[Congressional Record Volume 149, Number 36 (Thursday, March 6, 2003)]
[Senate]
[Pages S3326-S3329]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LUGAR (by request):
  S. 571. A bill to establish the Millennium Challenge Account and the 
Millennium Challenge Corporation in order to reduce global poverty 
through increased economic growth by supporting a new compact for 
global development; to the Committee on Foreign Relations.
  Mr. LUGAR. Mr. President, by request, I introduce for appropriate 
reference a bill to establish the Millennium Challenge Account and the 
Millennium Challenge Corporation in order to reduce global poverty 
through increased economic growth by supporting a new compact for 
global development.
  This proposed legislation has been requested by the President of the 
United States, George W. Bush, and I am introducing it in order that 
there may be a specific bill to which Members of the Senate and the 
public may direct their attention and comments.
  I reserve my right to support or oppose this bill, as well as to make 
any suggested amendments to it, as this important initiative of the 
President continues to be considered by the Committee on Foreign 
Relations.
  I ask unanimous consent that the text of the bill be printed in the 
Record together with a section-by-section analysis of the bill and the 
letter from the President of the United States to the Congress of the 
United States dated February 5, 2003.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 571

       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 ``Millennium Challenge Act of 
     2003''.

     TITLE I--THE MILLENNIUM CHALLENGE ACCOUNT

     SEC. 101. STATEMENT OF POLICY.

       It is the policy of the United States to reduce global 
     poverty through increased economic growth by supporting a new 
     compact for global development in which increased support is 
     provided by developed countries to those developing countries 
     that are ruling justly, fostering economic freedom, and 
     investing in their citizens.

     SEC. 102. ELIGIBILITY CRITERIA.

       To be eligible for assistance under this Act, a country 
     (``eligible country'')--
       (1) must suffer from significant poverty;
       (2) must have a demonstrated commitment to--
       (A) Just and democratic governance, including political 
     pluralism and the rule of law, and respect for human and 
     civil rights of all citizens, protect private property 
     rights, encourage transparency and accountability of 
     governance, and limit corruption;
       (B) Economic freedom, including economic policies that 
     encourage citizens and firms to participate in the global 
     product and capital markets, promote private sector growth, 
     and avoid direct government participation in the economy; and
       (C) Investing in its own people, including improving the 
     availability of educational opportunities and health care for 
     all citizens; and
       (3) must have entered into a Millennium Challenge Contract, 
     as defined in section 103, with the United States.

     SEC. 103. MILLENNIUM CHALLENGE CONTRACT.

       (a) In General.--A Millennium Challenge Contract, is an 
     agreement between the United States and an eligible country 
     that establishes a multi-year plan of partnership for 
     achieving shared development objectives in furtherance of the 
     purposes of this Act.
       (b) Elements.--The Millennium Challenge Contract shall 
     contain--
       (1) the specific objectives that the eligible country and 
     the United States expect to achieve;
       (2) the responsibilities of the eligible country and the 
     United States in the achievement of those objectives;
       (3) regular benchmarks to measure progress towards 
     achieving the agreed upon objectives and a description of how 
     the objectives will be sustained once assistance under this 
     Millennium Challenge Contract ends;
       (4) a plan and a timeframe that describes how and when 
     those objectives will be met;
       (5) the role and contribution of the business community, 
     private and voluntary organizations, and other members of 
     civil society in designing that plan and achieving the 
     objectives;
       (6) where appropriate, the contribution of other donors in 
     the achievement of those objectives; and
       (7) a plan to ensure financial accountability of funds used 
     to achieve those objectives.
       (c) Local Input.--The Millennium Challenge Contract should 
     take into account the perspectives of the rural and urban 
     poor in an eligible country, and should reflect consultation 
     with private and voluntary organizations, and the business 
     community in the country.
       (d) Other Donors.--To the maximum extent feasible, 
     activities undertaken to achieve the objectives of the 
     Millennium Challenge Contract should be undertaken in 
     coordination with the assistance activities of other donors.

     SEC. 104. MILLENNIUM CHALLENGE ASSISTANCE.

       The President is authorized to provide assistance for 
     eligible countries to support policies and programs that are 
     in furtherance of the purposes of this Act. The goal of the 
     Millennium Challenge Account is to reduce poverty by 
     significantly increasing the economic growth trajectory of 
     recipient countries. This requires an emphasis on investments 
     that raise the productive potential of a country's citizens 
     and firms and help integrate its economy into the global 
     product and capital markets. Key areas of focus for 
     Millennium Challenge Assistance will include:
       (a) Agricultural development;
       (b) Education;
       (c) Enterprise and private sector development;
       (d) Governance;
       (e) Health; and
       (f) Trade and investment capability building.

     SEC. 105. AUTHORIZATION OF THE MILLENNIUM CHALLENGE ACCOUNT 
                   AND AUTHORITIES.

       (a) Authorization of Millennium Challenge Account.
       (1) Authorization.--There are authorized to be appropriated 
     to the President to carry out this Act $1,300,000,000 for 
     fiscal year 2004, and such sums as may be necessary for 
     subsequent fiscal years.
       (2) Availability--Funds appropriated under paragraph (1)--
       (A) may be referred to as the ``Millennium Challenge 
     Account'';
       (B) are authorized to remain available until expended; and
       (C) are in addition to funds otherwise available for such 
     purposes.
       (b) Applicability of Provisions of Law.--
       (1) Funds made available to carry out the purposes of this 
     Act may be made available notwithstanding any other provision 
     of law, except the provisions of the Anti-Deficiency Act.
       (2) Notwithstanding paragraph (l), country, including the 
     government of a country, that is ineligible to receive 
     assistance under provisions of law that would prohibit 
     assistance under Part I of the Foreign Assistance Act of 1961 
     shall not be eligible to receive assistance under this Act. 
     If the President waives the provisions of Part I of the 
     Foreign Assistance Act of 1961, such country could receive 
     assistance under this Act.
       (c) Use of Other Funds.--Any funds allocated from funds 
     appropriated to carry out any other Act may be made 
     available, if used in conjunction with funds appropriated to 
     carry out this Act, under the authority and subject to the 
     limitations applicable to funds made available to carry out 
     this Act.

     SEC. 106. EVALUATION AND ACCOUNT ABILITY.

       All concluded Millennium Challenge Contracts and 
     performance evaluations of activities under these contracts 
     shall be made available to the public on the Internet, unless 
     the Board makes a specific finding that a performance 
     evaluation or contract should not be posted.

     SEC. 107. GRADUATION.

       The Millennium Challenge Contract will provide funds for 
     limited purposes, projects, and terms.

     TITLE II--THE MILLENNIUM CHALLENGE CORPORATION

     SEC. 201. ESTABLISHMENT OF THE MILLENNIUM CHALLENGE 
                   CORPORATION.

       (a) Establishment of the Millennium Challenge 
     Corporation.--There is hereby established in the executive 
     branch, a corporation to be known as the Millennium Challenge 
     Corporation (hereinafter in this Act referred to as the 
     ``Corporation'').
       (b) Responsibility of the Corporation.--It shall be the 
     responsibility of the Corporation to implement title I of 
     this Act, consistent with the direction of the President.

[[Page S3327]]

     SEC. 202. MANAGEMENT OF THE CORPORATION.

       (a) Board of Directors.--The management of the Corporation 
     shall be vested in a board of directors (hereafter in this 
     title referred to as the ``Board'') composed of the Secretary 
     of State, who shall Chair, the Secretary of the Treasury, and 
     the Director of the Office of Management and Budget, and may 
     include individuals serving in such positions in an acting 
     capacity.
       (b) Functions of the Board.--
       (1) The Board shall direct the exercise of all the 
     functions and powers of the Corporation, including the 
     authority to review and approve the eligibility of countries 
     for assistance.
       (2) The Board may prescribe, amend, and repeal bylaws, 
     rules, regulations, and procedures governing the manner in 
     which the business of the Corporation may be conducted and in 
     which the powers granted to it by law may be exercised and 
     enjoyed.
       (3) Members of the Board shall serve without additional 
     compensation, but may be reimbursed for travel expenses, 
     including per diem, in lieu of subsistence, while engaged in 
     their duties on behalf of the Corporation.
       (c) Chief Executive Officer of the Corporation.--
       (1) The chief executive officer of the Corporation 
     (hereafter referred to in this title as the ``CEO'') shall be 
     appointed by the President, by and with the advice and 
     consent of the Senate, and shall exercise the functions and 
     powers vested in the CEO by the President and the Board.
       (2) The CEO shall receive compensation at the rate provided 
     for level II of the Executive Schedule under section 5313 of 
     title 5, United States Code.
       (d) Functions of, and actions by, the Corporation, Board, 
     CEO, or an officer of the United States under this Act are 
     vested in their discretion.

     SEC. 203. FUNCTIONS OF THE CORPORATION.

       In order to carry out programs in furtherance of the 
     purposes and policies of this Act, and in accordance with the 
     provisions of Title I of this Act, the Corporation may make 
     grants for any eligible country, including to any private or 
     public entity, and including for the purpose of providing 
     technical assistance to any such country for the development 
     of the Millennium Challenge Contract and the management, 
     including financial management, and evaluation of programs 
     for which assistance is provided pursuant to this Act.

     SEC. 204. POWERS OF THE CORPORATION.

       (A) Powers.--The Corporation--
       (1) shall have perpetual succession unless dissolved by the 
     Act of Congress;
       (2) may adopt, alter, and use a seal, which shall be 
     judicially noticed;
       (3) may prescribe, amend, and repeal such rules, 
     regulations, and procedures as may be necessary for carrying 
     out the functions of the Corporation;
       (4) may make and perform such contracts, grants, and other 
     agreements with any individual, corporation, or other private 
     or public entity however designated and wherever situated, as 
     may be necessary for carrying out the functions of the 
     Corporation and all Millennium Challenge Contracts;
       (5) may determine and prescribe the manner in which its 
     obligations shall be incurred and its expenses allowed and 
     paid, including expenses for representation not exceeding 
     $95,000 in any fiscal year;
       (6) may lease, purchase, or otherwise acquire, improve, and 
     use such real property wherever situated, as may be necessary 
     for carrying out the functions of the Corporation;
       (7) may accept cash gifts or donations of services or of 
     property (real, personal, or mixed), tangible or intangible, 
     in furtherance of the purposes of this Act;
       (8) may use the United States mails in the same manner and 
     on the same conditions as the executive departments of 
     Government;
       (9) may, with the consent of the agency of the United 
     States, use the information, services, facilities, and 
     personnel of that agency on a full or partial reimbursement 
     or on a non-reimbursable basis in carrying out the purposes 
     of this Act;
       (10) may contract with individuals for personal services, 
     who shall not be considered federal employees for any 
     provision of law administered by the Office of Personnel 
     Management;
       (11) hire or obtain passenger motor vehicles; and
       (12) shall have such other powers as may be necessary and 
     incident to carrying out this Act;
       (b) Principal Office.--
       (1) The Corporation shall maintain its principal office in 
     the metropolitan Washington, D.C. area.
       (2) The Corporation may establish other offices in any 
     place including places outside the United States, in the 
     Corporation may carry on all or any of its operations and 
     business.
       (c) Positions With Foreign Governments.--When approved by 
     the Corporation, in furtherance of its purposes, employees of 
     the Corporation (including individuals detailed to the 
     Corporation) may accept and hold offices or positions to 
     which no compensation is attached with governments or 
     governmental agencies of foreign countries or international 
     organizations.
       (d) Commitment Authority.--Subject to the provisions of the 
     Anti-Deficiency Act, a contract, grant, or other agreement 
     which entails commitments for the expenditure of funds 
     available under this Act may commit with expenditures for 
     such period of time as it deemed necessary to carrying out 
     this Act.
       (e) Contracting Authority.--In furtherance of the purposes 
     of this Act, functions and powers authorized by this Act may 
     be performed without regard to any provision of law 
     regulating the making, performance, amendment, or 
     modification of contracts, grants, and other agreements.
       (f) Taxation of the Corporation.--The Corporation, 
     including all its assets and property, shall be exempt from 
     taxation now or hereafter imposed by the United States, or 
     any territory or possession thereof, or by any State, county, 
     municipality, or local taxing authority.

     SEC. 205. PERSONNEL AND ADMINISTRATIVE AUTHORITIES.

       (a) Personnel Authorities.--Notwithstanding any provision 
     of title 5, United States Code or of the Foreign Service Act 
     of 1980, as amended, the CEO of the Millennium Challenge 
     Corporation may, in regulations prescribed jointly with the 
     Director of the Office of Personnel Management, establish, 
     and from time to time adjust, a human resources management 
     system, including a retirement benefits programs.
       (1) Any system established under this subsection shall not 
     waive, modify, or otherwise affect, with respect to Civil 
     Service and Foreign Service employees--
       (A) the public employment principles of merit and fitness 
     set forth in section 2301 of title 5, including the 
     principles of hiring based on merit, fair treatment without 
     regard to political affiliation or other non-merit 
     considerations, equal pay for equal work, and protection of 
     employees against reprisal for whistle blowing,
       (B) section 2302 (b) of title 5,
       (C) chapters 72 and 73 of title 5,
       (D) the conflict of interest provisions in title 18, 
     chapter 11 of the United States Code.
       (2) The CEO of the Corporation may, without regard to the 
     civil service and foreign service laws and regulations, 
     appoint and terminate personnel as may be necessary to enable 
     the Corporation to perform its duties.
       (3) The CEO may fix the compensation of the Corporation 
     personnel without regard to the provisions of chapter 51 and 
     subchapter III of chapter 53 of title 5, United States Code, 
     relating to the classification of positions and General 
     Schedule pay rates, and without regard to the provisions of 
     chapters 4 and 5 of the Foreign Service Act, relating to the 
     classification of positions and Foreign Service pay rates.
       (4) The Corporation may utilize such authority contained in 
     the Foreign Service Act of 1980, as amended, as the 
     Corporation deems appropriate.
       (5) The CEO and other personnel who are employees of the 
     Corporation shall be employees under section 2105 of title 5, 
     United States Code, for purposes of chapters 63 (relating to 
     leave), 81 (relating to compensation for work injuries), 85 
     (relating to unemployment benefits), 87 (relating to life 
     insurance benefits), 89 (relating to health insurance 
     benefits), and 90 (relating to long-term care insurance) of 
     that title. If the CEO chooses not to waive chapters 83 and 
     84 (relating to retirement benefits) of title 5, or chapter 8 
     of the Foreign Service Act (relating to Foreign Service 
     retirement systems), employees of the Corporation shall be 
     eligible for benefits under those chapters as otherwise 
     applicable.
       (6) No individual, except for the officers of the 
     Corporation, may be employed by the Corporation for a period 
     in excess of 5 years: Provided, That the CEO, under special 
     circumstances, may approve an extension of the length of 
     employment on an individual basis.
       (7) Individuals employed by the Corporation, including 
     individuals detailed to or contracted by the Corporation, 
     while performing duties in any country or place outside the 
     United States, and their families shall, if they are 
     nationals of or permanently resident in such country or 
     place, enjoy the privileges and immunities of at least the 
     administrative and technical staff of the Mission of the 
     United States to such country and shall be subject to 22 
     U.S.C. 3927 in the same manner as United States Government 
     employees.
       (8) The CEO may procure temporary and intermittent services 
     under section 3109(b) of title 5, United States Code, at 
     rates for individuals which do not exceed the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level V of the Executive Schedule under section 5316 of such 
     title.
       (b) Detail of Personnel to the Corporation.--
       (1) Any Federal Government employee may be detailed to the 
     Corporation on a fully or partially reimbursable or on a 
     nonreimbursable basis, and such detail shall be without 
     interruption or loss of civil service or Foreign Service 
     status or privilege.
       (2) Alternatively, an employee serving under a career or 
     career conditional appointment or the equivalent in an agency 
     who transfers to or converts to an appointment in the 
     Corporation with the consent of the head of the agency is 
     entitled to be returned to the employee's former position or 
     a position of like seniority, status, and pay without grade 
     or pay reduction in the agency if the employee--
       (A) is being separated from the Corporation for reasons 
     other than misconduct, neglect of duty, or malfeasance; and 
     (B) applies for return not later than 30 days before the date 
     of the termination of the employment in the Corporation.
       (3) An employee of a private sector organization assigned 
     to the Corporation under this section is deemed, during the 
     period of

[[Page S3328]]

     assignment, to be on detail to such agency. Such employee--
       (A) may continue to receive pay and benefits from the 
     private sector organization from which he is assigned;
       (B) is deemed to be an employee of the Corporation as 
     specified in (a)(5) of this section, for the purposes of 
     chapters 81 and 85 of title 5 U.S.C.;
       (C) may not have access to any trade secrets or to any 
     other non-public information which is of commercial value to 
     the private sector organization from which he is assigned, 
     and
       (D) is subject to such regulations as the President may 
     prescribe. Such assignment may be made with or without 
     reimbursement by the Corporation for the pay, or a part 
     thereof, of the employee during the period of assignment, or 
     for any contribution of the private sector organization to 
     its employee benefit system. A private sector organization 
     may not charge the Federal Government, as direct or indirect 
     costs under a Federal contract, the costs of pay or benefits 
     paid by the organization to an employee assigned to the 
     Corporation.
       (c) Allocation of Funds.--
       (1) Transfer or Allocation.--The Corporation may allocate 
     or transfer to any agency of the United States Government any 
     part of any funds available for carrying out the purposes of 
     this Act. Such funds shall be available for obligation and 
     expenditure for the purposes for which authorized, in 
     accordance with authority granted in this Act or under 
     authority governing the activities of the agencies of the 
     United States Government to which such funds are allocated or 
     transferred.
       (2) Use of Services.--For carrying out the purposes of this 
     Act, the Corporation may utilize the services and facilities 
     of, or procure commodities from, any agency of the United 
     States Government under such terms and conditions as may be 
     agreed to by the head of such agency and the Corporation.
       (d) Other Authorities.--Except where inconsistent with the 
     provisions of this Act, the Corporation is authorized to use 
     any of the administrative authorities contained in the State 
     Department Basic Authorities Act of 1956 and the Foreign 
     Assistance Act of 1961.
       (e) Government Corporation Control Act.--The Corporation 
     shall be subject to the provisions of the Government 
     Corporation Control Act, title 31, United States Code.
                                  ____


                    Millennium Challenge Act of 2003


                      section-by-section analysis

     Section 1. Short title
       This Act may be cited as the ``Millennium Challenge Act of 
     2003''.

               TITLE I--THE MILLENNIUM CHALLENGE ACCOUNT

     Sec. 101. Statement of policy
       Section 101 states the objective of the Millennium 
     Challenge Account, which is to reduce poverty through 
     promoting sustained economic growth in developing countries 
     committed to implementing good policies.
     Sec. 102. Eligibility criteria
       Section 102 identifies the criteria by which countries will 
     be eligible to receive Millennium Challenge Account (MCA) 
     assistance funds. MCA assistance will go to:
       Very poor countries. It is currently anticipated that in FY 
     2004, countries eligible for MCA funds will be those that are 
     currently eligible to borrow from the International 
     Development Association (IDA) and which have per capita 
     incomes below $1,435 (the historical IDA ``cutoff'' for aid). 
     In FY 2005, all countries with per capita incomes below 
     $1,435 will be eligible for MCA assistance. In FY 2006, the 
     list of eligible countries further expands to those with per 
     capita incomes up to $2,975 (the current World Bank cutoff 
     for lower middle income countries). The per capita income 
     levels will be adjusted on an annual basis.
       Countries with a demonstrated commitment to ruling justly, 
     encouraging economic freedom, and investing in their people. 
     To assess this commitment and identify recipient countries, 
     the MCA will use clear, concrete, and objective criteria. It 
     is the Administration's intent that in 2004, countries will 
     be selected based on 16 indicators chosen because of the 
     relative quality and objectivity of their data, country 
     coverage, public availability, and correlation with growth 
     and poverty reduction. The specific indicators are listed 
     below with their source noted.
       Governing Justly:
       Civil Liberties (Freedom House);
       Political Rights (Freedom House);
       Voice and Accountability (World Bank Institute);
       Government Effectiveness (World Bank Institute);
       Rule of Law (World Bank Institute); and
       Control of Corruption (World Bank Institute).
       Investing in People:
       Public Primary Education Spending as Percent of Gross 
     Domestic Product (GDP) (World Bank/national sources);
       Primary Education Completion Rate (World Bank/national 
     sources);
       Public Expenditures on Health as Percent of GDP (World 
     Bank/national sources); and
       Immunization Rates: DPT (diphtheria, pertussis, tetanus) 
     and Measles (World Bank/UN/national sources).
       Promoting Economic Freedom:
       Country Credit Rating (Institutional Investor Magazine);
       Inflation (International Monetary Fund [IMF]);
       3-Year Budget Deficit (IMF/national sources);
       Trade Policy (Heritage Foundation);
       Regulatory Quality (World Bank Institute); and
       Days to Start a Business (World Bank).
       Countries that have signed a Millennium Challenge Contract 
     with the United States. The terms of this contract are 
     defined in Section 103 below.
     Sec. 103. Millennium challenge contract
       Section 103 specifies the contractual relationship between 
     recipient nations and the United States. Each MCA country 
     will negotiate and sign a Millennium Challenge Contract with 
     the Millennium Challenge Corporation (MCC), established in 
     Title II. To initiate the negotiation, the selected MCA 
     countries will submit country proposals for MCA funds which 
     integrate official interests with those of the private sector 
     and civil society.
       The negotiated Millennium Challenge Contracts will include 
     a limited number of clear and measurable objectives, regular 
     benchmarks to measure progress toward achieving the 
     objectives, a plan and a timeframe describing how and when 
     the objectives will be met. Each contract will state the 
     responsibilities of the recipient country and the United 
     States, and describe the role and contributions of non-
     governmental entities including other donors as appropriate. 
     In addition, all contracts will provide for the financial 
     accountability of MCA funds.
     Sec. 104. Millennium challenge assistance
       Section 104 authorizes the President to provide assistance 
     for activities that contribute to the achievement of the 
     objectives specified in the contract. These activities will 
     drive productivity and economic growth in MCA countries. 
     Areas of focus for the MCA include agricultural development, 
     education, enterprise and private sector promotion, good 
     governance, health, and trade and investment capacity 
     building.
     Sec. 105. Authorization of the millennium challenge account 
         and authorities
       Section 105 authorizes appropriations to the President of 
     $1.3 billion in FY 2004 to carry out the MCA and such sums as 
     may be necessary for subsequent fiscal years. It is 
     anticipated that funding for MCA will reach $5 billion by FY 
     2006. MCA funds will be available until expended (``no-year 
     funds''). This availability of funds allows the Corporation 
     to obligate funds in the most productive manner.
       Section 105 allows the provision of MCA assistance to 
     countries notwithstanding any other provision of law with the 
     exception of prohibiting MCA assistance to countries that are 
     ineligible to receive assistance under part I of the Foreign 
     Assistance Act of 1961. This provision restricts or prohibits 
     assistance to countries that engage in actions prohibited in 
     part I, including countries that: violate human rights, 
     support trafficking in narcotics or human beings, and 
     contribute to terrorist financing. If the President waives 
     any of these provisions to make a country eligible to receive 
     assistance under part I of the Foreign Assistance Act, then 
     that country also would be eligible to receive MCA 
     assistance. MCA assistance would be subject to the provisions 
     of the Anti-Deficiency Act.
       In addition, section 105 makes the authorities and 
     limitations that are applicable to MCA assistance applicable, 
     as well, to any other funds used in conjunction with MCA 
     funds.
     Sec. 106. Evaluation and accountability
       Section 106 requires the Millennium Challenge Corporation, 
     established in Title II, to make all concluded Millennium 
     Challenge Contracts and their formal performance evaluations 
     publicly available on the Internet. The public nature of MCA 
     performance information makes the recipient countries and 
     implementers of MCA programs directly accountable to the 
     citizens of MCA countries and United States taxpayers.
     Sec. 107. Graduation
       Participation in the MCA will be limited according to the 
     terms of the Millennium Challenge Contracts, which will 
     define the purposes, activities and timeframe. MCA assistance 
     will have a clearly defined end date. For example, at the 
     conclusion of the contract period, MCA assistance will end 
     unless participant countries submit a new proposal and 
     renegotiate a new contract with the Corporation. Each 
     contract will also specify the conditions under which the 
     contract will be amended or terminated, including for reasons 
     of poor performance.

             TITLE II--THE MILLENNIUM CHALLENGE CORPORATION

     Sec. 201. Establishment of the millennium challenge 
         corporation
       Section 201 establishes an independent U.S. Government 
     Corporation that will implement the MCA according to 
     provisions of Title I of this Act.
     Sec. 202. Management of the corporation
       Section 202 establishes a board of directors for the 
     Corporation that will be chaired by the Secretary of State 
     and include the Secretary of the Treasury, and the Director 
     of the Office of Management and Budget. Individuals serving 
     in these positions in an acting capacity may serve on the 
     Board. The Board will direct the exercise of all functions 
     and powers of the Corporation, and shall make the final 
     decision on the eligibility and selection of MCA countries.

[[Page S3329]]

       The position of the CEO of the Corporation will be a 
     Senate-confirmed Presidential appointment. The CEO's 
     compensation is fixed at the equivalent of a deputy secretary 
     of a department of level II of the Executive Schedule.
     Sec. 203. Functions of the corporation
       Section 203 authorizes the Corporation to make grants to 
     any private or public entity to carry out the Millennium 
     Challenge Contracts, to provide technical assistance to 
     develop or carry out the Contracts, and to provide for the 
     financial management and evaluation of MCA programs.
     Sec. 204. Powers of the corporation
       Section 204 provides general powers to the MCC to enable it 
     to conduct business operations. The principal office of the 
     MCC is to be established in the Washington, D.C. metropolitan 
     area. The MCC also has the authority to establish overseas 
     offices as it sees fit. Employees of the MCC, and individuals 
     detailed to the MCC, are provided the authority to hold 
     offices with foreign governments, foreign government 
     agencies, or international organizations, so long as no 
     compensation is paid to such employees or individuals by the 
     foreign entity or international organization. Contracts and 
     other commitments of funds may make commitments for the 
     expenditure of funds for such period of time as the MCC deems 
     necessary. This section also provides discretion to the MCC 
     with regard to the making, performance, amendment, or 
     modification of contracts, grants, and other agreements. 
     Finally, this section provides that the MCC and its assets 
     and property are to be exempt from taxation by the United 
     States or by any State or local taxing authority.
     Sec. 205. Personnel and administrative authorities
       Section 205 authorizes the CEO of the MCC, in coordination 
     with the Director of the Office of Personnel Management, to 
     establish a human resources management system for the 
     Corporation, including a retirement benefits program. 
     However, provisions of title 5 of the United States Code 
     related to anti-discrimination, merit systems principles, 
     whistle blowing, and conflicts of interest, are specifically 
     made applicable to the MCC. Employees of the MCC are 
     considered Federal employees for purposes of leave benefits, 
     workers compensation, unemployment benefits, life insurance, 
     health insurance, and long-term care insurance.
       Section 205 also provides the authorities for detailing 
     U.S. government employees and private sector staff to the 
     Corporation. Federal employees have two options for serving 
     in the Corporation. They may be detailed on a reimbursable or 
     nonreimburseable basis without interruption of their civil 
     service status and privileges. Alternatively, they may resign 
     from their home agency and retain employment rights. Private 
     sector organizations may also detail staff to the MCC, while 
     continuing to pay those employees pay and benefits.
       The Corporation has the authority to allocate or transfer 
     money to other agencies; use the services and facilities of 
     any U.S. agency under agreed upon terms; and use any of the 
     administrative authorities contained in the State Department 
     Basic Authorities Act of 1956 and the Foreign Assistance Act 
     of 1961.
       Section 205 also makes the provisions of the Government 
     Corporation Control act applicable to the MCC.
                                  ____

     To the Congress of the United States:
       I am pleased to transmit a legislative proposal to 
     establish the Millennium Challenge Account and the Millennium 
     Challenge Corporation. Also transmitted is a section-by-
     section analysis.
       The Millennium Challenge Account (MCA) represents a new 
     approach to providing and delivering development assistance. 
     This new compact for development breaks with the past by 
     tying increased assistance to performance and creating new 
     accountability for all nations. This proposal implements my 
     commitment to increase current levels of core development 
     assistance by 50 percent over the next 3 years, thus 
     providing an annual increase of $5 billion by fiscal; year 
     2006. To be eligible for this new assistance, countries must 
     demonstrate commitment to three standards--ruling justly, 
     investing in their people, and encouraging economic freedom. 
     Given this commitment, and the link between financial 
     accountability and development success, special attention 
     will be given to fighting corruption.
       The goal of the Millennium Challenge Account initiative is 
     to reduce poverty by significantly increasing economic growth 
     in recipient countries through a variety of targeted 
     investments. The MCA will be administered by a new, small 
     Government corporation, called the Millennium Challenge 
     Corporation, designed to support innovative strategies and to 
     ensure accountability for measurable results. The Corporation 
     will be supervised by a Board of Directors chaired by the 
     Secretary of State and composed of other Cabinet-level 
     officials. The Corporation will be led by a Chief Executive 
     Officer appointed by the President, by and with the advice 
     and consent of the Senate. This proposal provides the 
     Corporation with flexible authorities to optimize program 
     implementation, contracting, and personnel selection while 
     pursuing innovative strategies.
       The Millennium Challenge Account initiative recognizes the 
     need for country ownership, financial oversight, and 
     accountability for results to ensure effective assistance. We 
     cannot accept permanent poverty in a world of progress. The 
     MCA will provide people in developing nations the tools they 
     need to seize the opportunities of the global economy. I urge 
     the prompt and favorable consideration of this legislation.
                                                   George W. Bush.
                                 The White House February 5, 2003.
                                 ______