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H.R. 4819 (ih) To amend the Wildlife Services Program of the Department of Agriculture [Introduced in House] ...
106th CONGRESS 2d Session H. R. 4818 To promote international monetary stability and to share seigniorage with officially dollarized countries. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES July 10, 2000 Mr. Ryan of Wisconsin introduced the following bill; which was referred to the Committee on Banking and Financial Services _______________________________________________________________________ A BILL To promote international monetary stability and to share seigniorage with officially dollarized countries. 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 ``International Monetary Stability Act of 2000''. SEC. 2. FINDINGS; STATEMENT OF POLICY. (a) Findings.--Congress finds that-- (1) monetary stability is a prerequisite for strong long- term economic growth and increasing standards of living; (2) many emerging market countries lack monetary stability and have therefore suffered economic and financial problems that suppress economic growth and living standards, including financial fragility, inflation expectations that are built into labor markets, and high and volatile inflation rates and interest rates; (3) many emerging market countries have used pegged exchange rate systems to try to foster monetary stability and have experienced temporary periods of higher economic growth and lower inflation followed by drastic balance of payments problems, steep devaluations, and major losses in international reserves; (4) emerging market countries that have adopted currency board systems have enjoyed higher rates of economic growth and lower interest rates, although interest rates have remained higher for loans denominated in the domestic currency than in the anchor currency; (5) since the financial and economic crisis that struck Asia in 1997, there has been growing international interest in official dollarization, whereby a country would substantially or totally eliminate its domestic currency and adopt the United States dollar as legal tender; (6) official dollarization would let a country import monetary stability, thereby bringing inflation and interest rates down toward the levels of the United States; (7) official dollarization would make it impossible for governments to print domestic currency to pay for government programs, thereby promoting fiscal discipline; (8) official dollarization would make it easier for people to conduct financial transactions in the currency they use for daily commerce, thereby promoting deeper financial markets; (9) lower inflation, interest rates, and inflation and interest-rate volatility, greater fiscal discipline, and deeper financial markets would increase long-term economic growth and raise living standards in emerging market countries; (10) by increasing trade and investment flows and decreasing the need for foreign assistance, greater economic growth and higher living standards abroad would serve the interests of the United States; (11) countries that become officially dollarized would lose seigniorage (the profit from issuing a currency) and this is a significant barrier to official dollarization; (12) official dollarization would increase the seigniorage earnings of the United States; (13) it would be mutually beneficial for the United States to encourage official dollarization by offering to share with countries that become officially dollarized a portion of the extra seigniorage earnings that the United States would earn; and (14) encouraging official dollarization complements ongoing efforts by the United States to strengthen the international financial architecture. (b) Statement of Policy.--It is the policy of the United States that-- (1) the Federal Reserve System has no obligation to act as a lender of last resort to the financial systems of dollarized countries; (2) the Federal Reserve System has no obligation to consider the economic conditions of dollarized countries when formulating or implementing monetary policy; (3) the supervision of financial institutions in dollarized countries remains the responsibility of those countries; and (4) in the absence of certification by the Secretary of the Treasury under section 3, countries are free to dollarize unilaterally. SEC. 3. CERTIFICATION. (a) In General.--The Secretary of the Treasury (in this Act referred to as the ``Secretary'') may certify a country as officially dollarized, after consideration of whether the country has-- (1) ceased issuing a domestic paper currency; (2) destroyed the materials (such as plates and dies) used to produce such currency; (3) extinguished a substantial portion of the domestic currency in circulation, with plans to extinguish as much of it as feasible; (4) ended the legal tender status of the domestic currency; (5) granted legal tender status to the United States dollar; (6) ceased accepting domestic currency, except in exchange for dollars; (7) ceased making government payments in the domestic currency; (8) substantially redenominated its prices, assets, and liabilities in dollars; (9) either opened its banking system to foreign competition or met international banking standards (such as those described in the Core Principles for Effective Banking Supervision issued by the Basle Committee on Banking Supervision of the Bank for International Settlements); (10) engaged in advance consultations with the Secretary to determine whether the country is a good candidate for official dollarization; and (11) cooperated with the United States regarding the prevention of money laundering and counterfeiting. (b) Other Considerations.--In deciding whether to certify a country as officially dollarized under this section, the Secretary may consider any additional factors that the Secretary deems relevant. (c) Decision by Secretary.--The absence of any 1 or more of the considerations described in subsection (a) or (b) does not preclude the Secretary from certifying a country as officially dollarized. (d) Statement by Secretary.--The Secretary shall issue a written statement upon certification of a country under this section that explains why that country has been certified. The Secretary may not certify United States territories or commonwealths as officially dollarized. SEC. 4. PAYMENTS. (a) In General.--Starting with the first business day of the fourth full calendar month following the date of certification of a country under section 3, the Secretary shall, every 3 calendar months, pay a country certified under section 3 an amount equal to the following: (C)(i)(25%)(P2/P1)(85%). (b) Definitions.--In this Act the following definitions shall apply: (1) ``C'' = the lesser of-- (A) the dollar amount of Federal Reserve Notes that the country receiving the payment acquired from the Federal Reserve System for purposes of official dollarization under this Act; or (B) the dollar value of the domestic currency in circulation in the country receiving the payment prior to the certification of that country under section 3. (2) ``i'' = average yield to maturity on 90-day Treasury bills in the most recent full 3-month calendar period occurring before the date of payment under subsection (a), except that if 90-day Treasury bills are discontinued, the Secretary may substitute an appropriate alternative interest rate. (3) ``P2'' = the nonseasonally adjusted United States City Average All Items Consumer Price Index for All Urban Consumers (referred to as ``CPI-U'') for the most recent month occurring before the date of payment under subsection (a) for which data are available, except that if this price measure is discontinued or, in the judgment of the Secretary, altered in a manner that is materially adverse to the interests of the United States, the Secretary may, after consultation with the Bureau of Labor Statistics, substitute an appropriate alternative index. (4) ``P1'' = the nonseasonally adjusted United States City Average All Items Consumer Price Index for All Urban Consumers (CPI-U) for the month occurring before the date of certification under section 3, except that if this price measure is discontinued or, in the judgment of the Secretary, altered in a manner that is materially adverse to the interests of the United States, the Secretary may, after consultation with the Bureau of Labor Statistics, substitute an appropriate alternative index. (c) Faith of the United States Government.--Except as otherwise provided in this Act, the faith of the United States Government is pledged to pay, in legal tender, any payments due under this Act. (d) Source of Funds.--The Secretary may make payments under this Act out of revenue from deposits of earnings by Federal Reserve Banks. (e) Reductions in Payments.--If, in the judgment of the Secretary, the amount of dollars in circulation in a certified country is such that payments under this Act would impose a net loss of revenue on the United States Government, the Secretary may reduce the payment, but only after the Secretary has issued a written public statement explaining the reasons for doing so. SEC. 5. PREVIOUSLY DOLLARIZED COUNTRIES. (a) In General.-- (1) Limitation.--The Republic of the Marshall Islands, the Federated States of Micronesia, the Republic of Palau, Panama, East Timor, the Turks and Caicos Islands, and the British Virgin Islands may not be certified as officially dollarized or issued payments under this Act until 10 percent of the combined quarterly payments made to countries other than those listed in this paragraph equals or exceeds the total combined quarterly payments that would be made to the countries listed in this paragraph upon their being certified. (2) Payment calculation.--Upon certification under section 3, each of the countries listed in paragraph (1) shall receive payments in accordance with section 4, except that for purposes of the countries listed in paragraph (1), ``C'' = (4%)(Y), where ``Y'' = nominal dollar gross domestic product for the country receiving the payment, as calculated by the World Bank (or other recognized statistical authority), as of September 30, 1999, for calendar year 1997. SEC. 6. PAYMENT CANCELLATION. (a) In General.--The United States shall cease making payments to a country under this Act if the United States declares war on the country, or if the Secretary issues a written public statement that the country is no longer officially dollarized in accordance with this Act, which statement shall list the reasons for such a finding. (b) Considerations.--In making a determination under this section, the Secretary shall consider those factors listed in section 3(a) and any additional factors that the Secretary deems relevant. SEC. 7. REGULATIONS. The Secretary and the Board of Governors of the Federal Reserve System may issue regulations appropriate to carry out this Act. SEC. 8. EXPENSES. Amounts to pay necessary expenses to make payments under this Act are appropriated to the Secretary of the Treasury. <all>
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