[Pages H3513-H3514]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

{time} 1800
ALIGNING SEC REGULATIONS FOR THE WORLD BANK'S INTERNATIONAL DEVELOPMENT
ASSOCIATION ACT

Mr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 1764) to accord securities issued by the
International Development Association the same exemption from the
securities laws that applies to the securities of other multilateral
development banks in which the United States is a member, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 1764

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Aligning SEC Regulations for
the World Bank's International Development Association Act''.

SEC. 2. EXEMPTION OF SECURITIES OF THE INTERNATIONAL
DEVELOPMENT ASSOCIATION FROM THE SECURITIES
LAWS.

(a) In General.--The International Development Association
Act (22 U.S.C. 284 et seq.) is amended by adding at the end
the following:

``SEC. 33. EXEMPTION OF SECURITIES OF THE INTERNATIONAL
DEVELOPMENT ASSOCIATION FROM THE SECURITIES
LAWS.

``(a) Exemption From Securities Laws; Reports to Securities
and Exchange Commission.--Any securities issued by the
Association (including any guaranty by the Association,
whether or not limited in scope) and any securities
guaranteed by the Association as to both principal and
interest shall be deemed to be exempted securities within the
meaning of section 3(a)(2) of the Securities Act of 1933 (15
U.S.C. 77c(a)(2)) and section 3(a)(12) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(12)). The Association
shall file with the Securities and Exchange Commission such
annual and other reports with regard to such securities as
the Commission shall determine to be appropriate in view of
the special character of the Association and its operations
and necessary in the public interest or for the protection of
investors.
``(b) Authority of Securities and Exchange Commission to
Suspend Exemption; Reports to Congress.--The Securities and
Exchange Commission, acting in consultation with the National
Advisory Council on International Monetary and Financial
Problems, is authorized to suspend the provisions of
subsection (a) of this section at any time as to any or all
securities issued or guaranteed by the Association during the
period of such suspension. The Commission shall include in
its annual reports to the Congress such information as it
shall deem advisable with regard to the operations and effect
of this section.''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect 30 days after the date of enactment of this Act.
(2) Exception.--Notwithstanding paragraph (1), the
amendment made by subsection (a) shall not take effect if,
before the effective date described under paragraph (1), the
Secretary of the Treasury reports to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate that the International Development Association is
providing financial assistance to any country the government
of which the Secretary of State has determined, for purposes
of section 6(j) of the Export Administration Act of 1979,
section 620A of the Foreign Assistance Act of 1961, or
section 40 of the Arms Export Control Act, to be a government
that has repeatedly provided support for acts of
international terrorism.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Arkansas (Mr. Hill) and the gentlewoman from California (Ms. Waters)
each will control 20 minutes.
The Chair recognizes the gentleman from Arkansas.

General Leave

Mr. HILL of Arkansas. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Arkansas?
There was no objection.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in strong support of H.R. 1764, the Aligning SEC
Regulations for the World Bank's International Development Association
Act, the bill offered by the gentlewoman from California (Ms. Waters).
Mr. Speaker, this legislation classifies securities issued by the IDA
as exempted securities, subject to appropriate reporting requirements
as determined by the Securities and Exchange Commission.
This change would place the IDA on equal regulatory footing with the
other World Bank divisions such as the Inter-American Development Bank,
the Asian Development Bank, the European Bank for Reconstruction and
Development, and the African Development Bank.
Prior to 2018, the IDA did not issue debt in the securities markets.
Its funding came primarily from donor contributions and repayments on
past loans.
As the IDA evolves to meet the needs of the world's poorest nations,
it has entered the capital markets to expand its resources and its
impact.
It is only logical and fair that its securities receive the same
exempted status consistent with previous treatment of multilateral
development bank securities.
Supporting IDA's access to efficient financing would reflect the
United States' leadership in global development and our commitment to
the world's most vulnerable populations.
Ms. Waters' bill is bipartisan. It is practical. It is overdue. I
urge all of my colleagues to join me in supporting this bill.
Mr. Speaker, I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of my bill, H.R. 1764, the Aligning
SEC Regulations for the World Bank's International Development Act.
The International Development Association, IDA, is an example of both
the value of our multilateral institutions and America's leadership in
these organizations. The IDA is the World Bank's lending arm, and it is
one of the most effective tools we have to combat poverty and
instability worldwide.
The IDA offers grants and low-cost or no-cost lending to help the
poorest nations to invest in their futures, improve the lives of their
citizens, and create more prosperous communities for the long term.
The United States, as the largest donor to the IDA, helps to direct
where and how these funds are used. My bill would exempt IDA securities
from Securities and Exchange Commission regulations, just as other
World Bank arms have been exempt for decades. This ensures that the IDA
can continue raising capital efficiently, allowing it to direct
resources that are needed the most.
This is needed because in April 2018, the IDA began issuing
securities on the bond market which are also distributed in the United
States. These securities are not exempted from the SEC's registration
and regulatory framework.
Congress passed legislation in 1945 and 1955, exempting other arms of
the World Bank, including the International Bank for Reconstruction and
Development and the International Finance Corporation, from SEC's
regulations.
Importantly, this gave the SEC the ability to recall these exemptions
if the SEC finds that they are harmful to U.S. investors. Moreover,
many other multilateral development banks of which the U.S. is a member
are exempt from the SEC regulations.
SEC exemptions for these securities are warranted as they are backed
by the commitments, or equities, of the largest economies of the world
including the United States.
These securities tend to be AAA rated which is the highest investment
grade, making them safe investments for all investors.
Harmonizing the exemption regime available for MDBs with that of the
IDA would enhance the IDA's ability to raise capital in the United
States without weakening investor protection. In turn, it will be able
to use these proceeds to provide increased funding for the world's
poorest countries. Importantly, too, the bill retains the SEC's ability
to revoke these exemptions should it find them harmful to U.S.
investors.

[[Page H3514]]

One additional but important note is this bill comes to the floor as
we await the 6-month review mandated by Donald Trump's February 4
executive order directing the Secretary of State to determine in which
international organizations the U.S. should continue or from which it
should withdraw. Inexplicably, that includes World Bank among other
international financial institutions.
The United States has long been a leader in IFIs like the World Bank.
Our leadership in these institutions provides us with a strong voice to
improve global economic stability, decrease poverty, and boost
prosperity.
Through our membership, we advocate for high standards, push for
transparency, and drive economic reforms that benefit not only
developing nations but our own national security, too. It is wrong,
even unconscionable, that Donald Trump would put America's leadership
in question. It is the kind of thing that only one beholden to Russia
and China would do.
Mr. Speaker, I urge my Republican colleagues to speak out against the
President's suggestion that we retreat from the world stage and loudly
oppose any outcome of this review that will harm America's economic
leadership across the globe.
Mr. Speaker, I urge my colleagues to support this bill, and I reserve
the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I include in the Record the CBO
estimate on this bill.

H.R. 1764, ALIGNING SEC REGULATIONS FOR THE WORLD BANK'S INTERNATIONAL
DEVELOPMENT ASSOCIATION ACT, AS REPORTED BY THE HOUSE COMMITTEE ON
FINANCIAL SERVICES ON MARCH 21, 2025
------------------------------------------------------------------------
By fiscal year, millions of
dollars--
-------------------------------
2025 2025-2030 2025-2035
------------------------------------------------------------------------
Direct Spending (Outlays)............... 0 0 0
Revenues................................ 0 0 0
Increase or Decrease (-) in the Deficit. 0 0 0
Spending Subject to Appropriation * * **
(Outlays)..............................
------------------------------------------------------------------------
* = between zero and $500,000.
** = not estimated.

Increases net direct spending in any of the four
consecutive 10-year periods beginning in 2036? No.
Increases on-budget deficits in any of the four consecutive
10-year periods beginning in 2036? No.
Statutory pay-as-you-go procedures apply? No.
Mandate Effects:
Contains intergovernmental mandate? No.
Contains private-sector mandate? Yes, Under threshold.
H.R. 1764 would exempt the International Development
Association at the World Bank from the requirement to
register securities that it issues or guarantees with the
Securities and Exchange Commission (SEC). The exemption would
not take effect if the Department of the Treasury determines
that the association has provided financial assistance to any
country identified by the Department of State as supporting
terrorism. The SEC could require the association to file
additional reports and, in consultation with the National
Advisory Council on International Monetary and Financial
Problems, suspend the exemption at any time.
Using information about the cost of similar provisions, CBO
estimates that it would cost the SEC less than $500,000 to
update rules and process any additional disclosures by the
Association. Moreover, because the SEC is authorized to
collect fees each year to offset its annual appropriation,
CBO expects that the net effect on discretionary spending
over the 2025-2030 period would be negligible, assuming
appropriation actions consistent with that authority.
If the SEC increases fees to offset the costs associated
with implementing the bill, H.R. 1764 would increase the cost
of an existing mandate on private entities required to pay
those assessments. CBO estimates that the incremental cost of
the mandate would be small and would fall well below the
annual threshold for private-sector mandates established in
the Unfunded Mandates Reform Act (UMRA) ($198 million in
2023, adjusted annually for inflation).
H.R. 1764 contains no intergovernmental mandates as defined
in UMRA.
The CBO staff contacts for this estimate are Aurora Swanson
(for federal costs) and Rachel Austin (for mandates). The
estimate was reviewed by H. Samuel Papenfuss, Deputy Director
of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.

Mr. HILL of Arkansas. Mr. Speaker, I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, this bill simply exempts IDA securities from SEC
regulations, aligning with other World Bank arms which have been exempt
for decades.
By making IDA securities equal to similar funds, the World Bank will
have additional funds that can be applied to its mission to help the
poorest of nations.
The United States has long been a leader in the international
financial institutions, and this is one way that we can protect our
leadership and stretch the value of our contributions to the World
Bank.
Mr. Speaker, I urge my colleagues to support this bill, and I yield
back the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I urge a ``yes'' vote on this very
practical bill, and I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Goldman of Texas). The question is on
the motion offered by the gentleman from Arkansas (Mr. Hill) that the
House suspend the rules and pass the bill, H.R. 1764, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.

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