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<PRE>[DOCID: f:h2870enr.txt]
        H.R.2870

                       One Hundred Fifth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-
                                  eight


                                 An Act


 
To amend the Foreign Assistance Act of 1961 to facilitate protection of 
 tropical forests through debt reduction with developing countries with 
                            tropical forests.

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

SECTION 1. DEBT REDUCTION FOR DEVELOPING COUNTRIES WITH TROPICAL 
              FORESTS.

    The Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.) is 
amended by adding at the end the following:

``PART V--DEBT REDUCTION FOR DEVELOPING COUNTRIES WITH TROPICAL FORESTS

``SEC. 801. SHORT TITLE.

    ``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 major 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 Bank-supported 
    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 
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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.

``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 appropriated under sections 
        806(a)(2) and 807(a)(2) 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
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 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
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 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 from among 
    the representatives appointed under section 610(b)(1)(A) of such 
    Act or paragraph (1)(A) of this subsection.
    ``(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.''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.

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