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Foreign Assistance Act Part V – Debt Reduction for
Developing Countries with Tropical Forests
SEC. 801
This part may be cited as the ``Tropical Forest
Conservation Act of 1998''.
SEC. 802 FINDINGS AND PURPOSES.
(a) FINDINGS The Congress finds the following:
(1) It is the established policy of the United States to support
and seek protection of tropical forests around the world.
(2) Tropical forests provide a wide range of benefits to humankind
by-
(A) harboring a major share of the Earth's biological and
terrestrial resources, which are the basis for developing
pharmaceutical products and revitalizing agricultural
crops;
(B) playing a critical role as carbon sinks in reducing
greenhouse gases in the atmosphere, thus moderating potential
global climate change; and
(C) regulating hydrological cycles on which far-flung agricultural
and coastal resources depend.
(3) International negotiations and assistance programs to
conserve forest resources have proliferated over the past decade,
but the rapid rate of tropical deforestation continues
unabated.
(4) Developing countries with urgent needs for investment
and capital for development have allocated a significant
amount of their forests to logging concessions.
(5) Poverty and economic pressures on the populations of developing
countries have, over time, resulted in clearing of vast
areas of forest for conversion to agriculture, which is often
unsustainable in the poor soils underlying tropical forests.
(6) Debt reduction can reduce economic pressures on developing
countries and result in increased protection for tropical forests.
(7) Finding economic benefits to local communities from sustainable
uses of tropical forests is critical to the protection of
tropical forests.
(b) PURPOSES.-The purposes of this part are-
(1) to recognize the values received by United States citizens
from protection of tropical forests;
(2) to facilitate greater protection of tropical forests (and to
give priority to protecting tropical forests with the highest levels
of biodiversity and under the most severe threat) by providing
for the alleviation of debt in countries where tropical forests
are located, thus allowing the use of additional resources
to protect these critical resources and reduce economic pressures
that have led to deforestation;
(3) to ensure that resources freed from debt in such countries
are targeted to protection of tropical forests and their associated
values; and
(4) to rechannel existing resources to facilitate the protection
of tropical forests.
SEC. 803 DEFINITIONS.
As used in this part:
(1) ADMINISTERING BODY.-The term ''administering body''
means the entity provided for in section 809(c).
(2) APPROPRIATE CONGRESSIONAL COMMITTEES.-The term
''appropriate congressional committees'' means-
(A) the Committee on International Relations and the
Committee on Appropriations of the House of Representatives;
and
(B) the Committee on Foreign Relations and the Committee
on Appropriations of the Senate.
(3) BENEFICIARY COUNTRY.-The term ''beneficiary country''
means an eligible country with respect to which the authority
of section 806(a)(1), section 807(a)(1), or paragraph (1) or (2) of
section 808(a) is exercised.
(4) BOARD.-The term ''Board'' means the board referred to
in section 811.,
(5) DEVELOPING COUNTRY WITH A TROPICAL FOREST.-The
term ''developing country with a tropical forest'' means-
(A)(i) a country that has a per capita income of $725 or
less in 1994 United States dollars (commonly referred to
as ''low-income country''), as determined and adjusted on
an annual basis by the International Bank for Reconstruction
and Development in its World Development Report; or
(ii) a country that has a per capita income of more than
$725 but less than $8,956 in 1994 United States dollars
(commonly referred to as ''middle-income country''), as determined
and adjusted on an annual basis by the International
Bank for Reconstruction and Development in its
World Development Report; and
(B) a country that contains at least one tropical forest
that is globally outstanding in terms of its biological diversity
or represents one of the larger intact blocks of tropical
forests left, on a regional, continental, or global scale.
(6) ELIGIBLE COUNTRY.-The term ''eligible country'' means a
country designated by the President in accordance with section
805.
(7) TROPICAL FOREST AGREEMENT.-The term ''Tropical Forest
Agreement'' or ''Agreement'' means a Tropical Forest Agreement
provided for in section 809.
(8) TROPICAL FOREST FACILITY.-The term ''Tropical Forest
Facility'' or ''Facility'' means the Tropical Forest Facility established
in the Department of the Treasury by section 804.
(9) TROPICAL FOREST FUND.-The term ''Tropical Forest
Fund'' or ''Fund'' means a Tropical Forest Fund provided for in
section 810.
SEC. 804 ESTABLISHMENT OF THE FACILITY.
There is established in the Department of the Treasury an entity
to be known as the ''Tropical Forest Facility'' for the purpose of
providing for the administration of debt reduction in accordance with
this part.
SEC. 805 ELIGIBILITY FOR BENEFITS.
(a) IN GENERAL.-To be eligible for benefits from the Facility
under this part, a country shall be a developing country with a
tropical forest-
(1) whose government meets the requirements applicable to
Latin American or Caribbean countries under paragraphs (1)
through (5) and (7) of section 703(a) of this Act; and
(2) that has put in place 1167 investment reforms, as evidenced
by the conclusion of a bilateral investment treaty with
the United States, implementation of an investment sector
loan with the Inter-American Development Bank, World Banksupported
investment reforms, or other measures, as appropriate.
(b) ELIGIBILITY DETERMINATIONS.-
(1) IN GENERAL.-Consistent with subsection (a), the President
shall determine whether a country is eligible to receive
benefits under this part.
(2) CONGRESSIONAL NOTIFICATION.-The President shall notify
the appropriate congressional committees of his intention
to designate a country as an eligible country at least 15 days
in advance of any formal determination.
SEC. 806 REDUCTION OF DEBT OWED TO THE UNITED STATES AS
A RESULT OF CONCESSIONAL LOANS UNDER THE FOREIGN
ASSISTANCE ACT OF 1961.
(a) AUTHORITY TO REDUCE DEBT.-
(1) AUTHORITY.-The President may reduce the amount owed
to the United States (or any agency of the United States) that
is outstanding as of January 1, 1998, as a result of
concessional loans made to an eligible country by the United
States under part I of this Act, chapter 4 of part II of this Act,
or predecessor foreign economic assistance legislation.
(2) AUTHORIZATION OF APPROPRIATIONS.-For the cost (as defined
in section 502(5) of the Federal Credit Reform Act of
1990) for the reduction of any debt pursuant to this section,
there are authorized to be appropriated to the President-
(A) $25,000,000 for fiscal year 1999;
(B) $75,000,000 for fiscal year 2000; and
(C) $100,000,000 for fiscal year 2001.
(3) CERTAIN PROHIBITIONS INAPPLICABLE.-
(A) IN GENERAL.-A reduction of debt pursuant to this
section shall not be considered assistance for purposes of
any provision of law limiting assistance to a country.
(B) ADDITIONAL REQUIREMENT.-The authority of this
section may be exercised notwithstanding section 620(r) of
this Act or section 321 of the International Development
and Food Assistance Act of 1975.
(b) IMPLEMENTATION OF DEBT REDUCTION.-
(1) IN GENERAL.-Any debt reduction pursuant to subsection
(a) shall be accomplished at the direction of the Facility by the
exchange of a new obligation for obligations of the type referred
to in subsection (a) outstanding as of the date specified
in subsection (a)(1).
(2) EXCHANGE OF OBLIGATIONS.-
(A) IN GENERAL.-The Facility shall notify the agency
primarily responsible for administering part I of this Act
of an agreement entered into under paragraph (1) with an
eligible country to exchange a new obligation for outstanding
obligations.
(B) ADDITIONAL REQUIREMENT.-At the direction of the
Facility, the old obligations that are the subject of the
agreement shall be canceled and a new debt obligation for
the country shall be established relating to the agreement,
and the agency primarily responsible for administering
part I of this Act shall make an adjustment in its accounts
to reflect the debt reduction.
(c) ADDITIONAL TERMS AND CONDITIONS.-The following additional
terms and conditions shall apply to the reduction of debt
under subsection (a)(1) in the same manner as such terms and conditions
apply to the reduction of debt under section 704(a)(1) of this
Act:
(1) The provisions relating to repayment of principal under
section 705 of this Act.
(2) The provisions relating to interest on new obligations
under section 706 of this Act.
(d) 1169 AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEARS
AFTER FISCAL YEAR 2001.-For the cost (as defined in section
502(5) of the Federal Credit Reform Act of 1990) for the reduction
of any debt pursuant to this section or section 807, there are authorized
to be appropriated to the President the following:
(1) $50,000,000 for fiscal year 2002.
(2) $75,000,000 for fiscal year 2003.
(3) $100,000,000 for fiscal year 2004.
SEC. 807 REDUCTION OF DEBT OWED TO THE UNITED STATES AS
A RESULT OF CREDITS EXTENDED UNDER TITLE I OF THE
AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE
ACT OF 1954.
(a) AUTHORITY TO REDUCE DEBT.-
(1) AUTHORITY.-Notwithstanding any other provision of law,
the President may reduce the amount owed to the United
States (or any agency of the United States) that is outstanding
as of January 1, 1998, as a result of any credits extended
under title I of the Agricultural Trade Development and Assistance
Act of 1954 (7 U.S.C. 1701 et seq.) to a country eligible
for benefits from the Facility.
(2) AUTHORIZATION OF APPROPRIATIONS.-
(A) IN GENERAL.-For the cost (as defined in section
502(5) of the Federal Credit Reform Act of 1990) for the
reduction of any debt pursuant to this section, there are authorized
to be appropriated to the President-
(i) $25,000,000 for fiscal year 1999;
(ii) $50,000,000 for fiscal year 2000; and
(iii) $50,000,000 for fiscal year 2001.
(B) LIMITATION.-The authority provided by this section
shall be available only to the extent that appropriations
for the cost (as defined in section 502(5) of the Federal
Credit Reform Act of 1990) of the modification of any debt
pursuant to this section are made in advance.
(b) IMPLEMENTATION OF DEBT REDUCTION.-
(1) IN GENERAL.-Any debt reduction pursuant to subsection
(a) shall be accomplished at the direction of the Facility by the
exchange of a new obligation for obligations of the type referred
to in subsection (a) outstanding as of the date specified
in subsection (a)(1).
(2) EXCHANGE OF OBLIGATIONS.-
(A) IN GENERAL.-The Facility shall notify the Commodity
Credit Corporation of an agreement entered into under
paragraph (1) with an eligible country to exchange a new
obligation for outstanding obligations.
(B) ADDITIONAL REQUIREMENT.-At the direction of the
Facility, the old obligations that are the subject of the
agreement shall be canceled and a new debt obligation
shall be established for the country relating to the agreement,
and the Commodity Credit Corporation shall make
an adjustment in its accounts to reflect the debt reduction.
(c) ADDITIONAL TERMS AND CONDITIONS.-The following additional
terms and conditions shall apply to the reduction of debt
under subsection (a)(1) in the same manner as such terms and conditions
apply to the reduction of debt under section 604(a)(1) of the
Agricultural Trade Development and Assistance Act of 1954 (7
U.S.C. 1738c):
(1) The provisions relating to repayment of principal under
section 605 of such Act.
(2) The provisions relating to interest on new obligations
under section 606 of such Act.
SEC. 808 AUTHORITY TO ENGAGE IN DEBT-FOR-NATURE SWAPS
AND DEBT BUYBACKS.
(a) LOANS AND CREDITS ELIGIBLE FOR SALE, REDUCTION, OR CANCELLATION.-
(1) DEBT-FOR-NATURE SWAPS.-
(A) IN GENERAL.-Notwithstanding any other provision
of law, the President may, in accordance with this section,
sell to any eligible purchaser described in subparagraph
(B) any concessional loans described in section 806(a)(1) or
any credits described in section 807(a)(1), or on receipt of
payment from an eligible purchaser described in subparagraph
(B), reduce or cancel such loans (or credits) or portion
thereof, only for the purpose of facilitating a debt-for-nature
swap to support eligible activities described in section
809(d).
(B) ELIGIBLE PURCHASER DESCRIBED.-A loan or credit
may be sold, reduced, or canceled under subparagraph (A)
only to a purchaser who presents plans satisfactory to the
President for using the loan or credit for the purpose of engaging
in debt-for-nature swaps to support eligible activities
described in section 809(d).
(C) CONSULTATION REQUIREMENT.-Before the sale under
subparagraph (A) to any eligible purchaser described in
subparagraph
(B), or any reduction or cancellation under
such subparagraph (A), of any loan or credit made to an
eligible country, the President shall consult with the country
concerning the amount of loans or credits to be sold,
reduced, or canceled and their uses for debt-for-nature
swaps to support eligible activities described in section
809(d).
(D) AUTHORIZATION OF APPROPRIATIONS.-For the cost
(as defined in section 502(5) of the Federal Credit Reform
Act of 1990) for the reduction of any debt pursuant to subparagraph
(A), amounts authorized to be appropriated
under sections 806(a)(2), 807(a)(2), and 806(d) 1172 shall be
made available for such reduction of debt pursuant to subparagraph
(A).
(2) DEBT BUYBACKS.-Notwithstanding any other provision of
law, the President may, in accordance with this section, sell to
any eligible country any concessional loans described in section
806(a)(1) or any credits described in section 807(a)(1), or on receipt
of payment from an eligible country, reduce or cancel
such loans (or credits) or portion thereof, only for the purpose
of facilitating a debt buyback by an eligible country of its own
qualified debt, only if the eligible country uses an additional
amount of the local currency of the eligible country, equal to
not less than the lessor of 40 percent of the price paid for such
debt by such eligible country, or the difference between the
price paid for such debt and the face value of such debt, to support
eligible activities described in section 809(d).
(3) LIMITATION.-The authority provided by paragraphs (1)
and (2) shall be available only to the extent that appropriations
for the cost (as defined in section 502(5) of the Federal
Credit Reform Act of 1990) of the modification of any debt pursuant
to such paragraphs are made in advance.
(4) TERMS AND CONDITIONS.-Notwithstanding any other provision
of law, the President shall, in accordance with this section,
establish the terms and conditions under which loans and
credits may be sold, reduced, or canceled pursuant to this section.
(5) ADMINISTRATION.-
(A) IN GENERAL.-The Facility shall notify the administrator
of the agency primarily responsible for administering
part I of this Act or the Commodity Credit Corporation,
as the case may be, of eligible purchasers described
in paragraph (1)(B) that the President has determined to
be eligible under paragraph (1), and shall direct such agency
or Corporation, as the case may be, to carry out the
sale, reduction, or cancellation of a loan pursuant to such
paragraph.
(B) ADDITIONAL REQUIREMENT.-Such agency or Corporation,
as the case may be, shall make an adjustment in its
accounts to reflect the sale, reduction, or cancellation.
(b) DEPOSIT OF PROCEEDS.-The proceeds from the sale, reduction,
or cancellation of any loan sold, reduced, or canceled pursuant
to this section shall be deposited in the United States Government
account or accounts established for the repayment of such loan.
SEC. 809 TROPICAL FOREST AGREEMENT.
(a) AUTHORITY.-
(1) IN GENERAL.-The Secretary of State is authorized, in
consultation with other appropriate officials of the Federal
Government, to enter into a Tropical Forest Agreement with
any eligible country concerning the operation and use of the
Fund for that country.
(2) CONSULTATION.-In the negotiation of such an Agreement,
the Secretary shall consult with the Board in accordance
with section 811.
(b) CONTENTS OF AGREEMENT.-The requirements contained in
section 708(b) of this Act (relating to contents of an agreement)
shall apply to an Agreement in the same manner as such requirements
apply to an Americas Framework Agreement.
(c) ADMINISTERING BODY.-
(1) IN GENERAL.-Amounts disbursed from the Fund in each
beneficiary country shall be administered by a body constituted
under the laws of that country.
(2) COMPOSITION.-
(A) IN GENERAL.-The administering body shall consist
of-
(i) one or more individuals appointed by the United
States Government;
(ii) one or more individuals appointed by the government
of the beneficiary country; and
(iii) individuals who represent a broad range of-
(I) environmental nongovernmental organizations
of, or active in, the beneficiary country;
(II) local community development nongovernmental
organizations of the beneficiary country;
and
(III) scientific, academic, or forestry organizations
of the beneficiary country.
(B) ADDITIONAL REQUIREMENT.-A majority of the members
of the administering body shall be individuals described
in subparagraph (A)(iii).
(3) RESPONSIBILITIES.-The requirements contained in section
708(c)(3) of this Act (relating to responsibilities of the administering
body) shall apply to an administering body described
in paragraph (1) in the same manner as such requirements
apply to an administering body described in section
708(c)(1) of this Act.
(d) ELIGIBLE ACTIVITIES.-Amounts deposited in a Fund shall be
used only to provide grants to conserve, maintain, and restore the
tropical forests in the beneficiary country, through one or more of
the following activities:
(1) Establishment, restoration, protection, and maintenance
of parks, protected areas, and reserves.
(2) Development and implementation of scientifically sound
systems of natural resource management, including land and
ecosystem management practices.
(3) Training programs to increase the scientific, technical,
and managerial capacities of individuals and organizations involved
in conservation efforts.
(4) Restoration, protection, or sustainable use of diverse animal
and plant species.
(5) Research and identification of medicinal uses of tropical
forest plant life to treat human diseases, illnesses, and health
related concerns.
(6) Development and support of the livelihoods of individuals
living in or near a tropical forest in a manner consistent with
protecting such tropical forest.
(e) GRANT RECIPIENTS.-
(1) IN GENERAL.-Grants made from a Fund shall be made
to-
(A) nongovernmental environmental, forestry, conservation,
and indigenous peoples organizations of, or active in,
the beneficiary country;
(B) other appropriate local or regional entities of, or active
in, the beneficiary country; or
(C) in exceptional circumstances, the government of the
beneficiary country.
(2) PRIORITY.-In providing grants under paragraph (1), priority
shall be given to projects that are run by nongovernmental
organizations and other private entities and that involve
local communities in their planning and execution.
(f) REVIEW OF LARGER GRANTS.-Any grant of more than
$100,000 from a Fund shall be subject to veto by the Government
of the United States or the government of the beneficiary country.
(g) ELIGIBILITY CRITERIA.-In the event that a country ceases to
meet the eligibility requirements set forth in section 805(a), as determined
by the President pursuant to section 805(b), then grants
from the Fund for that country may only be made to nongovernmental
organizations until such time as the President determines
that such country meets the eligibility requirements set forth in
section 805(a).
SEC. 810 TROPICAL FOREST FUND.
(a) ESTABLISHMENT.-Each beneficiary country that enters into a
Tropical Forest Agreement under section 809 shall be required to
establish a Tropical Forest Fund to receive payments of interest on
new obligations undertaken by the beneficiary country under this
part.
(b) REQUIREMENTS RELATING TO OPERATION OF FUND.-The following
terms and conditions shall apply to the Fund in the same
manner as such terms as conditions apply to an Enterprise for the
Americas Fund under section 707 of this Act:
(1) The provision relating to deposits under subsection (b) of
such section.
(2) The provision relating to investments under subsection
(c) of such section.
(3) The provision relating to disbursements under subsection
(d) of such section.
SEC. 811 BOARD.
(a) ENTERPRISE FOR THE AMERICAS BOARD.-The Enterprise for
the Americas Board established under section 610(a) of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C.
1738i(a)) shall, in addition to carrying out the responsibilities of
the Board under section 610(c) of such Act, carry out the duties described
in subsection (c) of this section for the purposes of this part.
(b) ADDITIONAL MEMBERSHIP.-
(1) IN GENERAL.-The Enterprise for the Americas Board
shall be composed of an additional four members appointed by
the President as follows:
(A) Two representatives from the United States Government,
including a representative of the International Forestry
Division of the United States Forest Service.
(B) Two representatives from private nongovernmental
environmental, scientific, forestry, or academic organizations
with experience and expertise in preservation, maintenance,
sustainable uses, and restoration of tropical forests.
(2) CHAIRPERSON.-Notwithstanding section 610(b)(2) of the
Agricultural Trade Development and Assistance Act of 1954 (7
U.S.C. 1738i(b)(2)), the Enterprise for the Americas Board
shall be headed by a chairperson who shall be appointed by the
President and shall be the representative from the Department
of State appointed under section 610(b)(1)(A) of such Act''.1176
(c) DUTIES.-The duties described in this subsection are as follows:
(1) Advise the Secretary of State on the negotiations of Tropical
Forest Agreements.
(2) Ensure, in consultation with-
(A) the government of the beneficiary country;
(B) nongovernmental organizations of the beneficiary
country;
(C) nongovernmental organizations of the region (if appropriate);
(D) environmental, scientific, forestry, and academic
leaders of the beneficiary country; and
(E) environmental, scientific, forestry, and academic
leaders of the region (as appropriate), that a suitable administering
body is identified for each Fund.
(3) Review the programs, operations, and fiscal audits of
each administering body.
SEC. 812 CONSULTATIONS WITH THE CONGRESS.
The President shall consult with the appropriate congressional
committees on a periodic basis to review the operation of the Facility
under this part and the eligibility of countries for benefits from
the Facility under this part.
SEC. 813 ANNUAL REPORTS TO THE CONGRESS.
(a) IN GENERAL.-Not later than December 31 of each year, the
President shall prepare and transmit to the Congress an annual report
concerning the operation of the Facility for the prior fiscal
year. Such report shall include-
(1) a description of the activities undertaken by the Facility
during the previous fiscal year;
(2) a description of any Agreement entered into under this
part;
(3) a report on any Funds that have been established under
this part and on the operations of such Funds; and
(4) a description of any grants that have been provided by
administering bodies pursuant to Agreements under this part.
(b) SUPPLEMENTAL VIEWS IN ANNUAL REPORT.-Not later than
December 15 of each year, each member of the Board shall be entitled
to receive a copy of the report required under subsection (a).
Each member of the Board may prepare and submit supplemental
views to the President on the implementation of this part by December
31 for inclusion in the annual report when it is transmitted
to Congress pursuant to this section.
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