House Report 105-443 - TROPICAL FOREST CONSERVATION ACT OF 1998

[House Report 105-443]
[From the U.S. Government Publishing Office]

105th Congress Report
2d Session HOUSE OF REPRESENTATIVES 105-443
_______________________________________________________________________

TROPICAL FOREST CONSERVATION ACT OF 1998
_______

March 13, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Gilman, from the Committee on International Relations, submitted
the following

R E P O R T

[To accompany H.R. 2870]

[Including cost estimate of the Congressional Budget Office]

The Committee on International Relations, to whom was
referred the bill (H.R. 2870) to amend the Foreign Assistance
Act of 1961 to facilitate protection of tropical forests
through debt reduction with developing countries with tropical
forests, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:

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.
``(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;
``(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; and
``(3) whose government meets other requirements related to
its environmental policies and practices, as determined by the
President.
``(b) Eligibility Determinations.--
``(1) In general.--Consistent with subsection (a), the
President shall determine whether a country is eligible to
receive benefits under this part.
``(2) Congressional notification.--The President shall notify
the appropriate congressional committees of his intention to
designate a country as an eligible country at least 15 days in
advance of any formal determination.

``SEC. 806. REDUCTION OF DEBT OWED TO THE UNITED STATES AS A RESULT OF
CONCESSIONAL LOANS UNDER THE FOREIGN ASSISTANCE ACT
OF 1961.

``(a) Authority To Reduce Debt.--
``(1) Authority.--The President may reduce the amount owed to
the United States (or any agency of the United States) that is
outstanding as of January 1, 1997, 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, 1997, 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.--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) $50,000,000 for fiscal year 2000; and
``(C) $50,000,000 for fiscal year 2001.
``(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
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
lesser 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) 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.
``(4) 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 a 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 or academic
organizations or institutions 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
to provide grants to preserve, maintain, and restore the tropical
forests in the beneficiary country, including 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 strengthen conservation
institutions and increase 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) Mitigation of greenhouse gases in the atmosphere.
``(6) Development and support of the livelihoods of
individuals living in or near a tropical forest, including the
cultures of such individuals, 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, conservation,
and indigenous people organizations of, or active in,
the beneficiary country;
``(B) other appropriate local or regional entities
of, or active in, the beneficiary country; and
``(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 and conditions apply to an Enterprise for the Americas Fund under
section 707 of this Act:
``(1) The provision relating to deposits under subsection (b)
of such section.
``(2) The provision relating to investments under subsection
(c) of such section.
``(3) The provision relating to disbursements under
subsection (d) of such section.

``SEC. 811. BOARD.

``(a) Enterprise for the Americas Board.--The Enterprise for the
Americas Board established under section 610(a) of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C. 1738i(a)) shall,
in addition to carrying out the responsibilities of the Board under
section 610(c) of such Act, carry out the duties described in
subsection (c) of this section for the purposes of this part.
``(b) Additional Membership.--
``(1) In general.--The Enterprise for the Americas Board
shall be composed of an additional four members appointed by
the President as follows:
``(A) Two representatives from the United States
Government.
``(B) Two representatives from private
nongovernmental environmental, scientific, and academic
organizations with experience and expertise in
preservation, maintenance, 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, and academic leaders
of the beneficiary country, and
``(E) environmental, scientific, 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 fiscal 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 fiscal 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.''.

Background and Purpose

In General

H.R. 2870, the Tropical Forest Conservation Act of 1998,
was introduced on November 7, 1997 by Mr. Portman, Mr. Kasich
and Mr. Hamilton. The bill amends the Foreign Assistance Act of
1961 to facilitate the protection of tropical forests through
debt reduction for developing countries with tropical forests.

The Problem--Diminishing Tropical Forests

Tropical forests are home to half of all known species of
plants and animals. These forests, which include rain, moist
and dry forests, absorb massive quantities of carbon dioxide,
thereby reducing greenhouse gases. Tropical forests serve as
the anchor of the growing eco-tourism industry. These forests
regulate rainfall and are genetic storehouses of materials
essential for new medicines, strains of grain and other
products essential to boosting the health and productivity of
the world's economy in the 21st century. Genetic diversity used
in plant breeding accounts for about one-half of all the grains
in agricultural yields in the U.S. between 1930 and 1980. One
quarter of all prescription drugs in the U.S. contain compounds
derived from wild species.
Since 1950, half of all tropical forests have been burned
or logged. From 1980 to 1990, tropical forest areas have been
shrinking on an average of 30-40 million acres (15.4 million
hectares) per year. This represents an area the size of
Pennsylvania denuded of forest cover each year. In sum,
approximately .8% of the world's total remaining tropical
forest cover is lost each year. At the current rate, half of
all tropical forests will be lost by 2030. By 2015, 6% of all
known living species will become extinct.
While 76 countries contain tropical forests, half of the
remaining forest cover is located in four countries: Brazil,
Indonesia, Peru and the Democratic Republic of the Congo
(Zaire). These four countries plus Mexico and Bolivia account
for over half of tropical deforestation. The loss of habitats
is clearest on islands. When the Philippine island of Cebu was
completely logged, nine out of the island's ten species of
birds unique to the island became extinct.

Developing Country Debt Crisis

Developing countries where most tropical forests are
located suffer from a number of problems including massive
debts to international creditors. Following their independence
and growing economies during the 1950s and 1960s, many
developing countries borrowed heavily from the private sector,
multilateral banks and foreign governments to finance their
development. With the recession of the 1970s following the oil
price shocks, many developing countries were unable to repay
their debts. Developing country debts topped $1.2 trillion in
the late 1980s, much of which could not be repaid. While newly
industrializing countries like Mexico eventually worked their
way out of bankruptcy, many other developing countries
stagnated under debts built up over years past. As a result,
many developing country governments were unable to foster the
conservation of unique habitats within their borders.

The First Debt-for-Nature Swap

The debt crisis presented a unique opportunity for
supporters of conservation who could help developing countries
work their way out of debt. The world's first major debt-for-
nature swap was arranged by Conservation International (CI), a
U.S. environmental organization, in 1987. Using $100,000
donated by the Frank Weeden Foundation, CI purchased $650,000
in debt owed by the Bolivian government. CI agreed to cancel
the debt in return for the Bolivian government's promise to
protect 3.7 million acres in what became the Beni Biosphere
Reserve. The government of Bolivia endowed a fund with $100,000
to help manage the reserve. The U.S. Agency for International
Development (AID) also contributed $250,000 to the management
fund. These funds support the Bolivian National Academy of
Sciences to manage and conserve the reserve.

The Enterprise for the Americas Initiative (EAI)

President Bush accelerated such transactions under his
Enterprise for the Americas Initiative (EAI). One main pillar
of the EAI was debt-for-nature swaps. Under the EAI as approved
by Congress in 1991, the United States forgave $874 million out
of $1.6 billion in debts owed by seven Latin American
countries. The cost of reducing such debt to the U.S. was $90
million. In return, these countries endowed conservation funds
with $154 million to be spent for conservation purposes. Under
the EAI, an international board in each host country composed
of representatives of the U.S. government, host country and
Non-Governmental (NGO) representatives supervised the forest
management and other projects supported by the endowments.
Debt relief for the poorest countries remains a high
priority for President Clinton. Under the President's Highly
Indebted Poor Country (HIPC) program, the United States and
other official creditors are offering increased debt relief for
the poorest countries that continue to sink under the weight of
old loans.
The Committee notes that many developing countries
participating in the Enterprise for the Americas Initiative
(EAI) established a successful track record in making debt
reduction proceeds available for environmental projects. The
Environmental Fund for Jamaica, for example, has used $12
million to provide funding for more than 200 projects in
Jamaica, including several relating to reforestation and the
protection of endangered species in forest habitats. El
Salvador's national EAI fund has allocated nearly $10 million
for a variety of environmental education projects, including
many relating to biodiversity and reforestation. The Committee
believes that such debt-for-nature swaps represent an important
model for the kind of debt reduction authorized in this
legislation, and would welcome the full participation of these
countries in the new facility.

The Tropical Forest Protection Act

H.R. 2870 follows in the legislative path of the EAI in a
number of important aspects. It authorizes the Treasury
Department to offer countries debt relief for commitments to
conservation in much the same way as the EAI. It differs from
the EAI in four key aspects:
Programs would be focused on tropical forest
conservation,
Debtors outside the Americas would be eligible for
relief,
Debt beyond the stock offered under the EAI may be
offered for relief, and
Cost-free debt buybacks by developing countries and
swaps with eligible third parties are specifically
permitted.
As shown above, many key tropical forests are outside of
the Americas. Under H.R. 2870, the U.S. government would be
able to rechannel existing resources to use the EAI debt-relief
mechanism to offer debt relief for the protection of these key
habitats. The Act would also permit the Treasury Department to
offer AID and Department of Agriculture debt beyond amounts
authorized under the EAI for relief and permit eligible third
parties to purchase debt for the beneficiary country in
exchange for that country's providing substantial local
currency for tropical forest conservation. Finally, the U.S.
government would be authorized to offer the innovative debt
buyback mechanism to middle income developing countries in
transactions that do not have an impact on the U.S. budget.
Under such transactions, a debtor country may repurchase its
debt at a fair market value in return for commitments to
protect tropical forests. The government of Peru recently
carried out such a transaction with the U.S. at no net cost to
the taxpayer. Testimony from both the private sector and the
Administration has verified the importance of the programs
provided for in this Act to reduce developing country debt and
preserve tropical forests.

Committee Action

On March 4, 1998, the Full Committee held a hearing on H.R.
2870, The Tropical Forest Protection Act. Witnesses for the
hearing included: Hon. Rob Portman, Member of Congress; Mr.
Thomas Fox, Assistant Administrator, Policy and Planning
Bureau, Agency for International Development; Ms. Mary Chaves,
Director, International Debt Policy, Department of Treasury;
Ms. Tia Nelson, Senior Policy Advisor for Latin American and
Caribbean Programs, The Nature Conservancy; Mr. Ian Bowles,
Vice President of Conservation Policy, Conservation
International; and Mr. James Resor, Director of Conservation
Finance, World Wildlife Fund.
H.R. 2870 was introduced by Rep. Portman on November 7,
1997. The Full Committee marked up the bill in open session,
pursuant to notice, on March 11, 1998. During the debate,
testimony was taken from three Administration officials, Mr.
Michael Klosson, Deputy Assistant Secretary of State for
Legislative Affairs; Ms. Mary Chaves, Director, International
Debt Policy, Department of Treasury; and Mr. James Hester,
Agency Environmental Coordinator, Agency for International
Development.
The Full Committee considered the bill as original text for
the purpose of amendment and took the following preliminary
action, by voice vote: Adopted the Gilman amendment in the
nature of a substitute as amended by a Campbell amendment.
After concluding consideration of the bill, with a quorum being
present, the Committee ordered the bill favorably reported to
the House by voice vote.

Roll Call Votes

Clause (2)(l)(2)(B) of rule XI of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. No roll call votes were held on the motion to report
the legislation or on amendments to the legislation.

Committee Oversight Findings

In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
the findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.

Committee on Government Reform and Oversight Findings

No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.

New Budget Authority and Tax Expenditures

The Committee adopts the cost estimate of the Congressional
Budget Office, set out below, as its submission of any required
information on new budget authority, new spending authority,
new credit authority, or an increase or decrease in the
national debt required by clause 2(l)(3)(B) of rule XI of the
Rules of the House of Representatives.

Federal Mandates Statement

The Committee adopted as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.

Applicability to the Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.

Constitutional Authority Statement

In compliance with clause 2(l)(4) of rule XI of the Rules
of the House of Representatives, the Committee cites the
following specific powers granted to the Congress in the
Constitution as authority for enactment of H.R. 2870 as
reported by the Committee: Article I, section 8, clause 3
(relating to the regulation of commerce with foreign nations
and among the several states); and Article I, section 8, clause
18 (relating to making all laws necessary and proper for
carrying into execution powers vested by the Constitution in
the government of the United States).

Advisory Committee Statement

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.

Congressional Budget Office Cost Estimate

In compliance with clause 2(l)(3)(C) of rule XI of the
Rules of the House of Representatives, the Committee sets forth
with respect to H.R. 2870 as reported by the Committee the
following estimate and comparison prepared by the Director of
the Congressional Budget Office under section 403 of the Budget
Act of 1974:

U.S. Congress,
Congressional Budget Office,
Washington, DC, March 13, 1998.
Hon. Benjamin A. Gilman,
Chairman, Committee on International Relations,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2870, the Tropical
Forest Conservation Act of 1998.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Joseph C.
Whitehill.
Sincerely,
June E. O'Neill, Director.
Enclosure.

H.R. 2870--Tropical Forest Conservation Act of 1998

Summary: H.R. 2870 would authorize the Secretary of State
to negotiate agreements with eligible countries to create local
funds administered by local boards with the authority to make
grants to preserve, maintain, and restore tropical forests. The
local funds would receive a stream of interest payments
generated by modifying the terms of outstanding development
assistance or food-aid debt owed to the United States. In
addition, the bill would authorize the President to reduce or
cancel such debt, to use the debt for debt-for-nature swaps, or
to allow an eligible country to buy back its debt. The bill
would authorize the appropriation of $325 million over the
fiscal years 1999-2001 for the cost of modifying debt, and CBO
estimates that outlays totaling that amount would be recorded
over the 1999-2003 period.
Because H.R. 2870 would not affect direct spending or
receipts, pay-as-you-go procedures would not apply. The bill
contains no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act of 1995 (UMRA), and
would not affect the budgets of state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2870 is shown in the following table.
The costs of this legislation fall within budget function 150
(international affairs).
Basis of estimate: The estimate assumes enactment of H.R.
2870 and subsequent appropriation of the amounts authorized by
the bill. Outlays would be recorded at the time outstanding
debt are modified. The estimated assumes it will take from one
to three years to negotiate agreements with eligible countries
and to sign bilateral agreements that cancel, reduce, sell, or
otherwise modify outstanding debt.

[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION

Spending under current law for debt restructuring:
Budget authority \1\.................................. 27 0 0 0 0 0
Estimated outlays..................................... 31 15 1 0 0 0
Proposed changes:
Authorization level................................... 0 50 125 150 0 0
Estimated outlays..................................... 0 23 81 133 81 8
Spending under H.R. 2870 for debt restructuring:
Authorization level \1\............................... 27 50 125 150 0 0
Estimated outlays..................................... 31 38 82 133 81 8
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the amount appropriated for that year.

Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: The bill
contains no intergovernmental or private-sector mandates as
defined in UMRA, and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Federal Costs: Joseph C. Whitehill;
Impact on State, Local, and Tribal Governments: Pepper
Santalucia; Impact on the Private Sector: Lesley Frymier.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.

Section-by-Section Analysis

SEC. 801. SHORT TITLE

This section allows this section of the Foreign Assistance
Act to be cited as the ``Tropical Forest Conservation Act of
1998''.

SEC. 802. FINDINGS AND PURPOSES

This section makes the following findings by Congress:
(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.
The section also sets out the following purposes of the
Act:
(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

This section defines the following terms used in the Act:
(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 theTropical
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

This section establishes the Tropical Forest Facility in
the Department of the Treasury to provide for the
administration of debt reduction in accordance with this part.
The Committee encourages the Treasury Department to show
flexibility in the administration and operation of the Tropical
Forest Facility, Tropical Forest Funds and Tropical Forest
Agreements to limit bureaucracy and to maximize efficiencies.
For those beneficiary countries that are also participating in
the Enterprise for the Americas Initiative, for example, it may
be advisable for the local administering bodies established
under Section 809(c) to build on, work with, or consist of the
same organizations and individuals that are part of the
administering bodies under the Enterprise for the Americas
Initiative. It may also be appropriate to consolidate the work
of, share resources with and otherwise coordinate the Tropical
Forest Facility and the EAI Facility within the Treasury
Department. Because the eligible activities under this
legislation are different from the Enterprise for the Americas
Initiative and other programs, however, it is essential that
funds for this program remain segregated from funds for any
other program. Tropical Forest Agreements must also be separate
and apart from EAI Framework Agreements for the same reasons.

SEC. 805. ELIGIBILITY FOR BENEFITS

This section establishes the eligibility requirements for
benefits under the Act. Subsection (a)(1) requires the
developing country with a tropical forest to meet the
requirements applicable to Latin American or Caribbean
countries under paragraphs (1) through (5) and (7) of section
703(a) of the Foreign Assistance Act.
These paragraphs contain several requirements. First, the
government must be democratically elected. Second, the
government is prohibited from: repeatedly supporting acts of
international terrorism; failing to cooperate on international
narcotics control matters; and engaging in violations of
internationally recognized human rights. Finally, the
government must receive approval for or (in exceptional cases)
make significant progress towards an IMF standby arrangement;
have a structural or sectoral adjustment loan of the World Bank
in place (unless the President determines that the standby or
adjustment requirements could reasonably be expected to have
significant adverse social or environmental effects); and, as
appropriate, have reached an agreement with commercial bank
lenders on a satisfactory lending program.
Subsection (a)(2) requires the developing country to have
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. The
Committee intends that such reforms would be consistent with
the goals of the Act.
Subsection (a)(3) requires the developing country to meet
any other requirements related to its environmental policies
and practices, as determined by the President.
Subsection (b)(1) governs eligibility determinations as
required by subsection (a) and a notification to Congress under
(b)(2) of whether a country is eligible to receive benefits
under this part to 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
The Act requires that in addition to meeting the
eligibility criteria under EAI, a country must meet other
requirements related to its environmental policies and
practices. This provision recognizes the progress that has been
made by many countries since the enactment of EAI with the
focus more narrowly placed on the protection of tropical
forests. It is not the intent of this provision to exclude
countries that currently do not have environmental policies and
practices, but only those countries who show no willingness to
work toward implementing programs that can facilitate the
activities contemplated under this bill.
The Act also requires a country to have a government that
is democratically elected. One of the purposes of this
legislation is to promote democracy in those areas of the world
where it has not yet taken hold. The Committee intends to give
the Administration flexibility in interpreting this provision.
In addition to the eligibility criteria outlined in the
legislation, the Committee notes that to qualify under this
program, a country must have at least one tropical forest that
is globally outstanding in terms of its biological diversity or
have a tropical forest that is one of the larger intact blocks
of tropical forests left, on a regional, continental or global
scale. The intention of this provision is to ensure that
limited resources are used in a targeted fashion. When
exercising the authority under this Act, the President may also
want to consider the immediacy or severity of the threat posed
to a tropical forest, such as the burnings that have occurred
in various countries over the past year. The President may also
want to consider the potential benefits from the transaction,
such as the ability to leverage more conservation dollars in
local currency with the reduction of U.S. debt.
The Committee notes that there are a number of countries,
such as Bangladesh, that have tropical forests that are
significant on a regional scale which should qualify and would
benefit from reforestation and other conservation efforts
contemplated under this program. According to the Food and
Agricultural Organization's Forest Resource Assessment for
1990, Bangladesh has 769,000 hectares (approximately 1.9
million acres) of natural forest cover. This habitat is
critical to the region and is under pressure from Bangladesh's
high population density. Given Bangladesh's high level of
indebtedness to the U.S. government, the Committee believes
that Bangladesh is an ideal candidate fordebt relief under this
Act. The Committee's understanding of current law is that if debt
relief is provided to Bangladesh or any other P.L.-480 Title I
recipient under this Act, that the country will remain eligible for
agricultural credits. It is the Committee's understanding that
constraints on new lending under section 411 of the Agricultural Trade
and Development Assistance Act of 1954 (7 U.S.C. 1701 et seq.) not
carry over to the provisions of this Act.

SEC. 806. REDUCTION OF DEBT OWED TO THE UNITED STATES AS A RESULT OF
CONCESSIONAL LOANS UNDER THE FOREIGN ASSISTANCE ACT OF 1961

Subsection (a) provides the President with the authority to
reduce debt owed to the United States (or any agency of the
United States) that is outstanding as of January 1, 1997, as a
result of concessional loans made to an eligible country by the
United States under development assistance (part I of the FAA)
or the economic support fund (chapter 4 of part II), or
predecessor foreign economic assistance legislation.
Subsection (a)(2) authorizes 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
in the following amounts: $25,000,000 for fiscal year 1999,
$75,000,000 for fiscal year 2000, and $100,000,000 for fiscal
year 2001.
Under subsection (3)(A) debt reductions under this section
are not considered to be assistance for purposes of any
provision of law limiting assistance to a country. Subsection
(B) provides that this authority may be exercised
notwithstanding requirements for the full repayment of debts to
the U.S. under section 620(r) of the FAA or section 321 of the
International Development and Food Assistance Act of 1975.
Subsection (b) requires the Facility to carry out any debt
reduction by exchanging new obligations for obligations of the
type referred to in subsection (a) outstanding as of the date
specified in subsection (a)(1). Subsection (2)(A) required the
Facility to notify AID (the agency primarily responsible for
administering part I of the FAA) of an agreement entered into
under paragraph (1) with an eligible country to exchange a new
obligation for outstanding obligations.
Subsection (c) adds additional terms and conditions for
debt reduced under subsection (a)(1). These terms must be
provided in the same manner as such terms and conditions apply
to the reduction of debt under the EAI (section 704(a)(1) of
the FAA), including repayment in U.S. dollars (Section 705) and
that interest be charged at concessional rates (section 706).

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

This section follows the example of section 806 but
concerns debt extended under Title I of the Agricultural Trade
Act of 1954. Subsection (a)(1) provides the authority to the
President to reduce the amount owed to the United States (or
any agency of the United States) that is outstanding as of
January 1, 1997, 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.
Subsection (a)(2) authorizes the appropriations of the
following amounts for cost as defined under section 502(5) of
the Federal Credit Reform Act of 1990: $25,000,000 for fiscal
year 1999, $50,000,000 for fiscal year 2000, and $50,000,000
for fiscal year 2001.
Subsection (b)(2) requires the Facility to 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.
Subsection (c) requires 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 the EAI section
of the Agricultural Trade Development and Assistance Act of
1954 (section 604(a)(1) or 7 U.S.C. 1738c). Other requirements
include the repayment of principal (section 605), and
concessional interest (section 606).

SEC. 808. AUTHORITY TO ENGAGE IN DEBT-FOR-NATURE SWAPS AND DEBT
BUYBACKS

This section includes new language permitting debtors who
can afford to repurchase their debts in return for commitments
to the environment. The Committee understands that the U.S.
government recently concluded such a transaction with the
government of Peru.
Under subsection (a), the President may, in accordance with
this section, sell to any eligible purchaser described in
subparagraph (B) any concessional development assistance loans
described in section 806(a)(1) or any agricultural 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).
Under subsection (B), loans or credits 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). Subsection (C) requires that before the sale, or any
reduction or cancellation of debt, that the President 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). Subsection (D) limits the authorization of
appropriations for such purchasers to the amounts authorizedto
appropriated under sections 806(a)(2) and 807(a)(2).
Under subsection (2) the President may sell to any eligible
country any development assistance concessional loans
(described in section 806(a)(1)) or any agricultural credits
(described in section 807(a)(1)). On receipt of payment from an
eligible country, the President may 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. The President may only do this if the eligible
country uses an additional amount of the local currency of the
eligible country, equal to not less than the lesser 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).
For example, if Bolivia owed the U.S. government $1 million
in development loan debt with a net present value of $600,000,
the President could sell that debt to Peru for $600,000 only if
Peru commited to provide the lesser of the difference from the
purchase price from the face value ($400,000) or 40% of the
price paid ($240,000). In sum, Peru could purchase $1 million
of its debt if it paid the U.S. government $600,000 and
commited $240,000 to tropical forest conservation projects
managed under an international agreement specified under this
Act.
Under subsection (3), funds to carry out swaps and buybacks
may be made available only to the extent provided in advance by
appropriations for the cost as defined in section 502(5) of the
Credit Reform Act of 1990 for the modification of any debt.
Subsection (4) authorizes the President to establish the
terms and conditions under which loans and credits may be sold,
reduced, or canceled pursuant to this section. Subsection (5)
requires the Facility to notify the administrator of AID or the
Commodity Credit Corporation (CCC) of eligible purchasers
described in paragraph (1)(B) that the President has determined
to be eligible under paragraph (1), and shall direct AID or the
CCC to carry out the sale, reduction, or cancellation of a
loan. AID or the CCC would then make adjustments in its
accounts to reflect the sale, reduction, or cancellation.
Subsection (b) required the proceeds from the sale,
reduction, or cancellation of any loan sold, reduced, or
canceled pursuant to this section to be deposited in the United
States Government account or accounts established for the
repayment of such loan.

SEC. 809. TROPICAL FOREST AGREEMENT

This section authorizes the Secretary of State to enter
into a Tropical Forest Agreement with any eligible country
concerning the operation and use of the Fund for that country.
The Secretary must consult with the Board in accordance with
section 811. These agreements must contain the requirements
contained in section 708(b) of the FAA (relating to interest
payments, prompt disbursements, conservation of value, purposes
of the agreement and enforcement terms), applied in the same
manner as such requirements apply to an EAI Americas Framework
Agreement.
Funds disbursed from the Fund in each beneficiary country
must be administered by a body constituted under the laws of
that country. The administering body must consist of one or
more individuals appointed by the United States Government, one
or more individuals appointed by the government of the
beneficiary country and individuals who represent a broad range
of environmental non-governmental organizations of, or active
in, the beneficiary country, local community development non-
governmental organizations of the beneficiary country and
scientific or academic organizations or institutions of the
beneficiary country. A majority of the members of the
administering body must be representatives of scientific or
academic organizations or institutions of the beneficiary
country.
The required responsibilities of the administering bodies
are contained in section 708(c)(3) of the FAA (relating to the
receipt of grant proposals, program oversight, annual audits,
access by the U.S. General Accounting Office, and annual
reports) and apply in the same manner as such requirements
apply to an administering body described in section 708(c)(1)
of the FAA.
Subsection (d) details the eligible activities that can be
supported. The administering bodies may provide grants to
preserve, maintain, and restore the tropical forests in the
beneficiary country, including 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 strengthen conservation
institutions and increase 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) Mitigation of greenhouse gases in the atmosphere,
and
(6) Development and support of the livelihoods of
individuals living in or near a tropical forest,
including the cultures of such individuals, in a manner
consistent with protecting such tropical forest.
In conjunction with these activities, a beneficiary country
is encouraged to enforce its laws against illegal logging and
illegal trade in tropical timber.
Subsection (e) specifies eligible grant recipients who are:
(A) nongovernmental environmental, conservation, and
indigenous people organizations of, or active in, the
beneficiary country;
(B) other appropriate local or regional entities of,
or active in, the beneficiary country; and
(C) in exceptional circumstances, the government of
the beneficiary country.
The Committee stresses that governments should be truly
rare recipients of grants made by Administering boards--less
than 1% of the number of grants or funds made available. This
subsection also establishes that priority must be given to
projects that are run by nongovernmental organizations and
other private entities and that involve local communities in
their planning and execution. Subsection (f) provides that any
grant of more than $100,000 from a Fund is also subject to a
veto by the Government of the United States or the government
of the beneficiary country.
Subsection (g) provides that if 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

This section requires that 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.
Subsection (b) requires that the 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 the FAA (relating to the deposit of local
currencies not considered as assistance, the investment of
funds not expended and the requirement that funds be disbursed
only pursuant to the agreement).

SEC. 811. BOARD

This section expands the duties of the Enterprise for the
Americas Board which in addition to carrying out the
responsibilities of the Board under section 610(c) of the FAA,
will carry out the duties described in subsection (c) of this
section for the purposes of this part. The Act requires the
addition of four members to the EAI board appointed by the
President as follows:
(A) Two representatives from the United States
Government, and
(B) Two representatives from private nongovernmental
environmental, scientific, and academic organizations
with experience and expertise in preservation,
maintenance, and restoration of tropical forests.
This section provides, notwithstanding section 610(b)(2) of
the Agricultural Trade Development and Assistance Act of 1954
(7 U.S.C. 1738i(b)(2)) that the 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. The duties of the Board are expanded to reflect the
broader scope of this Act, including advising the Secretary of
State on the negotiations of Tropical Forest Agreements,
consultation with the government of the beneficiary country,
non-governmental organizations of the beneficiary country, non-
governmental organizations of the region (if appropriate),
environmental, scientific, and academic leaders of the
beneficiary country, and environmental, scientific, and
academic leaders of the region (as appropriate) to identify a
suitable administering body; and oversight and review of the
programs, operations, and fiscal audits of each administering
body.
Under the Enterprise for the Americas Initiative,
individual Environmental Framework Agreements establishing the
local boards limit administrative expenses to a certain
percentage (typically 10 percent) of the total annual interest
payments made into the account by the host country. The purpose
of this cap was to minimize the risk that funds would be
diverted from environmental (and child survival) projects to
overhead. The Committee understands that six of the seven
countries participating in Enterprise for the Americas
Initiative have a cap on administrative expenses equal to or
less than 10 percent of the total annual interest payments. The
Committee also understands that this administrative cap can be
changed only by amending the bilateral agreements through an
exchange of notes between the U.S. Government and the
beneficiary country.
It is the intention of the Committee that administrative
expenses are generally not to exceed 10 percent of the total
annual interest payments made into a Tropical Forest Fund and
that such cap should be referenced in all Tropical Forest
Agreements with the beneficiary country.
In order to avoid duplication of effort and to maximize
efficiencies, the bill provides that the EAI Board shall have
expanded authority and membership to oversee the operational
implementation of the Tropical Forest Agreements and Funds.

SEC. 812. CONSULTATIONS WITH THE CONGRESS

This section requires the President to 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

Section (a) requires the President to transmit a report,
not later than December 31 of each fiscal year, concerning the
operation of the Facility for the prior fiscal year. This
report must include a description of the activities undertaken
by the Facility during the previous fiscal year, a description
of any Agreement entered into under this part, a report on any
Funds that have been established under this part and on the
operations of such Funds and a description of any grants that
have been provided by administering bodies pursuant to
Agreements under this part.
Subsection (b) requires that not later than December 15 of
each fiscal year, each member of the Board shall be entitled to
receive a copy of the report required in 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.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (new matter is printed
in italic and existing law in which no change is proposed is
shown in roman):

FOREIGN ASSISTANCE ACT OF 1961

* * * * * * *

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.
(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;
(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;
and
(3) whose government meets other requirements related
to its environmental policies and practices, as
determined by the President.
(b) Eligibility Determinations.--
(1) In general.--Consistent with subsection (a), the
President shall determine whether a country is eligible
to receive benefits under this part.
(2) Congressional notification.--The President shall
notify the appropriate congressional committees of his
intention to designate a country as an eligible country
at least 15 days in advance of any formal
determination.

SEC. 806. REDUCTION OF DEBT OWED TO THE UNITED STATES AS A RESULT OF
CONCESSIONAL LOANS UNDER THE FOREIGN ASSISTANCE ACT
OF 1961.

(a) Authority To Reduce Debt.--
(1) Authority.--The President may reduce the amount
owed to the United States (or any agency of the United
States) that is outstanding as of January 1, 1997, 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, 1997, 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 Facilityby 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 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 lesser 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) 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.
(4) 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) shallapply to a 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 or academic
organizations or institutions
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 to provide grants to preserve, maintain, and restore
the tropical forests in the beneficiary country, including 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 strengthen conservation
institutions and increase 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) Mitigation of greenhouse gases in the atmosphere.
(6) Development and support of the livelihoods of
individuals living in or near a tropical forest,
including the cultures of such individuals, 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,
conservation, and indigenous people
organizations of, or active in, the beneficiary
country;
(B) other appropriate local or regional
entities of, or active in, the beneficiary
country; and
(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 and conditions apply to an Enterprise
for the Americas Fund under section 707 of this Act:
(1) The provision relating to deposits under
subsection (b) of such section.
(2) The provision relating to investments under
subsection (c) of such section.
(3) The provision relating to disbursements under
subsection (d) of such section.

SEC. 811. BOARD.

(a) Enterprise for the Americas Board.--The Enterprise for
the Americas Board established under section 610(a) of the
Agricultural Trade Development and Assistance Act of 1954 (7
U.S.C. 1738i(a)) shall, in addition to carrying out the
responsibilities of the Board under section 610(c) of such Act,
carry out the duties described in subsection (c) of this
section for the purposes of this part.
(b) Additional Membership.--
(1) In general.--The Enterprise for the Americas
Board shall be composed of an additional four members
appointed by the President as follows:
(A) Two representatives from the United
States Government.
(B) Two representatives from private
nongovernmental environmental, scientific, and
academic organizations with experience and
expertise in preservation, maintenance, 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, and academic
leaders of the beneficiary country, and
(E) environmental, scientific, 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 fiscal
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 fiscal 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.