the Secretary of the Treasury its 
notes, debentures, bonds, or other obligations; but the 
aggregate amount of such obligations outstanding at any one 
time shall not exceed $100,000,000. Any such obligation shall 
be repaid to the Treasury within one year after the date of 
issue of such obligation. Any such obligation shall bear 
interest at a rate determined by the Secretary of the Treasury, 
taking into consideration the current average market yield on 
outstanding marketable obligations of the United States of 
comparable maturities during the month preceding the issuance 
of any obligation authorized by this subsection. The Secretary 
of the Treasury shall purchase any obligation of the 
Corporation issued under this subsection, and for such purchase 
he may use as a public debt transaction the proceeds of the 
sale of any securities issued under the Second Liberty Bond Act 
after the date of enactment of the Overseas Private Investment 
Corporation Amendments Act of 1974. The purpose for which 
securities may be issued under such Bond Act shall include any 
such purchase.
          (1) * * *

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  Sec. 238. Definitions.--As used in this title--
          (a) * * *
          (b) the term ``expropriation'' includes, but is not 
        limited to, any abrogation, repudiation, or impairment 
        by a foreign government, a political subdivision of a 
        foreign government, or a corporation owned or 
        controlled by a foreign government, of its own contract 
        with an investor with respect to a project, where such 
        abrogation, repudiation, or impairment is not caused by 
        the investor's own fault or misconduct, and materially 
        adversely affects the continued operation of the 
        project;

           *       *       *       *       *       *       *

          (d) the term ``noncredit account revolving fund'' 
        means the account in which funds under section 236 and 
        all funds from noncredit activities are held; [and]

           *       *       *       *       *       *       *

          (f) the term ``predecessor guaranty authority'' means 
        prior guaranty authorities (other than housing guaranty 
        authorities) repealed by the Foreign Assistance Act of 
        1969, section 202(b) and 413(b) of the Mutual Security 
        Act of 1954, as amended, and section 111(b)(3) of the 
        Economic Cooperation Act of 1948, as amended (exclusive 
        of authority relating to informational media 
        guaranties)[.]; and
          (g) the term ``local financial institution''--
                  (1) means any bank or financial institution 
                that is organized under the laws of any country 
                or area in which the Corporation operates; but
                  (2) does not include a branch, however 
                organized, of a bank or other financial 
                institution that is organized under the laws of 
                a country in which the Corporation does not 
                operate.

           *       *       *       *       *       *       *

  Sec. 240. Small Business Development.--
  (a) In General.--The Corporation shall undertake, in 
cooperation with appropriate departments, agencies, and 
instrumentalities of the United States as well as private 
entities and others, to broaden the participation of United 
States small business, cooperatives, and other small United 
States investors in the development of small private enterprise 
in less developed friendly countries or areas. The Corporation 
shall allocate up to 50 percent of its annual net income, after 
making suitable provision for transfers and additions to 
reserves, to assist and facilitate the development of projects 
consistent with the provisions of this section. Such funds may 
be expended, notwithstanding the requirements of section 
231(a), on such terms and conditions as the Corporation may 
determine, through loans, grants, or other programs authorized 
by section 234 and section 234A.
  (b) Outreach to Minority-Owned and Women-Owned Businesses.--
The Corporation shall collect data on the involvement of 
minority- and women-owned businesses in projects supported by 
the Corporation, including--
          (1) the amount of insurance and financing provided by 
        the Corporation to such businesses in connection with 
        projects supported by the Corporation; and
          (2) to the extent such information is available, the 
        involvement of such businesses in procurement 
        activities conducted or supported by the Corporation.
The Corporation shall include, it its annual report submitted 
to the Congress under section 240A, the aggregate data 
collected under this paragraph, in such form as to quantify the 
effectiveness of the Corporation's outreach activities to 
minority- and women-owned businesses.

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