[Congressional Record Volume 157, Number 69 (Wednesday, May 18, 2011)]
[Senate]
[Pages S3108-S3112]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. KOHL (for himself and Mr. Enzi):
S. 1020. A bill to amend the Internal Revenue Code of 1986 to modify
the rules relating to loans made from a qualified employer plan, and
for other purposes; to the Committee on Finance.
Mr. KOHL. Mr. President, today I am introducing the Savings
Enhancement by Alleviating Leakage in 401(k) Savings Act of 2011,
otherwise known as the SEAL 401(k) Savings Act. This bill, which I
introduce together with my friend Senator Mike Enzi, will reduce
leakage from retirement plans and help ensure that retirement savings
in defined contribution plans last throughout retirement.
With the recent shift from defined benefit retirement savings plans
to 401(k)-type defined contribution plans, many Americans are now
responsible for making the proactive decision to save for their
retirement. These decisions include how much to save and where to
invest their savings. Meanwhile, they also must resist the urge to tap
into their savings in times of hardship through withdrawals and loans.
During these difficult economic times, we are increasingly seeing
401(k) funds being treated as rainy day funds, as participants take out
withdrawals and loans. According to a recent study by Aon Hewitt, as of
the end of 2010, about 28 percent of active participants in defined
contribution plans had an outstanding loan. This is a record high.
Withdrawals from defined contribution plans also have increased since
the 2008 financial crisis. This leakage from these plans can
significantly reduce workers' savings and put their retirement security
at risk.
To determine how to best tackle the issue of leakage from retirement
plans, the Special Committee on Aging, of which I chair, held a hearing
in July 2008 entitled, ``Saving Smartly for Retirement: Are Americans
Being Encouraged to Break Open the Piggy Bank?.'' The Committee also
requested a GAO report entitled, ``401(k) Plans: Policy Changes Could
Reduce the Long-term Effects of Leakage on Workers' Retirement
Savings,'' which was released in August 2009.
The SEAL 401(k) Savings Act builds on the recommendations the
Committee received from witnesses during our hearing and from the GAO
and would reduce leakage and increase retirement savings. First, the
bill would extend the time workers have to repay loans. When an
employee with a 401(k) plan loan loses his job, he generally is put to
the choice of defaulting on his outstanding loan and incurring tax
penalties or immediately repaying the entire outstanding loan balance.
Paying back a loan after just losing your job can be difficult so our
bill would give people more time.
While having access to a loan in an emergency is an important feature
for many participants, a 401(k) savings account should not be used as a
piggy bank for revolving loans. Also, the administrative burden of
managing multiple loans for a few individuals can increase the costs
for all workers in a plan. The SEAL Act reduces the overall number of
loans that participants can take to three at one time. Currently
employers determine the number of loans available, and many employers,
like the Federal Thrift Savings Program, have chosen to restrict the
number of loans to reduce leakage and overall cost.
The bill also would allow 401(k) participants to continue to make
additional contributions during the 6 months following a hardship
withdrawal. Currently, after an employee takes a withdrawal from a
401(k) plan due to a hardship, he or she is prohibited from making
contributions to the plan and all other plans maintained by the
employer for at least six months. This loss of both employee
contributions and company matching contributions during this period can
exacerbate the long-term negative effects on retirement savings.
Finally, the bill would ban products that promote leakage, such as
the 401(k) debit card. By offering a 401(k) debit card, plans send the
message that it is okay to use your retirement savings for every day
purchases, despite the fact that the high fees associated with its use
will drastically diminish their savings.
I look forward to working with my colleagues to pass this important
legislation.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 1020
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 ``Savings Enhancement by
Alleviating Leakage in 401(k) Savings Act of 2011'' or the
``SEAL 401(k) Savings Act''.
SEC. 2. EXTENDED ROLLOVER PERIOD FOR THE ROLLOVER OF PLAN
LOAN OFFSET AMOUNTS IN CERTAIN CASES.
(a) In General.--Paragraph (3) of section 402(c) of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new subparagraph:
``(C) Rollover of certain plan loan offset amounts.--
``(i) In general.--In the case of a qualified plan loan
offset amount, paragraph (1) shall not apply to any transfer
of such amount made after the due date (including extensions)
for filing the return of tax for the taxable year in which
such amount is treated as distributed from a qualified
employer plan.
``(ii) Qualified plan loan offset amount.--For purposes of
this subparagraph, the term `qualified plan loan offset
amount' means a plan loan offset amount which is treated as
distributed from a qualified employer plan to a participant
or beneficiary solely by reason of--
``(I) the termination of the qualified employer plan, or
``(II) the failure to meet the repayment terms of the loan
from such plan because of the separation from service of the
participant (whether due to layoff, cessation of business,
termination of employment, or otherwise).
``(iii) Plan loan offset amount.--For purposes of clause
(ii), the term `plan loan offset amount' means the amount by
which the participant's accrued benefit under the plan is
reduced in order to repay a loan from the plan.
``(iv) Limitation.--This subparagraph shall not apply to
any plan loan offset amount unless such plan loan offset
amount relates to a loan to which section 72(p)(1) does not
apply by reason of section 72(p)(2).
``(v) Qualified employer plan.--For purposes of this
subsection, the term `qualified employer plan' has the
meaning given such term by section 72(p)(4).''.
(b) Conforming Amendment.--Subparagraph (A) of section
402(c)(3) of the Internal Revenue Code of 1986 is amended by
striking ``subparagraph (B)'' and inserting ``subparagraphs
(B) and (C)''.
(c) Effective Date.--The amendments made by this section
shall apply to transfers made after the date of the enactment
of this Act.
SEC. 3. MODIFICATION OF RULES GOVERNING HARDSHIP
DISTRIBUTIONS.
Not later than 1 year after the date of the enactment of
this Act, the Secretary of the
[[Page S3109]]
Treasury shall modify Treasury Regulation section 1.401(k)--
1(d)(3)(iv)(E) to--
(1) delete the prohibition imposed by paragraph (2)
thereof, and
(2) to make any other modifications necessary to carry out
the purposes of section 401(k)(2)(B)(i)(IV) of the Internal
Revenue Code of 1986.
SEC. 4. QUALIFIED EMPLOYER PLANS PROHIBITED FROM MAKING LOANS
THROUGH CREDIT CARDS AND OTHER SIMILAR
ARRANGEMENTS.
(a) In General.--Paragraph (2) of section 72(p) of the
Internal Revenue Code of 1986 is amended by redesignating
subparagraph (D) as subparagraph (E) and by inserting after
subparagraph (C) the following new subparagraph:
``(D) Prohibition of loans through credit cards and other
similar arrangements.--Subparagraph (A) shall not apply to
any loan which is made through the use of any credit card or
any other similar arrangement.''
(b) Effective Date.--The amendments made by this section
shall apply to plan years beginning after the date which is
60 days after the date of the enactment of this Act.
SEC. 5. LIMITATION ON NUMBER OF LOANS FROM QUALIFIED EMPLOYER
PLANS WHICH MAY BE OUTSTANDING WITH RESPECT TO
ANY PARTICIPANT OR BENEFICIARY.
(a) In General.--Paragraph (2) of section 72(p) of the
Internal Revenue Code of 1986, as amended by section 4, is
amended by redesignating subparagraph (E) as subparagraph (F)
and by inserting after subparagraph (D) the following new
subparagraph:
``(E) Exception only to apply to 3 loans.--Subparagraph (A)
shall not apply to any loan made after the date of the
enactment of this subparagraph if, immediately after such
loan is made, the number of outstanding loans from the plan
to the participant or beneficiary exceeds 3.''.
(b) Effective Date.--The amendments made by this section
shall apply to loans made after the date which is 1 year
after the date of the enactment of this Act.
Mr. ENZI. Mr. President, in February the Committee on Health,
Education, Labor, and Pensions held a hearing on the success of the
automatic enrollment provisions of the Pension Protection Act of 2006
which helped millions of workers and their families access to a 401(k)
retirement savings accounts. Because of the Pension Protection Act, we
greatly expanded retirement savings and individuals ability to put
money away for their golden years.
Just last week, Fidelity Investments released a report that employer-
sponsored retirement plans with an automatic enrollment feature have an
overall participation rate of 82 percent compared with only 56 percent
without automatic enrollment. The Fidelity report also indicated that
average account balances for 401(k) and similar retirement accounts
have reached an all-time high. This is some good news to show that
workers and their families retirement accounts are coming back from the
economic distress of just a few years ago.
While our Nation's 401(k) retirement system is providing greater
opportunities for individuals to save, there is still room for
improvement. Recent studies have shown that money saved in 401(k)
accounts sometimes ``leaks'' out of the system and is never put back.
AonHewitt released a report this week showing that unpaid loans,
withdrawals and cashouts of 401(k) monies, otherwise known as
``leakage,'' can have a substantial effect on how much money ultimately
will be there for retirement. According to the AonHewitt report, an
individual who ceases to make loan repayments during the loan term is
expected to erode future retirement income by 10 to 13 percent. If the
individual has two loans and payments are not made then the reduction
in retirement savings nearly doubles. In the event of a complete
default of the loan, then the monies are permanently gone from the
retirement system.
Today, I join the Chairman of the Senate Aging Committee, Senator
Kohl, in taking the first step in helping to stop leakage in the
retirement system. Chairman Kohl held a hearing on this very issue and
had the Government Accountability Office, GAO, research and come up
with recommendations to stop retirement savings leakage. The bill we
introduce today, The Savings Enhancement by Alleviating Leakage in
401(k) Pension Act also known as the SEAL Act, is based upon those
initial GAO recommendations.
The SEAL Act takes the first steps in helping workers and their
families to pay back loans from 401(k) accounts when a worker leaves a
job. Typically, when a worker separates from an employer any
outstanding 401(k) loan must be paid back immediately or suffer tax
penalties. The SEAL Act would allow for a greater period of time for
the loan to be paid back thereby helping families to pay back the loan
and allowing the monies to be put back into their retirement savings
and avoid the tax penalty.
The bill also would remove the prohibition against individuals from
making contributions to their 401(k) accounts in the following 6 months
after a hardship loan has been made. Situations where hardship loans
are made are some of the most stressful times for individuals and their
families. If they have the ability and means to continue to contribute
to their 401(k) accounts then they should be provided that option. The
bill gives them the option to continue to save for retirement even in
dire circumstances.
Finally, the bill would provide structural changes to 401(k) plans to
help businesses keep down administrative costs and extra fees.
Currently, the Internal Revenue Code permits businesses to structure
retirement plans with an unlimited amount of loans per individual but
an individual cannot take more than 50 percent of their retirement
account balances in loans up to $50,000 for all outstanding loans. The
Federal Government's Thrift Savings Plan has a limit of two outstanding
loans, one personal loan and one loan for the purchase of a house, at
any time. We consulted with retirement experts, mutual funds and
retirement service providers and virtually all agreed that the optimal
number of loans agreed upon was 3 outstanding loans at any time. Some
believed that we should match the Thrift Savings Plan, however, we
believe that businesses need to reduce administrative costs but they
should be able to provide flexibility to their workers. The bill also
would restrict the use of credit and/or debit card loans on 401(k)
accounts. Again, these types of loans pull money out in ``reserve'' so
that individuals can tap the reserve at any time. However, the extra
administrative costs and fees are burdensome to businesses and to their
workers.
Overall, the SEAL bill is the first step in helping to provide
flexibility for individuals and plan structure to help keep retirement
monies in retirement savings accounts. I look forward to working with
Chairman Kohl in moving this important piece of retirement savings
legislation. I also look forward to working with my colleagues to
improve and add other items to help reduce leakage in 401(k) retirement
savings and to help our Nation's workers and their families have their
money there for them at retirement. Each step that we take to stop
leakage will mean that individuals will be more financial secure in
retirement.
______
By Mr. REID:
S. 1022. A bill to extend expiring provisions of the USA PATRIOT
Improvement and Reauthorization Act of 2005 and the Intelligence Reform
and Terrorism Prevention Act of 2004 until December 31, 2014, and for
other purposes; read the first time.
Mr. REID. Mr. President, I ask unanimous consent that the text of the
bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 1022
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 ``PATRIOT Sunsets Extension
Act of 2011''.
SEC. 2. SUNSET EXTENSIONS.
(a) USA PATRIOT Improvement and Reauthorization Act of
2005.--Section 102(b)(1) of the USA PATRIOT Improvement and
Reauthorization Act of 2005 (Public Law 109-177; 50 U.S.C.
1805 note, 50 U.S.C. 1861 note, and 50 U.S.C. 1862 note) is
amended by striking ``May 27, 2011'' and inserting ``December
31, 2014''.
(b) Intelligence Reform and Terrorism Prevention Act of
2004.--Section 6001(b)(1) of the Intelligence Reform and
Terrorism Prevention Act of 2004 (Public Law 108-458; 50
U.S.C. 1801 note) is amended by striking ``May 27, 2011'' and
inserting ``December 31, 2014''.
______
By Mr. DURBIN (for himself, Ms. Collins, and Mr. Kerry):
S. 1023. A bill to authorize the President to provide assistance to
the Government of Haiti to end within 5 years the deforestation in
Haiti and restore within 30 years the extent of tropical forest cover
in existence in Haiti in 1990, and for other purposes; to the Committee
on Foreign Relations.
[[Page S3110]]
Mr. DURBIN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 1023
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 ``Haiti Reforestation Act of
2011''.
SEC. 2. FINDINGS; PURPOSE.
(a) Findings.--Congress finds that--
(1) the established policy of the Federal Government is to
support and seek protection of tropical forests around the
world;
(2) tropical forests provide a wide range of benefits by--
(A) harboring a major portion of the biological and
terrestrial resources of Earth and providing habitats for an
estimated 10,000,000 to 30,000,000 plant and animal species,
including species essential to medical research and
agricultural productivity;
(B) playing a critical role as carbon sinks that reduce
greenhouse gases in the atmosphere, as 1 hectare of tropical
forest can absorb up to approximately 3 tons of carbon
dioxide per year, thus moderating potential global climate
change; and
(C) regulating hydrological cycles upon which agricultural
and coastal resources depend;
(3) tropical forests are also a key factor in reducing
rates of soil loss, particularly on hilly terrain;
(4) while international efforts to stem the tide of
tropical deforestation have accelerated during the past 2
decades, the rapid rate of tropical deforestation continues
unabated;
(5) in 1923, over 60 percent of the land of Haiti was
forested but, by 2006, that percentage had decreased to less
than 2 percent;
(6) during the period beginning in 2000 and ending in 2005,
the deforestation rate in Haiti accelerated by more than 20
percent over the deforestation rate in Haiti during the
period beginning in 1990 and ending in 1999;
(7) as a result, during the period described in paragraph
(6), Haiti lost--
(A) nearly 10 percent (approximately 11,000 hectares) of
the forest cover of Haiti; and
(B) approximately 22 percent of the total forest and
woodland habitat of Haiti;
(8) poverty and economic pressures are--
(A) two factors that underlie the tropical deforestation of
Haiti; and
(B) manifested particularly through the clearing of vast
areas of forest for conversion to agricultural uses;
(9) 80 percent of the population of Haiti lives below the
poverty line;
(10) two-thirds of the population of Haiti depend on the
agricultural sector, which consists mainly of small-scale
subsistence farming;
(11) 60 percent of the population of Haiti relies on
charcoal produced from cutting down trees for cooking fuel;
(12) soil erosion represents the most direct effect of the
deforestation of Haiti, as the erosion has--
(A) lowered the productivity of the land due to the poor
soils underlying the tropical forests;
(B) worsened the severity of droughts and flooding events;
(C) led to further deforestation;
(D) significantly decreased the quality and, as a result,
quantity of freshwater and clean drinking water available to
the population of Haiti; and
(E) increased the pressure on the remaining land and trees
in Haiti;
(13) tropical forests provide forest cover to soften the
effect of heavy rains and reduce erosion by anchoring the
soil with their roots;
(14) when trees are cleared, rainfall runs off the soil
more quickly and contributes to floods and further erosion;
(15) in 2004, Hurricane Jeanne struck Haiti, killing
approximately 3,000, and affecting over 200,000, people,
partly because deforestation had resulted in the clearing of
large hillsides, which enabled rainwater to run off directly
to settlements located at the bottom of the slopes;
(16) research conducted by the United Nations Environmental
Programme has revealed a direct (89 percent) correlation
between the extent of the deforestation of a country and the
incidence of victims per weather event in the country;
(17) the consequences of the January 2010 earthquake in
Haiti, which destroyed much of the infrastructure of Port au
Prince, were greater because of deforestation which reduced
hillside stability and increased the likelihood of mudslides,
soil erosion, and flooding--factors that also negatively
impacted the water supply and heightened concerns for the
spread of waterborne diseases;
(18) finding economic benefits for local communities from
sustainable uses of tropical forests is critical for the
long-term protection of the tropical forests in Haiti;
(19) On July 29, 2010, the Supplemental Appropriations Act
of 2010 (Public Law 111-212) was enacted into law, which
included $25,000,000 for ``the reforestation and other
restoration of Haiti's' key watersheds''; and
(20) tropical reforestation efforts would provide new
sources of jobs, income, and investments in Haiti by--
(A) providing employment opportunities in tree seedling
programs, contract tree planting and management, sustainable
agricultural initiatives, sustainable and managed timber
harvesting, and wood products milling and finishing services;
and
(B) enhancing community enterprises that generate income
through the trading of sustainable forest resources, many of
which exist on small scales in Haiti and in the rest of the
region.
(b) Purpose.--The purpose of this Act is to provide
assistance to the Government of Haiti to develop and
implement, or improve, nationally appropriate policies and
actions--
(1) to reduce deforestation and forest degradation in
Haiti;
(2) to increase annual rates of afforestation and
reforestation in a measurable, reportable, and verifiable
manner--
(A) to restore social and economic conditions for
environmental recovery of 35 percent of Haiti's land surface
area within 5 years after the date of enactment of this Act;
(B) to restore within 30 years after the date of enactment
of this Act the forest cover of Haiti to at least 10 percent
of the land in Haiti; and
(C) to establish within 10 years after the date of
enactment of this Act agroforestry cover of land in Haiti to
more than 25 percent; and
(3) to improve sustainable resource management at the
watershed scale.
SEC. 3. DEFINITIONS.
In this Act:
(1) Afforestation.--
(A) In general.--The term ``afforestation'' means the
establishment of a new forest through the seeding of, or
planting of tress on, a parcel of nonforested land.
(B) Inclusion.--The term ``afforestation'' includes--
(i) the introduction of a tree species to a parcel of
nonforested land of which the species is not a native
species; and
(ii) the increase of tree cover through plantations.
(2) Agroforestry.--
(A) In general.--The term ``agroforestry'' refers to
systems in which perennial trees or shrubs are integrated
with crops or livestock, and where perennials constitute a
minimum 10 percent of ground cover.
(B) Inclusion.--Actual forest cover resulting from
agroforestry programs can be counted toward the total forest
cover goal set forth in section (2)(b).
(3) Appropriate committees of congress.--The term
``appropriate committees of Congress'' means--
(A) the Committee on Foreign Relations and the Committee on
Appropriations of the Senate; and
(B) the Committee on Foreign Affairs and the Committee on
Appropriations of the House of Representatives.
(4) Deforestation.--The term ``deforestation'' refers to
the conversion of forest to another land use or the long term
reduction of the tree canopy.
(5) Forest.--
(A) In general.--The term ``forest'' means a terrestrial
ecosystem containing native tree species generated and
maintained primarily through natural ecological and
evolutionary processes.
(B) Exclusion.--The term ``forest'' does not include
plantations, such as crops of trees planted primarily by
humans for the purposes of harvesting.
(6) Reforestation.--
(A) In general.--The term ``reforestation'' refers to the
establishment of forest on lands that were previously
considered as forest, but which have been deforested.
(B) Inclusion.--The term ``reforestation'' includes the
increase of tree cover through plantations.
TITLE I--FORESTATION AND WATERSHED MANAGEMENT ASSISTANCE TO GOVERNMENT
OF HAITI
SEC. 101. FORESTATION ASSISTANCE.
(a) Authority.--
(1) In general.--In accordance with section 117 of the
Foreign Assistance Act of 1961 (22 U.S.C. 2151p) and
consistent with the provisions of paragraph (2), the
President is authorized to provide assistance to the
Government of Haiti in the form of financial assistance,
technology transfers, or capacity building assistance for the
conduct of activities to develop and implement 1 or more
forestation proposals under paragraph (2)--
(A) to reduce the deforestation of Haiti; and
(B) to increase the rates of afforestation and
reforestation in Haiti.
(2) Proposals.--
(A) In general.--Assistance under this title may be
provided to the Government of Haiti to implement one or more
proposals that contain--
(i) a description of each policy and initiative to be
carried out using the assistance;
(ii) adequate documentation to ensure, as determined by the
President, that--
(I) each policy and initiative will be--
(aa) carried out and managed in accordance with widely
accepted environmentally sustainable forestry and
agricultural practices; and
(bb) designed and implemented in a manner by which to
improve the governance of forests by building governmental
capacity to be more transparent, inclusive, accountable, and
coordinated in decisionmaking processes and the
implementation of the policy or initiative; and
(II) the proposals will further establish and enforce legal
regimes, standards, and safeguards designed to ensure that
members of
[[Page S3111]]
local communities in affected areas, as partners and primary
stakeholders, will be engaged in the design, planning,
implementation, monitoring, and evaluation of the policies
and initiatives; and
(iii) a description of how the proposal or proposals
support and aid forest restoration efforts consistent with
the purpose set forth in section 2(b).
(B) Determination of compatibility with certain programs.--
In evaluating each proposal under subparagraph (A), the
President shall ensure that each policy and initiative
described in the proposal submitted by the Government of
Haiti under that subparagraph is compatible with--
(i) broader development, poverty alleviation, sustainable
energy usage, and natural resource conservation objectives
and initiatives in Haiti;
(ii) the development, poverty alleviation, disaster risk
management, and climate resilience programs of the United
States Agency for International Development, including those
involving technical support from the United States Forest
Service; and
(iii) activities of international organizations and
multilateral development banks.
(b) Eligible Activities.--Any assistance received by the
Government of Haiti under subsection (a)(1) shall be
conditional upon development and implementation of a proposal
under subsection (a)(2), which may include--
(1) the provision of technologies and associated support
for activities to reduce deforestation or increase
afforestation and reforestation rates, including--
(A) fire reduction initiatives;
(B) forest law enforcement initiatives;
(C) the development of timber tracking systems;
(D) the development of cooking fuel substitutes;
(E) initiatives to increase agricultural productivity;
(F) tree-planting initiatives; and
(G) programs that are designed to focus on market-based
solutions, including programs that leverage the international
carbon-offset market;
(2) the enhancement and expansion of governmental and
nongovernmental institutional capacity to effectively design
and implement a proposal developed under subsection (a)(2)
through initiatives, including--
(A) the establishment of transparent, accountable, and
inclusive decision-making processes relating to all
stakeholders (including affected local communities);
(B) the promotion of enhanced coordination among ministries
and agencies responsible for agroecological zoning, mapping,
land planning and permitting, sustainable agriculture,
forestry, and law enforcement; and
(C) the clarification of land tenure and resource rights of
affected communities, including local communities;
(3) the development and support of institutional capacity
to measure, verify, and report the activities carried out by
the Government of Haiti to reduce deforestation and increase
afforestation and reforestation rates through the use of
appropriate methods, including--
(A) the use of best practices and technologies to monitor
land use change in Haiti, including changes in the extent of
natural forest cover, protected areas, mangroves,
agroforestry, and agriculture;
(B) the monitoring of the impacts of policies and
initiatives on--
(i) affected communities;
(ii) the biodiversity of the environment of Haiti; and
(iii) the health of the tropical forests of Haiti; and
(C) independent and participatory forest monitoring; and
(4) the development of and coordination with watershed
restoration programs in Haiti, including--
(A) agreements with the Government of Haiti,
nongovernmental organizations, or private sector partners to
provide technical assistance, capacity building, or
technology transfers which support the environmental recovery
of Haiti's watersheds through forest restoration activities,
provided that the assistance will help strengthen economic
drivers of sustainable resource management, reduce
environmental vulnerability, and improve governance,
planning, and community action of watersheds in Haiti;
(B) actions to support economic incentives for sustainable
resource management, may including enhanced incentives for
the replacement of annual hillside cropping with perennial
and non-erosive production systems;
(C) enhanced extension services supporting the sustainable
intensification of agriculture to increase farmer incomes and
reduce pressure on degraded land; and
(D) investments in watershed infrastructure to reduce
environmental vulnerability, including the establishment of
appropriate erosion control measures through reforestation
activities in targeted watersheds or sub-watersheds.
(c) Development of Performance Metrics.--
(1) In general.--If the President provides assistance under
subsection (a)(1), the President, in cooperation with the
Government of Haiti, shall develop appropriate performance
metrics to measure, verify, and report--
(A) the conduct of each policy and initiative to be carried
out by the Government of Haiti;
(B) the results of each policy and initiative with respect
to the tropical forests of Haiti; and
(C) each impact of each policy and initiative on the local
communities of Haiti.
(2) Requirements.--Performance metrics developed under
paragraph (1) shall, to the maximum extent practicable,
include short-term and long-term metrics to evaluate the
implementation of each policy and initiative contained in
each proposal developed under subsection (a)(2).
(d) Reports.--
(1) Initial report.--Not later than 18 months after the
date of enactment of this Act, the President shall submit to
the appropriate committees of Congress a report that
describes the actions that the President has taken, and plans
to take--
(A) to engage with the Government of Haiti, nongovernmental
stakeholders, and public and private nonprofit organizations
to implement this section; and
(B) to enter into agreements with the Government of Haiti
under subsection (a)(1).
(2) Biennial reports.--Not later than 2 years after the
date on which the President first provides assistance to the
Government of Haiti under subsection (a)(1) and biennially
thereafter, the President shall submit to Congress a report
that describes the progress of the Government of Haiti in
implementing each policy and initiative contained in the
proposal submitted under subsection (a)(2).
(e) Additional Assistance.--The President is authorized to
provide financial and other assistance to the Government of
Haiti, local government bodies, or nongovernmental
organizations for the purpose of--
(1) providing local communities information relating to
each policy and initiative to be carried out by the
Government of Haiti through funds made available under
subsection (a)(1);
(2) promoting effective participation by local communities
in the design, implementation, and independent monitoring of
each policy and initiative; and
(3) promoting, consistent with supporting the
sustainability of forestation activities, enhanced watershed
governance, national planning, and community action programs
that lead to increased--
(A) development of a national watershed management policy
for Haiti with the Inter-Ministerial Committee for Land
Management, the Ministry of Environment, Ministry of
Agriculture, and the Ministry of Planning and External
Cooperation;
(B) establishment of an effective forum for donor
coordination related to management and reforestation in
Haiti;
(C) support for the National Center for Geospatial
Information (CNIGS) to provide technology, data, and
monitoring support for improved watershed and forest resource
management at a national scale in Haiti; and
(D) development of effective governance structures in Haiti
for stakeholder engagement, coordination of approaches, and
land use planning and disaster mitigation at the watershed
scale.
TITLE II--GRANTS FOR REFORESTATION
SEC. 201. REFORESTATION GRANT PROGRAM.
(a) Establishment.--The President is authorized to
establish a grant program to carry out the purposes of this
Act, including reversing deforestation and improving
reforestation and afforestation in Haiti.
(b) Grants Authorized.--
(1) In general.--The President is authorized to award
grants and contracts to carry out projects that, in the
aggregate, reverse deforestation and improve reforestation
and afforestation.
(2) Maximum amount.--
(A) In general.--Except as provided in subparagraph (B),
the President may not award a grant under this section in an
amount greater than $500,000 per year.
(B) Exception.--The President may award a grant under this
section in an amount greater than $500,000 per year if the
President determines that the recipient of the grant has
demonstrated success with respect to a project that was the
subject of a grant under this section.
(3) Duration.--The President shall award grants under this
section for a period not to exceed 3 years.
(c) Use of Funds.--
(1) In general.--Grants awarded pursuant to subsection (b)
may be used for activities such as--
(A) providing a financial incentive to protect trees;
(B) providing hands-on management and oversight of
replanting efforts;
(C) focusing on sustainable income-generating growth;
(D) providing seed money to start cooperative reforestation
and afforestation efforts and providing subsequent
conditional funding for such efforts contingent upon required
tree care and maintenance activities;
(E) promoting widespread use of improved cooking stove
technologies, to the extent that this does not result in the
harvesting of tropical forest growth and other renewable fuel
technologies that reduce deforestation and improve human
health; and
(F) securing the involvement and commitment of local
communities--
(i) to protect tropical forests in existence as of the date
of enactment of this Act; and
(ii) to carry out afforestation and reforestation
activities.
(2) Consistency with proposals.--To the maximum extent
practicable, a project carried out using grant funds shall
support and be consistent with the proposal developed
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under section 101(a)(2) that is the subject of the project.
(d) Application.--
(1) In general.--To be eligible for a grant under this
section, an entity shall prepare and submit an application at
such time, in such manner, and containing such information as
the President may reasonably require.
(2) Content.--Each application submitted under paragraph
(1) should be consistent with the findings of the 2007 United
States Agency for International Development report entitled,
``Environmental Vulnerability in Haiti: Findings and
Recommendations'', and shall include--
(A) a description of the objectives to be attained;
(B) a description of the manner in which the grant funds
will be used;
(C) a plan for evaluating the success of the project based
on verifiable evidence; and
(D) to the extent that the applicant intends to use
nonnative species in afforestation efforts, an explanation of
the benefit of the use of nonnative species over native
species and verification that the species to be used are not
invasive.
(3) Preference for certain projects.--In awarding grants
under this section, preference shall be given to applicants
that propose--
(A) to develop market-based solutions to the difficulty of
reforestation in Haiti, including the use of conditional cash
transfers and similar financial incentives to protect
reforestation efforts;
(B) to partner with local communities and cooperatives; and
(C) to focus on efforts that build local capacity to
sustain growth after the completion of the underlying grant
project.
(e) Dissemination of Information.--The President shall
collect and widely disseminate information about the
effectiveness of the demonstration projects assisted under
this section.
SEC. 202. FOREST PROTECTION GRANTS.
Chapter 7 of part I of the Foreign Assistance Act of 1961
(22 U.S.C. 2281 et seq.) is amended by inserting after
section 466 the following new section:
``SEC. 467. PILOT PROGRAM FOR HAITI.
``(a) Submission of List of Areas of Severely Degraded
Natural Resources.--The President, in cooperation with
nongovernmental conservation organizations, shall invite the
Government of Haiti to submit a list of areas within the
territory of Haiti in which tropical forests are seriously
degraded or threatened.
``(b) Review of List.--The President shall assess the list
submitted by the Government of Haiti under subsection (a) and
shall seek to reach agreement with the Government of Haiti
for the restoration and future sustainable use of those
areas.
``(c) Grant Program.--
``(1) Grants authorized.--The President is authorized to
make grants on such terms and conditions as may be necessary
to nongovernmental organizations for the purchase on the open
market of discounted debt of the Government of Haiti, if a
market is determined to be viable, in exchange for
commitments by the Government of Haiti to restore tropical
forests identified by the Government under subsection (a) or
for commitments to develop plans for sustainable use of such
tropical forests.
``(2) Management of protected areas.--Each recipient of a
grant under this subsection shall participate in the ongoing
management of the area or areas protected pursuant to such
grant.
``(3) Retention of proceeds.--Notwithstanding any other
provision of law, a grantee (or any subgrantee) of the grants
referred to in section (a) may retain, without deposit in the
Treasury of the United States and without further
appropriation by Congress, interest earned on the proceeds of
any resulting debt-for-nature exchange pending the
disbursements of such proceeds and interest for approved
program purposes, which may include the establishment of an
endowment, the income of which is used for such purposes.
``(4) Termination of program.--The authority to make grants
under the pilot program shall terminate five years after the
date of the enactment of this Act. The authority may be
renewed for one additional five-year period during the 30-
year reforestation period targeted by this Act if the
President determines and certifies to Congress that the pilot
program is effective in meeting the goals of the Act and the
commitment of the Government of Haiti to returning land in
Haiti to long-term sustainable forests. The cumulative
duration of the pilot program may not exceed ten total
years.''.
TITLE III--ADMINISTRATIVE PROVISION
SEC. 301. DELEGATION.
The President (or the Administrator of the United States
Agency for International Development or the Secretary of
State as the President's delegee) may draw, as appropriate,
on the expertise of the United States Forest Service in
designing and implementing programs pursuant to this Act
relating to reforestation, watershed restoration, and
monitoring of land use change.
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