Africa Investment Incentive Act of 2006 - Amends the African Growth and Opportunity Act to extend duty-free treatment to imported apparel articles wholly assembled or knit-to-shape and wholly assembled, or both, in one or more lesser developed beneficiary sub-Saharan African countries (regardless of the country of origin of the fabric or the yarn used to make such articles) in an amount not to exceed a certain percentage of all apparel articles imported into the United States in the preceding 12-month period.
Authorizes the President to remove preferential treatment for fabric or yarn of an article that was determined on the basis of fraud to: (1) be eligible for such treatment; or (2) not be available in commercial quantity.
Grants preferential treatment to textiles that are products of a lesser developed beneficiary sub-Saharan African country and are wholly formed in one or more such countries from fibers, yarns, fabrics, fabric components, or components knit-to-shape that are the product of one or more such countries.
Amends the Internal Revenue Code to establish a sub-Saharan economic activity credit.
Extends the Generalized System of Preferences (GSP) Program. Authorizes limitations on waivers of competitive need limitation.
Haitian Hemisphere Opportunity through Partnership Encouragement Act of 2006 - Amends the Caribbean Basin Economic Recovery Act to provide for five one-year periods of duty-free treatment for apparel articles wholly assembled or knit-to-shape in Haiti. Directs the Bureau of Customs and Border Protection of the Department of Homeland Security (DHS) to provide for import compliance.
Grants five-year duty-free treatment to complying wire harness automotive components imported from Haiti.
Expresses the sense of Congress that these provisions should be broadly interpreted in order to expand the textile and apparel trade between Haiti and the United States.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6142 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 6142
To amend the African Growth and Opportunity Act relating to
preferential treatment to apparel articles of lesser developed
countries, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 21, 2006
Mr. Thomas introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the African Growth and Opportunity Act relating to
preferential treatment to apparel articles of lesser developed
countries, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Table of contents.
TITLE I--AFRICAN GROWTH AND OPPORTUNITY ACT
Sec. 101. Short title.
Sec. 102. Preferential treatment of apparel products of lesser
developed countries.
Sec. 103. Technical corrections.
Sec. 104. Sub-Saharan Africa economic activity credit.
TITLE II--GENERALIZED SYSTEM OF PREFERENCES (GSP) PROGRAM
Sec. 201. Limitations on waivers of competitive need limitation.
Sec. 202. Extension of GSP program.
TITLE III--HAITI
Sec. 301. Short title.
Sec. 302. Trade benefits for Haiti.
Sec. 303. ITC study.
Sec. 304. Sense of Congress on interpretation of textile and apparel
provisions for Haiti.
Sec. 305. Technical amendments.
Sec. 306. Effective date.
TITLE I--AFRICAN GROWTH AND OPPORTUNITY ACT
SEC. 101. SHORT TITLE.
This title may be referred to as the ``Africa Investment Incentive
Act of 2006''.
SEC. 102. PREFERENTIAL TREATMENT OF APPAREL PRODUCTS OF LESSER
DEVELOPED COUNTRIES.
(a) In General.--Section 112 of the African Growth and Opportunity
Act (19 U.S.C. 3721) is amended--
(1) by redesignating subsections (c) through (e) as
subsections (d) through (f);
(2) in subsection (b)--
(A) in the matter preceding paragraph (1), by
striking ``The'' and inserting ``Subject to subsection
(c), the'' ; and
(B) by striking subparagraph (B) and redesignating
subparagraph (C) as subparagraph (B); and
(3) by inserting after subsection (b) the following new
subsection:
``(c) Lesser Developed Countries.--
``(1) Preferential treatment of products through september
30, 2008.--
``(A) Products covered.--In addition to the
products described in subsection (b), and subject to
paragraph (4), the preferential treatment described in
subsection (a) shall apply through September 30, 2008,
to apparel articles wholly assembled, or knit-to-shape
and wholly assembled, or both, in one or more lesser
developed beneficiary sub-Saharan African countries,
regardless of the country of origin of the fabric or
the yarn used to make such articles, in an amount not
to exceed the applicable percentage of the aggregate
square meter equivalents of all apparel articles
imported into the United States in the preceding 12-
month period for which data are available.
``(B) Applicable percentage.--For purposes of
subparagraph (A), the term `applicable percentage'
means--
``(i) 2.9285 percent for the 1-year period
beginning October 1, 2005;
``(ii) 3.5 percent for the 1-year period
beginning October 1, 2006; and
``(iii) 3.5 percent for the 1-year period
beginning October 1, 2007.
``(2) Preferential treatment of products beginning october
1, 2008.--
``(A) In general.--In addition to the products
described in subsection (b), the preferential treatment
described in subsection (a) shall apply to apparel
articles described in subparagraph (B) of a producer or
entity controlling production that are imported
directly from a lesser developed beneficiary sub-
Saharan African country during an applicable 1-year
period, subject to the limitations set forth in this
subsection.
``(B) Articles described.--The apparel articles
referred to in subparagraph (A) are apparel articles
that are wholly assembled, or are knit-to-shape, in a
lesser developed beneficiary sub-Saharan African
country from any combination of fabrics, fabric
components, components knit-to-shape, and yarns.
``(C) Restrictions in second through seventh
applicable 1-year periods.--The preferential treatment
under subparagraph (A) applies to apparel articles
described in subparagraph (B) in each of the second
through seventh applicable 1-year periods only if, for
each entry in the preceding applicable 1-year period,
the sum of--
``(i) the cost or value of the materials
produced in one or more beneficiary sub-Saharan
African countries or one or more countries
described in subparagraph (E), or any
combination thereof, plus
``(ii) the direct costs of processing
operations (as defined in section 213(a)(3)) of
the Caribbean Basin Economic Recovery Act
performed in one or more beneficiary developed
beneficiary sub-Saharan African countries or
one or more countries described in subparagraph
(E), or any combination thereof,
is not less than the applicable percentage (as defined
in subparagraph (I)) of the declared customs value of
such apparel articles.
``(D) Deductions.--In calculating cost or value
under subparagraph (C)(i), there shall be deducted the
cost or value of--
``(i) any foreign materials that are used
in the production of the apparel articles in a
lesser developed beneficiary sub-Saharan
African country; and
``(ii) any foreign materials that are used
in the production of the materials described in
subparagraph (C)(i).
``(E) Countries described.--The countries referred
to in subparagraph (C) are the following:
``(i) The United States.
``(ii) Any country that is a party to a
free trade agreement with the United States
that is in effect on the date of the enactment
of the Africa Investment Incentive Act of 2006,
or that enters into force under the Bipartisan
Trade Promotion Authority Act of 2002 (19
U.S.C. 3801 et seq.).
``(iii) Any country designated as a
beneficiary country under section 213(b)(5)(B)
of the Caribbean Basin Economic Recovery Act.
``(iv) Any country designated as a
beneficiary country under section 204(b)(6)(B)
of the Andean Trade Preference Act (19 U.S.C.
3203(b)(6)(B)).
``(F) Annual aggregation.--The requirements under
subparagraph (C) relating to applicable percentage may
also be met for articles of a producer or an entity
controlling production that enter during an applicable
1-year period by aggregating--
``(i) the cost or value of materials under
subparagraph (C)(i), and
``(ii) the direct costs of processing
operations under subparagraph (C)(ii),
of all apparel articles of that producer or entity
controlling production that are wholly assembled, or
are knit-to-shape, in a lesser developed beneficiary
sub-Saharan African country and are entered during that
applicable 1-year period.
``(G) Deductions.--In calculating the cost or value
under subparagraph (F)(i), there shall be deducted the
cost or value of--
``(i) any foreign materials that are used
in the production of the articles in a lesser
developed beneficiary sub-Saharan African
country; and
``(ii) any foreign materials that are used
in the production of the materials described in
subparagraph (F)(i).
``(H) Quantitative limitations.--The preferential
treatment described in this paragraph shall be
extended, during each applicable 1-year period, to not
more than 3.5 percent of the aggregate square meter
equivalents of all apparel articles imported into the
United States in the most recent 12-month period for
which data are available. No preferential treatment
shall be provided under this paragraph after the last
day of the seventh applicable 1-year period.
``(I) Definitions.--In this paragraph:
``(i) Applicable 1-year period.--
``(I) In general.--The term
`applicable 1-year period' means each
of the 1-year periods described in
subclauses (I) through (VIII).
``(II) Initial 1-year period.--The
term `initial 1-year period' means the
1-year period beginning October 1,
2008.
``(III) Second applicable 1-year
period.--The term `second applicable 1-
year period' means the 1-year period
beginning October 1, 2009.
``(IV) Third applicable 1-year
period.--The term `third applicable 1-
year period' means the 1-year period
beginning October 1, 2010.
``(V) Fourth applicable 1-year
period.--The term `fourth applicable 1-
year period' means the 1-year period
beginning October 1, 2011.
``(VI) Fifth applicable 1-year
period.--The term `fifth applicable 1-
year period' means the 1-year period
beginning October 1, 2012.
``(VII) Sixth applicable 1-year
period.--The term `sixth applicable 1-
year period' means the 1-year period
beginning October 1, 2013.
``(VIII) Seventh applicable 1-year
period.--the term `seventh applicable
1-year period' means the 1-year period
beginning October 1, 2014.
``(ii) Applicable percentage.--The term
`applicable percentage' means--
``(I) 50 percent or more during the
initial applicable 1-year period, the
second applicable 1-year period, and
the third applicable 1-year period;
``(II) 55 percent or more during
the fourth applicable 1-year period;
and
``(III) 60 percent or more during
the fifth, sixth, and seventh
applicable 1-year periods.
``(3) Development of procedure to ensure compliance.--
``(A) In general.--The Bureau of Customs and Border
Protection of the Department of Homeland Security
shall, not later than 1 year after the date of
enactment of the Africa Investment Incentive Act of
2006, develop and implement methods and procedures to
ensure ongoing compliance with the requirements set
forth in paragraph (2).
``(B) Noncompliance.--If the Bureau of Customs and
Border Protection finds that a producer or an entity
controlling production has not satisfied the
requirements of paragraph (2) in any applicable 1-year
period, then apparel articles described in paragraph
(2)(B) of that producer or entity shall be ineligible
for preferential treatment under paragraph (2) during
any succeeding applicable 1-year period until--
``(i) the cost or value of materials under
paragraph (2)(C)(i), plus
``(ii) the direct costs of processing
operations under paragraph (2)(C)(ii),
of that producer or entity controlling production, is
not less than the applicable percentage that would
otherwise apply under paragraph (2)(C), plus 10
percent, of the aggregate declared customs value of all
apparel articles of that producer or entity controlling
production that are wholly assembled, or are knit-to-
shape, in a sub-Saharan African country and are entered
during the preceding applicable 1-year period.
``(C) Retroactive application of duty-free
treatment.--
``(i) In general.--If--
``(I) a producer or an entity
controlling production is ineligible
for preferential treatment under
paragraph (2) in an applicable 1-year
period because that producer or entity
controlling production did not satisfy
the requirements of paragraph (2)(C) or
(2)(F), and
``(II) that producer or entity
controlling production satisfies the
requirements of subparagraph (B) of
this paragraph in that applicable 1-
year period,
then, notwithstanding section 514 of the Tariff
Act of 1930 (19 U.S.C. 1514) or any other
provision on law, upon proper request filed
with the Bureau of Customs and Border
Protection before the 90th day after the Bureau
of Customs and Border Protection determines
that subclause (II) applies, any entry
described in clause (ii) shall be liquidated or
reliquidated as though such preferential
treatment applied to such entry.
``(ii) Entries.--An entry is described in
this clause if it is an entry of any articles--
``(I) that was made during the
applicable 1-year period referred to in
clause (i)(I); and
``(II) with respect to which there
would have been preferential treatment
under paragraph (2) if the producer or
entity controlling production had
satisfied the requirements of paragraph
(2)(C) or (2)(F) (as the case may be).
``(D) Fabrics not available in commercial
quantities.--For purposes of determining the applicable
percentage under paragraph (2)(C) or (2)(F), there may
be included in that percentage--
``(i) the cost of fabrics or yarns to the
extent that apparel articles of such fabrics or
yarns would be eligible for preferential
treatment, without regard to the source of the
fabrics or yarns, under Annex 401 of the NAFTA;
and
``(ii) the cost of fabrics or yarns that
are designated as not being available in
commercial quantities for purposes of--
``(I) section 213(b)(2)(A)(v) of
the Caribbean Basin Economic Recovery
Act,
``(II) paragraph (5) of this
subsection,
``(III) section
204(b)(3)(B)(i)(III) or (ii) of the
Andean Trade Preference Act, or
``(IV) any other provision,
relating to determining whether a
textile or apparel article is an
originating good eligible for
preferential treatment, of a law that
implements a free trade agreement that
enters into force under the Bipartisan
Trade Promotion Authority Act of 2002,
without regard to the source of the fabrics or
yarns.
``(4) Special rules for products in commercial quantities
in africa.--
``(A) Petition process.--Upon a petition filed by
an interested party (which may include a foreign
manufacturer), the Commission shall determine whether a
fabric or yarn produced in beneficiary sub-Saharan
African countries is available in commercial quantities
for use by lesser developed beneficiary sub-Saharan
African countries.
``(B) Effect of affirmative determination.--
``(i) Determination of quantity
available.--If the Commission determines under
subparagraph (A) that a fabric or yarn produced
in beneficiary sub-Saharan African countries is
available in commercial quantities for use by
lesser developed beneficiary sub-Saharan
African countries, the Commission shall
determine the quantity of the fabric or yarn
that will be so available in lesser developed
beneficiary sub-Saharan African countries in
the applicable 1-year period (as defined in
paragraph (2)(H)) beginning after the
determination is made.
``(ii) Determinations.--In each case in
which the Commission determines that a fabric
or yarn is available in commercial quantities
under subparagraph (A) for an applicable 1-year
period, the Commission shall determine, before
the end of that applicable 1-year period--
``(I) whether the fabric or yarn
produced in beneficiary sub-Saharan
African countries will be available in
commercial quantities in the succeeding
applicable 1-year period; and
``(II) if so, the quantity of the
fabric or yarn that will be so
available in that succeeding 1-year
period, subject to clause (iii).
``(iii) Determination regarding imported
articles.--After the end of each applicable 1-
year period for which a determination under
clause (i) is in effect, the Commission shall
determine to what extent the quantity of the
fabric or yarn determined under clause (i) to
be available in commercial quantities for use
by lesser developed beneficiary sub-Saharan
African countries was used in the production of
apparel articles receiving preferential
treatment under paragraph (1) or (2) that were
entered in that applicable 1-year period. To
the extent that the quantity so determined was
not so used, then the Commission shall add to
the quantity of that fabric or yarn determined
to be available in the next applicable 1-year
period the quantity not so used in the
preceding applicable 1-year period.
``(C) Denim.--Denim articles provided for in
subheading 5209.42.00 of the Harmonized Tariff Schedule
of the United States shall be deemed to have been
determined to be in abundant supply under subparagraph
(A) in an amount of 30,000,000 square meter equivalents
for the 1-year period beginning October 1, 2006.
``(D) Presidential authority to restrict imports.--
``(i) In general.--Subject to clause (ii),
the President may by proclamation provide that
apparel articles otherwise eligible for
preferential treatment under paragraph (1) or
(2) that contain a fabric or yarn determined to
be available in commercial quantities under
subparagraph (A) may not receive such
preferential treatment in an applicable 1-year
period unless--
``(I) the fabric or yarn in such
articles was produced in 1 or more
beneficiary sub-Saharan African
countries; or
``(II) the Commission has
determined that the quantity of the
fabric or yarn determined under
subparagraph (B) (or (C), as the case
may be) to be available in lesser
developed beneficiary sub-Saharan
African countries for that applicable
1-year period has already been used in
the production of apparel articles
receiving preferential treatment under
paragraph (1) or (2) that were entered
in that applicable 1-year period.
``(ii) Mandatory restriction.--If a fabric
or yarn is determined to be available in
commercial quantities under subparagraph (A) in
an applicable 1-year period, and for 2
consecutive applicable 1-year periods the
quantities determined to be so available are
not used in the production of apparel articles
receiving preferential treatment under
paragraph (1) or (2) that were entered during
those 2 applicable 1-year periods, then
beginning in the succeeding applicable 1-year
period, apparel articles containing that fabric
or yarn are ineligible for preferential
treatment under paragraph (1) or (2) in any
succeeding applicable 1-year period unless the
Commission has determined that the quantity of
the fabric or yarn determined under
subparagraph (B) (or (C), as the case may be)
to be available in lesser developed beneficiary
sub-Saharan African countries for that
applicable 1-year period has already been used
in the production of apparel articles receiving
preferential treatment under paragraph (1) or
(2) that were entered in that applicable 1-year
period.
``(E) Procedures.--The Commission shall use the
procedures prescribed in subsection (b)(3)(C)(iv) for
the Secretary of Commerce in making determinations
under this paragraph.
``(5) Removal of designation of fabrics or yarns not
available in commercial quantities.--If the President
determines that--
``(A) any fabric or yarn described in paragraph
(4)(A) was determined to be eligible for preferential
treatment, or
``(B) any fabric or yarn described in paragraph
(4)(B) was designated as not being available in
commercial quantities,
on the basis of fraud, the President may remove the eligibility
or designation (as the case may be) of that fabric or yarn with
respect to articles entered after such removal.
``(6) Applicability of other provisions.--Subsection
(b)(3)(C) applies to apparel articles eligible for preferential
treatment under this subsection to the same extent as that
subsection applies to apparel articles eligible for
preferential treatment under subsection (b)(3).
``(7) Definitions.--In this subsection:
``(A) Commission.--The term `Commission' means the
United States International Trade Commission.
``(B) Enter; entry.--The terms `enter' and `entry'
refer to the entry, or withdrawal from warehouse for
consumption, in the customs territory of the United
States.
``(C) Foreign material.--The term `foreign
material' means a material produced in a country other
than a sub-Saharan African country or a country
described in paragraph (2)(E).
``(D) Lesser developed beneficiary sub-saharan
african country.--The term `lesser developed
beneficiary sub-Saharan African country' means--
``(i) a beneficiary sub-Saharan African
country that had a per capita gross national
product of less than $1,500 in 1998, as
measured by the International Bank for
Reconstruction and Development;
``(ii) Botswana; and
``(iii) Namibia.''.
(b) Additional Preferential Treatment.--Section 112(b) of the
African Growth and Opportunity Act (19 U.S.C. 3721(b)) is amended by
adding at the end the following new paragraph:
``(8) Textile articles originating entirely in one or more
lesser developed beneficiary sub-saharan african countries.--
Textile articles, other than apparel articles, that are wholly
assembled, or are knit-to-shape, in one or more lesser
developed beneficiary sub-Saharan African countries, from
fabrics, fabric components, components knit-to-shape, and yarns
originating entirely in one or more lesser developed
beneficiary sub-Saharan African countries.''.
(c) Technical Amendment.--Section 112(e)(3) of the African Growth
and Opportunity Act (as redesignated by subsection (a)(1) of this
section) is amended by striking ``subsection (b)'' and inserting
``subsections (b) and (c)''.
SEC. 103. TECHNICAL CORRECTIONS.
Section 112 of the African Growth and Opportunity Act (19 U.S.C.
3721) is amended as follows:
(1) Subsection (b)(5) is amended by adding at the end the
following new subparagraph:
``(C) Removal of designation of fabrics or yarns
not available in commercial quantities.--If the
President determines that any fabric or yarn was
determined to be eligible for preferential treatment
under subparagraph (A) on the basis of fraud, the
President is authorized to remove that designation from
that fabric or yarn with respect to articles entered
after such removal.''.
(2) Subsection (e) is amended by adding at the end the
following:
``(4) Enter; entered.--The terms `enter' and `entered'
refer to the entry, or withdrawal from warehouse for
consumption, in the customs territory of the United States.''.
(3) Subsection (f) is amended by striking ``2008'' and
inserting ``2015''.
SEC. 104. SUB-SAHARAN AFRICA ECONOMIC ACTIVITY CREDIT.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to other credits) is
amended by adding at the end the following new section:
``SEC. 30D. SUB-SAHARAN AFRICA ECONOMIC ACTIVITY CREDIT.
``(a) Allowance of Credit.--Except as otherwise provided in this
section, if a domestic corporation elects the application of this
section, there shall be allowed as a credit against the tax imposed by
this chapter the amount determined under subsection (b).
``(b) Amount of Credit.--The amount determined under this
subsection is the excess of--
``(1) the product of the highest rate of tax specified in
section 11(b) multiplied by the taxable income (determined
without regard to any deduction for the taxes described in
paragraph (2)), from sources without the United States, from
the active conduct of a qualified trade or business within sub-
Saharan Africa, over
``(2) the aggregate taxes described in section 901(b)(1)
which are paid or accrued with respect to such income.
``(c) Limitation to Tax Attributable to Foreign Source Income.--
``(1) In general.--The amount determined under subsection
(b) for any taxable year shall not exceed the excess of--
``(A) the amount which bears the same ratio to the
tax against which such credit is taken which the
taxpayer's taxable income from sources without the
United States (but not in excess of the taxpayer's
entire taxable income) bears to the taxpayer's entire
taxable income for the same taxable year, over
``(B) the sum of the credits allowed under section
901, 30A, and 936 for the taxable year.
``(2) Allocable share of specified items taken into
account.--In the case of a taxpayer whose specified items are
increased under subsection (f), paragraph (1) shall be
applied--
``(A) by treating the taxpayer's aggregate
allocable share of the taxable income referred to in
subsection (f)(2)(A) as taxable income of the taxpayer
from sources without the United States, and
``(B) by increasing the amount described in
paragraph (1)(B) by the taxpayer's aggregate allocable
share of taxes referred to in subsection (f)(2)(B).
``(d) Limitations on Credit for Active Business Income.--The amount
determined under subsection (b) for any taxable year shall not exceed
the sum of the following amounts:
``(1) 60 percent of the sum of--
``(A) the aggregate amount of the domestic
corporation's qualified Africa wages for such taxable
year, plus
``(B) the allocable qualified employee fringe
benefit expenses of the domestic corporation for such
taxable year.
``(2) The sum of--
``(A) 15 percent of the depreciation allowances for
the taxable year with respect to short-life qualified
tangible property,
``(B) 40 percent of the depreciation allowances for
the taxable year with respect to medium-life qualified
tangible property, and
``(C) 65 percent of the depreciation allowances for
the taxable year with respect to long-life qualified
tangible property.
``(e) Definitions.--For purposes of this section--
``(1) Qualified trade or business.--The term `qualified
trade or business' means any trade or business other than--
``(A) the trade or business of mining (as defined
in section 613(c)(2)), and
``(B) the trade or business of exploring for,
developing, producing, refining, transporting, or
selling crude oil or natural gas, or any product
thereof.
``(2) Qualified africa wages.--
``(A) In general.--The term `qualified Africa
wages' means, with respect to any taxable year, the
excess of--
``(i) the sum of the wages which are paid
or incurred during such taxable year in
connection with the active conduct of a
qualified trade or business within sub-Saharan
Africa to any employee for services performed
in sub-Saharan Africa, but only if such
services are performed while the principal
place of employment of such employee is within
sub-Saharan Africa, over
``(ii) the sum of wages (if any) paid or
incurred during the last taxable year ending
before the date of the enactment of this
section in connection with the active conduct
of a qualified trade or business within sub-
Saharan Africa (determined as of the first day
of the taxable year referred to in clause (i))
to any employee for services performed in sub-
Saharan Africa (as so determined), but only if
such services are performed while the principal
place of employment of such employee is within
sub-Saharan Africa (as so determined).
``(B) Applicable rules for determining wages.--For
purposes of subparagraph (A), rules similar to the
rules of subparagraphs (B), (C), and (D) of section
936(i)(1) shall apply.
``(3) Qualified employee fringe benefit expenses.--
``(A) In general.--The term `qualified employee
fringe benefit expense' means, with respect to any
taxable year, the excess of--
``(i) the sum of the employee fringe
benefit expenses which are paid or incurred
during such taxable year in connection with the
active conduct of a qualified trade or business
within sub-Saharan Africa to or for the benefit
of any employee for services performed in sub-
Saharan Africa, but only if such services are
performed while the principal place of
employment of such employee is within sub-
Saharan Africa, over
``(ii) the sum of the employee fringe
benefit expenses paid or incurred during the
last taxable year ending before the date of the
enactment of this section in connection with
the active conduct of a qualified trade or
business within sub-Saharan Africa (determined
as of the first day of the taxable year
referred to in clause (i)) to or for the
benefit of any employee for services performed
in sub-Saharan Africa (as so determined), but
only if such services are performed while the
principal place of employment of such employee
is within sub-Saharan Africa (as so
determined).
``(B) Employee fringe benefit expenses.--The term
`employee fringe benefit expenses' means with respect
to any taxable year the expenses described in section
936(i)(2)(B).
``(4) Definitions related to depreciation.--
``(A) Depreciation allowances.--The term
`depreciation allowances' means the depreciation
deductions allowable under section 167 to the taxpayer.
``(B) Qualified tangible property.--The term
`qualified tangible property' means any tangible
property--
``(i) substantially all of the use of which
is in sub-Saharan Africa in the active conduct
of a qualified trade or business by the
taxpayer in sub-Saharan Africa,
``(ii) the original use of which in sub-
Saharan Africa commences with the taxpayer
after September 21, 2006, and
``(iii) which is acquired by the taxpayer
by purchase (as defined in section 179(d))
after September 21, 2006, but only if no
written binding contract for the acquisition
was in effect on or before such date.
Such term shall not include any vessel or aircraft,
including any container used in connection with any
such vessel or aircraft, within the meaning of section
863(c)(3).
``(C) Short-, medium-, and long-life qualified
tangible property.--The terms `short-life qualified
tangible property', `medium-life qualified tangible
property', and `long-life qualified tangible property'
shall have the same meaning given such terms,
respectively, by section 936(i)(4)(B), except that in
applying such section the term `qualified tangible
property' shall have the meaning given such term by
subparagraph (B).
``(5) Sub-saharan africa.--The term `sub-Saharan Africa'
means, with respect to any taxable year, the region comprised
of countries for which there is in effect on the first day of
such taxable year a designation as an eligible sub-Saharan
Africa country under section 104 of the African Growth and
Opportunity Act (19 U.S.C. 3703).
``(f) Allocation of Items From Controlled Foreign Corporations to
United States Shareholders.--
``(1) In general.--For purposes of this section, in the
case of a domestic corporation which elects the application of
this section, each of the domestic corporation's specified
items shall be increased by such corporation's allocable share
of each such specified item of each controlled foreign
corporation with respect to which such domestic corporation is
a United States shareholder (as defined in section 951(b)).
``(2) Specified items.--For purposes of this subsection,
the term `specified items' means--
``(A) the taxable income taken into account under
subsection (b)(1),
``(B) the taxes taken into account under subsection
(b)(2),
``(C) the wages taken into account under clauses
(i) and (ii) of subsection (e)(2)(A),
``(D) the expenses taken into account under clauses
(i) and (ii) of subsection (e)(3)(A), and
``(E) the depreciation allowances with respect to
each class of property under subparagraphs (A), (B),
and (C) of subsection (d)(2).
For purposes of determining any specified item of a controlled
foreign corporation under this subsection, such corporation
shall be treated as a domestic corporation electing the
application of this section. For purposes of this paragraph,
taxes do not include any withholding tax paid to a foreign
government with respect to payments by the controlled foreign
corporation to its shareholders.
``(3) Allocable share.--For purposes of this subsection,
the term `allocable share' means, with respect to any item of a
controlled foreign corporation which is owned by any United
States shareholder (as defined in section 951(b)), the
percentage of total combined voting power of all classes of
stock entitled to vote of such foreign corporation which is
owned by such United States shareholder (within the meaning of
section 958(a)), or is considered as owned by such United
States shareholder by applying the rules of ownership of
section 958(b). For purposes of the preceding sentence, section
958(b) shall be applied in the same manner as in determining
whether a United States person is a United States shareholder
within the meaning of section 951(b).
``(4) Dividends from sub-saharan africa business
activity.--Dividends from a controlled foreign corporation and
amounts included in gross income under section 951(a) (and any
taxes associated with such dividends or amounts under section
902 or 960) shall not be taken into account in determining the
taxable income or taxes which are taken into account under
subsections (b) and (c) to the extent such dividends or amounts
are attributable to income described in paragraph (2)(A) and
taken into account under paragraph (1).
``(g) Carryforward.--If the limitation under subsection (d) for any
taxable year exceeds the credit allowed under subsection (a) for such
taxable year, such excess shall be carried to the succeeding taxable
year and added to the limitation under subsection (d) for such
succeeding taxable year. No limitation may be carried forward under
this subsection to any taxable year following the tenth taxable year
after the taxable year in which the limitation arose. For purposes of
the preceding sentence, limitations shall be treated as used on a
first-in first-out basis.
``(h) Credit Not Allowed Against Certain Taxes.--The credit
provided by subsection (a) shall not be allowed against the tax imposed
by--
``(1) section 59A (relating to environmental tax),
``(2) section 531 (relating to the tax on accumulated
earnings),
``(3) section 541 (relating to personal holding company
tax), or
``(4) section 1351 (relating to recoveries of foreign
expropriation losses).
``(i) Administrative Provisions.--For purposes of this title--
``(1) rules similar to the rules of subsections (b), (g),
and (h) of section 936 shall apply in the same manner as if the
credit under this section were a credit under section
936(a)(1)(A) for a domestic corporation to which section
936(a)(4)(A) applies,
``(2) the credit under this section shall be treated in the
same manner as the credit under section 936 (other than for
purposes of subsection (c)), and
``(3) a corporation to which this section applies shall be
treated in the same manner as if it were a corporation electing
the application of section 936.
``(j) Aggregation Rule for Wages and Fringe Benefits.--
``(1) In general.--All members of an expanded affiliated
group shall be treated as a single corporation for purposes
paragraphs (2) and (3) of subsection (e).
``(2) Expanded affiliated group.--For purposes of paragraph
(1), the term `expanded affiliated group' means an affiliated
group as defined in section 1504(a), determined--
``(A) by substituting `more than 50 percent' for
`at least 80 percent' each place it appears, and
``(B) without regard to paragraphs (2) and (4) of
section 1504(b).
``(k) Election.--The election provided in subsection (a) shall be
made at such time and in such manner as the Secretary may by
regulations prescribe. Any such election shall apply for the taxable
year for which made and for each succeeding taxable year. Such election
may be revoked only with the consent of the Secretary.
``(l) Regulations.--The Secretary shall prescribe regulations to
carry out this section, including regulations--
``(1) for determining the credit under this section for
when a country is designated under section 104 of the African
Growth and Opportunity Act as an eligible sub-Saharan Africa
country on a day other than the first day of the taxable year
or if such designation is terminated during the taxable year,
``(2) for determining the allocable share of specified
items (as defined in subsection (f)) of a partnership in the
case of a domestic corporation or a controlled foreign
corporation in which such domestic corporation is a United
States shareholder, or a lower tier entity of either such
corporation, which is a partner in such partnership, and
``(3) to prevent the abuse of this section.
``(m) Termination.--No credit shall be allowed under this section
with respect to any taxable year beginning after December 31, 2015.''.
(b) Conforming Amendments.--
(1) The first sentence of section 55(c)(1) of such Code is
amended by striking ``27(b), and'' and inserting ``27(b),'' and
by inserting before the period at the end the following: ``,
and the Sub-Saharan Africa economic activity credit under
section 30D''.
(2) Section 56(g)(4)(C)(ii)(I) of such Code is amended by
inserting ``30D,'' after ``30A,''.
(3) Section 56(g)(4)(C)(iii)(VI) of such Code is amended by
inserting before the period at the end ``and, notwithstanding
section 30D(i), shall not be treated as including references to
section 30D''.
(4) Section 59(b) of such Code is amended by inserting ``,
30D,'' after ``30A'' each place it appears in the heading and
text.
(5) The table of sections for subpart B of part IV of
subchapter A of chapter 1 of such Code (relating to other
credits) is amended by adding at the end the following new
item:
``Sec. 30D. Sub-Saharan Africa economic activity credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
TITLE II--GENERALIZED SYSTEM OF PREFERENCES (GSP) PROGRAM
SEC. 201. LIMITATIONS ON WAIVERS OF COMPETITIVE NEED LIMITATION.
Section 503(d)(4)(B) of the Trade Act of 1974 (19 U.S.C.
2463(d)(4)(B)) is amended--
(1) by striking ``The President'' and inserting ``(i) The
President'';
(2) by striking ``(i) had'' and inserting ``(I) had'' and
by striking ``(ii) had'' and inserting ``(II) had''; and
(3) by adding at the end the following new clauses:
``(ii) Beginning on January 1, 2007, the President
may not exercise the waiver authority provided under
this subsection with respect to a quantity of an
eligible article of a beneficiary developing country
entered during any calendar year if the President
determines that the aggregate appraised value of the
article of the country that entered duty-free under
this title during the preceding calendar year exceeded
$1,500,000,000.
``(iii) Beginning on January 1, 2007, the President
may not exercise the waiver authority provided under
this subsection with respect to a quantity of any
eligible article of a beneficiary developing country
entered during any calendar year if the President
determines that the per capita gross national income
(GNI) of the country during the preceding calendar year
exceeded $3,400.''.
SEC. 202. EXTENSION OF GSP PROGRAM.
Section 505 of the Trade Act of 1974 (19 U.S.C. 2465) is amended by
striking ``December 31, 2006'' and inserting ``December 31, 2008''.
TITLE III--HAITI
SEC. 301. SHORT TITLE.
This Act may be cited as the ``Haitian Hemispheric Opportunity
through Partnership Encouragement Act of 2006''.
SEC. 302. TRADE BENEFITS FOR HAITI.
(a) In General.--The Caribbean Basin Economic Recovery Act (19
U.S.C. 2701 et seq.) is amended by inserting after section 213 the
following new section:
``SEC. 213A. SPECIAL RULES FOR HAITI.
``(a) Definitions.--In this section:
``(1) Applicable 1-year period.--
``(A) In general.--The term ``applicable 1-year
period'' means each of the 1-year periods described in
subparagraphs (B) through (F).
``(B) Initial applicable 1-year period.--The term
`initial applicable 1-year period' means the 1-year
period beginning on the date of the enactment of the
Haitian Hemispheric Opportunity through Partnership
Encouragement Act of 2006.
``(C) Second applicable 1-year period.--The term
`second applicable 1-year period' means the 1-year
period beginning on the day after the last day of the
initial applicable 1-year period.
``(D) Third applicable 1-year period.--The term
`third applicable 1-year period' means the 1-year
period beginning on the day after the last day of the
second applicable 1-year period.
``(E) Fourth applicable 1-year period.--The term
`fourth applicable 1-year period' means the 1-year
period beginning on the day after the last day of the
third applicable 1-year period.
``(F) Fifth applicable 1-year period.--The term
`fifth applicable 1-year period' means the 1-year
period beginning on the day after the last day of the
fourth applicable 1-year period.
``(2) Enter; entry.--The terms `enter' and `entry' refer to
the entry, or withdrawal from warehouse for consumption, in the
customs territory of the United States.
``(b) Apparel Articles.--
``(1) In general.--In addition to any other preferential
treatment under this title, apparel articles described in
paragraph (2) of a producer or entity controlling production
that are imported directly from Haiti shall enter the United
States free of duty during an applicable 1-year period, subject
to the limitations set forth in paragraphs (2) and (3), if
Haiti has met the requirements of subsections (d) and (e).
``(2) Apparel articles described.--
``(A) For initial applicable 1-year period.--
Apparel articles described in this paragraph are
apparel articles that are wholly assembled, or are
knit-to-shape, in Haiti from any combination of
fabrics, fabric components, components knit-to-shape,
and yarns, that are entered during the initial
applicable 1-year period.
``(B) For other applicable 1-year periods.--
``(i) In general.--In each of the second,
third, fourth, and fifth applicable 1-year
periods, apparel articles described in this
paragraph are apparel articles that are wholly
assembled, or are knit-to-shape, in Haiti from
any combination of fabrics, fabric components,
components knit-to-shape, and yarns, only if,
for each entry in the preceding applicable 1-
year period, the sum of--
``(I) the cost or value of the
materials produced in Haiti or one or
more countries described in
subparagraph (C), or any combination
thereof, plus
``(II) the direct costs of
processing operations (as defined in
section 213(a)(3)) performed in Haiti
or one or more countries described in
subparagraph (C), or any combination
thereof,
is not less than the applicable percentage (as
defined in subparagraph (E)(i)) of the declared
customs value of such apparel articles.
``(ii) Deductions.--In calculating cost or
value under clause (i)(I), there shall be
deducted the cost or value of--
``(I) any foreign materials that
are used in the production of the
apparel articles in Haiti; and
``(II) any foreign materials that
are used in the production of the
materials described in clause (i)(I).
``(C) Countries described.--The countries referred
to in subparagraph (B) are the following:
``(i) The United States.
``(ii) Any country that is a party to a
free trade agreement with the United States
that is in effect on the date of the enactment
of the Haitian Hemispheric Opportunity through
Partnership Encouragement Act of 2006, or that
enters into force under the Bipartisan Trade
Promotion Authority Act of 2002 (19 U.S.C. 3801
et seq.).
``(iii) Any country designated as a
beneficiary country under section 213(b)(5)(B)
of this Act.
``(iv) Any country designated as a
beneficiary country under section 506A(a)(1) of
the Trade Act of 1974 (19 U.S.C. 2466a(a)(1)),
if a finding has been made by the President or
the President's designee, and published in the
Federal Register, that the country has
satisfied the requirements of section 113 of
the African Growth and Opportunity Act (19
U.S.C. 3722).
``(v) Any country designated as a
beneficiary country under section 204(b)(6)(B)
of the Andean Trade Preference Act (19 U.S.C.
3203(b)(6)(B)).
``(D) Annual aggregation.--
``(i) Aggregation.--The requirements under
subparagraph (B) relating to applicable
percentage may also be met for articles of a
producer or an entity controlling production
that enter during an applicable 1-year period
by aggregating--
``(I) the cost or value of
materials under clause (i)(I) of
subparagraph (B), and
``(II) the direct costs of
processing operations under clause
(i)(II) of subparagraph (B),
of all apparel articles of that producer or
entity controlling production that are wholly
assembled, or are knit-to-shape, in Haiti and
are entered during that applicable 1-year
period.
``(ii) Deductions.--In calculating cost or
value under clause (i)(I), there shall be
deducted the cost or value of--
``(I) any foreign materials that
are used in the production of the
apparel articles in Haiti; and
``(II) any foreign materials that
are used in the production of the
materials described in clause (i)(I).
``(iii) Inclusion in calculation of other
articles receiving preferential treatment.--(I)
The entry of a woven apparel article receiving
preferential treatment under paragraph (4) is
not included in an annual aggregation under
clause (i).
``(II) Entries of articles receiving
preferential treatment under paragraph (5) are
not included in an annual aggregation under
clause (i) unless the producer or entity
controlling production elects, at the time the
annual aggregation calculation is made, to
include such entries in such aggregation.
``(III) Entries of apparel articles that
receive preferential treatment under any
provision of law other than this subsection or
are subject to the `General' column 1 rate of
duty under the HTS are not included in an
annual aggregation under clause (i) unless the
producer or entity controlling production
elects, at the time the annual aggregation
calculation is made, to include such entries in
such aggregation.
``(E) Definitions.--In this paragraph:
``(i) Applicable percentage.--The term
``applicable percentage'' means--
``(I) 50 percent or more during the
initial applicable 1-year period, the
second applicable 1-year period, and
the third applicable 1-year period;
``(II) 55 percent or more during
the fourth applicable 1-year period;
and
``(III) 60 percent or more during
the fifth applicable 1-year period.
``(ii) Foreign material.--The term `foreign
material' means a material produced in a
country other than Haiti or any country
described in subparagraph (C).
``(F) Development of procedure to ensure
compliance.--
``(i) In general.--The Bureau of Customs
and Border Protection of the Department of
Homeland Security shall develop and implement
methods and procedures to ensure ongoing
compliance with the requirements set forth in
subparagraphs (B) and (D).
``(ii) Noncompliance.--If the Bureau of
Customs and Border Protection finds that a
producer or an entity controlling production
has not satisfied such requirements in any
applicable 1-year period, then apparel articles
described in subparagraph (B) of that producer
or entity shall be ineligible for preferential
treatment under paragraph (1) during any
succeeding applicable 1-year period until--
``(I) the cost or value of
materials under subclause (I) of
subparagraph (B)(i), plus
``(II) the direct costs of
processing operations under subclause
(II) of subparagraph (B)(i),
of that producer or entity controlling
production, is not less than the applicable
percentage under subparagraph (E)(i), plus 10
percent, of the aggregate declared customs
value of all apparel articles of that producer
or entity controlling production that are
wholly assembled, or are knit-to-shape, in
Haiti and are entered during the preceding
applicable 1-year period.
``(iii) Retroactive application of duty-
free treatment.--If--
``(I) a producer or an entity
controlling production is ineligible
for preferential treatment under
paragraph (1) in an applicable 1-year
period because that producer or entity
controlling production did not satisfy
the requirements of subparagraph (B) or
(D), and
``(II) that producer or entity
controlling production satisfies the
requirements of clause (ii) of this
subparagraph in that applicable 1-year
period,
then, notwithstanding section 514 of the Tariff
Act of 1930 (19 U.S.C. 1514) or any other
provision of law, upon proper request filed
with the Bureau of Customs and Border
Protection before the 90th day after the Bureau
of Customs and Border Protection determines
that subclause (II) applies, the entry of any
articles--
``(aa) that was made during that
applicable 1-year period, and
``(bb) with respect to which there
would have been preferential treatment
under paragraph (1) if the producer or
entity controlling production had
satisfied the requirements in
subparagraph (B) or (D) (as the case
may be),
shall be liquidated or reliquidated as though
such preferential treatment under paragraph (1)
applied to such entry.
``(G) Fabrics not available in commercial
quantities.--
``(i) In general.--For purposes of
determining the applicable percentage under
subparagraph (B) or (D), there may be included
in that percentage--
``(I) the cost of fabrics or yarns
to the extent that apparel articles of
such fabrics or yarns would be eligible
for preferential treatment, without
regard to the source of the fabrics or
yarns, under Annex 401 of the NAFTA;
and
``(II) the cost of fabrics or yarns
that are designated as not being
available in commercial quantities for
purposes of--
``(aa) section
213(b)(2)(A)(v) of this Act,
``(bb) section 112(b)(5) of
the African Growth and
Opportunity Act,
``(cc) section
204(b)(3)(B)(i)(III) or (ii) of
the Andean Trade Preference
Act, or
``(dd) any other provision,
relating to determining whether
a textile or apparel article is
an originating good eligible
for preferential treatment, of
a law that implements a free
trade agreement that enters
into force under the Bipartisan
Trade Promotion Authority Act
of 2002,
without regard to the source of the
fabrics or yarns.
``(ii) Removal of designation of fabrics or
yarns not available in commercial quantities.--
If the President determines that--
``(I) any fabric or yarn described
in clause (i)(I) was determined to be
eligible for preferential treatment, or
``(II) any fabric or yarn described
in clause (i)(II) was designated as not
being available in commercial
quantities,
on the basis of fraud, the President is
authorized to remove the eligibility or
designation (as the case may be) of that fabric
or yarn with respect to articles entered after
such removal.
``(3) Quantitative limitations.--The preferential treatment
described in paragraph (1) shall be extended, during each of
the applicable 1-year periods set forth in the following table,
to not more than the corresponding percentage of the aggregate
square meter equivalents of all apparel articles imported into
the United States in the most recent 12-month period for which
data are available:
The corresponding
``During the: percentage is:
Initial applicable 1-year period.............. 1 percent
Second applicable 1-year period............... 1.25 percent
Third applicable 1-year period................ 1.5 percent
Fourth applicable 1-year period............... 1.75 percent
Fifth applicable 1-year period................ 2 percent.
No preferential treatment shall be provided under paragraph (1)
after the last day of the fifth applicable 1-year period.
``(4) Special rule for woven apparel.--In the case of
apparel articles classifiable under chapter 62 of the HTS
(other than articles classifiable under subheading 6212.10 of
the HTS), as in effect on the date of the enactment of the
Haitian Hemispheric Opportunity through Partnership
Encouragement Act of 2006, that do not qualify for preferential
treatment under paragraph (1) because they do not meet the
percentage requirements under paragraph (2)(B) or (2)(D), the
preferential treatment under paragraph (1)--
``(A) shall be extended, in addition to the
quantities permitted under paragraph (3) to--
``(i) not more than 50,000,000 square meter
equivalents of such apparel articles for the
initial applicable 1-year period;
``(ii) not more than 50,000,000 square
meter equivalents of such apparel articles for
the second applicable 1-year period; and
``(iii) not more than 33,500,000 square
meter equivalents for the third applicable 1-
year period; and
``(B) may not be extended to such apparel articles
after the last day of the third applicable 1-year
period.
``(5) Special rule for brassieres.--The preferential
treatment under paragraph (1) shall, subject to the limitations
under paragraph (3), be extended to any article classifiable
under heading 6212.10 of the HTS, if the article is both cut
and sewn or otherwise assembled in Haiti or the United States,
or both, without regard to the source of the fabric or
components from which the article is made, and if Haiti has met
the requirements of subsections (d) and (e).
``(c) Special Rule for Certain Wire Harness Automotive
Components.--
(1) In general.--Any wire harness automotive component that
is the product or manufacture of Haiti and is imported directly
from Haiti into the customs territory of the United States
shall enter the United States free of duty, during the 5-year
period beginning on the date of the enactment of the Haitian
Hemispheric Opportunity through Partnership Encouragement Act
of 2006, if Haiti has met the requirements of subsection (d)
and if the sum of--
``(A) the cost or value of the materials produced
in Haiti or one or more countries described in
subsection (b)(2)(C), or any combination thereof, plus
``(B) the direct costs of processing operations (as
defined in section 213(a)(3)) performed in Haiti or the
United States, or both,
is not less than 50 percent of the declared customs value of
such wire harness automotive component.
``(2) Wire harness automotive component.--For purposes of
this subsection, the term ``wire harness automotive component''
means any article provided for in subheading 8544.30.00 of the
HTS, as in effect on the date of the enactment of the Haitian
Hemispheric Opportunity through Partnership Encouragement Act
of 2006.
``(d) Eligibility Requirements.--
``(1) In general.--Haiti shall be eligible for preferential
treatment under this section if the President determines and
certifies to Congress that Haiti--
``(A) has established, or is making continual
progress toward establishing--
``(i) a market-based economy that protects
private property rights, incorporates an open
rules-based trading system, and minimizes
government interference in the economy through
measures such as price controls, subsidies, and
government ownership of economic assets;
``(ii) the rule of law, political
pluralism, and the right to due process, a fair
trial, and equal protection under the law;
``(iii) the elimination of barriers to
United States trade and investment, including
by--
``(I) the provision of national
treatment and measures to create an
environment conducive to domestic and
foreign investment;
``(II) the protection of
intellectual property; and
``(III) the resolution of bilateral
trade and investment disputes;
``(iv) economic policies to reduce poverty,
increase the availability of health care and
educational opportunities, expand physical
infrastructure, promote the development of
private enterprise, and encourage the formation
of capital markets through microcredit or other
programs;
``(v) a system to combat corruption and
bribery, such as signing and implementing the
Convention on Combating Bribery of Foreign
Public Officials in International Business
Transactions; and
``(vi) protection of internationally
recognized worker rights, including the right
of association, the right to organize and
bargain collectively, a prohibition on the use
of any form of forced or compulsory labor, a
minimum age for the employment of children, and
acceptable conditions of work with respect to
minimum wages, hours of work, and occupational
safety and health;
``(B) does not engage in activities that undermine
United States national security or foreign policy
interests; and
``(C) does not engage in gross violations of
internationally recognized human rights or provide
support for acts of international terrorism and
cooperates in international efforts to eliminate human
rights violations and terrorist activities.
``(2) Time limit for determination.--The President shall
determine whether Haiti meets the requirements of paragraph (1)
not later than 90 days after the date of the enactment of the
Haitian Hemispheric Opportunity through Partnership
Encouragement Act of 2006.
``(3) Continuing compliance.--If the President determines
that Haiti is not making continual progress in meeting the
requirements described in paragraph (1)(A), the President shall
terminate the preferential treatment under this section.
``(e) Conditions Regarding Enforcement of Circumvention.--
``(1) In general.--The preferential treatment under
subsection (b)(1) shall not apply unless the President
certifies to Congress that Haiti is meeting the following
conditions:
``(A) Haiti has adopted an effective visa system,
domestic laws, and enforcement procedures applicable to
articles described in subsection (b) to prevent
unlawful transshipment of the articles and the use of
counterfeit documents relating to the importation of
the articles into the United States.
``(B) Haiti has enacted legislation or promulgated
regulations that would permit the Bureau of Customs and
Border Protection verification teams to have the access
necessary to investigate thoroughly allegations of
transshipment through such country.
``(C) Haiti agrees to report, on a timely basis, at
the request of the Bureau of Customs and Border
Protection, on the total exports from and imports into
that country of articles described in subsection (b),
consistent with the manner in which the records are
kept by Haiti.
``(D) Haiti agrees to cooperate fully with the
United States to address and take action necessary to
prevent circumvention as provided in Article 5 of the
Agreement on Textiles and Clothing.
``(E) Haiti agrees to require all producers and
exporters of articles described in subsection (b) in
that country to maintain complete records of the
production and the export of such articles, including
materials used in the production, for at least 5 years
after the production or export (as the case may be).
``(F) Haiti agrees to report, on a timely basis, at
the request of the Bureau of Customs and Border
Protection, documentation establishing the country of
origin of articles described in subsection (b) as used
by that country in implementing an effective visa
system.
``(2) Definition of transshipment.--Transshipment within
the meaning of this subsection has occurred when preferential
treatment for a textile or apparel article under this section
has been claimed on the basis of material false information
concerning the country of origin, manufacture, processing, or
assembly of the article or any of its components. For purposes
of this paragraph, false information is material if disclosure
of the true information would mean or would have meant that the
article is or was ineligible for preferential treatment under
this section.
``(f) Regulations.--The President shall issue regulations to carry
out this section not later than 180 days after the date of the
enactment of the Haitian Hemispheric Opportunity through Partnership
Encouragement Act of 2006. The President shall consult with the
Committee on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate in preparing such regulations.''.
SEC. 303. ITC STUDY.
The International Trade Commission shall, not later than 18 months
after the date of the enactment of this Act, submit a report to
Congress on the effects of the amendments made by this Act on the trade
markets and industries, involving textile and apparel articles, of
Haiti, the countries described in clauses (ii) and (iii) of section
213A(b)(2)(C) of the Caribbean Basin Economic Recovery Act (as added by
section 302 of this Act), and the United States.
SEC. 304. SENSE OF CONGRESS ON INTERPRETATION OF TEXTILE AND APPAREL
PROVISIONS FOR HAITI.
It is the sense of the Congress that the executive branch,
particularly the Committee for the Implementation of Textile Agreements
(CITA), the Bureau of Customs and Border Protection of the Department
of Homeland Security, and the Department of Commerce, should interpret,
implement, and enforce the provisions of section 213A(b) of the
Caribbean Basin Economic Recovery Act, as added by section 302 of this
Act, relating to preferential treatment of textile and apparel
articles, broadly in order to expand trade by maximizing opportunities
for imports of such articles from Haiti.
SEC. 305. TECHNICAL AMENDMENTS.
(a) CBI.--Section 213(b)(2)(A)(v) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2703(b)(2)(A)(v)) is amended by adding at the
end the following new subclause:
``(III) If the President determines that
any fabric or yarn was determined to be
eligible for preferential treatment under
subclause (I) on the basis of fraud, the
President is authorized to remove that
designation from that fabric or yarn with
respect to articles entered after such
removal.''.
(b) ATPA.--Section 204(b)(3)(B) of the Andean Trade Preference Act
(19 U.S.C. 3202(b)(3)(B)) is amended by adding at the end the following
new clause:
``(viii) Removal of designation of fabrics
or yarns not available in commercial
quantities.--If the President determines that
any fabric or yarn was determined to be
eligible for preferential treatment under
clause (i)(III) or (ii) on the basis of fraud,
the President is authorized to remove that
designation from that fabric or yarn with
respect to articles entered after such
removal.''.
SEC. 306. EFFECTIVE DATE.
This title and the amendments made by this title apply to articles
entered, or withdrawn from warehouse for consumption, on or after the
15th day after the date of the enactment of this Act.
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Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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