HR509-119

1. Short title This Act may be cited as the Western Hemisphere Nearshoring Act.

2. Findings Congress finds the following: Our neighbors in the Western Hemisphere play a vital role in ensuring peace, security, and democracy. Instability and lack of economic opportunities in the region are major drivers of migration in violation of the Immigration and Nationality Act. According to the United States Census Bureau, in 2021 the United States exported $174.62 billion worth of goods to Central and South America, and imported $121 billion. The United States is a net exporter with Central and South America. Economic growth and development of the Western Hemisphere brings essential strength and stability to the region. There is significant opportunity to expand the free flow of goods and services in the Western Hemisphere. Closer relations among the Americas through free trade agreements and trade liberalization would encourage further economic development and stability in the region. The United States should exercise its influence to encourage privatization, free markets, and economic cooperation in the region. Countries in the region should combat corruption, strengthen the rule of law, reduce bureaucratic red tape, streamline permitting, and embrace free market principles to encourage further private sector investment. With cooperation from the United States, regional countries must take serious steps to curb migration in violation of the Immigration and Nationality Act. The Western Hemisphere has supply chains that are vulnerable due to their over dependence on the People’s Republic of China. Free trade and expanded commercial ties between the United States and Western Hemisphere partners will foster economic and commercial cooperation, increase investment opportunities, decrease migration in violation of the Immigration and Nationality Act, reduce our dependence on the People’s Republic of China, and create jobs for American workers.

3. Use of United States International Development Finance Corporation funds to finance moving expenses and necessary workforce development costs incurred by companies moving from the People’s Republic of China to Latin America or the Caribbean The United States International Development Finance Corporation, in coordination with relevant Federal agencies (including the United States Trade and Development Agency, the Export-Import Bank of the United States, the United States Army Corps of Engineers, and the United States Agency for International Development) and the United States Executive Directors of relevant international financial institutions (including the World Bank Group, the Inter-American Development Bank, and the International Monetary Fund), shall use not less than 10 percent of the amounts made available to provide financing under section 1421 of the Better Utilization of Investments Leading to Development Act of 2018 (22 U.S.C. 9621) for each fiscal year beginning after the date of the enactment of this Act to finance the qualified moving costs and necessary workforce development costs of, and reduce the interest rate on any loan to be provided by the DFC to the interest rate described in paragraph (3) to, any qualified corporation that is eligible for, or a recipient of, assistance from the DFC, to the extent of qualifying applications for assistance under this section. If the DFC does not use the entire amount described in paragraph (1) for a fiscal year described in such paragraph, such amount shall, to the maximum extent practicable, be made available to the DFC for the next fiscal year to carry out this section or other DFC programs for Latin American or Caribbean countries. The interest rate described in this paragraph is— the Federal funds rate; or the interest rate that is determined by reducing by not less than 1/2 of 1 percent and not more than 1 percent (but to not less than zero percent) the interest rate on the loan to be provided by the DFC to the qualified corporation, The DFC shall not provide assistance under this section unless the Secretary of Commerce has determined that the provision of the assistance would not result in a negative effect on employment in the United States. A corporation to which financing is made under this section shall remit to the DFC any portion of the assistance that is not expended within a period of time after the date the financing is made that is determined by the DFC on a case-by-case basis. The DFC— may provide loans under this section to a corporation only if the loans are commercially viable, as determined by the DFC; and shall determine an appropriate amount of time for repayment of loans under this section to a corporation. Not later than 180 days after the date of the enactment of this Act, the DFC shall develop and submit to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate a plan to streamline the provision of assistance under this section, including to expedite the approval process for the provision of such assistance.

4. Authority to provide duty-free treatment for goods and services of companies moving from the People’s Republic of China to Latin America or the Caribbean Notwithstanding any other provision of law, the President shall proclaim duty-free treatment (or other preferential treatment) for any good or service made or produced in a Latin American or Caribbean country by a qualified corporation that has received assistance under section 3, subject to such terms and conditions as the President determines to be appropriate. The President shall prescribe such regulations as may be necessary to carry out this section. Subsection (a) shall apply with respect to a good or service made or produced in a Latin American or Caribbean country by a corporation for the 15-year period beginning on the date on which the corporation begins operations in such country. Nothing in this section may be construed to affect duty-free treatment (or other preferential treatment) for any good or service made or produced in a Latin American or Caribbean country by a qualified corporation after the 15-year period described in paragraph (1) if goods and services from such country are otherwise generally eligible for duty-free treatment (or other preferential treatment).

5. Additional conditions on receipt of assistance under section 3 and duty-free treatment (or other preferential treatment) under section 4 The appropriate Federal agency may not provide assistance under section 3 or duty-free treatment (or other preferential treatment) under section 4 to a corporation unless— the agency determines that the corporation will create jobs in the Latin American or Caribbean country to which it moves operations in numbers determined by the agency to be commensurate with the assistance provided; the corporation makes a binding commitment to the agency that on and after the date the assistance is provided— the corporation will not come under the ownership or control of the Government of the People’s Republic of China or the Chinese Communist Party, the Government of the Russian Federation, or any other foreign adversary; and the corporation will not have its headquarters in the People’s Republic of China, the Russian Federation, or any other foreign adversary; within 2 years after the date described in paragraph (2), and subject to an additional extension as determined appropriate by the agency, all assets of the corporation with respect to which the assistance is provided will have been moved from the People’s Republic of China to a Latin American or Caribbean country; and the corporation retains all assets of the corporation with respect to which the assistance is provided in a Latin American or Caribbean country after the date described in paragraph (2) or the last day of the extension described in paragraph (3), as the case may be. The appropriate Federal agency, in coordination with the Department of State, shall make all determinations regarding compliance with the provisions of subsection (a). A qualified corporation that has received assistance under section 3 or duty-free treatment (or other preferential treatment) under section 4 that is subsequently determined by the appropriate Federal agency not to be in compliance with the provisions of subsection (a) shall be subject to the following actions: Any good or service made or produced in a Latin American or Caribbean country by the corporation (other than a good or service made or produced in a free trade zone or which is subject to benefits under a free trade agreement) shall not be eligible for duty-free treatment (or other preferential treatment) under section 4. The appropriate Federal agency shall adjust the interest rate on any loan to be provided by the agency to the corporation to the prevailing market interest rate. In this section, the term appropriate Federal agency means— with respect to actions relating to assistance under section 3, the DFC; and with respect to actions relating to duty-free treatment (or other preferential treatment) under section 4, the United States Trade Representative.

6. Expenses paid for with tariffs collected from the People’s Republic of China There is established in the Treasury of the United States a trust fund consisting of such amounts as are appropriated to such trust fund under subsection (b). There are hereby appropriated to such trust fund amounts equivalent to the tariffs collected by the United States on goods manufactured in the People’s Republic of China. There are hereby appropriated from such trust fund to the General Fund of the Treasury amounts equivalent to the reduction in revenue to such General Fund by reason of assistance provided by the DFC under this Act. Rules similar to the rules of section 9601 of the Internal Revenue Code of 1986 shall apply with respect to appropriations to and from such trust fund under subsections (b) and (c).

7. Amendments to the BUILD Act of 2018 Section 1411 of the Better Utilization of Investments Leading to Development Act of 2018 (22 U.S.C. 9611) is amended— in paragraph (7), by striking and at the end; in paragraph (8), by striking the period at the end and inserting a semicolon; and by adding at the end the following: to further United States economic growth by prioritizing United States-owned businesses in providing support under title II; and to further United States national security by prioritizing the production of goods in critical industries, as determined by the Corporation, in consultation with the Department of Homeland Security. Title V of the Better Utilization of Investments Leading to Development Act of 2018 (22 U.S.C. 9671 et seq.) is amended by adding at the end the following: Except as provided in subsection (b), the Corporation is prohibited from providing support under title II for an entity owned or controlled by a foreign government. The Corporation may provide feasibility studies and technical assistance under title II for an entity owned or controlled by a foreign government that is not a foreign adversary. In this subsection, the term foreign adversary means a foreign government engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons. The table of contents for the FAA Reauthorization Act of 2018 (49 U.S.C. 40101 note) is amended by inserting after the item relating to section 1454 the following: (9)to further United States economic growth by prioritizing United States-owned businesses in providing support under title II; and (10)to further United States national security by prioritizing the production of goods in critical industries, as determined by the Corporation, in consultation with the Department of Homeland Security.. 1455.Prohibition on support for entities owned or controlled by foreign governments (a)In generalExcept as provided in subsection (b), the Corporation is prohibited from providing support under title II for an entity owned or controlled by a foreign government. (b)Exception (1)In generalThe Corporation may provide feasibility studies and technical assistance under title II for an entity owned or controlled by a foreign government that is not a foreign adversary. (2)Foreign adversary definedIn this subsection, the term foreign adversary means a foreign government engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons.. Sec. 1455. Prohibition on support for entities owned or controlled by foreign governments..

1455. Prohibition on support for entities owned or controlled by foreign governments Except as provided in subsection (b), the Corporation is prohibited from providing support under title II for an entity owned or controlled by a foreign government. The Corporation may provide feasibility studies and technical assistance under title II for an entity owned or controlled by a foreign government that is not a foreign adversary. In this subsection, the term foreign adversary means a foreign government engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons.

8. Trade negotiating authority The United States Trade Representative shall take action to initiate negotiations to obtain trade agreements with each Latin American or Caribbean country that as of the date of the enactment of this Act is not a party to a free trade agreement with the United States if the country meets the conditions described in subsection (b). The conditions described in this subsection are the following: The country is taking steps to reduce migration in violation of the Immigration and Nationality Act. The country is taking steps to reduce economic dependence on the People’s Republic of China. The country allows Taiwan to establish and maintain a commercial office in the country.

9. Agreements for cooperation pursuant to section 123 of the Atomic Energy Act of 1954 The President is authorized to take action to initiate negotiations with Latin American and Caribbean countries to obtain agreements for cooperation pursuant to section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) to approve the sales of nuclear reactors to such countries, or to qualified corporations that receive assistance under this Act, but only if— the President determines that such sales will not threaten the national security of the United States; and the countries or qualified corporations, as the case may be, meet the conditions described in paragraphs (1), (2), and (3) of section 8(b). The Administrator of the United States Agency for International Development, in consultation with the Secretary of Energy and the DFC, may provide technical assistance and expertise in electrical grid and energy efficiency improvements related to sales under subsection (a), as appropriate.

10. Temporary increased expensing for relocating manufacturing from the People’s Republic of China to a Latin American or Caribbean country For purposes of section 168(k) of the Internal Revenue Code of 1986, in the case of any qualified relocated manufacturing property which is placed in service by a qualified manufacturer after the date of the enactment of this Act, and before January 1, 2038— such property shall be treated as qualified property (within the meaning of such section), the applicable percentage otherwise determined under paragraph (6) of such section with respect to such property shall be 75 percent, and paragraphs (8) and (10) of such section shall not apply. For purposes of this section— The term qualified relocated manufacturing property means qualified property (within the meaning of section 168(k) of such Code) or nonresidential real property (as defined in section 168(e)(2)(B) of such Code) which is— placed in service in a Latin American or Caribbean country by a qualified manufacturer, and is acquired by such qualified manufacturer in connection with a qualified relocation of manufacturing. The term qualified relocation of manufacturing means, with respect to any qualified manufacturer, the relocation of the manufacturing of any tangible personal property from the People’s Republic of China to a Latin American or Caribbean country. For purposes of subparagraph (A), manufacturing shall not fail to be treated as relocated merely because property used in such manufacturing was not relocated. For purposes of subparagraph (A), manufacturing shall not be treated as relocated unless the property manufactured in a Latin American or Caribbean country is substantially identical to the property previously manufactured in the People’s Republic of China and the increase in the units of production of such property in a Latin American or Caribbean country by the qualified manufacturer is not less than the reduction in the units of production of such property by such qualified manufacturer in the People’s Republic of China. For purposes of this section, the term qualified manufacturer means any person— which is engaged in the trade or business of manufacturing any tangible personal property, with respect to which the Secretary of the Treasury (or the Secretary’s delegate) has made the determination described in section 5(a)(1), and which has entered into a binding agreement with such Secretary (or such delegate) to meet the requirements of section 5(a)(2) which is enforceable under terms similar to the terms of section 5(b).

11. Definitions In this Act: The term DFC means the United States International Development Finance Corporation. The term qualified corporation does not include a State-owned enterprise. The term qualified moving costs means— the costs of moving inventory, equipment, and supplies from the People’s Republic of China to a Latin American or Caribbean country; and the costs of workforce development and construction of facilities. The terms Latin American or Caribbean country and Western Hemisphere— mean a country in the Caribbean Sea, South America, or Central America, and Mexico; and except as provided in subparagraph (B), do not include Cuba or Venezuela. The term Latin American or Caribbean country shall include Cuba or Venezuela if the Secretary of State determines and certifies to Congress that— the government of such country— has held free and fair presidential and legislative elections, as determined by independent international observers, and subsequent elections are scheduled; respects and upholds human rights; is taking significant steps to privatize its economy and institute a free market; permits the international community to provide humanitarian, governance, and economic development assistance; has freed all unlawfully detained United States citizens, legal permanent residents, and political prisoners; and has expelled all security services from foreign adversaries from the country; and the prior authorities of such country have renounced their illegitimate claim to power. The term Federal funds rate means the discount window primary credit interest rate most recently published on the Federal Reserve Statistical Release on selected interest rates (daily or weekly), commonly referred to as the H.15 release.