[House Report 107-663]
[From the U.S. Government Publishing Office]



107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-663

======================================================================
 
      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                       APPROPRIATIONS BILL, 2003

                                _______
                                

 September 19, 2002.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Kolbe, from the Committee on Appropriations, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 5410]

    The Committee on Appropriations submits the following 
report in explanation of the accompanying bill making 
appropriations for Foreign Operations, Export Financing, and 
Related Programs, and for sundry independent agencies and 
corporations for the fiscal year ending September 30, 2003, and 
for other purposes.

                        INDEX TO BILL AND REPORT

_______________________________________________________________________


                                                               Page

                                                            Bill Report
Summary of the Bill........................................
                                                                      2
Committee Recommendations..................................
                                                                      3
Title I--Export and Investment Assistance:
        Export-Import Bank of the United States............     2
                                                                      6
        Overseas Private Investment Corporation............     4
                                                                      7
        Trade and Development Agency.......................     6
                                                                      8
Title II--Bilateral Economic Assistance:
        Child Survival and Health Programs Fund............     6
                                                                      9
        Development Assistance.............................    12
                                                                     19
        International Disaster Assistance..................    13
                                                                     34
        Transition Initiatives.............................    14
                                                                     35
        Development Credit Authority.......................    14
                                                                     36
        Payment to the Foreign Service Retirement and 
            Disability Fund................................    15
                                                                     36
        Operating Expenses of the United States Agency for 
            International Development......................    16
                                                                     36
        Capital Investment Fund............................    16
                                                                     40
        Operating Expenses of the Agency for International 
            Development, Office of the Inspector General...    17
                                                                     41
        Economic Support Fund..............................    18
                                                                     41
        International Fund for Ireland.....................    21
                                                                     49
        Assistance for Eastern Europe and the Baltic States    21
                                                                     50
        Assistance for the Independent States of the Former 
            Soviet Union...................................    24
                                                                     52
Independent Agencies:
        Inter-American Foundation..........................    28
                                                                     57
        African Development Foundation.....................    28
                                                                     57
        Peace Corps........................................    29
                                                                     58
Department of State:
        International Narcotics Control and Law Enforcement    30
                                                                     58
        Andean Counterdrug Initiative......................    30
                                                                     61
        Migration and Refugee Assistance...................    33
                                                                     65
        Emergency Refugee and Migration Assistance Fund....    34
                                                                     68
        Nonproliferation, Anti-terrorism, Demining and 
            Related Programs...............................    34
                                                                     68
Department of the Treasury:
        International affairs technical assistance.........    36
                                                                     69
Title III--Military Assistance:
        International Military Education and Training......    36
                                                                     70
        Foreign Military Financing Program.................    37
                                                                     71
        Peacekeeping Operations............................    40
                                                                     74
Title IV--Multilateral Economic Assistance:
        Global Environment Facility........................    41
                                                                     74
        International Development Association (IDA)........    41
                                                                     74
        Multilateral Investment Guarantee Agency...........    41
                                                                     75
        Inter-American Investment Corporation..............    42
                                                                     76
        Multilateral Investment Fund.......................    42
                                                                     76
        Asian Development Fund (ADF).......................    42
                                                                     76
        African Development Bank...........................    42
                                                                     77
        African Development Fund (AFDF)....................    43
                                                                     77
        European Bank for Reconstruction and Development 
            (EBRD).........................................    43
                                                                     77
        International Fund for Agricultural Development 
            (IFAD).........................................    44
                                                                     77
Department of State:
        International Organizations and Programs...........    44
                                                                     78
Title V--General Provisions................................    44
                                                                     78
House of Representatives Report Requirements...............
                                                                     83

                          SUMMARY OF THE BILL

    The Committee has recommended foreign assistance and export 
financing funding at a level that is $78,678,000 above the 
Administration's fiscal year 2003 request of $16,470,696,000 in 
discretionary budget authority. The resulting total of 
$16,549,374,000 in discretionary appropriations is needed to 
meet the essential requirements of the United States and its 
President in conducting foreign policy and meeting urgent 
humanitarian needs abroad. The primary reason the bill exceeds 
the President's request is the need for additional funds to 
combat HIV/AIDS.

ACCRUAL FUNDING OF RETIREMENT COSTS AND POST-RETIREMENT HEALTH BENEFITS

    The President's Budget included a legislative proposal 
under the jurisdiction of the House Committee on Government 
Reform to charge to individual agencies, starting in fiscal 
year 2003, the fully accrued costs related to retirement 
benefits of Civil Service Retirement System employees and 
retiree health benefits for all civilian employees. The Budget 
also requested an additional dollar amount in each affected 
discretionary account to cover these accrued costs.
    Without passing judgment on the merits of this legislative 
proposal, the Committee has reduced the dollar amounts of the 
President's request shown in the ``Comparative Statement of New 
Budget Authority'' and other tables in this report to exclude 
the accrual funding proposal. The disposition by Congress of 
the legislative proposal is unclear at this time. Should the 
proposal be passed by Congress and enacted, the Committee will 
make appropriate adjustments to the President's request to 
include accrual amounts.
    The Committee further notes that administration proposals 
requiring legislative action by the authorizing committees of 
Congress are customarily submitted in the budget as separate 
schedules apart from the regular appropriations requests. 
Should such a proposal be enacted, a budget amendment formally 
modifying the President's appropriation request for 
discretionary funding is then transmitted to the Congress.
    The Committee is concerned that this practice, which has 
always worked effectively for both Congress and past 
administrations, was not followed for the accrual funding 
proposal. In this case, the Office of Management and Budget 
(OMB) decided to include accrual amounts in the original 
discretionary appropriations language request. These amounts 
are based on legislation that has yet to be considered and 
approved by the appropriate committees of Congress. This led to 
numerous misunderstandings both inside and outside of Congress 
of what was the ``true'' President's budget request. The 
Committee believes that, in the future, OMB should follow long-
established procedures with respect to discretionary spending 
proposals that require legislative action.
    The following chart indicates, by relevant account within 
this appropriations act, the budget request with and without 
the accrual proposal of the President.

------------------------------------------------------------------------
                                                 Accrual       03 w/o
            Account              03 request      portion       accrual
------------------------------------------------------------------------
Export-Import Bank                70,300,000     1,928,000    68,372,000
 administrative expenses......
OPIC administrative expenses..    40,676,000       791,000    39,885,000
Trade and Development Agency..    44,696,000       184,000    44,512,000
USAID Operating Expenses......   586,087,000    13,887,000   572,200,000
USAID Inspector General.......    34,046,000     1,346,000    32,700,000
Inter-American Foundation.....    14,185,000       185,000    14,000,000
Peace Corps...................   320,228,000     3,228,000   317,000,000
International Narcotics.......   197,713,000       713,000   197,000,000
Migration and Refugee           \1\ 705,565,       565,000  \2\ 705,000,
 Assistance...................           000                        000
------------------------------------------------------------------------
\1\ W/admin. ceiling of 16,565,000.
\2\ W/admin. ceiling of 16,000,000.

                       COMMITTEE RECOMMENDATIONS

    For export and investment assistance programs the Committee 
has recommended a gross total of $723,097,000 which is 
partially offset by collections and a negative subsidy totaling 
$319,000,000. The subsidy appropriation for the Export-Import 
Bank is $541,400,000 and the Trade and Development Agency is 
funded at $49,512,000. Consistent with the President's budget 
request, the Committee has provided $24,000,000 in subsidy 
appropriations for the Overseas Private Investment Corporation.
    The Committee has recommended $1,345,997,000 of the 
$1,437,097,000 requested for the international financial 
institutions. The overall level is $170,801,000 above the 
fiscal year 2002 enacted level and $91,500,000 below the 
request.
    For development and humanitarian assistance, the Committee 
has recommended a total of $4,165,191,000 of which 
$1,710,000,000 is for child survival and health programs. 
Another $1,398,000,000 is for longer-term development 
assistance. The Committee has also included $315,500,000 for 
disasters worldwide and $40,000,000 for transition initiatives.
    The Committee has continued its highly effective Child 
Survival and Health Programs Fund. The account is designed to 
ensure that there will not be reductions in these vital 
programs as the overall bilateral assistance program is 
constrained. The emphasis is on programs that directly affect 
children and on accelerating efforts to eradicate diseases that 
threaten younger children and caregivers alike. As in fiscal 
year 2002, the account includes population assistance, while 
basic education for children is funded through the Development 
Assistance account. It does provide for a grant to UNICEF at a 
level of $120,000,000.
    The Committee has included a total of $755,000,000 in 
assistance to the Independent States of the Former Soviet 
Union, and $520,000,000 for Eastern Europe and the Baltic 
States.
    The Committee has recommended a total of $820,000,000 for 
refugee programs.
    For economic assistance under the Economic Support Fund, 
the Committee has recommended a total of $2,445,000,000.
    The Committee has recommended $347,400,000 for a 
Nonproliferation, Anti-terrorism and Demining account which 
includes funding for the Nonproliferation and Disarmament Fund, 
anti-terrorism assistance, demining activities, United States 
participation in the Korean Energy Development Organization 
(KEDO), and the U.S. voluntary contribution to the 
International Atomic Energy Agency (IAEA).
    For the Foreign Military Financing program, the Committee 
has recommended a grant program of $4,080,200,000, including an 
increase of $60,000,000 in assistance for Israel.

                              AFGHANISTAN

               HUMANITARIAN AND RECONSTRUCTION ASSISTANCE

    In response to the ongoing need for assistance for 
Afghanistan, the Committee recommends a new general provision, 
section 523, providing that not less than $295,500,000 shall be 
made available for humanitarian and reconstruction assistance 
for Afghanistan, including assistance to improve the status of 
women in Afghanistan, assistance to victims of war, and 
assistance to repair roads and bridges.
    Under the heading, ``Economic Support Fund'', the Committee 
recommends language providing that not less than $45,000,000 
should be made available for assistance for Afghanistan, which 
shall be used for reconstruction and other infrastructure 
assistance, including roads and bridges.
    Other humanitarian and economic assistance for Afghanistan 
is provided under the headings ``Child Survival and Health 
Programs Fund'', ``International Disaster Assistance'', 
``International Narcotics and Law Enforcement'', ``Migration 
and Refugee Assistance'', ``Nonproliferation, Anti-terrorism, 
Demining and Related Programs'', and ``International 
Organizations and Programs''.

                        TRADE CAPACITY BUILDING

    The Committee this year places major emphasis on economic 
growth, especially the role of trade capacity building and 
education. Language is included in titles I, II, and V 
directing the Trade and Development Agency, the U.S. Agency for 
International Development, and the Department of State to 
obligate not less than $452,000,000 for myriad activities 
designed to promote trade within and between regions. The 
Committee's emphasis on trade capacity assistance is intended 
to complement the African Growth and Opportunity and Andean 
Trade Acts.
    The Committee is aware that substantial progress toward 
rule of law, effective regulatory structures, transparent 
governance, and a more educated work force are necessary 
companions to effective trade capacity assistance. The 
Committee's objective is to benefit the majority of citizens in 
the beneficiary countries, not the small elite who have 
typically received the bulk of benefits from oil and gas 
exports by developing nations.

                      MILLENNIUM CHALLENGE ACCOUNT

    The Committee notes that in March 2002 the President 
announced a major change in the form and substance of as much 
as $10,000,000,000 in additional United States foreign 
assistance over a three year period beginning in 2004. As the 
Millennium Challenge Account, this new approach to foreign 
assistance would encourage economic development by creating a 
positive competition among potential recipients, with this 
competition rewarding those countries that adopt policies that 
help their citizens.
    On June 27, 2002, the Committee conducted a hearing on the 
Millennium Challenge Account concept, during which Members and 
witnesses expressed a broad range of views and concerns 
regarding the proposed change. A number of members expressed 
interest in funding a pilot project with a relatively small 
appropriation in this Act, so that Congress and the Executive 
branch would better understand the implications of this new 
approach to economic development assistance. To date, the 
Administration has made no legislative proposal or budget 
request for a pilot program. It is the Committee's 
understanding that the inter-agency process has reached no 
common approach regarding management or implementation of the 
proposal. For these reasons, the Committee does not recommend 
funding for a pilot project to test and perfect the Millennium 
Challenge Account concept.
    The Committee expects to be consulted as development of the 
Millennium Challenge Account proceeds within the Executive 
branch. While the Committee welcomes new approaches to foreign 
aid, it remains determined to protect Congress's constitutional 
power of the purse.

               TITLE I--EXPORT AND INVESTMENT ASSISTANCE


                Export-Import Bank of the United States


                         SUBSIDY APPROPRIATION



Fiscal year 2002 level................................      $727,323,000
Fiscal year 2003 request..............................       541,400,000
Committee recommendation..............................       541,400,000


                        ADMINISTRATIVE EXPENSES




Fiscal year 2002 level................................       $63,000,000
Fiscal year 2003 request..............................        68,372,000
Committee recommendation..............................        68,300,000


    The Committee is recommending a subsidy appropriation for 
the Export-Import Bank of $541,400,000 and an appropriation of 
$68,300,000 for administrative expenses. Taken together, the 
recommended appropriation for the Export-Import Bank is 
$180,623,000 less than the fiscal year 2002 level and $72,000 
below the request.
    Although the $541,400,000 requested by the President for 
the subsidy appropriation is a $185,923,000 reduction from the 
fiscal year 2002 level, there should be no cut in Export-Import 
Bank activity levels due to changes in the methodology for 
estimating risk factors as estimated by the Office of 
Management and Budget and required under the Federal Credit 
Reform Act. The Committee expects that this level of subsidy 
will support a projected level of Export-Import Bank 
authorizations of $11,500,000,000 in 2003, approximately 
$500,000,000 higher than the estimated fiscal year 2002 levels.
    The Committee provided no additional funds for a tied-aid 
``war chest''. The estimated $260,500,000 remaining ``war 
chest'' balance for tied-aid purposes may be used to support 
loans.
    The Committee has continued prior year language limiting 
the export of nuclear technology or fuel to certain countries.
    The Committee urges the Export-Import Bank to take into 
account global and domestic market conditions before extending 
financing to foreign buyers, especially with respect to the 
domestic steel market and the President's goal of reducing the 
global excess steel making capacity. The Committee expects the 
Export-Import Bank to report back to the Committee any steel 
related proposals posted on the agenda of the Export-Import 
Bank's Board.
    The Committee recommends a one-year extension of the 
Export-Import Bank's dual use authority, which expired on June 
14, 2002. Dual use authority allows the Bank to finance 
transactions dealing with items that can be used for both 
civilian and military purposes, but must be non-lethal in 
nature, and shall be used predominantly by civilian 
authorities.

                       REPORT ON AMERICAN CONTENT

    The Committee is interested in the implementation of the 
requirements of the charter of the Export-Import Bank on United 
States content. Therefore, the Committee directs that the 
Export-Import Bank prepare and submit a report by February 28, 
2003 on the methodology used to determine United States content 
of goods which are the product of Export-Import Bank backed 
loans or guarantees.

                      BROOKE AMENDMENT PROCEDURES

    The Committee is aware of an inter-agency agreement among 
the Departments of State and Defense, the Export-Import Bank, 
and USAID that establishes reporting procedures regarding 
compliance with section 512 of the bill, the so-called Brooke 
amendment, and section 620(q) of the Foreign Assistance Act. 
The procedures provide a mechanism to share information among 
those agencies regarding countries that are either in arrears 
on loan repayments owed the United States or which may soon 
become so. Since the provision of foreign assistance to 
countries in arrears is restricted by those sections, 
information required by these procedures is of great importance 
to the administration of foreign assistance funds. The 
Committee is therefore concerned about reports that the Export-
Import Bank has, in at least two instances this year, failed to 
provide information on arrearages in a timely fashion in 
accordance with its obligations under the inter-agency 
agreement. The Committee directs the Export-Import Bank to 
follow the inter-agency agreement and not allow a similar lapse 
to occur again.

                Overseas Private Investment Corporation


                           NONCREDIT ACCOUNT




Fiscal year 2002 level................................       $38,608,000
Fiscal year 2003 request..............................        39,885,000
Committee recommendation..............................        39,885,000


                            PROGRAM ACCOUNT




Fiscal year 2002 level................................  ................
Fiscal year 2003 request..............................       $24,000,000
Committee recommendation..............................        24,000,000


    The Committee is recommending a $24,000,000 subsidy 
appropriation for the Overseas Private Investment Corporation's 
(OPIC) direct and guaranteed loan credit programs and 
$39,885,000 for administrative expenses, the same levels as the 
request.
    Because of significant carryover in the credit programs 
account in fiscal year 2002, there was no request by the 
President for an appropriation. Because these funds expire at 
the end of fiscal year 2002, an appropriation is requested and 
needed in fiscal year 2003.
    The Committee continues prior year language required by the 
Federal Credit Reform Act and addressing representation 
expenses and availability of funds.
    As in last year's report, the Committee directs OPIC to 
continue to provide on a semi-annual basis written reports 
including the following information for each investment fund: 
the identity, selection process, and professional background of 
current and past managers; the fees and compensation currently 
provided to senior management; the amount of OPIC guarantees 
and actual investments made at the end of the previous month; 
and any additional observations that OPIC may want to include.
    The Committee commends the managers of OPIC for exploring 
new ways of meeting OPIC's development mandate, but the 
Committee is concerned about attempts by OPIC to offer 
financing guarantees in developing countries without 
coordination with USAID. To ensure that foreign assistance is 
not provided to countries on different terms by different 
United States Government agencies, the Committee expects OPIC 
to coordinate with USAID, OMB and other agencies of the United 
States Government with which OPIC may overlap in providing 
financing. The Committee does not believe that OPIC should 
compete with USAID in countries that have USAID missions and 
programs.

                  Funds Appropriated to the President


                      TRADE AND DEVELOPMENT AGENCY




Fiscal year 2002 level................................       $50,024,000
Fiscal year 2003 request..............................        44,512,000
Committee recommendation..............................        49,512,000


    The Committee is recommending $49,512,000 for the Trade and 
Development Agency (TDA), a decrease of $512,000 below the 2002 
level and $5,000,000 above the request.
    The Committee understands that TDA has achieved an 
extraordinary high level of programming activity in fiscal year 
2002, and it has demonstrated an ability to respond quickly to 
changing United States foreign policy needs after September 
2001 in frontline states and regions in transition from 
conflict. The Committee commends TDA's new trade capacity 
building efforts and initiatives to support United States 
international economic policy, including those related to the 
Africa Growth and Opportunity Act (AGOA) initiative and the 
Partnership for Prosperity.
    The Committee believes that the President's request for 
TDA, a $5,512,000 reduction from fiscal year 2002, is not 
reflective of current demand and anticipated requirements. 
Therefore, the Committee has provided $49,512,000 for TDA, of 
which $5,000,000 above the request is provided for trade 
capacity building activities. In addition, the Committee urges 
the Department of State and USAID to transfer up to $24,000,000 
from title II accounts to TDA.
    In collaboration with the U.S. National Institute of 
Standards and Technology, TDA is encouraged to support United 
States participation in the development of national technical 
standards compatible with American goods and services in key 
transition country markets.

                TITLE II--BILATERAL ECONOMIC ASSISTANCE


                  Funds Appropriated to the President


                  Agency for International Development


              STRUCTURE OF DEVELOPMENT ASSISTANCE ACCOUNTS

    The Committee provides two accounts for longer-term 
development assistance programs managed by the U.S. Agency for 
International Development (USAID). As in fiscal year 2002, the 
bill includes an account for child survival and health 
programs. It also includes a separate development assistance 
account for other program sectors, including economic growth 
and trade capacity building activities, education, environment, 
and governance. The President recommended a single account for 
longer-term development assistance programs.
    Two existing regional accounts jointly managed by the 
Department of State and the Agency for International 
Development are included elsewhere in title II under ``Other 
Bilateral Assistance''. The Committee utilizes the regional 
accounts to fund most economic and political cooperation with 
Russia and the independent states of the former Soviet Union as 
well as the former captive nations of the Soviet Empire in 
Central Europe.
    Finally, authority is provided for the United States to 
make contributions from the Child Survival and Health Programs 
Fund to three international health funds: the Global Fund to 
Fight AIDS, Malaria and Tuberculosis, The Vaccine Fund 
[associated with the Global Alliance for Vaccines and 
Immunizations]; and the International AIDS Vaccine Initiative.

                Child Survival and Health Programs Fund


                     (INCLUDING TRANSFER OF FUNDS)




Fiscal year 2002 level................................    $1,433,500,000
Fiscal year 2003 request..............................  ................
Committee recommendation..............................     1,710,000,000
    (by transfer).....................................       (6,000,000)


    The Committee recommends $1,710,000,000 for the ``Child 
Survival and Health Programs Fund'', an amount that is 
$226,000,000 above the request under the fiscal year 2002 
account structure and $276,500,000,000 above the amount enacted 
for 2002 under the existing account structure. The 
recommendation includes authority for United States 
contributions to three international health funds.

                    OVERVIEW OF HIV/AIDS ASSISTANCE

    The United States has been, and is continuing to be, the 
leader in the global fight against HIV/AIDS. As it has for many 
years, the Committee continues to support the fight against 
HIV/AIDS through United States bilateral assistance programs 
managed by the Agency for International Development. In other 
appropriation Acts, additional support for the fight against 
HIV/AIDS is provided through the Centers for Disease Control 
and the National Institutes of Health.
    In order to protect the integrity of the Child Survival and 
Health Programs Fund and the long-standing role of the 
Secretary of State as primary agent of the President of the 
United States in foreign affairs, the Committee includes 
language from the conference agreement on H.R. 4775 that limits 
transfer of these funds to another department or agency of the 
United States Government. Under the overall policy guidance of 
the Secretary of State, USAID works with both the CDC and the 
NIH in its overseas operations. All of these bilateral programs 
are fully operational today; together they are the worldwide 
leaders in the field.
    The Committee has made available a total of $786,500,000 in 
this bill for HIV/AIDS, of which $746,500,000 is funded through 
the Child Survival and Health Programs Account. Another 
$40,000,000 is provided through other AID-managed accounts, 
such as the Economic Support Fund, International Disaster 
Assistance, and regional accounts for Eastern Europe and the 
former Soviet Union. By comparison, two years ago the Committee 
recommended a total of $210,000,000 and the final conference 
agreement provided $315,000,000 for the same purpose. Last 
year, the comparable amounts were $474,000,000 and 
$475,000,000. Overall, the fiscal 2003 allowance of 
$786,500,000 for HIV/AIDS is $311,000,000 above the fiscal year 
2002 enacted level, an increase of 150 percent over two years, 
and $46,500,000 above the President's request for programs 
funded in this act.

          GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS AND MALARIA

    In order to encourage other donors to match and exceed the 
United States contribution, the Committee recommends that 
$250,000,000 be provided from USAID's Child Survival and Health 
Programs Fund to the Global Fund to Fight AIDS, Tuberculosis 
and Malaria (Global Fund). To date, the President has requested 
$100,000,000 for this purpose in this bill. In addition, 
$100,000,000 has been requested for the Global Fund in the 
Labor, Health, and Human Services Appropriations bill.
    Should the Committee's recommendation in this bill for the 
Global Fund and the President's request for the Global Fund 
from the Department of Health and Human Services both be 
enacted into law, the United States contribution over the 2002-
2003 period would total at least $650,000,000, much more than 
has been made available to the Global Fund, thus far, by all 
other donors. The Committee urges the President and the 
Secretary of State to take advantage of the extensive 
international health field experience of the U.S. Agency for 
International Development by designating, when a vacancy 
occurs, the Assistant Administrator for Global Health as the 
next United States representative on the Governing Board of the 
Global Fund.
    The Committee notes that the Global Fund was established to 
fight the global resurgence of tuberculosis and malaria as well 
as HIV/AIDS. In calculating its recommended allocations by 
USAID of the Child Survival and Health Programs Fund, the 
Committee assumes that the U.S. contribution will be used for 
awards that focus on HIV/AIDS, although some may be used for 
tuberculosis and malaria. The actual distribution of funds by 
the Global Fund will depend on the merits of the proposals it 
receives.
    In order to support the international character of the 
Fund, as jointly announced by the UN Secretary General and the 
U.S. President, the Committee again recommends a burden-sharing 
provision, similar to one recently enacted into law in the 
conference agreement on H.R. 4775, limiting the United States 
cumulative contribution to an amount that does not exceed the 
total resources made available by other donors for immediate 
use by the Global Fund.

      ESSENTIAL ROLE OF FREE MARKET ECONOMIC GROWTH IN DEVELOPMENT

    The Committee has reluctantly resisted appeals to 
accelerate funding increases for this account. The Child 
Survival and Health Programs Fund is only one part of the 
United States effort to help others work toward the standards 
of living most Americans have achieved already. The Committee 
recognizes that the long-term benefits of the Fund are limited 
unless there are future jobs and income for the children we 
help when they grow up to be adults. Continuing USAID support 
for free market approaches to economic growth and trade remains 
essential to complete the work of child survival. In each poor 
country helped by American child survival activities, a 
balanced assistance program also requires cooperation to 
provide reasonably priced and reliable food, clean water, 
efficient power, and global communications as well as access to 
credit.

         ALLOCATION OF CHILD SURVIVAL AND HEALTH PROGRAMS FUND

    Unless modifications are subsequently notified and agreed 
to by the Committees on Appropriations, fiscal year 2003 
appropriations for the Child Survival and Health Programs Fund 
are deemed to be allocated as follows:

        Category                                              Allocation
Child Survival and Maternal Health......................    $340,000,000
Vulnerable children.....................................      30,000,000
HIV/AIDS................................................ \1\ 746,000,000
Other Infectious Diseases...............................     105,000,000
Reproductive Health/Voluntary Family Planning...........     368,500,000
Grant to UNICEF.........................................     120,000,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total in this account.............................   1,710,000,000
Other CSH activities in ESF.............................      90,000,000
CSH activities in regional accounts.....................      75,000,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total in all bilateral accounts...................   1,875,000,000

\1\ The two categories indicated include amounts for TB prevention among 
persons with HIV/AIDS that also may be included in the other infectious 
diseases/TB category.

    A definition of program categories and their components can 
be found on pages 9 through 11 of House Report 107-142 and 
under the heading ``Family Planning/Reproductive Health'' on 
page 12 of Senate Report 107-58. The United States Agency for 
International Development has also issued guidance on this 
matter.
    The Committee is again including bill language that 
prohibits the use of certain funds in this account for 
nonproject assistance, or cash grants, to governments. The 
provision of cash grants as general budget support for 
governments is no longer an appropriate development tool, given 
current funding constraints. To the extent that cash grants are 
necessary for countries in transition or for specific foreign 
policy goals, funds are available through the ``Economic 
Support Fund''.

        CHILD SURVIVAL AND MATERNAL HEALTH: FORMER SOVIET UNION

    The Committee continues to be concerned about the low 
priority assigned to declining maternal and environmental 
health conditions and the increasing incidence of TB/HIV/AIDS 
in Russia, Ukraine, and the Central Asian republics. The 
positive results achieved with the small amounts already spent 
for such programs in recent years have been dramatic. The 
Committee has included bill language regarding a minimum level 
of $45,000,000 to be allocated for child survival and health 
programs within the separate account, ``Assistance to the 
Independent States of the Former Soviet Union.''

           CHILD SURVIVAL AND MATERNAL HEALTH: MICRONUTRIENTS

    The Committee recommends that USAID make every effort to 
provide $30,000,000 from all accounts for its overall 
micronutrient program. Vitamin A is essential to the 
functioning of the immune system and increases children's 
resistance to disease. It affects more than 100 million 
children and is responsible for as many as one out of every 
four child deaths in countries where the problem exists. 
Vitamin A is a low-cost solution to many easily preventable 
diseases, and at least $20,000,000 of the overall micronutrient 
program should be for activities related to Vitamin A 
deficiency.
    The Committee is aware that iodine deficiency disorder 
(IDD) is the leading preventable cause of mental retardation in 
children. The problems associated with iodine deficiency are 
particularly of concern in the former Soviet republics and 
southeast Europe and regions of Africa and South Asia. Private 
funds, raised by Kiwanis International and implemented by 
UNICEF, are preventing the mental retardation of millions of 
children. The Committee recommends that in order to help meet 
the IDD partnership goals, USAID provide a total of at least 
$2,500,000 from the Child Survival and Health Programs Fund and 
$1,000,000 from Europe and Eurasia regional accounts for the 
Kiwanis/UNICEF IDD partnership program.

         CHILD SURVIVAL AND MATERNAL HEALTH: POLIO ERADICATION

    The Committee recommendation includes within the child 
survival and maternal health allocation not less than 
$25,000,000 for the final phases of the program initiated by 
the Committee in fiscal year 1996 to eradicate polio by 2006.

     CHILD SURVIVAL AND MATERNAL HEALTH: VACCINES AND IMMUNIZATION

    The Committee is aware that as many as three million 
children die each year because they do not receive life-saving 
immunizations. Over many years, the Committee has funded 
procurement of polio and other childhood vaccines directly 
through AID and indirectly through the grant to UNICEF. In 
addition, The Vaccine Fund provides resources to support the 
international, public and private partnerships. More than 
$900,000,000 for 60 countries has been committed for 
immunization programs--potentially saving as many as two 
million lives a year. The Committee strongly supports continued 
funding for this program, and recommends that $60,000,000 be 
provided to The Vaccine Fund in fiscal year 2003.

                          VULNERABLE CHILDREN

    The Committee directs AID to allocate $30,000,000 for 
displaced children and orphans and blind children in fiscal 
year 2003.
    Older children permanently placed in orphanages are often 
dismissed from state care and thrown out on the streets to 
survive without skills. Most teenage orphans find that their 
only chance for survival is to participate in criminal acts, 
including prostitution and selling drugs. United States 
assistance in establishing a limited number of vocational-
technical centers will teach these orphans the necessary skills 
to become productive members of society. The Committee is aware 
of the effective programs to address this situation by Kidsave 
International and the Fabretto Children's Foundation and 
requests that USAID support them.
    The Committee is particularly concerned about the 
destitution and abuse of such older children in Central 
America, especially Nicaragua, and requests that the 
Administrator of USAID submit a brief written report to the 
Committee by March 1, 2003 on the status of vulnerable older 
children in Central America and the level of assistance 
provided to organizations helping them.
    The Committee is painfully aware that trafficking in 
children and youth especially affects vulnerable children. 
Although the Committee continues to encounter difficulty in 
obtaining timely information about the identity and funding of 
anti-trafficking projects (apart from those funded through 
regional accounts for Europe and Eurasia) that were authorized 
by P.L. 106-386, it urges USAID officials responsible for 
vulnerable children activities to work closely with the 
appropriate anti-trafficking office in the Department of State 
to alert that office and the Committee regarding any credible 
reports that any NGO advocates so-called consenting 
prostitution, especially among children and youth. The 
Committee was informed of a credible allegation that a European 
NGO supported court action in South Asia to halt efforts to 
rescue children in danger of recruitment as prostitutes.
    According to the World Health Organization there are 1.5 
million blind children around the world. Another 7 million 
children suffer from low levels of vision. The Committee 
recognizes the work being done by Helen Keller Worldwide and 
other organizations to assist blind children and children with 
low levels of vision. These children can be helped through 
simple and inexpensive methods of prevention and low cost care. 
The committee recommends that the AID program for children's 
blindness be funded at a level of $1,500,000.
    The Committee notes that handicapped and other 
disadvantaged children in USAID countries have few 
opportunities for physical exercise that promotes development. 
A significant portion of the $5,000,000 increase above the 
current level for vulnerable children should be allocated for 
established organizations such as Special Olympics and Olympic 
Aid that have a record of accomplishments in this sector.

                           HIV/AIDS: OVERVIEW

    As with all USAID programs, the fight against HIV/AIDS 
requires ``good development partners''. The rapid increase in 
HIV infection in many poor countries can be attributed, in 
part, to government leaders' refusal to publicly acknowledge 
the crisis and to their slowness in dedicating resources to 
fight it. Government leaders have a responsibility to their 
citizens to foster awareness and education, the causes of 
transmission, and the scientifically proven methods to combat 
it. All USAID country strategies for HIV programs must include 
components to encourage behavioral, cultural and social change.
    The United States has long led the world's response to HIV/
AIDS and will expand its financial commitment as effective 
models of assistance and effective partners are identified. For 
fiscal year 2003, the Committee directs USAID to increase 
funding for all of its international AIDS and related TB 
activities from not less than $475,000,000 in 2001 to at least 
$746,000,000 in 2003.
    The Committee urges USAID and the Department of State to 
focus on three priorities for the increases provided in its 
fiscal 2003 appropriation for HIV/AIDS: mother-to-child 
transmission in conjunction with maternal health programs in 
affected communities; more extensive involvement in treatment 
programs for people living with HIV/AIDS, and higher funding 
levels for UNAIDS. Although there is broad agreement about the 
first two priorities, the last may not be widely understood. 
Increasing funding for UNAIDS above its current level would 
enable UNAIDS to support $15,000,000 for effective country 
coordinating mechanisms, without which the Global Fund to Fight 
AIDS, Tuberculosis, and Malaria cannot be successful. As in 
past years, AID should utilize to the maximum extent community-
based, nongovernmental organizations that have ``on the 
ground'' prevention and care programs.
    The grave and urgent nature of the epidemic requires that 
funds be disbursed as rapidly as possible. With due regard for 
financial accountability and program effectiveness, USAID, in 
consultation with the Department of State and the Centers for 
Disease Control, is strongly encouraged to identify and employ 
implementation strategies for accelerating the provision of 
resources to those working on the front lines of the epidemic. 
Coordination with other bilateral and multilateral donors is 
encouraged, but should not delay United States efforts to 
deliver resources to the field.

                 HIV/AIDS: MOTHER-TO-CHILD TRANSMISSION

    Up to $100,000,000, as requested by the President on 
September 3, 2002, should be made available for International 
Mother and Child HIV Prevention activities, including awards 
for this objective by the Global Fund from United States 
contributions for this purpose.
    The Committee commends USAID for its rapidly expanding 
support of programs to prevent mother-to-child transmission 
(MTCT) in sub-Saharan Africa, the Caribbean, and other regions 
currently experiencing or anticipating a high prevalence of HIV 
infections among pregnant mothers. In addition, USAID should 
ensure that established MTCT prevention sites expand to provide 
the most extensive care and treatment program possible for all 
mothers and infants, along with related social services 
designed to keep families and communities intact.

                  HIV/AIDS: VACCINES AND MICROBICIDES

    The Committee acknowledges the critical need to find new 
technologies to prevent HIV infections and continues to support 
$15,000,000 for research on and testing of AIDS vaccines and 
microbicides. In addition to research and development, the 
Committee supports efforts to identify and resolve barriers to 
accessing those technologies. USAID is urged to participate 
with organizations such as the International AIDS Vaccine 
Initiative and the Alliance for Microbicide Development in 
efforts to insure that microbicides and vaccines are widely 
available as soon as scientifically possible. The Committee 
requests the Department of State, in consultation with USAID 
and the National Institutes of Health, to provide it with a 
brief written report on the status of federal support for 
microbicide and vaccine research, including access issues, not 
later than February 28, 2003.

                      HIV/AIDS: CARE AND TREATMENT

    USAID is urged to accelerate its efforts to identify 
strategies for implementing broad-based programs that include 
treatment. The Committee also recognizes the importance of 
involving people living with HIV/AIDS in the planning and 
implementation of programs, and urges USAID to increase its 
efforts in this area through collaborations with established 
peer organizations. The Committee requests USAID to provide the 
Committee with a written report on its current and planned 
activities supporting treatment and care of persons living with 
HIV/AIDS, including the provision of antiretroviral therapy to 
the extent possible, not later than March 15, 2003. The report 
should discuss efforts to involve persons living with HIV/AIDS 
in its programs for care and treatment.

          HIV/AIDS: BURMA AND THE RESURGENCE IN SOUTHEAST ASIA

    The Committee is aware that HIV/AIDS is spreading rapidly 
in Asia, and that Burma is playing a pivotal role in its 
spread. In Thailand, a country thought to have the epidemic 
under control, recent evidence shows a resurgence of the 
disease. Burma itself faces devastating epidemics of heroin 
addiction and HIV/AIDS infection, with the HIV virus spreading 
rapidly from intravenous drug users to the wider population. 
Finally, the Burmese regime officially acknowledged that HIV/
AIDS is a serious problem in Burma; however, it has made 
minimal official effort to contain the disease. The Committee 
appreciates USAID, State Department, and CDC reporting and 
analysis of the HIV/AIDS crisis in Burma, and has included a 
general provision directing USAID to continue to expand its 
support of Burmese struggling to limit HIV/AIDS.

          HIV/AIDS: CHILDREN AND FAMILIES AFFECTED BY HIV/AIDS

    AIDS is devastating the family structure in many countries, 
leaving millions of children orphaned and more vulnerable to 
HIV infection, poor health, little schooling, and even sexual 
exploitation. Approximately 600,000 newborns in the developing 
world contracted the virus just last year. Experts predict that 
the number of AIDS orphans will reach 40,000,000 by the end of 
the current decade.
    The Committee strongly supports efforts to assist these 
vulnerable children, and urges that at least $20,000,000 be 
provided to assist AIDS orphans and HIV positive children. The 
Committee encourages USAID to support effective programs, 
including those administered by UNICEF and non-governmental 
organizations such as HOPE Worldwide and Lott Carey 
International, that are operating within nations affected by 
the epidemic. The Committee requests that the USAID bureaus for 
Africa and Latin America and the Caribbean provide periodic 
reports on USAID support for the activities of Lott Carey 
International and HOPE Worldwide.
    A primary factor in the impoverishment of children affected 
by HIV/AIDS is the denial of inheritance rights of widowed 
women in many African countries. Often mothers with children 
are no longer allowed to remain in the family home or cultivate 
matrimonial land after a spouse living with HIV/AIDS dies. 
Denial of inheritance rights also aggravates the HIV/AIDS 
epidemic by forcing young widows with few resources into 
relations with men who carry HIV/AIDS, effectively increasing 
the number of orphans. The Committee urges USAID to award up to 
$1,000,000 in grants to private non-governmental organizations 
with competence to address this issue in Africa.

                       HIV/AIDS: MEDIA EDUCATION

    The fight against HIV/AIDS takes place on many fronts. More 
education about causes, effect and treatment of HIV/AIDS is 
needed in many regions, especially in Sub-Sahara Africa and the 
Caribbean. A promising approach to prevention is the use of 
unbiased, accurate, and culturally sensitive media to spread 
information on HIV/AIDS. The Committee supports additional 
funding for independent media training and effective public 
service announcements to meet these needs.

                            HIV/AIDS SUMMARY

    The Committee anticipates that at least $40,000,000 for 
HIV/AIDS will be funded from the Economic Support Fund 
($17,000,000), regional accounts ($13,000,000), and accounts 
administered by the Bureau for Democracy and Humanitarian 
Assistance ($10,000,000). Together with not less than 
$746,000,000 from the Child Survival and Health Programs Fund, 
the bill makes available $786,000,000,000 for HIV/AIDS. The 
Committee directs that AID include all HIV/AIDS-related 
activities, such as TB/HIV tuberculosis prevention in its 
reports on achieving these targets.

                   OTHER INFECTIOUS DISEASES: MALARIA

    The Committee includes not less than the fiscal year 2002 
level for the prevention of malaria, a re-emerging global 
killer of children and a major impediment to economic 
development in many poor countries. Serious consideration 
should be given to a grant demonstrating United States support 
for the Medicines for Malaria Venture, a public/private 
partnership leading the effort to develop new, affordable 
malaria drugs. The Bureau for Democracy and Humanitarian 
Response is urged to provide not less than $2,500,000 for 
malaria from its grant program for private voluntary 
organizations, consistent with current practice.

                OTHER INFECTIOUS DISEASES: TUBERCULOSIS

    The Committee recognizes that tuberculosis (TB) is the 
major infectious killer of adults in the world, killing between 
two and three million each year. This disease could result in 
the deaths of up to 30,000,000 people in the next decade. TB 
kills more women than any other cause of mortality and is the 
major killer of persons with AIDS. Many of these will be 
parents, whose orphans will be a burden on already stressed 
societies. In addition, the Committee notes the threat to the 
United States from this disease due to international travel and 
immigration. An estimated 15 million Americans are currently 
infected with the TB bacteria.
    Therefore the Committee includes in the allocation for 
other infectious diseases not less than $85,100,000 from all 
accounts for programs for the prevention, treatment, control 
of, and research on tuberculosis. The Committee encourages 
USAID to utilize the Global TB Drug Facility (GDF), as well as 
the Green Light Committee (GLC) to treat multi-drug resistant 
TB, and to inform the Committee not later than 30 days after 
enactment of this Act of the extent of its support for or 
proposed use of the GDF and the GLC.
    In its last four reports, the Committee requested USAID to 
assist Texas and Mexico combat a particularly threatening 
outbreak of tuberculosis along their border. The Committee 
regrets that the Agency and the Government of Mexico became 
embroiled in administrative and policy disputes, allowing the 
shipment of equipment to Mexico to be delayed for more than 8 
months. The Committee expects Agency officials to promptly 
inform the Chairman of such incidents in the future.

  OTHER INFECTIOUS DISEASES: ANTIMICROBIAL RESISTANCE AND SURVEILLANCE

    The Committee supports the efforts of USAID and the Centers 
for Disease Control to reduce the spread of antimicrobial 
resistance. The Committee is aware of the special problems of 
infectious diseases among patients hospitalized in Asia, Latin 
America, and Africa, and encourages USAID to encourage the use 
of proven new technologies to combat antimicrobial resistance. 
The Committee has been made aware of the work in this area by 
the Alliance for the Prudent Use of Antibiotics (antimicrobial 
resistance) and the International Foundation for the Reduction 
of Infectious Diseases, and suggests that AID cooperate with 
the Alliance and the Foundation. In addition, AID is encouraged 
to continue improving capacity for surveillance and response to 
infectious diseases at the national and local levels.

   INFECTIOUS DISEASES: COLLABORATIVE RESEARCH BY UNIVERSITY MEDICAL 
                                SCHOOLS

    The Committee is aware of and supports the renewed 
engagement of many United States university medical schools and 
medical research facilities in the global campaign against 
infectious diseases, especially those which affect children. As 
many contributed greatly to domestic public health progress in 
earlier decades, the Committee welcomes their interest in the 
global campaign.
    The Agency for International Development and multilateral 
health and child survival agencies benefiting from this bill 
are urged to give every consideration to detailed proposals 
submitted by the relevant institutions cited in a separate 
section of this report following the discussion of the 
``Development Assistance'' account. The Committee notes with 
concern the continuing inability of the Agency to successfully 
collaborate, after many meetings with senior officials and 
numerous prior year report directives, with Tulane University, 
the University of Notre Dame, and Johns Hopkins University on 
their joint efforts to limit the spread of malaria.

                      REPRODUCTIVE HEALTH OVERVIEW

    The Committee anticipates that at least $56,500,000 for 
reproductive health/voluntary family planning will be funded 
from the Economic Support Fund, Europe and Eurasia regional 
accounts, and accounts administered by the Bureau for 
Humanitarian Response. Together with $368,500,000 from the 
Child Survival and Health Programs Fund, the bill total for 
reproductive health should be at least $425,000,000, as 
requested by the President. The Committee directs that USAID 
include all reproductive health activities, including those 
funded from other accounts in this bill, in its reports on 
achieving these targets.

      REPRODUCTIVE HEALTH/VOLUNTARY FAMILY PLANNING: RESTRICTIONS

    The Committee has continued prior year language in the bill 
that requires that none of the funds appropriated in this bill, 
or any unobligated balances, be made available to any 
organization or program which, as determined by the President, 
supports and participates in the management of a program of 
coercive abortion or involuntary sterilization. The bill 
language also states that funds cannot be used to pay for the 
performance of abortions as a method of family planning or to 
motivate or coerce any person to practice abortion. Further, 
the language indicates that in order to reduce reliance on 
abortions in developing countries, population funds shall be 
available only to voluntary family planning projects which 
offer, either directly or through referral, information about 
access to a broad range of family planning methods and 
services. An additional provision in the bill requires that in 
awarding grants for natural family planning under section 104 
of the Foreign Assistance Act, no applicant shall be 
discriminated against because of such applicant's religious or 
conscientious commitment to offer only natural family planning.
    The Committee also has continued prior year language that 
states that nothing in the bill is to alter any existing 
statutory prohibitions against abortion which are included 
under section 104 of the Foreign Assistance Act. Further, the 
Committee has continued prior year language which states that 
project service providers or referral agents cannot implement 
or be subject to quotas or other numerical targets of total 
number of births, number of family planning acceptors, or 
acceptors of a particular method of family planning.
    The Committee is concerned by reports that informed consent 
problems persist in Peru after the implementation of the 
``Tiahrt Amendment'' in fiscal year 1999. In fiscal year 2001 
the Committee asked USAID to conduct an investigation into 
these allegations and report its findings. Also, the Committee 
directed USAID to provide biannual reports regarding the 
monitoring of this provision. The Committee directs USAID to 
continue such biannual reports on its investigations of 
allegations of violations per the fiscal year 2001 
instructions.

                    PRIMARY HEALTH CARE IN THE CONGO

    The Committee is aware that the vast majority of Congo 
citizens no longer have access to primary health care as a 
result of wars and corrupt governments since its independence 
in 1960. In addition to its ongoing efforts to support 
restoration of primary health care throughout the former Zaire, 
the Committee recommends that USAID give every consideration to 
a proposal for support from a promising public-private 
partnership, the Dikembe Mutombo Foundation, to build the first 
major hospital and teaching facility in Kinshasa in almost 40 
years. The Committee recommends that up to $2,000,000 be 
allocated over several years to support a Foundation proposal 
to promote primary health care and upgrade surviving clinics 
and health centers throughout the Congo.

             PUBLIC HEALTH INFRASTRUCTURE IN THE CARIBBEAN

    The Committee is concerned about the deteriorating health 
situation in the countries of the Caribbean region, and urges 
that USAID place greater focus on restoring the health 
infrastructure there. USAID's Global Health Bureau and the 
Center for Disease Control, in consultation with the Pan 
American Health Organization, are asked to review the role in 
regional health of the Caribbean Epidemiology Center (CAREC), 
headquartered in Trinidad, and report, through USAID, to the 
Committee not later than March 14, 2003, on the status of 
CAREC's physical infrastructure, the scope and effectiveness of 
its applied public health and field epidemiology programs, and 
the status of proposals made by CAREC to USAID and CDC for 
funding and technical assistance. The Committee is prepared to 
support USAID's share of an overall United States Government 
initiative of up to $10,000,000 to improve public health 
infrastructure in the Caribbean.
    The Committee is also aware of the interest of INOVA 
Fairfax Hospital in promoting continuing medical and health 
care education to physicians and nurses in the Pignon region of 
Haiti, and recommends that USAID gives serious consideration to 
supporting such a public-private partnership.

          GRANT TO THE UNITED NATIONS CHILDREN'S FUND (UNICEF)

    The Committee supports efforts to reach the child survival 
goals set by the World Summit for Children. In order to 
implement these goals, the Committee is recommending that up to 
$120,000,000 of the funds provided under the Child Survival and 
Health Programs Fund shall be provided as a contribution in 
grant form to the United Nations Children's Fund. Funding for 
the United States, voluntary contribution to UNICEF and other 
international organizations has been provided for a number of 
years on a grant basis with minimal direction from the 
Executive branch or Congress. In order to determine whether 
there should be exceptions to that policy, the Committee 
requests the Secretary of State to provide the Committee not 
later than February 15, 2003, with a report on the policy 
direction given to UNICEF and similar United Nations affiliates 
by the United States, direction given by other donor countries, 
and recommendations, if needed, for modification of the current 
system of contributions to such international organizations.

                         Development Assistance





Fiscal year 2002 level................................    $1,178,000,000
Fiscal year 2003 request..............................     2,839,500,000
Committee recommendation..............................     1,398,000,000


    The Committee recommends $1,398,000,000 for the general 
account for development assistance for economic growth, trade 
and environment. The amount recommended is $1,441,500,000 below 
the budget request and $220,000,000 above the fiscal year 2002 
level.
    Funding in this account includes worldwide activities for 
free market economic development, agriculture, rural 
development, literacy and basic education for children and 
adults, environment, energy, science and technology and other 
programs related to longer-term development.
    The Committee recommends the continuation of bill language 
to prohibit the use of funds for any activities in 
contravention of the Convention on International Trade in 
Endangered Species (CITES) in order to address concerns that 
AID funded activities in Zimbabwe are contributing to trade in 
elephant ivory.
    The Committee recommends the transfer of up to $24,500,000, 
from the ``Development Assistance'' account, to support 
development credit activities instead of $12,500,000 as 
proposed by the President. Should carryover authority from 
fiscal year 2002 meet or exceed the budget estimate, new 
transfer authority would not exceed $12,500,000.

                       ECONOMIC GROWTH: OVERVIEW

    The Committee considers free market economic growth, and 
the USAID programs designed to lead directly to growth, the 
Agency's most important objective in Latin America and Asia. 
Simply put, without sustained economic growth, USAID's 
development programs for health, population, environment and 
other purposes, can have only marginal long-term benefits in 
poor countries.
    In the near-term, the Committee continues to support 
increases in USAID resources for health improvement through the 
``Child Survival and Health Programs'' account. But improved 
social conditions of children matter only if the future 
economies of these countries can provide employment for these 
healthier, better educated citizens. Therefore, the Committee 
encourages AID to increase funding for free market economic 
development in its development programs in each of these 
regions.
    The Committee continues to support USAID technical 
assistance programs to encourage macro-level economic growth. 
These include programs to assist with privatization of state-
run industry and legal and regulatory reform to modify trade 
and tax barriers which stifle local entrepreneurs and which 
deter U.S. investment. In addition, AID technical help for 
improving energy, transportation, telecommunication, and 
finance sectors is key to directly improving the economic 
climate of poor countries. Essential to this, of course, AID 
must continue to search out reform-minded government leaders 
without whom these programs cannot succeed. The proposed 
Millennium Challenge Account is based on this approach.
    The Committee supports the efforts of USAID to better 
coordinate with the U.S. Trade Representative and other 
concerned agencies the significant amounts of aid already being 
committed to assist other countries to strengthen their trade-
related laws and regulatory regimes. It is in the United States 
national interest to ensure that relevant economic growth funds 
are programmed to complement trade negotiating objectives.

                            BASIC EDUCATION

    The Committee recognizes that educating children in 
developing countries provides the foundation for sustained 
economic growth, poverty alleviation, and the creation of 
democratic institutions. There is also clear evidence that the 
collateral benefits of providing basic education for girls, 
including improved child and maternal health, lower fertility 
rates, reduced child labor, and increased political 
participation, make it one of the most effective expenditures 
of U.S. foreign assistance.
    The Committee strongly recommends a minimum level of 
$250,000,000 from this and other accounts for basic education, 
an increase of more than 50 percent above last year's 
recommendation. In addition, it encourages AID to place 
particular emphasis on programs that expand access and quality 
of education for girls, enhance community and parental 
participation in schools, improve teacher training, and build 
local management capacity. The Committee also recognizes that 
USAID's capacity to create and execute innovative and effective 
basic education programs suffered disproportionately during the 
reduction in personnel over the last decade, and directs AID to 
increase the number of direct hire education staff directly 
supporting and managing field programs.
    The Committee also recognizes the importance of education 
in the fight against HIV/AIDS in developing countries. The 
pandemic has severely affected not only school-age children, 
but also the teacher populations in sub-Saharan Africa. The 
Committee encourages AID to promote approaches to HIV/AIDS 
prevention which recognize the central role played by schools 
and teachers, including integrating information into curricula, 
instituting prevention programs in schools, and focusing on 
HIV/AIDS in teacher training institutes.

                        TRADE CAPACITY BUILDING

    Trade capacity building is a critical element of 
development assistance because it can be leveraged to generate 
economic growth, reduce poverty, promote the rule of law, and 
help provide the much needed public resources to finance social 
investments by developing countries. Over time, it plays a 
catalytic role in helping to leverage other resources for 
sustainable development.
    The committee recognizes USAID's government-wide surveys 
over the last three years to document all current federal trade 
capacity building activities. Through these surveys, USAID has 
demonstrated that the United States is the policy and resource 
leader in the provision of trade capacity building assistance. 
Nevertheless, it has become apparent that USAID lacks a clearly 
defined, coherent, annual trade capacity building budget 
process aligned with key officials who are empowered to 
coordinate and approve agency programs. Increasingly, it is 
imperative that these programs be consistent and responsive to 
the demands of developing countries and other U.S. Government 
agencies. At present, the USAID is unable to effectively meet 
these demands.
    At present, the Agency has the ability to assess its trade 
capacity assistance in a comprehensive way only through 
retrospective reviews. It does not possess a budget or 
prospective strategic planning process. The committee strongly 
encourages USAID efforts to improve its effectiveness in trade 
capacity building assistance. Such programs help countries 
build the capacity to participate in the multilateral trading 
system beyond the border, at the border, and behind the border.
    The Committee expects USAID to implement immediately a 
budget planning process that effectively allows the Agency to 
track and implement trade capacity building initiatives at a 
mission, regional and central bureau levels for the submission 
of the President's FY 2004 budget.
    Concurrent with this effort, not later than sixty days 
after enactment of this Act, the Committee requests that USAID 
report on its internal structure as it affects trade capacity 
building development assistance and the process of agency/
mission coordination with the Executive branch's inter-agency 
trade capacity building working group. In this process, USAID 
should identify the persons or Agency element responsible for 
carrying out the following:
     Review and coordination of trade capacity building 
requests by developing country trade, finance, and development 
ministers.
     Leadership of the Agency's participation in the 
U.S. Government inter-agency process to provide effective trade 
capacity building assistance to developing countries consistent 
with U.S. foreign and international economic policy objectives.
     Communication and coordination of U.S. trade 
capacity building efforts with multilateral organizations such 
as OECD, U.N. Development Program, UNCTAD, the World Bank, and 
the World Trade Organization.
     Resource allocation, review, and approval of trade 
capacity building initiatives at mission, regional and central 
bureau levels.
    Not later than 90 days after enactment of this Act, the 
Committee requests that USAID provide a report identifying the 
trade capacity building strategy of the Agency for deployment 
of fiscal year 2003 resources. Within this strategy, the 
Committee urges a special evaluation on capacity building 
efforts designed to improve transparency, application of best 
practices in the development of commercial law and regulations, 
and the provision of assistance for effective developing 
country participation in the trade negotiation process.
    The Committee is concerned that USAID has not complied with 
the directive regarding support for a Center for Latin American 
Trade Expansion that was included in the Statement of Managers 
accompanying the conference agreement on the fiscal year 2001 
Act, and directs that the Administrator report to the Committee 
not later than December 1, 2002 on the resolution of this long-
outstanding issue.

                     GLOBAL ISSUES: URBAN PROGRAMS

    The Committee is aware that urban populations in developing 
nations are growing rapidly, threatening the quality of life of 
billions of individuals. Within less than ten years, more 
people will be living in the world's cities than in its small 
towns and villages. The Committee is concerned that USAID 
funding for urban programs and associated technical staff has 
been declining sharply as urban growth accelerates. The new 
$11,000,000 Urban Water Partnership to supply clean water to 
urban slum dwellers is a welcome sign of renewed USAID 
involvement with alleviation of urban poverty.
    In order to allow renewed focus on urban challenges to 
economic growth and poverty alleviation, the Committee directs 
USAID to provide not less than $10,000,000 for urban programs 
to support field activities within the Economic Growth, Trade 
and Agriculture Bureau. The Committee requests that USAID 
submit a written report not later than April 10, 2003, 
including, but not limited to, a USAID definition of ``urban 
programs'', a USAID urban strategy, and its central, regional, 
and country obligations that are classified as urban programs 
during fiscal years 2002 and 2003.
    The Committee supports continuation of the technical 
assistance program of the International Real Property Program 
(IRRP) to create private real estate markets and promote 
property rights in ten former Soviet Bloc countries. As 
problems with property rights and inefficient property markets 
characterize many of the countries where USAID is active, the 
Committee endorses expanding the program into selected 
countries of Latin America, Asia and Africa. The Committee 
recommends that USAID allocate not less than $5,000,000 to be 
divided between the IRPP and an adequate core grant for the 
Institute for Liberty and Democracy.
    The Institute for Liberty and Democracy (ILD) is performing 
important work in the area of economic growth and poverty 
reduction for populations living in the extra-legal sector. Of 
the several hurdles many developing countries struggle to 
overcome, strengthening the practice of formalized capitalism 
within their borders is critically important. The promise of 
capitalism as a tool for economic growth and poverty reduction 
can never fully be achieved as long as large parts of the 
world's population have no stake in the capitalist mode of 
development.

                 GLOBAL ISSUES: LITERACY AND EDUCATION

    The Committee recognizes that expanding access to 
education, especially combating child and adult illiteracy, is 
critical to long-term development.
    The Committee supports the work of Alfalit International, 
an educational nongovernmental organization dedicated to 
promotion of literacy, elementary education, and community 
development in Africa and Latin America. Alfalit's proven 
record during the past three decades has helped significantly 
reduce child and adult illiteracy throughout Latin America and 
Africa. The Committee urges AID to provide not less than 
$1,500,000 for Alfalit to jointly develop and implement 
programs to combat adult illiteracy in additional countries in 
which USAID operates.

   GLOBAL ISSUES: CLEANER ENERGY, RELIABLE POWER AND THE ENVIRONMENT

    The Committee is aware that many environment challenges, 
from urban pollution to rural deforestation, are a result of 
failures to develop cleaner energy and more efficient power 
sources. Where lead continues to be used in gasoline, diesel 
generators substituted for electricity from unreliable grids, 
and areas surrounding towns and villages are denuded of 
vegetation in the daily search for cooking fuel, humans and 
their environment are degraded. The Committee welcomes the new 
focus of the President and Secretary of State on power 
generation for sustainable development.
    Immediate benefits to human health and economic development 
would result from support for effective programs to reduce lead 
and sulfur in gasoline and for reduction of indoor pollution in 
households resulting from indoor cooking and heating. A number 
of non-governmental organizations, such as the Global Lead 
Network, are already involved in these efforts, and could 
expand them with support from USAID. Such programs can use 
Development Assistance funds to improve health as well as 
promote economic development. Over a longer-term, technical 
assistance to improve energy use by municipalities, state-owned 
enterprises, and large land-holders, all of which often waste 
energy because of subsidized power, and introduction of modern, 
more efficient technologies for power generation, as 
demonstrated in regions of India with USAID support, will 
promote economic growth and improve the quality of life.
    As a key renewable element of the power for sustainable 
development initiative, the Committee propounds a renewed 
emphasis on hydropower, using an initial multi-year grant of up 
to $3,000,000 to a specialized non-governmental organization 
representing the U.S. hydropower industry to provide project 
development and implementation services. As with other power 
and energy sectors, USAID has a key role in assisting foreign 
governments, international financial institutions, and the 
local private sector to establish necessary energy and 
investment framework and governance practices in emerging 
markets.
    The Committee notes the undue delay in renewing existing 
central procurement mechanisms that are needed to access U.S. 
for-profit private sector providers of expertise and assistance 
in the energy/environment sector, and urges the Economic 
Growth, Agriculture and Trade Bureau and the Office of 
Procurement to expedite the necessary contracts to facilitate 
implementation of the power for sustainable development 
initiative.

       GLOBAL ISSUES: ACCESS TO CLEAN WATER AND WATER MANAGEMENT

    The Committee is pleased that the Administration is 
directing additional resources toward clean water and water 
management, more than $350,000,000 in fiscal year 2003. 
Competition for scarce fresh water is already predicted to be a 
major source of international conflict during the 21st Century, 
as it is now within the Middle East. Elsewhere, intra-regional 
cooperative programs in water management from the Indus Water 
Agreement between India and Pakistan more than 40 years ago to 
the new South Asia Water Resources Program are notable 
accomplishments for international development assistance. The 
Committee requests that the Administrator of USAID submit a 
brief written report to the Committee within 90 days of 
enactment of this Act detailing the Agency's programs and 
activities relating to clean water and efficient use of fresh 
water resources.

       GLOBAL ISSUES: THE ROLE OF GIRLS AND WOMEN IN DEVELOPMENT

    The Committee recognizes the importance of improving the 
economic and social situation of women and girls through 
respect for legal rights and expanded access to educational 
opportunities, adequate health care, and credit.
    The Committee has a history of support for the Office of 
Women in Development (WID), and has, in previous years, 
directed that not less than $15,000,000 be allocated to sustain 
the activities of the WID office. As USAID has undergone its 
recent reorganization, and as the agency and the development 
community overall have developed an enhanced awareness of the 
importance of integrating women into development strategies, 
the Committee concludes that both the form and the function of 
the WID office must evolve in order to ensure women and 
development issues remain a high priority.
    The Committee recommends that USAID replace the existing 
WID office, currently housed in the Bureau for Economic Growth 
and Trade, with a new Office for Women and Effective 
Development, to be housed in the Policy and Program 
Coordination (PPC) bureau. The office should have adequate 
direct hire staff and funding to secure its place as a resource 
for all of USAID's functional and geographic bureaus and, as 
the agency further decentralizes programming decisions, to the 
missions themselves. Further, the office should have the 
capacity and the mandate to participate in strategic planning 
and policy development agency-wide.
    The Committee recommends that the new Office for Women and 
Effective Development be headed by a senior USAID official with 
both field experience and expertise in gender and development 
issues. The director should have liaison counterparts within 
each functional and geographic bureau to ensure proper 
communication. The Office for Women and Effective Development 
should have operating expenses sufficient to hire a robust, 
permanent staff, and the budget capacity to conduct limited 
programming, provide technical assistance to missions and 
bureaus, and the ability to provide incentive funds to missions 
seeking to invest in upgrading the integration of gender into 
their programs.

                      WOMEN'S LEADERSHIP TRAINING

    The Committee reiterates language from last year's report 
concerning support for women's leadership. As USAID has paid 
minimal attention to this issue and the Committee's guidance, 
$10,000,000 is provided within the Development Assistance 
account only for women's leadership training programs. The 
Committee directs that during the first two years, these funds 
are to be managed by the Bureau for Democracy, Conflict, and 
Humanitarian Assistance, including its Office of Transition 
Initiatives. Funds provided under this directive may be used 
for various aspects of women's leadership training, including: 
training women to participate in local, regional and national 
political processes, facilitating women's involvement in 
reconciliation and reconstruction processes in conflictive and 
post-conflict societies, and building capacity of women-led 
private voluntary organizations to advocate for reform of local 
legislatures, judicial systems, and security agencies. The 
Committee directs USAID to submit a written plan for obligation 
of these funds, including a schedule for individual components, 
not later than 90 days after the enactment of this Act.

                      GLOBAL ISSUES: BIODIVERSITY

    The Committee applauds the accomplishments of AID in 
integrating biodiversity and forest management in its economic 
and social development programs. The Committee urges AID to 
provide not less than $70,000,000 in fiscal year 2003 for its 
biodiversity programs.
    The Committee welcomes the presidential initiative to 
conserve the forests of the Congo River Basin, building on 
USAID's Central African Regional Program for the Environment, 
and encourages the private not-for-profit and corporate 
partners in this critical public-private partnership in a 
region where conflict and poverty threaten the world's second 
largest block of intact tropical forest.
    The Committee again recommends that AID provide $500,000 to 
support the Peregrine Fund's Neotropical Raptor Center in 
Panama to conserve birds of prey in the Panama Canal watershed 
area and throughout the new-tropics. The Committee notes that 
the Center expects to receive matching private financing for 
this project.

        ECONOMIC GROWTH: COLLABORATIVE RESEARCH SUPPORT PROGRAMS

    The Committee supports the continuation of the 
collaborative research support programs (CRSPs) and urges USAID 
to increase funding for the CRSPs in fiscal year 2003. The 
Committee believes that CRSPs, such as the Peanut CRSP 
established in 1982, are clearly one of USAID's best 
investments, funding for which should be increased rather than 
reduced. The Committee notes that agricultural research and 
development has led to greater economic development, increased 
income, and a more available food supply for the world's poor. 
The Committee is aware of a new process to increase 
agricultural production in arid areas that would greatly aid in 
the reduction of world hunger. The Committee supports a grant 
to a participating university to conduct a demonstration 
project in a developing country that utilizes this new 
agricultural technique during 2003.

                    ECONOMIC GROWTH: MICROENTERPRISE

    Microenterprise, while unable to alter economic indicators 
on a national scale, can significantly improve personal and 
family incomes, thus providing money for school fees, health 
supplies, and more nutritious food, and stimulating economic 
growth at the community level. The Committee expects AID to 
exceed the authorization level enacted by Public Law 106-309, 
and to reach a total of $175,000,000. Also, programs of 
importance to economic growth, such as girls' and women's 
education and training programs, can assist in opening the 
marketplace to females.

 ECONOMIC GROWTH: DEVELOPMENT OF VOLUNTARY COOPERATION THROUGH CREDIT 
                        UNIONS AND COOPERATIVES

    The Committee encourages USAID to more fully utilize U.S. 
credit unions and cooperatives in its overseas programs, 
especially as the Agency continues to reinvigorate rural 
development and agriculture programs. The Committee continues 
to support cooperatives and credit unions as a means to lift 
families out of poverty through self-help and collective 
entrepreneurship. In a recent report to Congress, USAID 
established a new agenda for its relations with U.S. credit 
unions and cooperatives. The report emphasizes their use in 
post-conflict localities and communities affect by HIV/AIDS.
    The Committee is aware of the World Council of Credit 
Unions' (WOCCU) international credit development activities, 
especially its efforts to further develop credit union systems 
in Mexico and South Africa. The Committee recommends that 
favorable consideration be given to proposals by the WOCCU to 
participate in multi-year implementation of USAID economic 
growth strategies in those countries.
    The USAID Office of Private Voluntary Cooperation (PVC) is 
urged to allocate not less than $8,000,000 in fiscal year 2003 
in support of capacity building and dissemination of 
cooperative approaches to development. The Committee expects 
PVC to provide more pro-active information and program support 
for cooperatives seeking to work with USAID field missions 
whose strategies include economic growth objectives. Strong 
central support from PVC is essential, particularly for 
agribusiness development and community infrastructure 
activities involving better telecommunications and reliable 
electric power.

                   GLOBAL ISSUES: COFFEE PRICE CRISIS

    The Committee is concerned that 25 million coffee growers, 
many in Central America and Colombia, have been left destitute 
by a 70 percent drop in coffee prices since 1997. In several 
dozen countries, coffee is a critical source of rural 
employment and foreign exchange, and its price collapse 
threatens social and political stability. Current assistance 
programs for coffee-growing areas are insufficient, and 
sometimes worsen the situation.
    The Committee urges USAID to focus its rural development 
and relief programs on regions severely affected by the coffee 
crisis, especially in Colombia. A new general provision, 
section 551, directs USAID to focus development and relief 
resources in Central American countries where the adverse 
impact of the coffee crisis has dramatically increased abject 
poverty, especially in Nicaragua and Honduras.
    The Committee also supports efforts of the Polus Center for 
Social and Economic Development to expand humanitarian and 
rehabilitative services to landmine victims in both countries, 
and the programs of the Fabretto Children's Foundation in 
Nicaragua.

               LATIN AMERICA AND THE CARIBBEAN: OVERVIEW

    The Committee is pleased that USAID has responded to report 
language from prior years urging that greater emphasis be 
provided for programs in Latin America and the Caribbean. The 
Committee reiterates its intention that the allocation of funds 
for this region from Development Assistance and the Economic 
Support Fund should be at least at the combined level for both 
accounts in fiscal year 2002.
    Although the chain of events that have threatened the 
financial and, in some cases political, stability of Argentina 
and Brazil directly challenge the effectiveness of the 
international financial institutions funded in title IV of this 
Act, and activities to support Colombia and other Andean 
nations are largely funded under the Andean Counterdrug 
Initiative, development assistance has a potentially key role 
in reducing poverty and hunger in Central America and the 
Caribbean.
    The Andean and Central America/Caribbean regions, 
especially, would benefit from trade capacity building 
assistance, including that related to agricultural exports.

            LATIN AMERICA AND THE CARIBBEAN: PARKS IN PERIL

    The Committee notes its strong support for the existing AID 
Parks in Peril program, a partnership with the private sector 
to promote biodiversity conservation in imperiled ecosystems 
throughout Latin America and the Caribbean. The Committee 
believes that protection of rare ecosystems is important from 
an environmental standpoint and also serves the long-term 
economic interests of these nations and the interests of the 
United States.

          LATIN AMERICA AND THE CARIBBEAN: CORPS OF ENGINEERS

    The Committee is pleased that the State Department and 
USAID have begun to utilize the planning, engineering and 
design, environmental, and technical capabilities of the U.S. 
Army Corps of Engineers, particularly in Latin America where 
the Corps has existing field offices in Honduras, El Salvador, 
Panama, Colombia, Bolivia, and Peru. A partnership between the 
Corps and AID that takes advantage of these capabilities can 
significantly contribute to the strategic interests of the 
United States. The Committee intends that the State Department 
and AID use the Corps to a greater extent to support such 
activities as child survival (water and sanitation); 
development assistance; disaster assistance; and transition 
initiatives. Further, the Committee expects that the Department 
of State and AID will not establish additional engineering 
capabilities for activities that can be accomplished by the 
Corps. The Committee again requests that AID and the Department 
of State report separately within 60 days of enactment into law 
of this Act regarding plans to develop programs with the Corps 
during fiscal year 2003, including a Memorandum of Agreement 
with the Corps.

                                 MEXICO

    The Committee is concerned that the Republic of Mexico has 
unilaterally closed United States sport fishing access to the 
Revillagigedo Islands. The sport fishing industry provides 
approximately $5,500,000 in direct revenue to Southern 
California and employs hundreds of people. The United States 
and Mexico have maintained a cooperative working relationship 
with regard to fishing and environmental issues, and United 
States boats have had access to the Revillagigedo Islands under 
permits since 1994. The Government of Mexico withdrew these 
permits in March 2002 and closed the islands to United States 
sport fishing. The Committee directs the Secretary of State to 
initiate discussions with Mexico to achieve a resolution 
allowing the United States sport fishing fleet to return to 
fishing the islands.

           AFRICA: AGRICULTURAL IMPROVEMENTS TO REDUCE HUNGER

    Reducing hunger in Africa is the most significant 
accomplishment needed to meet the international goal of 
reducing by half the number of severely malnourished and 
impoverished people by 2015. As Africa is the one continent 
where hunger is increasing, the Committee agrees with 
Presidents Bush and Clinton that it is imperative to attempt to 
make agriculture an engine of growth in suitable areas of the 
continent. The 25 percent increase in funding for agricultural 
production and trade in sub-Saharan Africa would bring the 
total to $148,000,000 in fiscal year 2003. New and proven 
approaches based on science and technology, ranging from 
biofortification for micronutrition to vermiculture for more 
fertile soil, must be examined and used where appropriate to 
boost agricultural production. The Committee welcomes the 
renewed focus in Africa on agricultural policy reform and 
agricultural trade infrastructure and capacity building, 
indicating that lessons from the failure of prior donor advice 
have been identified and taken to heart.
    Additionally, the Committee urges USAID to maximize its 
assistance for the provision of seeds and agricultural imputs 
to help farmers recover and begin planting crops for the next 
harvest as a key component of reducing hunger in Africa.

            AFRICA: ASSISTANCE TO SOUTHERN SUDAN AND LIBERIA

    The Committee commends the Administration for its efforts 
to bring peace to the people of southern Sudan. Further, the 
Committee remains concerned about the credible reports of 
trafficking of human beings and slavery in Sudan. The Committee 
continues its support for Operation Lifeline Sudan (OLS), a 
multilateral effort to provide desperately needed food and 
humanitarian relief to southern Sudan.
    The Committee also reiterates its endorsement of proposals 
to promote democracy and non-governmental organizations, such 
as the Archdiocese of Monrovia, in Liberia.

                     AFRICA: EDUCATION INITIATIVES

    The Committee notes that both Presidents Bush and Clinton 
have given priority to improving education in Africa. As the 
most recent presidential initiative is moving toward 
implementation, the Committee again notes the Education for 
Development and Democracy Initiative (EDDI) record of 
accomplishment over the past two years. As EDDI is incorporated 
in the latest presidential initiative, the Committee continues 
to support the educational, technology transfer, and trade 
capacity components of EDDI, and urges that they be continued.

                    AFRICA: FARMER-TO-FARMER PROGRAM

    The Committee notes with approval efforts made this year by 
USAID in collaboration with the Department of Agriculture to 
expand the Farmer-to-Farmer Program in Africa. Programs that 
link American universities and producers with those of other 
nations are valuable tools in providing meaningful assistance 
to people at a critical period of economic development. The 
Committee encourages the Agency to expand such programs as it 
increases its focus on agriculture and rural development.

                             ASIA: OVERVIEW

    The Committee notes that Asia (beyond the Middle East) is a 
region of paramount strategic and economic importance to the 
United States. This is particularly evident since the events of 
September 11, 2001.
    As the Committee stated in last year's report, ``While Asia 
represents the greatest potential for growth in U.S. exports 
and investment opportunities, systemic legal, social and 
economic weaknesses throughout the region continue to threaten 
these interests.'' The Committee notes that South and East Asia 
still contain the largest concentration of poor people in the 
world, as well as the greatest land mass at risk of 
environmental degradation through poorly managed growth.
    Technical assistance in support of updated commercial 
policies and legal structures also promotes United States trade 
with, and investment in, Asia. This approach to development 
assistance should continue to be a high priority, and the 
Committee again directs the Agency to make available, for a 
third year, $60,000,000 for this purpose. The Agency is urged 
to provide sufficient operating expenses to effectively manage 
and oversee economic growth and other commercial and trade 
related programs in Asia, especially those in countries where 
AID does not have a field mission presence. Consideration 
should be given to opening additional USAID missions in 
countries where assistance levels exceed $10,000,000.

              AMERICAN SCHOOLS AND HOSPITALS ABROAD (ASHA)

    The Committee directs AID to provide up to $20,000,000 for 
the American Schools and Hospitals Abroad (ASHA) program in 
fiscal year 2003. The Committee directs that none of these 
funds be reserved for programming in any future fiscal year. 
All funds are to be allocated and obligated in fiscal year 
2003. The Committee further expects that support will be 
continued, as new resources are needed, for traditional 
recipients in the Middle East. The Committee expects AID to 
keep it currently informed regarding institutions which have 
received ASHA funding in previous years, but which continue to 
have significant unexpended balances. In addition, funds should 
be made available for other deserving institutions in all 
geographical regions, especially in sub-Saharan Africa.

                        CASS SCHOLARSHIP PROGRAM

    The Committee continues to support the work of the 
Cooperative Association of States for Scholarships (CASS) and 
supports continued funding for CASS and the extension of its 
cooperative agreement with USAID. The Committee encourages 
USAID to work with CASS to meet the current demand from 
existing program countries, and to accommodate requests from 
several additional countries for services provided by the 
program.

              INTERNATIONAL FERTILIZER DEVELOPMENT CENTER

    The Committee strongly supports the fertilizer-related 
research and development being conducted by the International 
Fertilizer Development Center (IFDC) and urges the 
Administrator of USAID to make $2,300,000 available for the 
core grant to IFDC, a center established to support AID.

                           DAIRY DEVELOPMENT

    Information provided by USAID indicates that the agency 
recently provided $18,600,000 to development projects connected 
to the dairy industry in developing economies. These projects 
have provided safe, nutritious and affordable food to the local 
populations, fostered growth of small businesses through reform 
of foreign government policies, and empowered stakeholders in 
local projects, especially women, through job creation and 
increased incomes--and continue to do so today. Such projects 
also allow the U.S. dairy industry to be more competitive by 
promoting American technology, equipment, inputs and industry-
based technical assistance abroad. As USAID continues to 
develop its priorities in developing agricultural capacity 
around the world, the Committee strongly recommends that USAID 
continue its support for dairy-related programs.
    The Committee directs USAID to fund such programs at not 
less than $25,000,000 for fiscal year 2003. Of this amount, the 
Committee recommends that at least $10,000,000 be made 
available for new projects at missions supplementing their 
existing rural development programs with a dairy component. 
These projects should facilitate efforts by U.S. dairy 
livestock businesses and organizations to engage emerging 
markets in developing local sustainable enterprises capable of 
delivering dairy livestock-related goods and services. The 
Committee recognizes the management needs of USAID in 
overseeing this program, and supports the use of a reasonable 
amount of operating expenses by the Economic Growth, 
Agriculture and Trade Bureau to meet its administrative burden.
    The Committee directs USAID to provide a report not later 
than March 31, 2003, outlining its actions in meeting the above 
directives.

                       TORTURE TREATMENT CENTERS

    Supporting treatment centers as permanent national 
institutions is the best way of providing treatment services to 
victims of torture and advocating for the elimination of 
torture globally. Accordingly, the Committee recommends 
$10,000,000 for AID to support foreign treatment centers for 
victims of torture as authorized by the Torture Victims Relief 
Act and the Torture Victims Relief Reauthorization Act of 1999.
    The Committee recommends that USAID significantly increase 
its direct financial support for the centers' basic treatment 
services while maintaining an adequate level of support for 
training and technical assistance. The Committee requests that 
USAID provide a brief written report not later than February 
15, 2003, on implementation of this recommendation.

       UNITED STATES UNIVERSITY SUPPORT FOR DEVELOPING COUNTRIES

    The Committee continues to receive numerous requests to 
fund specific activities at or through American institutions of 
higher education. The Committee strongly supports activities 
that advance international development and U.S. foreign policy 
goals. The Committee has reviewed the concepts proposed for 
funding, and recommends that USAID and/or the Department of 
State (as appropriate for the proposed project) actively 
consider proposals submitted by the following organizations.
    Unless a proposal demonstrates a unique, innovative, or 
proprietary capability, or demonstrates special considerations 
that justify limited or non-competitive treatment, the 
Committee expects that competitive procedures will be applied 
with regard to the proposals on the list that follows. The 
Committee also expects AID to give priority to proposals that 
have technical merit, realistic budgets, and achievable 
objectives.
    No later than February 28, 2003, the Agency for 
International Development shall submit a report to the 
Committee on the status of each activity identified below. Such 
report shall include: (1) the status of a funding proposal by 
the organization associated with each activity; (2) the degree 
to which the proposal is consistent with United States 
development assistance and foreign policy goals for the country 
or region in which the activity would take place; (3) the 
degree to which matching or other funds would be provided by 
the organization to complement the Federal contribution; (4) to 
the extent known at the time, any decision by AID or the 
Department of State on funding the activity, including the 
proposed funding level; and (5) any other relevant information 
deemed important by AID or the Department of State. The 
Committee also expects to receive a second report on the status 
of these proposals no later than September 5, 2003. In 
addition, the Committee requests that AID identify an office or 
organization within the agency, or within the Department of 
State if appropriate, to which inquiries can be directed on the 
status of these proposals.
    With the foregoing in mind, the Committee recommends the 
following proposals for AID's active consideration:
          A proposal by Mississippi State University for the 
        continuation of its International Agribusiness 
        Development Program, including activities to add value 
        to production and reduce post-harvest losses;
          A proposal by Loma Linda University for its 
        healthcare programs in developing countries;
          A proposal by Florida State University to fund a 
        distance learning program of instruction in basic legal 
        principles for students and professionals in Central 
        Asia;
          Proposals by Marquette University's project to train 
        a sustainable nursing workforce for HIV/AIDS Care and 
        Counseling in Kenya, and by its Les Aspin Center for 
        Government for continuing training in democracy, 
        leadership, and HIV/AIDS education in Kenya, Ghana, and 
        Nigeria;
          A proposal by the National Center for Computational 
        Hydroscience and Engineering (NCCHE) at the University 
        of Mississippi for the purpose of transferring state of 
        the art technology to Belize through programs to 
        enhance waterways navigation safety, flood prediction 
        and prevention, water resources engineering, 
        environmental and ecological impact assessment, and 
        soil conservation;
          A proposal by Ave Maria College of the Americas to 
        continue federal funding of its scholarship program to 
        support economic reconstruction within Nicaragua 
        through higher education of disadvantaged students, 
        mostly women from rural areas, until adequate private 
        and corporate support can be secured;
          A proposal by a consortium of schools of tropical 
        public health at Tulane University, the University of 
        Notre Dame, and Johns Hopkins University to expand 
        programs to reduce the global reemergence of malaria;
          A proposal by the University of Miami-Institute for 
        Cuban and Cuban-American Studies to participate in the 
        Cuban Transition Project;
          A proposal by Arizona State University on behalf of 
        its US/Andean Partnership for Science Education;
          A proposal by LaRoche College-Pacem in Terris 
        Institute to expand its international private/public 
        scholarship programs;
          A proposal by New York University-Robert F. Wagner 
        School for Public Service to establish distance 
        learning and communications technology programs at an 
        International Center for Democratic Public Service;
          Proposals by Louisiana State University to develop 
        mariculture in Namibia and by its School of Law-
        Commercial Law Program of the Americas to support 
        intra-hemispheric trade;
          A proposal by San Diego State University to develop 
        the South Asia Water Resources Program to promote 
        efficient use of water through agriculture sector 
        training and transnational cooperation on the efficient 
        use of shared water resources;
          A proposal by Dartmouth College and a consortium of 
        public and private institutions to enhance information 
        technology development in Lithuania;
          Proposals by the Morehouse School of Medicine to 
        expand its field activities in Africa, especially with 
        regard to HIV/AIDS and childhood infectious diseases;
          A proposal by the Atlanta-Tiblisi Healthcare 
        Partnership, consisting of Emory University, Georgia 
        State University, Morehouse School of Medicine, Georgia 
        Institute of Technology, and Grady Memorial Hospital, 
        to continue and expand its support of healthcare 
        infrastructure in the Republic of Georgia;
          A proposal by the University of Alabama at Birmingham 
        School of Public Health, the Johns Hopkins School of 
        Public Health and Hygiene, and the Gorgas Memorial 
        Institute for Tropical and Preventive Medicine, Inc. to 
        continue their tuberculosis control programs in Russia, 
        Latin America, Southeast Asia, and South Africa;
          A proposal by Educational Advancement Alliance on 
        behalf of the proposed Caribbean American Mission for 
        Education Research and Action initiative to elevate the 
        condition of people of the Caribbean using U.S. 
        expertise in educational methodologies as the major 
        vehicle;
          A proposal by Seton Hall University's School of 
        Diplomacy and International Relations to utilize its 
        Middle East and East Asia regional studies programs for 
        development assistance;
          A proposal by Boston University/African Presidential 
        Archives and Research Center for the study of 
        democratization and market reform in Africa;
          A proposal by the University of Arizona/Sino-U.S. 
        Center for Soil and Water Conservation and 
        Environmental Protection for an exchange or training 
        programs relating to sustainable food, fresh water and 
        clean air resources in western China;
          A proposal by the University of Arkansas to continue 
        its partnership with Volgograd State Medical Academy in 
        Russia;
          A proposal by Midwestern State University in Wichita 
        Falls to support its MSU/Caribbean Recruitment Program;
          A proposal by the Kroc Institute for International 
        Peace Studies at the University of Notre Dame to 
        support regional religious and cultural institutions in 
        non-violent solutions to problems in Muslim societies;
          A proposal by Historically Black Colleges and 
        Universities to strengthen and increase their 
        participation in education efforts targeting Africa and 
        its people;
          A proposal from Florida International University for 
        a program to help countries manage international trade 
        relations;
          A proposal by the University of Nebraska, Medical 
        Center Office of International Health Care Services to 
        combat a range of infectious diseases;
          A proposal by the University of Nebraska, Omaha to 
        further expand efforts to provide basic education in 
        Afghanistan;
          A proposal by the University of Northern Iowa to 
        support the Orava Project in eastern Europe; this 
        project has successfully worked with educators in 
        Slovakia to incorporate democratic concepts and 
        practices into schools and teacher education programs; 
        and
          A proposal by George Mason University to develop an 
        academic center of excellence for the trade capacity 
        building technical assistance;
          A proposal to support establishment of an Asian 
        University for Women in Bangladesh;
          A proposal by Florida A&M University to fund a 
        distance learning education program in Ghana.

                   International Disaster Assistance





Fiscal year 2002 level................................      $235,500,000
Emergency supplemental funding........................        90,000,000
Fiscal year 2003 request..............................       285,500,000
Committee recommendation..............................       315,500,000


    The Committee recommends $296,000,000 for the International 
Disaster Assistance account, $30,000,000 above the request and 
$10,000,000 below the fiscal year 2002 enacted level including 
emergency supplemental funding.
    The Committee recommendation includes the President's 
request of $50,000,000 for disaster assistance for the West 
Bank and Gaza, to remain available until expended. The 
Committee recommendation also provides that none of the funds 
appropriated for this purpose may be obligated or expended with 
respect to providing funds to the Palestinian Authority. The 
bill language on this matter is the same as that contained in 
the contingent emergency appropriation for disaster assistance 
for the West Bank and Gaza in Public Law 107-206. The funding 
limitation is consistent with the provisions of section 552 of 
this Act (``Limitation on Assistance to the Palestinian 
Authority''). The Committee directs that all funds appropriated 
for the West Bank and Gaza under this heading shall be made 
available for humanitarian assistance only through 
nongovernmental organizations.
    The Committee again requests two one-time reports from the 
Administrator of USAID: within 30 days of enactment of the 
bill, a report on the planned allocation of International 
Disaster Assistance Funds, including an appropriate amount for 
reconstruction activities proposed to be undertaken for victims 
of natural disasters; and within 90 days of enactment, a report 
on the Agency's recommendations for future budgeting for 
developmental relief to alleviate ongoing complex humanitarian 
disasters, such as in Sudan, from the disaster assistance and 
other AID-managed accounts.

                         AFGHAN WOMEN'S CENTERS

    The Committee reiterates its support for multi-service 
women's centers throughout Afghanistan that are being 
established by the Ministry for Women's Affairs. The Committee 
directs USAID to implement the directives relating the Ministry 
that are contained in House Report 107-583. In addition to the 
$2,500,000 provided for this purpose in P.L. 107-206, the 
Committee urges USAID to provide an additional $2,500,000 for 
the Women's Centers from funds made available in this Act.

                    REPORTS ON AFGHANISTAN AND SUDAN

    As the United States has played a major role in the peace 
process in Sudan to date, it is likely to continue its lead 
role in the transition from humanitarian aid to rehabilitation 
and development. The Committee has been made aware that support 
for a just peace settlement in Sudan may require as much as 
$60,000,000 from the ``International Disaster Assistance'' and 
``Transition Initiative'' accounts for support of the 
following: reintegration of internally displaced persons and 
refugees; demobilization of soldiers and reconciliation among 
communities; basic infrastructure such as roads and 
communications systems, and health care, combating infectious 
diseases, and provision of clean water. The Committee is 
unaware of any budget request that would enable the United 
States to undertake a rapid and effective response to a peace 
agreement in Sudan that is being brokered by the United States.
    Although the September 3, 2002 budget amendments of the 
President did not include any request for Afghanistan, the 
Committee is recommending, in a general provision (section 523) 
that not less than $295,500,000 shall be provided for 
Afghanistan, but notes that at least $300,000,000 or more is 
required to support post-Taliban Afghanistan in fiscal year 
2003.
    In an attempt to rectify this situation during the 
remaining weeks of the fiscal year 2003 appropriations process, 
the Committee requests that the Secretary of State and the 
Director of the Office of Management and Budget jointly provide 
the Committee, as soon as possible, a comprehensive financial 
plan detailing the economic and humanitarian assistance 
required to bring to a successful conclusion United States 
initiatives in Sudan and Afghanistan.

                         Transition Initiatives





Fiscal year 2002 level................................       $50,000,000
Fiscal year 2003 request..............................        55,000,000
Committee recommendation..............................        40,000,000


    The Committee recommends $40,000,000 for this account, 
compared to the budget request of $55,000,000. The Committee 
does not preclude USAID's Office of Transition Activities from 
using resources transferred from other development accounts in 
this Act. Also, the Committee requests that USAID report on a 
semi-annual basis the expenditure and specific use of funds by 
OTI.

                      Development Credit Authority


                     (INCLUDING TRANSFER OF FUNDS)

                            PROGRAM ACCOUNT

Fiscal year 2002 level................................  ................
    (by transfer).....................................     ($18,500,000)
Fiscal year 2003 request..............................  ................
    (by transfer).....................................              (--)
Committee recommendation..............................  ................
    (by transfer).....................................              (--)

                        ADMINISTRATIVE EXPENSES

Fiscal year 2002 level................................        $7,500,000
Fiscal year 2003 request..............................         7,591,000
Committee recommendation..............................         7,591,000

    The Committee recommends a ceiling of $24,500,000 on the 
amount that may be transferred from bilateral economic 
assistance accounts for the subsidy cost of loan guarantees 
under the Development Credit Authority program. The ceiling is 
reduced by the amount of any unobligated balances remaining 
from transfers pursuant to the fiscal year 2002 Act.
    The Committee recommends $7,591,000 for administrative 
expenses, the same as the requested level.

     Payment to the Foreign Service Retirement and Disability Fund


Fiscal year 2002 level................................       $44,880,000
Fiscal year 2003 request..............................        45,200,000
Committee recommendation..............................        45,200,000

    The Committee has provided the budget request for the 
mandatory payment to the Foreign Service Retirement and 
Disability Fund.

   Operating Expenses of the United States Agency for International 
                              Development


Fiscal year 2002 level................................      $549,000,000
Emergency funding.....................................         7,000,000
Fiscal year 2003 request..............................       572,200,000
Committee recommendation..............................       572,200,000

    The Committee has recommended funding for United States 
Agency for International Development operating expenses at a 
level of $572,200,000, which is the same as the 
Administration's request. The Committee has once again included 
a provision requiring USAID to notify the Committee in advance 
of opening any new mission overseas and of any capital 
construction of missions or purchase or long-term lease of 
offices. The reporting requirement also applies to funds 
appropriated under the heading ``Capital Investment Fund''.

                    FINANCIAL MANAGEMENT CHALLENGES

    Since 1997, the Inspector General's office has not been in 
a position to provide an unqualified opinion on USAID's 
financial management because its accounting systems do not 
produce reliable and timely information. In 2001, the Inspector 
General's office was able to provide a qualified opinion on 
three of the five essential financial statements mandated by 
the Federal Financial Management Improvement Act. Qualified 
opinions were rendered on USAID's balance sheet, the statement 
of changes in net position, and the statement on budgetary 
resources. However, the IG was not able to express an opinion 
on the statement on net cost and statement of financing. The 
Committee recognizes that USAID has made substantial progress 
in financial management allowing for at least a qualified audit 
to be issued for the first time in three areas since 1997. 
However, the Committee continues to be disappointed that the 
lead development agency of the U.S. Government is unable to 
adhere to financial management practices that allow for annual, 
routine audits of its operations.
    That being said, the Committee would note that the 
underlying critical issue does not relate to the Inspector 
General's ability to provide a clean, unqualified audit of the 
agency's operations. The paramount issue is the fact that 
agency managers do not have the ability to obtain timely, 
reliable, and complete financial and performance data on 
foreign assistance programs on a consistent basis. If agency 
managers possessed this fundamental managerial ability, they 
would be in a much better position to know the status of 
operations on a day to day basis.
    In its semiannual report to Congress, the Inspector General 
reported that USAID requires financial systems that integrate 
on a world wide basis, support day to day business operations, 
produce statements without the need for large infusions of 
agency or contractor resources, and include a cost accounting 
module that agency managers can use to relate costs to program 
performance. Specifically, the IG has noted that the agency is 
not able to attribute costs to organizations, locations, 
programs, and activities in a timely manner. As a result, the 
tendency of the Agency is to focus resources on program 
implementation and operations at the expense of proper program 
evaluation and reporting.
    The Committee strongly encourages USAID to conduct one or 
more pilot programs for the rollout of a worldwide, integrated 
financial management system that will meet standards 
established by the Federal Financial Management Improvement Act 
of 1996 and standards established by the Federal Accounting 
Standards Advisory Board, and will allow the agency to produce 
financial statements in accordance with the 1994 GMRA. Within 
thirty days after enactment, the Administrator of USAID should 
report to the Committee in writing on the proposed pilot, 
including dates of commencement and termination. This proposal 
should include the rationale for not pursuing a joint USAID-
State Department financial management system or other potential 
options as well as a timeline and cost for worldwide 
implementation. The pilot should commence not later than 
January 6th, 2003.

                         INFORMATION TECHNOLOGY

    The electronic mail system at USAID is particularly 
essential since the new restrictions placed on mail and courier 
service since September 11, 2001. The Committee directs USAID 
to evaluate the capacity and reliability of its electronic mail 
system, and to report on its findings not later than 30 days 
after the enactment of this Act.

                            HUMAN RESOURCES

    The Committee is concerned that the agency is failing to 
adequately address its current and future human resource needs 
necessary to meet the current and rapidly evolving foreign 
policy challenges of the United States. Specifically, the 
Committee is very concerned that the agency does not possess a 
reliable, comprehensive ability to evaluate and align the 
deployment of personnel and staff (irrespective of hiring 
status) with agency priorities, resources, and budget 
preparation processes. The lack of this managerial capability 
appears to have directly impacted the agency's ability to shift 
human resources to Afghanistan where U.S. foreign assistance 
forms an important part of the strategy to support the interim 
Afghan government.
    In the future, both in light of a scale up of U.S. 
resources to fight the HIV/AIDS pandemic as well as the natural 
progression of retirements within the agency, USAID faces 
tremendous human resource challenges. By 2005, almost 60 
percent of the U.S. direct hire foreign service personnel will 
be eligible for retirement. In the same year, thirty percent of 
the agency's civil service personnel will be eligible for 
retirement, an amount three times what it is today. Separate 
from these sobering trends, the Committee notes that USAID has 
experienced a decline in both Foreign Service and Civil Service 
staff as a percentage of total work force from 1995 to 2000. In 
1995, Foreign Service and Civil Service staff represented about 
15.1 and 16.1 percent respectively of the total workforce. By 
2001, the percent had dropped to 13.3 and 12.8 percent 
respectively. The committee is concerned that accompanying this 
increase is a continued tendency for USAID to rely on non-
foreign service officers for the performance of core USG 
responsibilities, specifically overseas procurement.
    The agency's proposed staffing pattern system (E-World) 
scheduled for roll out and completion by early November 2002 is 
a step in the right direction toward improved human resources 
management and meeting this challenge. This new system, 
nonetheless, appears not to report on the number of 
institutional contractors working toward an agency strategic 
objective. The Committee awaits this new system's operational 
capacity and encourages USAID to make sure it includes data on 
institutional contractors to facilitate budget planning and 
execution purposes. The Committee looks forward to future 
updates from the Agency regarding effective human resource 
planning, specifically on USAID's Human Capital Strategy and 
its emphasis on developing a direct hire work force with a core 
competency of planning and implementing HIV/AIDS programs with 
third party contractors.

                              PROCUREMENT

    Because USAID seeks to accomplish U.S. foreign policy 
objectives via third party contractors and grant recipients, an 
effective procurement management system is integral to spending 
U.S. taxpayer resources wisely. The Committee finds it 
distressing that the agency does not possess a system that 
allows agency managers to track procurement activity worldwide 
to monitor the efficiency, fairness or competitiveness, and 
consistency with objectives across countries and regions. The 
opaque nature of the agency's procurement process contributes 
to a lack of confidence in the agency's ability to achieve its 
core development mission. The Committee strongly encourages 
current agency efforts to develop a worldwide procurement 
tracking system that allows the agency to regularly evaluate 
its procurement process and ultimately allow data to be 
integrated into its financial management system. The Committee 
notes that agency efforts are underway within the BTEC process 
to positively address challenges. The agency should be prepared 
to provide an assessment of problems, challenges, and proposed 
solutions associated with its planned worldwide system 60 days 
after enactment.
    An important component of USAID's ongoing efforts to 
improve operations within its Office of Procurement is outreach 
to small, disadvantaged and minority contractors and grantees. 
The Committee is aware of the USAIDLINK initiative to train 100 
minority firms in 10 leading export cities to better compete 
for USAID awards, and directs that $2,000,000 be allocated for 
the USAIDLINK program over the next two years. The Committee 
recommends that any contract for administration of USAIDLINK 
should be given to a private concern (or entity) that has 
previously directed a formal business linkage program to help 
minority and disadvantaged firms to increase international 
business by linking them with larger firms that do 
international business with a broad range of agencies. 
USAIDLINK will also implement and maintain a national database 
of qualified small, disadvantaged, and minority firms. 
Information in the database should be disseminated on a monthly 
basis to all USAID overseas missions, Washington, staff, and to 
all USAID prime contractors.

                  USE OF PERSONAL SERVICE CONTRACTORS

    The Committee notes the continued use by USAID of personal 
service contractors (PSCs). The Committee has traditionally 
supported this method of employing qualified individuals for 
short and medium term program implementation.
    The Committee again provides special authority for 
Washington-based personal service contractors in a general 
provision, section 534(c). In this Act, the number and 
distribution of such exceptional PSC assignments has been 
reduced, and the Committee expects that the authority will be 
used primarily for Washington-based support for USAID 
activities in countries where new requirements are linked to 
the war against terrorism. As USAID has neglected to keep a 
core staff of engineers to supervise its increasing number of 
infrastructure projects, the Committee directs that priority 
emphasis be placed on hiring engineers to help draft contracts 
and monitor infrastructure projects, especially in Afghanistan 
and the Near East.
    The Committee also notes the trend toward employing PSCs 
over a period of many years at the Agency, who carry out 
functions similar to career personnel of the Civil Service and 
the Foreign Service, but who lack comparable health, 
retirement, and other benefits. The Committee requests USAID 
report in narrative form not later than March 1, 2003, on the 
total number of PSCs employed by the Agency, the average length 
of employment, the typical benefits provided to PSCs (compared 
to those provided to career Civil and Foreign Service 
employees), and the planned date for replacing these positions 
with direct hire personnel or to eliminate the PSC position.

                    VOLUNTARY SEPARATION INCENTIVES

    The Committee has included bill language providing for the 
payment of voluntary separation incentives to USAID employees 
for the purpose of eliminating positions and functions at AID. 
This provision further amends the fiscal year 2000 authority. 
The Agency is directed to consult with the Committee prior to 
announcing to AID employees the positions eligible for the 
separation incentives. The Committee expects this authority to 
be utilized to reduce employment levels in Washington, D.C., 
not at AID's overseas missions.

                               COMPUTERS

    The Committee directs AID to continue to report on a 
quarterly basis on the status of its computer systems, 
including the cumulative costs associated with design and 
implementation of its computer systems. Any costs for computer 
systems above those originally justified for fiscal year 2003 
shall be subject to prior review by the Committees on 
Appropriations. In addition, the Committee again directs that 
the Agency's fiscal year 2004 budget justification clearly 
identify the amounts requested for AID computer operations.

                        Capital Investment Fund


Fiscal year 2002 level................................  ................
Fiscal year 2003 request..............................       $95,000,000
Committee recommendation..............................        43,000,000

    The Committee is recommending $43,000,000 for the Capital 
Investment Fund for fiscal year 2003, $52,000,000 under the 
request. This is a new account that did not receive funds in 
fiscal year 2002.
    The account is intended to provide the United States Agency 
for International Development with the funds for overseas 
construction and related costs, and for the procurement and 
enhancement of information technology and related capital 
investments. Funds would remain available until expended and 
are in addition to funds otherwise available for such purposes.
    Of the funds recommended above, $13,000,000, as requested, 
is intended for enhancements to the agency's information 
technology systems. In addition, not to exceed $30,000,000 is 
available for construction of a new office building in Nairobi, 
Kenya. This building will provide secure space for USAID 
employees and contractors who are being forced to relocate due 
to the terrorist attack against the Nairobi Embassy on August 
7, 1998.
    Due to the urgent need to protect USAID employees in Kenya 
as a result of terrorism, the Committee considers the Nairobi 
building to be a special case and withholds judgment as to the 
advisability of making a special exception for USAID from the 
policy that the Department of State should fund all overseas 
construction for consolidated embassy compounds. The Committee 
notes that only USAID is being asked to fund capital projects 
at new embassy compounds overseas; buildings and space for all 
other government agencies is appropriated through the State 
Department account for overseas construction. Therefore the 
Committee has not approved the funding requests for other USAID 
buildings that would be located on new embassy compounds and 
urges the Department of State to work with the Office of 
Management and Budget and USAID to resolve this policy in a 
fair and equitable manner.
    The Committee is recommending bill language that provides 
the Administrator of USAID with the authority to assess fair 
and reasonable rent for the use of space by other employees of 
the United States Government. Such rent shall be deposited into 
this account as an offsetting collection. In addition, the 
assignment of United States Government employees or contractors 
to space in buildings constructed using funds appropriated 
under this heading shall be subject to the concurrence of the 
Administrator of the United States Agency for International 
Development. The Committee believes that if USAID is being 
asked to fund its own building in Nairobi, it should be given 
the authority as landlord of that building.
    All funds made available under this account, including the 
obligation of offsetting collections, are subject to the 
regular notification procedures of the Committees on 
Appropriations.

   Operating Expenses of the United States Agency for International 
              Development, Office of the Inspector General


Fiscal year 2002 level................................       $31,500,000
Fiscal year 2003 request..............................        32,700,000
Committee recommendation..............................        33,700,000

    The Committee has recommended $33,700,000 for the Office of 
the Inspector General of USAID for fiscal year 2003, $1,000,000 
above the budget request and $2,200,000 above the fiscal year 
2002 level. The increase above the request is provided for 
audit activities relating to expanded assistance programs in 
Asia and the Near East region. The Committee commends the 
Inspector General for his cooperation with the Committee in its 
oversight of USAID management.

                  Other Bilateral Economic Assistance


                         Economic Support Fund


                     (INCLUDING TRANSFER OF FUNDS)

Fiscal year 2002 level................................    $2,199,000,000
Emergency supplemental funding........................       465,000,000
Fiscal year 2003 request..............................     2,490,000,000
Committee recommendation..............................     2,445,000,000
    (by transfer).....................................     (200,000,000)

    The Committee recommends a total of $2,445,000,000 for the 
Economic Support Fund, an amount that is $45,000,000 below the 
request and $219,000,000 below the amount enacted for fiscal 
year 2002, including emergency supplemental appropriations.
    The Committee recommendation assumes a reduction of 
$160,000,000 in economic support for the Camp David countries. 
However, an additional $200,000,000 is provided Israel for 
anti-terrorism assistance. In addition, it reflects a reduction 
of $25,000,000 associated with the decision to retain a 
separate appropriations account for the International Fund for 
Ireland. The Administration's budget request included 
$25,000,000 for Ireland within the Economic Support Fund. The 
Committee recommendation also eliminates $20,000,000 associated 
with undefined policy initiatives.
    As requested by the President, the Committee is 
recommending the continuation of language similar to that 
contained in the fiscal year 2002 appropriations act that 
authorizes assistance to the National Democratic Alliance of 
Sudan for certain specified activities.
    The Committee is also recommending the retention of 
language from the fiscal year 2002 appropriations act 
specifying that policy and allocation decisions for funds 
appropriated under this heading in this Act and in prior acts 
shall be made by the Secretary of State or the Deputy Secretary 
of State and shall not be delegated. The Committee is concerned 
the programs and activities funded through this account 
accurately reflect both the priorities of the Secretary of 
State and the budget justification material provided to the 
Committees on Appropriations, as modified by the Congress. The 
managers reiterate the importance of Congressional intent in 
the programming of funds appropriated to the Economic Support 
Fund, and anticipate the continuation of a cooperative approach 
during fiscal year 2003 on funding allocations and programming 
decisions.

                                 ISRAEL

    The Committee is continuing the initiative begun five years 
ago for a phased reduction in economic assistance for Israel 
that will result in the eventual elimination of ``Economic 
Support Fund'' assistance. This proposal was originally made by 
the Government of Israel in response to new economic realities 
in the Middle East. The Committee is also convinced that the 
emerging security threats in the Middle East are significant 
and warrant increasing military assistance to Israel by 
$60,000,000 in fiscal year 2003.
    The Committee therefore recommends not less than 
$600,000,000 in economic support shall be provided for Israel, 
which is $120,000,000 less than the fiscal year 2002 level and 
the same as the President's budget request. The Committee also 
requires in bill language that these funds be provided to 
Israel as a cash grant and that funds be disbursed within 30 
days of enactment or by October 31, 2002, whichever is later.
    The Committee recommendation also includes the President's 
request for an additional $200,000,000 for Israel, all or a 
portion of which may be transferred to, and merged with, funds 
appropriated by this Act under the heading ``Nonproliferation, 
Anti-Terrorism, Demining and Related Programs'' for defensive, 
non-lethal anti-terrorism assistance in accordance with the 
provisions of chapter 8 of part II of the Foreign Assistance 
Act of 1961. The bill language on this matter is the same as 
that contained in the contingent emergency appropriation for 
assistance for Israel in Public Law 107-206.
    The Committee has retained an overall limit on Middle East 
spending (section 555) at a level of $5,466,700,000. The change 
from the fiscal year 2002 ceiling represents the net result of 
a decrease of $160,000,000 in economic support for the Camp 
David countries and an increase of $260,000,000 in military and 
anti-terrorism assistance for Israel, as well as increases for 
other activities in the region in order to support our allies 
in the war on terrorism.

                                 EGYPT

    As part of the Committee's ongoing review of Middle East 
aid levels, and as a result of budget constraints affecting the 
international affairs budget, the Committee is recommending 
continuation of a policy of reducing economic support for Egypt 
in a manner which does not inadvertently undermine the guiding 
principles of the Camp David Accords.
    The Committee therefore includes not less than $615,000,000 
in economic support be provided for Egypt on a grant basis, 
which is $40,000,000 less than the fiscal year 2002 level and 
the same as the President's budget request. A cash transfer may 
be provided with the understanding that Egypt will continue to 
implement significant economic reforms.
    The Committee notes that language included in the statement 
of the managers on the conference report accompanying H.R. 2506 
(House Report No. 107-345, page 66) stated explicitly the 
Congressional expectation that an immediate review be conducted 
of basic education programs in countries whose assistance is 
primarily provided from the Economic Support Fund. 
Specifically, the language encourages cooperative efforts to be 
initiated with ESF-recipient countries to develop and implement 
creative basic education programs that strengthen the capacity 
and accessibility of public education systems. The Committee is 
disappointed by the response of the Administration to this 
recommendation as it applies to Egypt.
    The Committee notes that the recently-released United 
Nations Development Programme publication on development in the 
Arab world specifically points to a ``human capabilities/
knowledge deficit relative to income'' which hinders 
development and which can be redressed, in part, through basic 
education. The Committee believes Egypt would benefit from an 
increased focus on this objective, and urges the State 
Department to consider the Committee's recommendation as it 
reviews the United States assistance program for Egypt. The 
Committee also directs the Department of State to submit a 
report to the Committees on Appropriations on the results of 
its review of the Egypt program, including recommendations for 
changes to the program, by March 1, 2003.

                           CAMP DAVID ACCORDS

    The Committee emphasizes once again that the recommended 
levels of assistance for Israel and Egypt are based in great 
measure upon their continued participation in the Camp David 
Accords and the Egyptian-Israeli peace process.

                          NON-MILITARY EXPORTS

    The Committee strongly urges the President to ensure, in 
providing cash transfer assistance to Egypt and Israel, that 
the level of such assistance does not cause an adverse impact 
on the total level of non-military exports from the United 
States to each such country.

                       ECONOMIC BOYCOTT OF ISRAEL

    The Committee has once again included language in the bill 
addressing the Arab League boycott of Israel under section 535 
of this Act. This language includes modifications made two 
years ago to urge that Arab League members normalize relations 
with Israel.

                       WEST BANK AND GAZA PROGRAM

    The Committee recommendation for the West Bank and Gaza 
program includes a continuation of language that prohibits 
funds in this Act from being obligated or expended for the 
Palestinian Authority (section 552). In addition, the Committee 
is concerned that funds for this program be provided in 
conformance with existing law and regulation, and that no funds 
be provided inadvertently to entities or individuals that 
advocate, plan, sponsor, engage in, or have engaged in, 
terrorist activity. Therefore the Committee recommendation 
includes a modification to section 563 that requires the 
Secretary of State to take all appropriate steps to ensure that 
assistance is not provided to such entities or individuals.
    In addition, in order to maintain proper oversight of 
grants and contracts issued under the West Bank and Gaza 
program, the Committee is recommending bill language requiring 
annual audits of all contractors and grantees, and significant 
subcontractors and subgrantees. Up to $1,000,000 is authorized 
to be made available to the Inspector General of the United 
States Agency for International Development for audits, 
inspections, and other activities in furtherance of this 
provision.
    The Committee acknowledges that one of the primary 
objectives of the West Bank and Gaza program is to create 
viable infrastructure in Palestinian Authority-controlled areas 
to ensure the health and welfare of the Palestinian people. Al 
Quds University, in cooperation with the Kuvin Center for 
Infectious Diseases of the Hebrew University of Jerusalem, has 
proposed the establishment of a regional health and disease 
program, which would work to build an effective infrastructure 
to deal with serious health and disease problems among the 
Palestinian people. The Committee understands that cooperative 
programs of this nature are rare in the current environment, 
and urges AID to work, through the West Bank and Gaza program, 
to help Al Quds and the Kuvin Center begin this initiative.

                                 JORDAN

    The Committee expresses its continued strong support for 
and appreciation of Jordan's constructive and critical role in 
the region and encourages the Administration, in close 
consultation and cooperation with the Congress, to continue its 
efforts to assist Jordan in both the economic and security 
areas. The Committee therefore recommends $250,000,000 in 
economic assistance for Jordan, the same as the President's 
budget request.
    Within the funds allocated for Jordan under this heading, 
the Committee urges AID to provide $350,000 for a feasibility 
study for the creation of an American University in Amman and/
or Aqaba. This feasibility study would include the development 
of plans for the project; a study of the design and operation 
of other American universities; an identification and 
evaluation of potential American university partners; and an 
examination of possible sources of ongoing funding for the 
construction and operation of the university.

                            LEBANON FUNDING

    The Committee believes support for the people of Lebanon 
continues to be in the United States national interest. The 
Committee supports $35,000,000 for assistance for Lebanon for 
fiscal year 2003. In that regard, the Committee has retained 
bill language similar to that contained in the fiscal year 2002 
appropriations act that directs that not less than $35,000,000 
should be made available for Lebanon. Working through such 
organizations as the Young Men's Christian Association (YMCA), 
the Catholic Near East Welfare Association, the Cooperative 
Housing Foundation, Mercy Corps, Save the Children Federation, 
State University of New York, and the World Rehabilitation 
Fund, the Agency for International Development is providing the 
basis for a democratic social and economic infrastructure that 
does not rely on other organizations operating in that country. 
In particular, the Committee commends the Rural Community 
Development Cluster (RCDC) program, which is helping to 
revitalize and expand economic opportunities in some of the 
most destitute and poverty-stricken areas of Lebanon.
    The Committee is also aware of the key role the Lebanese 
American University, American University of Beirut, and 
International College play training leaders in the region and 
urges that at least the fiscal year 2002 allocation be provided 
for these important institutions.
    The Committee recognizes that Lebanon can never achieve 
full independence until all foreign security and military 
forces are withdrawn, and control is reasserted by the national 
government throughout all of Lebanon, including the south. As 
it did last year, the Committee calls upon Lebanon and Syria to 
adopt a timetable for the complete withdrawal of all Syrian 
forces from Lebanon.

                     MIDDLE EAST REGIONAL PROGRAMS

    The Committee continues to be concerned about issues 
related to water allocation in the Middle East. Since the start 
of peace negotiations in the region, this has been one of the 
most critical issues to resolve, and, given the reality of 
supply and demand, it is not expected to diminish in 
importance.
    Therefore the Committee strongly supports the continued 
efforts of the International Arid Lands Consortium in 
addressing the critical issues of water, energy, and 
agriculture and land use in the Middle East and Central Asia, 
and directs AID to make available up to $2,500,000 to the 
Consortium for this work. These funds are to be allocated from 
bilateral, centrally managed or regional programs either in 
this account or in other accounts funded by this Act.
    In addition, the Committee continues to urge AID to provide 
assistance to the Blaustein Institute for Desert Research to 
investigate the flow and transport of pollutants in 
groundwater.

                 SUPPORT FOR IRAQ DEMOCRATIC OPPOSITION

    The Committee includes $25,000,000, as requested, for 
support of the democratic opposition in Iraq. Using funds 
appropriated for this activity, the Committee urges support for 
the Universities of Dohuk, Irbil, and Suleimani in the Kurdish 
region in Northern Iraq for the purpose of funding education 
programs, including infrastructure and equipment as 
appropriate, in order to promote programs in civil society, the 
rule of law, and democratic institution building. 
Representatives of Kurdish groups from the region have jointly 
requested $10,000,000 for this purpose. The Committee urges the 
Department of State to work with these groups to establish a 
viable funding level for these activities.
    The Committee notes that for several years the Department 
of State has made funds available for the United Nations guard 
program in Northern Iraq using section 451 of the Foreign 
Assistance Act. The Committee no longer considers support for 
this activity to be an unanticipated contingency and directs 
that any future funding needs be met through the reprogramming 
of funds intended for the Iraq democratic opposition.

                               EAST TIMOR

    The Committee recommends that $25,000,000 from the Economic 
Support Fund be made available to support income producing 
projects and other reconstruction activities in East Timor.

                                MONGOLIA

    The Committee supports the Administration's $12,000,000 
request for assistance for Mongolia for fiscal year 2003.

                                 TIBET

    The Committee recommends that $250,000 be made available 
through a nongovernmental organization, such as the National 
Endowment for Democracy, for the purpose of providing training 
and education of Tibetans in democracy activities, and 
monitoring the human rights situation in Tibet. In addition, 
language has been included in section 526 to allow for 
$3,000,000,000 in funding for activities that preserve cultural 
traditions and promote sustainable development and 
environmental conservation in Tibetan communities.
    The Committee is aware of the valuable assistance the 
Bridge Fund has provided to promote Tibetan-owned and operated 
businesses and educational, cultural, and natural resource 
conservation projects in Tibet, and urges that funds be 
provided for these activities.

                                 CYPRUS

    The Committee strongly supports the budget request of 
$15,000,000 for educational and other bicommunal projects in 
Cyprus, and recommends language similar to that included in the 
fiscal year 2002 act that provides that not less than 
$15,000,000 should be made available for these purposes. These 
funds provide a basis for mutual cooperation and preparation 
for the two communities of Cyprus to live together harmoniously 
by increasing inter-communal contacts.

                    LATIN AMERICA AND THE CARIBBEAN

    The Committee fully supports the budget request of 
$6,000,000 for the Cuba democracy program and its goal of 
promoting a peaceful transition to democracy in that country. 
When allocating these funds the Committee expects AID to 
consider proposals at or through institutions of higher 
education in the United States and expects that competitive 
procedures will be followed with regard to such proposals.
    The Committee continues to be concerned about the 
resolution of the cases involving the terrorist bombings of the 
Israeli Embassy and the AMIA Jewish Community Center in Buenos 
Aires, Argentina. It is disturbed by recent allegations 
regarding the role of Iran in these acts, and by possible 
collusion with former members of the Government of Argentina. 
The Committee urges the Secretary of State to continue to work 
with the Government of Argentina to ensure that progress is 
made in these cases, and to offer technical law enforcement 
assistance where appropriate to bring to justice the 
perpetrators of these terrorist acts.

                    HUMAN RIGHTS AND DEMOCRACY FUND

    As in fiscal years 2001, 2002, and 2003 the Committee urges 
that, of the funds allocated to the Human Rights and Democracy 
Fund, $1,000,000 should be provided to support the Reagan/
Fascell Democracy Fellows Program of the National Endowment for 
Democracy to enable activists, scholars, journalists, and 
practitioners from around the world to help make contributions 
to the strengthening of democracy in their respective 
countries. This program was authorized in section 104(a)(2)(B) 
of H.R. 3427 as enacted into law as part of Public Law 106-113. 
If insufficient funds are available within the Human Rights and 
Democracy Fund, another funding source within the Economic 
Support Fund should be identified by the Department of State. 
However, the Committee requests that the Department of State 
report within 60 days of enactment on the allocation of the 
$1,000,000 for this important program.
    The Committee also strongly recommends that $1,000,000 be 
made available in fiscal year 2003, as in fiscal year 2002, for 
democracy programs in China through the National Endowment for 
Democracy (NED). Additional funding for worldwide democracy 
activities through the NED should be allocated at the fiscal 
year 2002 level from the Human Rights and Democracy Fund with 
the expectation that the budget request for the Fund will be 
increased to accommodate these programs. If the Fund budget is 
not increased commensurate with the needs for these programs, 
ongoing support for these worldwide democracy activities 
(exclusive of $1,000,000 in funding for the China democracy 
programs and $1,000,000 for the Reagan/Fascell Democracy 
Fellows Program) should be allocated from other appropriate 
sources within the Economic Support Fund. Due to the delay in 
allocating and programming these funds in fiscal year 2002, the 
Committee directs that the State Department report no later 
than December 15, 2002, on its plans for implementing the 
intention of Congress as expressed in this paragraph.

                              TUNA TREATY

    The Treaty on Fisheries between the United States and the 
governments of certain Pacific Island states, popularly known 
as the South Pacific Regional Fisheries Treaty, requires that 
economic assistance be provided annually to the South Pacific 
states. Therefore, the Committee recommends that the treaty 
obligation be met through the payment of the full $18,000,000 
in fiscal year 2003, as requested by the President.

                          CONFLICT RESOLUTION

    The Committee recognizes the importance of youth training 
in conflict resolution as a tool for creating a climate of 
peace in regions of conflict. The Committee commends Seeds of 
Peace for its commitment to helping future leaders of the 
Middle East and other regions (such as Cyprus, the Balkans, and 
South Asia) to overcome prejudice, fear, and other obstacles to 
peace, and urges AID and the Department of State to provide 
$1,000,000 in fiscal year 2003 to support the important work of 
this organization.
    The Committee is disappointed that central funding has not 
been made available for the School for International Training's 
Conflict Transformation Across Cultures (CONTACT) program, as 
the Committee recommended in last year's report and in the 
statement of the managers accompanying the conference report on 
the fiscal year 2002 appropriations act. This program has 
trained people from Cyprus and the Balkans to Sri Lanka in the 
core skills and practical tools for responding to conflict in 
their communities. The Committee urges the Africa and South 
Asia bureaus at the Department of State to take greater 
advantage of this program. The Administrator of USAID, in 
consultation with the Bureau of Democracy, Conflict, and 
Humanitarian Assistance, is requested to report to the 
Committee not less than 80 days after the enactment of this Act 
on USAID's proposed core support for the CONTACT program. The 
Committee reiterates that $1,000,000 should be made available, 
overall, over fiscal years 2003 and 2004.
    The Committee supports the work of the Jerusalem 
International YMCA, which brings together Christian, Jewish and 
Muslim young people in a positive environment that promotes 
peace, respect, and understanding, and recommends that funds be 
provided for its work.
    The Committee recognizes the Foundation for Environmental 
Security and Sustainability's important contribution to United 
States national security interests. A public foundation working 
directly with the national security and civil communities, the 
Foundation focuses on practical actions in foreign countries to 
mitigate potentially destabilizing environmental and natural 
resource threats. The Foundation's work provided the United 
States and the international policy community's critical 
opportunities to mitigate problems before they become crises, 
and better prepare for crises that cannot be avoided. The 
conflict prevention focus of the Foundation provides critical 
input for USAID, the Department of Defense, and other Federal 
agencies in prioritizing areas for engagement and technical 
assistance and implementing focused and effective conflict 
prevention programs that are more critical than ever in the 
light of the events of September 11, 2001.
    The Committee believes that the International Crisis Group 
(ICG) provides the high-quality analysis and policy 
recommendations that can help prevent and reduce the level of 
deadly violence resulting from complex crises, and strongly 
recommends that the Department of State and USAID provide 
funding for the ICG to continue its research in areas of U.S. 
foreign policy interest.

                                 BURMA

    The Committee notes the apparent changes underway in Burma, 
especially the release of its democratically elected leader 
from house arrest. It encourages the United States Government 
and the United Nations to continue their efforts to promote 
greater political and economic space within Burma for pro-
democracy and pro-economic growth elements. The effects of 
Government violence against Burmese minorities, including 
forced displacement, laying of landmines, and systematic rape 
by regime soliders, and the collapse of much rural 
infrastructure in Burman-majority areas are compounded by rapid 
environmental degradation in much of Burma. The Committee is 
aware of reports that many Burmese are severely malnourished 
and that famine conditions are possible in the near future, and 
requests that USAID evaluate the food security situation in 
Burma.
    In order to help promote an orderly transition within 
Burma, which must include meaningful participation by Burmese 
minorities both inside and outside of the country, the 
Committee has included a general provision, section 578, 
providing that not less than $8,500,000 from the Economic 
Support Fund and $2,000,000 from the Child Survival and Health 
Programs Fund should be made available for activities within 
Burma and among Burmese who have fled to neighboring countries, 
especially Thailand. It is the Committee's intent that current 
programs that largely serve minority groups within and without 
Burma continue as increased resources are directed within Burma 
to benefit a broad range of Burman groups. None of the funds 
may be used to directly benefit the unelected central 
Government.

                         AVAILABILITY OF FUNDS

    The Committee has continued language that funds in this 
account are to remain available for obligation for two years.

                     International Fund for Ireland


Fiscal year 2002 level................................       $25,000,000
Fiscal year 2003 request..............................      (25,000,000)
Committee recommendation..............................        25,000,000

    The Committee recommends $25,000,000 for the International 
Fund for Ireland in support of the Anglo-Irish Accord. Funding 
for this activity is requested through the Economic Support 
Fund, but the Committee recommendation would continue a 
separate account for assistance to Ireland. The amount 
recommended is the same as the President's budget request and 
the fiscal year 2002 level.
    The Committee strongly urges the International Fund for 
Ireland to take every step possible to ensure that all 
recipients of Fund support are promoting equality of 
opportunity and non-discrimination in employment. The Committee 
further urges the Fund to focus on those projects that hold the 
greatest potential for job creation and equal opportunity for 
the Irish people, regardless of class, creed, gender, or 
ethnicity.
    The Committee encourages the International Fund for Ireland 
to favorably consider requests to fund training for the new 
police service of Northern Ireland, in cooperation with other 
donors.

          Assistance for Eastern Europe and the Baltic States


Fiscal year 2002 level................................      $621,000,000
Fiscal year 2003 request..............................       495,000,000
Committee recommendation..............................       520,000,000

    The Committee recommends $520,000,000 for Assistance for 
Eastern Europe and the Baltic States, an amount that is 
$101,000,000 below the level provided in fiscal year 2002, but 
$25,000,000 above the budget request. The increase above the 
budget request is intended for additional assistance for 
Montenegro, the Baltic States, Croatia, and regional efforts to 
solidify democratic gains through the National Endowment for 
Democracy and other institutions.
    The Committee intends that funding for democracy programs 
though the National Endowment for Democracy continue at the 
fiscal year 2002 level, and be provided as a transfer of funds 
pursuant to section 632(a) of the Foreign Assistance Act. Funds 
have been provided above the budget request to allow for 
continued support for these activities.

                                 KOSOVO

    The Committee has retained language from fiscal year 2002 
requiring that the United States should not provide more than 
15 percent of the resources pledged for Kosovo. In addition, 
bill language is continued from the fiscal year 2002 
appropriations act that would prohibit funding for large scale 
physical infrastructure reconstruction.

                         BOSNIA AND HERZEGOVINA

    The Committee has recommended the same bill language as in 
the fiscal year 2002 Act that requires the written approval of 
the Administrator of AID for loans and projects under the 
Economic Reconstruction Program For Bosnia; authorizes the use 
of local currency funds generated by the Bosnia assistance 
program for programs throughout the region; and authorizes the 
President to withhold funds for economic revitalization for 
Bosnia if he determines that Bosnia is not in compliance with 
the Dayton Accord regarding the presence of foreign forces and 
has not terminated intelligence cooperation with Iranian 
officials. All funds are subject to the provisions of section 
529 of this Act.

                                 SERBIA

    The Committee is aware that the Clinical Center of Serbia 
is in immediate need of medical equipment to deal with the 
dramatic increase in recent years of the incidence of cancer in 
Yugoslavia. This center and an associated institute are public, 
non-profit organizations located in Belgrade. The Committee 
urges USAID and the Department of State to assist the center 
using funds appropriated under this heading or made available 
elsewhere in title II of this Act.

                               MONTENEGRO

    The Committee strongly supports assistance for the Republic 
of Montenegro, and urges the Administration to make every 
effort to assist the Government of the Republic. The Committee 
recommendation includes funding above the President's request 
for this account in order to provide Montenegro with an 
allocation of $40,000,000, rather than $25,000,000. The 
Committee notes the strong support given by the Republic to the 
foreign policy of the United States during the latter years of 
the Milosovic regime in Serbia.

                           THE BALTIC STATES

    The Committee has included bill language directing that 
$5,000,000 should be provided for assistance for the Baltic 
States. The Committee strongly supports continued assistance to 
the Baltic States. Although these countries no longer have AID 
missions, they are still emerging from decades of dominance by 
the Soviet Union and continue to need United States technical 
assistance in order to emerge into the community of Western 
nations.
    The Committee intends that these resources be used for 
trade and economic reform programs, environment programs, 
health programs, anticrime and anticorruption programs, and 
rule of law programs. The majority of the funds should be 
programmed through the Agency for International Development.
    The Committee requests that the Department of State and the 
Agency for International Development consult with the 
Committees on Appropriations by February 1, 2003, on plans to 
implement these programs in the Baltic States. The Committee 
does not believe the maintenance of such programs will require 
AID to open missions in any of these countries. Such programs 
can and should be managed on a regional basis.

                          TREATMENT OF ORPHANS

    The Committee continues to be very concerned by the 
condition of orphaned children in the Federation of Bosnia and 
Herzegovina. While Bosnian families have been reluctant to 
adopt many of these children, American families have shown an 
interest in adopting Bosnian children. Unfortunately, 
legislative barriers within the Federation have prevented 
foreign adoptions, and the Committee is very disturbed that 
little action has been taken to modify these provisions. The 
Committee strongly encourages the Government of the Federation 
of Bosnia and Herzegovina to enact legislation that will 
expedite the adoption of Bosnia children by foreign families, 
and directs the Secretary of State to report not later than 
December 1, 2002, on the steps that have been taken both by 
Bosnia and by the Department to encourage passage of such 
legislation. The Committee also expects the continuation of the 
orphans program in Bosnia funded in the fiscal year 2002 
appropriations act.

                 LEGAL INITIATIVES AND THE RULE OF LAW

    The Committee encourages the Agency for International 
Development to continue to provide financial support for the 
Central and Eastern European Law Initiative (CEELI), a project 
of the American Bar Association. CEELI has received grants to 
help Central and East Europe and the NIS create new legal 
frameworks based on the rule of law rather than through party 
doctrine or caprice.
    Through a variety of program components, CEELI is making 
available legal expertise to assist countries that are in the 
process of modifying or restructuring their laws or legal 
systems. CEELI emphasizes long-term engagement country-by-
country and supports projects that facilitate extensive 
consultations with policy-makers, legal scholars, judges, and 
attorneys. CEELI has focused work in several critical priority 
areas: constitutional reform; judicial restructuring; bar 
reform; commercial law; criminal law and procedure; and legal 
education reform, and has helped develop and/or 
institutionalize self-sustaining indigenous nongovernmental 
organizations (NGOs). The Committee encourages support for this 
type of private sector involvement.
    The Committee strongly supports the USAID-funded program 
for distance learning legal education that has been initiated 
in the Central and East European region, and recommends funding 
for the program in fiscal year 2003 at the level provided in 
fiscal year 2002.

  TRAINING AND EXCHANGES IN THE FORMER SOVIET UNION AND CENTRAL EUROPE

    The Committee continues to support training, exchanges, and 
partnerships between the United States and the nations of 
Eurasia, Central Europe, and the southern tier of Europe. These 
programs are in the interest of the United States and important 
to sustaining democracies. The Committee strongly recommends 
the Administration provide funding for the Russian, Eurasian, 
and East European Research and Training Program (Title VIII) at 
the fiscal year 2002 level.
    The Committee continues to support the East Central 
European Scholarship Program (ECESP) and its important work. 
The Committee recommends the East Central European Scholarship 
Program be continued at the same level as in fiscal year 2002. 
It also expects USAID to continue funding ECESP on a basis that 
allows the program to operate effectively in the outyears. In 
addition, the Committee believes that the experience of ECESP 
might be well suited for several of the New Independent States 
of the Former Soviet Union.

    Assistance for the Independent States of the Former Soviet Union


Fiscal year 2002 level................................      $784,000,000
Emergency appropriations..............................       110,000,000
Fiscal year 2003 request..............................       755,000,000
Committee recommendation..............................       755,000,000

    The Committee recommends $755,000,000 for Ukraine, the 
Southern Caucasus states, Russia, and the Central Asian 
republics of the former Soviet Union. This is the same as the 
request and $29,000,000 less than the enacted fiscal year 2002 
level including emergency supplemental funding.
    The Committee has included in subsection (a) prior year 
language providing the funds under this heading 
``notwithstanding any other provision of law'' and applying the 
provisions of section 498B(j) of the Foreign Assistance Act. A 
general provision (section 517) also includes long-standing 
language on human rights, and non-use of funds for enhancing 
military capacities, and providing all funds subject to 
separate notification.
    The Committee recommendation includes a new paragraph (h) 
under this heading. It contains language regarding Uzbekistan 
identical to that carried under the heading ``Foreign Military 
Financing Program'' in Public Law 107-206. This language 
provides that funds made available by this Act for assistance 
for the Government of Uzbekistan may be made available if the 
Secretary of State determines and reports to the Committees on 
Appropriations that the Government of Uzbekistan is making 
substantial and continuing progress in meeting its commitments 
under the ``Declaration on The Strategic Partnership and 
Cooperation Framework Between the Republic of Uzbekistan and 
the United States of America''.

                       CHILD SURVIVAL AND HEALTH

    The Committee continues to be concerned about the low 
priority assigned to declining maternal and environmental 
health conditions and the increasing incidence of TB/HIV/AIDS 
in Russia, Ukraine, and the Central Asian Republics. The 
positive results achieved with the small amounts already spent 
for such programs in recent years have been dramatic. The 
health and child survival sector can effectively absorb 
increased resources, with an immediate and personal impact on 
the demographically-stressed citizens of these nations. In 
order to demonstrate its support for these high priority 
activities that directly affect the citizens of these 
countries, the Committee has included bill language allocating 
not less than $60,000,000 for them, including basic education.
    The Committee is aware of and commends the Birth Defects 
Monitoring Program recently instituted in Ukraine to detect the 
incidence of birth defects related to the Chernobyl accident. 
The Committee recommends that funds be provided for this 
purpose and a proposed program to fortify flour with folic acid 
to reduce the occurrence of spina bifida in Ukraine in fiscal 
year 2003. The Committee also commends AID for its efforts to 
prevent the trafficking of young women from the region and 
expects successful programs to be expanded. The Primary Health 
Care Initiative of the World Council of Hellenes, has come to 
the attention of the Committee. Funded by the Coordinator's 
Office of Humanitarian Assistance in prior years, this project 
merits consideration, based on its success, for $3,000,000 in 
2003.
    The Committee recognizes the work of the Eurasian Medical 
Education Program of the American College of Physicians in 
continuing medical education of Russian physicians in the 
treatment of tuberculosis, cardiovascular disease, and 
diabetes. This exchange program has given volunteer American 
physicians the opportunity to share experiences and knowledge 
with their Russian colleagues, greatly benefiting the people of 
the Russian Federation. The Committee urges continued AID 
support for this program.

          INTERNATIONAL AND COMMUNITY PARTNERSHIPS IN EURASIA

    The Committee recognizes that the effectiveness of efforts 
to promote good government and democracy are dependent on 
continuing USAID support for independent programs that pair 
U.S. cities with cities in the countries of the former Soviet 
Union.
    In Ukraine the U.S.-Ukraine Foundation and the Center for 
Economic Initiatives provide professional-level training and 
foster economic development at the local level. The Committee 
again urges USAID to expand its direct support for these 
valuable programs, without requiring them to dilute their 
unique community-linkages that have been built over several 
years. In Russia, the Committee has been made aware of the 
Future of Russia initiative to build a modern birthing clinic 
and remodel the maternity clinic at Balashikha, Russia, and 
requests that USAID give serious consideration to a proposal by 
this organization for participation in USAID's Russian health 
program.
    An example is the Arizona-Kazakhstan Partnership 
Foundation, which began as a Tuscon-Almaty sister city 
relationship in 1989 and now includes as many as five sub-
partnerships, ranging from the Tuscon Chamber of Commerce to 
the League of Women Voters and United Way. Identified by AID as 
one of its key partnerships, the Committee supports the 
continuation, and, if feasible, the expansion of this and 
similar regional programs.
    The Committee encourages the Office of the State Department 
Coordinator for Eastern Europe and Former Soviet Union to 
recognize the importance of strengthening the capacity of 
organizations such as Sister Cities International (SCI). The 
Committee further recognizes that a very modest investment in 
the organizational capacity of SCI will leverage hundreds of 
thousands of dollars in non-federal community resources that 
will be used to support community based humanitarian relief, 
economic development partnerships, and international exchanges. 
In response to the events of September 11th, SCI has embarked 
on a multiyear plan to double the number of partnerships that 
target underserved regions of the world. To this end the 
Committee urges the Coordinator to contribute an additional 
$164,000 in core funding to SCI in addition to support that the 
organization may receive through others grants.

                              RUSSIA-IRAN

    The Committee again recommends language dealing with 
Russian nuclear and ballistic missile cooperation with Iran. 
The language is identical with that contained in existing law. 
The Committee remains extremely disturbed by reports which 
indicate that Russian entities are extensively engaged with 
Iran in cooperative projects that significantly enhance Iran's 
ballistic missile capabilities. The ballistic missile 
cooperation, combined with Russian nuclear cooperation with 
Iran, represent a significant step in Iran's efforts to obtain 
a comprehensive, highly sophisticated weapons of mass 
destruction capability. The Committee reiterates the language 
from the fiscal year 2000 Statement of the Managers ``that 
assistance to combat infectious diseases, child survival and 
non-proliferation activities, support for regional and 
municipal governments, and partnerships between United States 
hospitals, universities, judicial training institutions and 
environmental organizations and counterparts in Russia should 
not be affected by this section.''

                              UKRAINE-IRAQ

    The Committee is extremely concerned about continuing 
reports that Ukraine has been involved in arms transfers to 
Iraq. This is particularly disturbing given the possibility 
that United States troops may soon be engaged in combat against 
the military of Iraq. Indeed, Iraq has intensified efforts to 
destroy military aircraft of the United States and its 
coalition allies involved in maintaining the ``no fly'' zones 
over northern and southern areas of that country. Therefore the 
Committee is recommending language that prohibits assistance 
for the Government of Ukraine unless the Secretary of State 
determines and certifies to the Committees on Appropriations 
that, since September 11, 2001, the Government of Ukraine has 
not facilitated or engaged in arms sales or arms transfers to 
Iraq. This restriction shall not apply to assistance to combat 
infectious diseases or assistance for victims of trafficking in 
persons, and to nonproliferation and disarmament activities 
authorized under title V of the FREEDOM Support Act. The 
Committee notes that assistance for the first activity does not 
require a specific exemption in bill language in this case, but 
has included it for clarity.

                         AGRICULTURE IN UKRAINE

    The Committee is aware of joint efforts by the Departments 
of State and Agriculture and USAID to develop a United States 
Government agricultural strategy framework for Ukraine. The 
development of agriculture production, processing and marketing 
by small landholders holds great promise for Ukraine and the 
region. Additionally, the Committee encourages USAID to develop 
in cooperation with the Department of Agriculture a program 
similar to the effective Marketing Assistance Program that has 
been underway in Armenia for the past several years.

               SOUTHERN CAUCASUS REGION: NAGORNO-KARABAKH

    The Committee continues to be concerned about the plight of 
the victims of the Nagorno-Karabakh conflict, and expects that 
the remainder of the $20,000,000 in humanitarian assistance, 
initially provided in the fiscal year 1998 Act, will be 
promptly disbursed. In the event the these funds are obligated 
and expended before the end of fiscal year 2003, up to 
$5,000,000 should be made available to address ongoing 
humanitarian needs in Nagorno-Karabakh.

       SUPPORT OF PEACEFUL RESOLUTION OF SOUTH CAUCASUS CONFLICTS

    The Committee reiterates themes included in its last four 
reports:
    The extent and timing of United States and multilateral 
assistance, other than humanitarian assistance, to the 
government of any country in the Caucasus region should be 
proportional to its willingness to cooperate with the Minsk 
Group and other efforts to resolve regional conflicts.
    In furtherance of a peaceful resolution to the Nagorno-
Karabagh conflict, and in support of the confidence building 
measures discussed at NATO and OSCE summits, the Committee 
strongly supports confidence-building measures among the 
parties to the conflict. Such measures include strengthening 
compliance with the cease-fire, studying post-conflict regional 
development such as landmine removal, water management, 
transportation routes and infrastructure, establishing a youth 
exchange program and other collaborative and humanitarian 
initiatives to foster greater understanding among the parties 
and reduce hostilities.
    The Committee has included renewed authority for the 
President to provide humanitarian assistance to the region, 
notwithstanding the restrictions of section 907 of the FREEDOM 
Support Act. The bill language is unchanged from last year. 
This exemption allows for direct assistance by American NGOs to 
refugees and displaced persons throughout the region, including 
those in Nagorno-Karabagh. The Committee understands that 
humanitarian assistance may include a broad range of activities 
and partnerships with United States hospitals and universities 
in maternal and children's health, eldercare, basic education 
and environmental health.

                                ARMENIA

    The Committee recommends that $83,433,000 be made available 
from funding sources in this title for Armenia. This is 
$9,500,000 above the request. The Committee is aware that 
economic recovery is dependent upon the growth of small- and 
medium-sized businesses in Armenia, and recommends that this 
sector, including investment funds, be given priority by USAID.

                                GEORGIA

    The Committee recommends that $82,500,000 be made available 
from funding sources in this title for the Republic of Georgia. 
This is $6,792,000 less than the request. The Committee intends 
that a significant part of the assistance for Georgia continue 
to be provided for technical security assistance for border and 
export control.

                       EXPANDED THREAT REDUCTION

    The Committee includes $15,000,000 for the bilateral U.S. 
Civilian Research and Development Foundation (CRDF) in this 
account, and not less than the request of $15,000,000 for the 
Georgia Border Security and Related Law Enforcement Assistance 
Program.
    The Committee recommends that of the amounts provided for 
ETR activities, up to $2,000,000 be made available for 
collaborative research grants for American and Russian scholars 
concerning the enhancement of verification of arms control and 
nonproliferation agreements, confidence-building measures to 
enhance international security, and economic and political 
studies of defense conversion.

                         VIOLENCE AGAINST WOMEN

    The Committee continues to be very concerned about the 
incidence of violence against women in Russia, Ukraine, and 
Central Asia and the indifference of many law enforcement 
officials to such crimes. Funds should be made available to 
improve the response of Russia's and Central Asia's law 
enforcement and judicial system to women victims of violence.

                           DEMOCRACY PROGRAMS

    Given the increasing repression of the fledgling 
institutions of civil society and general reversal of progress 
towards democracy in the Russian Federation and Ukraine, 
$4,000,000 should be made available through the National 
Endowment for Democracy and its subgrantees to assist 
nongovernmental organizations (NGO's). Such funding should be 
made available pursuant to section 632(a) of the Foreign 
Assistance Act. Special emphasis should be given to programs 
promoting human rights, freedom of information, market reform, 
rule of law, political party development, freedom of 
association and NGO development. Attention should be devoted to 
programs outside of the capital cities and to cross-border 
programs that promote the exchange of experience and 
information among the countries of Central and Eastern Europe, 
Russia and Ukraine.

                      RELIGIOUS FREEDOM IN RUSSIA

    The Committee continues to be concerned about the dire 
consequences to several religious groups resulting from 
regional enforcement of the religious freedom statute in the 
Russian Federation. Recently, federal denial of visas for long-
time resident church leaders threatens to further restrict 
religious freedom in the Russian Federation.
    The bill again includes language addressing this matter 
that is identical to language in prior years Acts.
    The Committee does not intend that the limitation on 
assistance to the Government of the Russian Federation limit 
assistance for regional and municipal governments or 
partnerships between United States hospitals and universities 
and counterpart institutions in Russia.

                  UNITED STATES RUSSIA INVESTMENT FUND

    The Committee remains concerned that funding allocations 
from this account for the U.S. Russia Investment Fund have not 
been adequate, if the Fund is to achieve its objectives. The 
Committee urges the Coordinator of Assistance to Europe and 
Eurasia to work with USAID and the Overseas Private Investment 
Corporation to assist the Fund to become adequately capitalized 
as soon as feasible.

                          Independent Agencies


                       Inter-American Foundation


Fiscal year 2002 level................................       $13,107,000
Fiscal year 2003 request..............................        14,000,000
Committee recommendation..............................        16,000,000

    The Committee recommends $16,000,000 for the Inter-American 
Foundation, $2,000,000 above the request and $2,893,000 above 
the fiscal year 2002 level.

                     African Development Foundation


Fiscal year 2002 level................................       $16,542,000
Fiscal year 2003 request..............................        16,689,000
Committee recommendation..............................        19,689,000

    The Committee recommends funding for the African 
Development Foundation at a level of $19,689,000. This is an 
increase of $3,147,000 above the fiscal year 2002 level and 
$3,000,000 above the request. The Committee has reviewed the 
work of the Foundation, and concludes that it could make 
effective use of an additional $3,000,000 in African countries 
where USAID does not have a presence.

                              Peace Corps


Fiscal year 2002 level................................      $275,000,000
Fiscal year 2003 request..............................       317,000,000
Committee recommendation..............................       317,000,000

    The Committee recommends $317,000,000 for the Peace Corps, 
an amount that is equivalent to the budget request and 
$42,000,000 above the amount enacted for fiscal year 2002. 
Prior year language addressing purchase of motor vehicles, 
abortion, and availability of funds has been continued in this 
Act. The Committee strongly supports the work of the Peace 
Corps and of its volunteers who currently work in 70 countries. 
The Committee has included the entire amount requested by the 
President for the Peace Corps even though the Committee has 
concerns regarding plans to rapidly increase the number of 
Peace Corps volunteers. Safety and security of volunteers must 
remain the first priority of the agency, even if the 
Administration's goal to double the number of volunteers must 
be delayed.
    The Committee includes a new provision that allows the 
Director of the Peace Corps to make appointments to permit 
Peace Corps employees to serve in excess of five years, the so-
called five-year rule, in the case of individuals whose 
appointment involves the safety of Peace Corps volunteers.
    The Committee believes that if safety and security are the 
top priorities of the Administration, then the personnel 
regulations should reflect that commitment and not be limited 
by the five-year rule. Establishing appropriate law enforcement 
networks in each country takes time and frequent visits by 
dedicated creditable professionals who have both Peace Corps 
and law enforcement experience, similar to Regional Security 
Officers at overseas embassies. According to the July 25, 2002 
GAO report on Peace Corps Safety and Security, implementation 
of the Peace Corps' new security framework is being implemented 
unevenly, partly as a result of staff turnover because of the 
five-year rule. Consistency is needed to provide a safe and 
secure environment. The Committee expects the waiver to apply 
to overseas and headquarters employees of the new Office of 
Safety and Security.
    The Committee urges the Director of the Peace Corps to 
submit individual Country Security reports to accompany the 
annual report that outlines the security environment in all 
countries in which Peace Corps volunteers currently work.
    Currently, there are over 2,100 Peace Corps volunteers 
participating in HIV/AIDS activities worldwide. The Committee 
expects the Peace Corps to devote a substantial amount of the 
fiscal year 2003 funding increase for additional health 
volunteers working with HIV/AIDS treatment and prevention 
methodologies and particularly the training of local HIV/AIDS 
trainers.

                          Department of State


          International Narcotics Control and Law Enforcement


Fiscal year 2002 level................................      $217,000,000
Emergency supplemental funding........................       114,000,000
Fiscal year 2003 request..............................       197,000,000
Committee recommendation..............................       197,000,000

    The Committee recommends $197,000,000 for ``International 
Narcotics Control and Law Enforcement''. This is equivalent to 
the budget request and $134,000,000 less than the fiscal year 
2002 level, including emergency supplemental appropriations. A 
limitation of $24,062,000 is recommended for administrative 
expenses.

                        NARCOTICS AND TERRORISM

    Organized crime and terrorist groups throughout the world 
have long used narcotics as a means to generate revenues to 
support armed conflict and the means to spread turmoil. The 
Committee continues to support a strong United States 
counternarcotics assistance program in order to protect United 
States communities from the ravages of drugs, but increasingly 
to deny drug profits that are often used to finance terrorist 
activities.

                          TERRORIST FINANCING

    The Committee recognizes that the International Narcotics 
Control and Law Enforcement (INL) bureau at the Department of 
State has a substantial responsibility to support efforts to 
fight money laundering and other financial crimes worldwide. 
Due to the priority of the war against terrorism, the Committee 
directs the Secretary of State to provide a quarterly report 
beginning 30 days after the first quarter of fiscal year 2003, 
of the bureau's obligation and expenditure of funds, by 
country, in support of combating terrorist financing.

                              AFGHANISTAN

    The Committee is concerned about reports that Afghan 
farmers are replanting poppy at greater rates even after the 
Afghan president announced a ban on poppy growing in April 
2002. While Operation Enduring Freedom has successfully ousted 
the Taliban from Afghanistan, one unfortunate consequence has 
been the resurgence of opium planting and trafficking.
    The United States contribution to the Afghanistan poppy 
eradication program represents approximately 10 percent of the 
British-led program. While the Committee lauds the efforts of 
the British government in tackling the opium industry, the 
Committee hopes the State Department will share with our allies 
our past experiences of providing individual compensation to 
farmers for not planting coca in the Andean region. This 
program faced many problems and resulted in contrary incentives 
and little means for verification. Given the existing lags in 
Afghanistan in the delivery of assistance, the difficulty of 
finding cash in country to make payments, and the resulting 
destruction of only a fraction of the poppy crop, the Committee 
recognizes that rural economic development in Afghanistan is 
the only long-term solution for the elimination of poppy.

                            DEMAND REDUCTION

    The Committee includes a provision that up to $10,000,000 
in funds of the funds under this heading should be made 
available for demand reduction programs. As escalating drug use 
and abuse continue to take a devastating toll on the health, 
welfare, security, and economic stability of all nations, the 
importance of drug demand reduction has grown. The Committee 
expects that these funds could be used to contribute to the 
preservation of the stability of societies threatened by 
increasing drug abuse and minimizing the impact of 
international crime.

                                  ILEA

    The Committee is concerned about the limited space and 
reported health and respiratory problems encountered by 
students undergoing training at the current classroom facility 
located at the Roswell Center. Therefore, the Committee 
strongly advises the administration to complete a new facility 
by allocating a combination of previously allocated funding, 
and future year funding to finish construction on a new 
facility that fully meets the terms of the agreement between 
INS and the Roswell Center. The Committee remains convinced 
that future funding necessary to complete construction for this 
facility will be contained in the next budget request, and that 
the facility will be completed prior to any initiatives to open 
an additional center in Latin America.

                                  CUBA

    The Committee has included a new general provision, section 
581, prohibiting counternarcotics assistance to the Government 
of Cuba. An estimated 11 percent of the total cocaine flow 
toward the United States moves along the Jamaica-Cuba-Bahamas 
route, but according to the July 19, 2002 report from the 
Department of State, ``detected drug shipments to or through 
Cuban territory are low.'' Additionally, according to the 
report, full reporting, transparency, and United States 
monitoring of the use of counternarcotics assistance would be 
``challenging'' given Cuban ``general hostility toward and 
resistance to the United States government''. Finally, the 
report states that there are ``legal and operational barriers'' 
to providing counternarcotics assistance to Cuba, for example:

          * * * the Border Guards (TGF) is the maritime drug 
        interdiction force. TGF officers and men were involved 
        in the 1994 sinking of a tugboat that resulted in the 
        deaths of 41 men, women, and children. Since no 
        adequate investigation of the event and punishment 
        occurred, according to both Amnesty International and 
        the Department's Country Reports on Human Rights 
        Practices * * * provision of assistance to the TGF 
        would violate the Leahy amendment.

                         TRAFFICKING IN PERSONS

    The Committee has encountered difficulty obtaining timely, 
accurate, or complete information from the Department of 
State's Office of Trafficking in Persons regarding 
international programs authorized by Public Law 106-386, the 
Victims of Trafficking and Violence Protection Act of 2000.
    The Committee requests that the Secretary of State obtain 
from the Office of Trafficking in Persons and transmit to the 
Committee not later than 30 days after enactment of this Act, a 
comprehensive financial plan on federal efforts to limit and 
eliminate international trafficking in persons. This financial 
plan should include, by agency, program and country of 
operation, planned obligations for fiscal year 2003, estimated 
obligation for fiscal year 2002 and actual obligations and 
expenditures during fiscal year 2001 by the Department of 
State, USAID, and other federal agencies operating abroad, and 
such other material that the Secretary may deem appropriate.

                     Andean Counterdrug Initiative


Fiscal year 2002 level................................      $625,000,000
Fiscal year 2003 request..............................       731,000,000
Committee recommendation..............................       731,000,000

    The Committee recommends $731,000,000 for the Andean 
Counterdrug Initiative, an amount equal to the request and 
$106,000,000 above the 2002 level. The Andean Counterdrug 
Initiative is the continuation of the Administration's multi-
year counterdrug assistance efforts designed to sustain and 
expand programs initially funded by Plan Colombia in the fiscal 
year 2000 emergency supplemental appropriations act. A 
limitation of $15,680,000 is recommended for administrative 
expenses for the Department of State and $4,500,000 for USAID. 
The Committee notes the requirement in the bill that the 
Secretary of State, in consultation with the Administrator of 
USAID, shall provide to the Committees on Appropriations not 
later than 45 days after the date of the enactment of this Act 
and prior to the initial obligation of funds appropriated under 
this heading, a report on the proposed uses of all funds under 
this heading on a country-by-country basis for each proposed 
program, project, or activity. This report is similar to the 
report required in the fiscal year 2000 emergency supplemental 
appropriations act and is required again in fiscal year 2003 
given the Committee's disappointment in the level of pertinent 
information included in the Department of State's Congressional 
Budget Justification and congressional notifications.
    The fiscal year 2000 emergency supplemental appropriations 
act provided over $1,000,000,000 in no-year funding for 
counternarcotics assistance in the Andean region. The Committee 
has learned that, more than two years after enactment of that 
Act, over half of the funds that were transferred by the 
Department of State to the Department of Justice for 
counternarcotics programs, have yet to be obligated by Justice. 
The Committee believes that the national interest of the United 
States would be better served if those funds, instead of 
sitting idle, be used to help combat the humanitarian crisis 
facing Colombia. Therefore, the Committee directs that the 
Department of State immediately terminate its inter-agency 
agreement with the Department of Justice and transfer remaining 
funds to USAID for development, rule of law, and humanitarian 
assistance programs.
    The Committee notes that section 520 of the bill applies to 
the use of Narcotics Control and Law Enforcement and Andean 
Counterdrug Initiative funds for Colombia.

                             ANDEAN NATIONS

    The Committee calls on the Department of State to ensure 
that all United States laws regarding human rights, including 
section 553 of this Act, are strictly applied in Colombia and 
each of the Andean nations. Additionally, the caps on the 
numbers of United States personnel in Colombia remain in 
effect. The Committee requests that the Secretary of State 
continue to submit to the Appropriations Committees a semi-
annual report with respect to the Andean Counterdrug 
Initiative. Each report shall include an accounting of all 
aircraft, vehicles, boats and lethal equipment (other than 
ammunition) transferred to the militaries or police of any 
nation with funds made available under this heading. Further, 
the report shall contain an accounting of the number of United 
States Armed Forces personnel deployed or assigned to duty in 
the Andean Region or other nation at any time during the 
preceding 180 days with funds made available under this 
heading, the length and purpose of the deployment or 
assignment, and the associated costs and force protection 
risks. The Committee directs the Secretary of State to submit 
this report directly to the Committees on Appropriations.
    The Committee recognizes the important contribution The 
Field Museum of Chicago is making to protect biological and 
cultural values in the Andean region and urges USAID to support 
The Field Museum's efforts to collaborate with local 
populations to promote economically and environmentally 
sustainable alternatives to growing illicit crops.

                                COLOMBIA

    The Committee urges President Bush to publicly support 
future peace efforts in Colombia. The Committee commends the 
Colombian president for his efforts in partnering with the 
United Nations in the Colombian government's efforts to find a 
way to revive the peace process. While only a few weeks in 
office, the Committee hopes the collaboration between the 
Colombian president and the United Nations Secretariat General 
continues.
    The Committee notes that the people of Colombia have shown 
a long-term resilience and tolerance for difficult and violent 
conditions, but the Committee is concerned about the urgency of 
the current situation facing Colombia. The Committee hopes the 
government's new fiscal policies will allow it to collect the 
additional resources needed to invest in the military, police, 
and social programs to establish security and give Colombians 
better access to services.
    The Committee recommends $1,000,000 for the Naval Post 
Graduate School (NPS) for programs to strengthen public 
engagement and democratic control of national security in 
Columbia. Building on the program stated with fiscal year 2002 
funds, funds in this Act should be used to develop and execute 
programs to help Columbia redesign its strategic planning 
process, to strengthen democratic control over security 
decision making, to provide for greater public input and 
support of Columbian security police, and to institutionalize 
changes to improve the quality of strategic planning while 
reinforcing democratic principles.

                USE OF UNITED STATES ASSETS IN COLOMBIA

    The Committee has extended the availability of funds 
provided for assistance for Colombia to support a unified 
campaign against narcotics trafficking, against activities by 
organizations designated as terrorist organizations, and to 
take actions to protect health and human welfare. The Committee 
is supportive of the Colombian government in its attempts to 
provide security for the Colombian people and has provided the 
expansion of authorities in recognition that the narcotics 
industry is invariably linked to the terrorist groups, 
including the paramilitary organizations, in Colombia. However, 
the Committee still concludes that coca provides the revenue 
and motive behind the violence committed by both the guerrilla 
and paramilitary groups. Therefore, the Committee expects 
counternarcotics, alternative development, and judicial reform 
to remain the principal focus of United States policy in 
Colombia. The expanded authority is not a signal from the 
Committee for the United States to become more deeply involved 
in assisting the Colombian Armed Forces in fighting the 
terrorist groups, especially not at the expense of the 
counternarcotics programs, but to provide the means for more 
effective intelligence gathering and fusion, and to provide the 
flexibility to the Department of State when the distinction 
between counternarcotics and counterterrorism are not clear 
cut. The Committee directs the Secretary of State to report to 
the Committee 90 days after enactment of the changes in United 
States policy, including new procedures and operations, as a 
result of implementing the expanded authorities.

                              HUMAN RIGHTS

    The bill includes again a general provision requiring that 
the Secretary of State certify that certain human rights 
conditions have been met before any funds may be made available 
for assistance for the Colombian Armed Forces. In the fiscal 
year 2002 appropriations act, section 567 required two 
certifications in the fiscal year. The Committee was alarmed to 
learn of the unintended costs to the pilot training program and 
the helicopter maintenance program that the semiannual 
certifications incurred at no apparent gain. Therefore the 
Committee recommends a one-time annual certification process in 
fiscal year 2003.

                  ALTERNATIVE DEVELOPMENT IN COLOMBIA

    Nearly two-thirds of the coca grown in Colombia is in 
Putamayo. The Committee notes that spraying of coca only took 
place for three months over the last 24 months in this region. 
Therefore, the Committee is hopeful that the concerns of many 
that the spray program was proceeding faster than the 
development program in Putamayo have been alleviated, and that 
development programs have had the opportunity to accelerate 
over the most recent 17-month reprieve from spraying, from 
February 2001 to July 2002.
    The Committee is aware of the decades old cynicism among 
local residents of the region concerning alternative 
development and delivery of services. The Committee recognizes 
the excessive bureaucratic delays that have hindered day-to-day 
operations of development workers in Putamayo, and therefore 
the Committee recognizes the need for full cooperation of the 
Government of Colombia at the highest levels. With the 
expiration of the Government of Colombia's social pacts with 
families in Putamayo, alternative development in Colombia is at 
a critical pass.
    The Committee strongly supports USAID's ambitious new 
alternative development strategy. This new strategy, started at 
the beginning of 2002, will focus on the historic 
underdevelopment of the region and concentrate on local 
infrastructure needs (roads, electricity, water) and delivery 
of services at the community level. The new focus on the entire 
community increases the social pressure for eradication and 
also helps organize the community to identify and prioritize 
local needs. Since the start of this focus, the Committee 
understands that over 5,000 hectares have been manually and 
voluntarily eradicated in Putamayo. The Committee hopes USAID 
partners can continue building on their good working 
relationships with the mayors and local leaders.
    The Committee notes that Afro-Colombians represent at least 
25 percent of Colombia's population, and Afro-Colombians suffer 
disproportionately from violence and displacement. The Pacific 
Coast region where many Afro-Colombians and indigenous peoples 
live is experiencing intensification of the Colombian conflict 
as the recent church massacre in Bojaya, Choco Province, on May 
2, 2002 exemplified, in which 119 civilians, all of whom were 
Afro-Colombians, were killed. The Committee is concerned that 
United States assistance programs do not address adequately the 
Afro-Colombian community and people in the Pacific Coast region 
in general. The Committee expects USAID to take the views and 
specific problems of Afro-Colombians into account as it 
formulates assistance projects in the areas of human rights, 
democracy, displaced persons, and alternative development, 
including plans of return. The Committee urges USAID to provide 
significant additional funding to programs that benefit Afro-
Colombian communities, municipalities, and NGOs.

                           HELICOPTER PROGRAM

    The Committee recognizes the difficulty the Government of 
Colombia has had in recruiting the necessary number of 
Colombian candidates to become helicopter pilots. The Committee 
encourages the United States embassy in Bogota to continue 
negotiating with the Colombian Navy and Colombian Air Force in 
efforts to identify possible candidates to alleviate the pilot 
shortage. The Committee hopes the United States embassy in 
Bogota will work closely with the new Colombian Minister of 
Defense to find a way to combat inter-service and inter-agency 
rivalries that hinder counternarcotics efforts. The helicopters 
provided to Colombia as part of Plan Colombia have flown over 
28,000 hours since the beginning of the program. The United 
States has made a significant investment in providing 
helicopters to Colombia and the Committee recognizes that 
future maintenance costs will be necessary to ensure the safety 
of pilots and crew.

                                  PERU

    Peru is the second largest recipient of counternarcotics 
and alternative development assistance from the United States, 
and while the Committee is aware that the political environment 
in Peru has direct consequences for eradicating coca, the 
Committee is alarmed at reports that the Peruvian government is 
not cooperating fully in counternarcotics matters. The 
Committee believes that the appointment of the new drug tsar is 
a positive sign of commitment to counternarcotics by the 
Peruvian government, but nevertheless, manual eradication 
efforts are falling behind this year's goals. The Committee 
realizes that safety issues are also contributing to the slow 
pace of eradication: that for every 60 eradicators, there must 
be 30 security forces to protect them from coca growers. 
Therefore, the Committee urges the INL bureau to provide non-
lethal means of riot control to the Peruvian police, who 
currently have no non-lethal ammunition at their disposal.

                                BOLIVIA

    The Committee takes special note of the progress that 
Bolivia has made in the war against drugs. The enormous success 
of the Bolivian Government's Dignity Plan has been due, in 
large part, to the support of the United States. This progress 
was made at a tremendous sacrifice by the Bolivian people, and 
that the progress could be erased quickly if the commitment by 
either the Bolivian government or the United States were to 
falter. The Committee urges the Administration to continue its 
strong support of Bolivia's efforts when deciding its 
allocation of aid.
    The Committee is concerned, however, with delays in the 
prosecutions of alleged human rights violations committed by 
security forces in Bolivia, funded in part with United States 
assistance. The Committee strongly encourages the Bolivian 
Government and the Department of State to take all necessary 
actions to ensure proper implementation of section 553 of this 
Act.

                         EUROPEAN CONTRIBUTIONS

    The Committee notes that demand for Colombian coca is 
rising in Europe and approaching United States consumption 
levels of approximately 300 tons a year. European nations and 
the European Union have contributed very little to eradication 
of coca or development programs in Colombia. The Committee 
again urges the Secretary of State to negotiate with our 
European allies in order to persuade them to contribute 
additional funds to counter-narcotics efforts, alternative 
development, and judicial reform in the Andean region.

                    Migration and Refugee Assistance


Fiscal year 2002 level................................      $705,000,000
Fiscal year 2003 request..............................       705,000,000
Committee recommendation..............................       800,000,000

    The Committee recommends $800,000,000 for Migration and 
Refugee Assistance, an amount that is $95,000,000 above the 
request and $95,000,000 more than the amount enacted for fiscal 
year 2002. A limitation of $16,000,000 is recommended for 
administrative expenses.

                              AFGHANISTAN

    Over 1,600,000 refugees have returned to Afghanistan from 
January to August 2002, far exceeding estimates by the 
Department of State and the United Nations High Commission for 
Refugees (UNHCR). Given the anticipated shortfall in funding in 
fiscal year 2003 from the accelerated pace of Afghan refugees 
returning, the Committee expects the greater part of the 
funding increase that the Committee recommends for fiscal year 
2003 be for Afghan refugees.
    While the number of internally displaced persons remains at 
a level of approximately 800,000, the Committee notes that 
refugee returns have most likely peaked and will continue to 
decline through fiscal year 2003. The Committee notes the 
desperate need for reconstruction and development assistance to 
combat the poverty facing returning refugees.

                          REFUGEE RESETTLEMENT

    The Committee notes that the President authorized up to 
70,000 refugees to be admitted to the United States for fiscal 
year 2002. To date, fewer than 20,000 have been actually 
admitted. The Committee is concerned that the discrepancy 
between authorized and actual number of refugees admitted gives 
the impression that the United States is abandoning 
humanitarian commitments and leadership in protecting the 
world's most vulnerable people. Given the terrorist attacks on 
the United States, the Committee understands the need for the 
increased security procedures now applied to the resettlement 
process. While there has been an increase in the cost per 
refugee for admission, the Committee notes a significant 
carryover of funds into fiscal year 2003 because of security-
related delays, therefore the Committee expects the Department 
of State to fully consult with the Committee as it decides the 
disposition of the 2002 carryover funds.

                            TIBETAN REFUGEES

    The Committee supports continued funding to assist Tibetan 
refugees and directs $2,000,000 for this purpose. The Committee 
requests that the Department of State coordinate with the 
Agency for International Development in determining the funding 
responsibility for long-term assistance for Tibetan refugees, 
including assistance to refugees residing in India.

                         RESETTLEMENT IN ISRAEL

    The Committee supports $60,000,000 for humanitarian 
migrants from the former Soviet Union and other countries of 
distress resettling in Israel. Since 1989, Israel has accepted 
more than one million refugees. The Committee remains strongly 
committed to assisting the resettlement of Russian, Eastern 
European, Ethiopian and other humanitarian migrants in Israel. 
The funds provided in this bill assist in the transportation 
and initial absorption costs for more than 100,000 migrants per 
year. The Committee notes, however, there has been a modest 
decline in the numbers arriving from the former Soviet Union in 
the last year. Should the current decline continue, the 
Committee expects this program to be funded at a level of 
$50,000,000 in fiscal year 2004.

                        MAGEN DAVID ADOM SOCIETY

    The Committee is disappointed again this year that the 
International Committee of the Red Cross (ICRC) has not taken 
action to admit the Magen David Adom Society of Israel to the 
International Red Cross and Red Crescent Movement. The American 
Red Cross has promoted the membership of the Society in the 
Movement, but little positive action has been forthcoming. As a 
result, the American Red Cross has withheld its headquarters 
contribution to the ICRC for the past three years. Therefore 
the Committee is recommending a continuation of bill language 
that would also withhold the annual headquarters contribution 
made by the Department of State unless the Magen David Adom 
Society is given the opportunity to participate in the 
activities of the International Red Cross and Red Crescent 
Movement. This limitation will not, and is not intended to, 
restrict funding for humanitarian assistance programs that may 
be programmed through the ICRC using other funds provided in 
this account. It is only intended to affect the funding the 
United States provides on an annual basis to the ICRC 
bureaucracy in Geneva.

                                 UNHCR

    The Committee is aware that the Department of State 
traditionally contributes twenty to twenty-five percent of the 
funds required for refugee programs managed by the United 
Nations High Commissioner for Refugees and certain other 
international relief agencies. The United States contribution 
as a share of the total has escalated in the past few years as 
European nations have not followed through with pledged 
contributions. The Committee supports the High Commissioner in 
his efforts to increase UNHCR contributions from Europe.

                                 UNRWA

    The Committee is concerned by reports that certain 
employees of the United Nations Relief and Works Agency for 
Palestine Refugees in the Near East (UNRWA) may not have acted 
appropriately during recent violence in the West Bank and Gaza. 
The Committee notes that section 301(c) of the Foreign 
Assistance Act mandates that no contribution may be made by the 
United States to UNRWA except on the condition that UNRWA take 
all possible measures to assure that no part of the United 
States contribution shall be used to furnish assistance to any 
refugee who is receiving military training as a member of the 
so-called Palestine Liberation Army or any other guerilla type 
organization or who has engaged in any act of terrorism. In a 
general provision (section 575) the Committee directs the 
Comptroller General to review the implementation of section 
301(c), and asks for a report from the Secretary of State on 
procedures that have been established to ensure that section 
301(c) is enforced to the fullest extent practicable.
    The Committee strongly supports humanitarian assistance for 
the Palestinian people, both under this account and through the 
bilateral West Bank and Gaza Program. The importance of such 
assistance has been highlighted by a recent report issued by 
the United States Agency for International Development that 
indicates an increase in malnutrition among Palestinian 
children in the West Bank and Gaza. For this reason it is 
especially important that United States humanitarian and 
refugee assistance be provided strictly for the purposes 
authorized in law.

                          NORTH KOREA REFUGEES

    The Committee condemns the Government of North Korea for 
the abuses inflicted upon the people of North Korea and notes 
that extra-judicial killings, torture, starvation and a failed 
economy have caused thousands of North Koreans to seek refuge 
in the People's Republic of China (PRC). The Committee urges 
the Administration to encourage the PRC to honor its 
international obligations regarding the treatment of refugees 
and asylum seekers, and allow international observers access to 
the PRC-North Korea border area to help determine which 
individuals require protection as refugees. The Committee is 
deeply troubled by the fate that awaits those who are forcibly 
repatriated to North Korea.

     United States Emergency Refugee and Migration Assistance Fund


Fiscal year 2002 level................................       $15,000,000
Fiscal year 2003 request..............................        15,000,000
Committee recommendation..............................        20,000,000

    The Committee recommends $20,000,000 for the Emergency 
Refugee and Migration Assistance (ERMA) Fund, which is the 
$5,000,000 above the 2002 enacted level and $5,000,000 above 
the request.

    Nonproliferation, Anti-Terrorism, Demining and Related Programs


Fiscal year 2002 level................................      $311,600,000
Emergency supplemental appropriations.................        83,000,000
Fiscal year 2003 request..............................       372,400,000
Committee recommendation..............................       347,400,000

    The Committee recommends a total appropriation of 
$347,400,000 for ``Nonproliferation, Anti-terrorism, Demining 
and Related Programs'', an amount that is $25,000,000 below the 
request and $47,200,000 below the fiscal year 2002 enacted 
level, including emergency supplemental appropriations.
    The Committee recommendation funds the President's budget 
request for this account with the exception of a reduction of 
$25,000,000 in the funding for the Korean Peninsula Energy 
Development Organization (KEDO).
    The Committee has included bill language from the fiscal 
year 2002 appropriations act that imposes the requirement for 
notice prior to the obligation of funds for the CTBT 
Preparatory Commission.
    The following is a chart that indicates fiscal year 2002 
funding for the programs covered by this account, as well as 
the President's request for fiscal year 2003 and the Committee 
recommendation:

----------------------------------------------------------------------------------------------------------------
                                                                      FY 2002         FY 2003
                                                                      enacted         request      FY 2003 House
----------------------------------------------------------------------------------------------------------------
Nonproliferation and Disarmament Fund...........................      14,000,000      15,000,000      15,000,000
Export Control & Border Security................................      17,000,000      36,000,000      36,000,000
Science Centers/BW Redirection..................................      37,000,000      52,000,000      52,000,000
IAEA Voluntary Contribution.....................................      50,000,000      50,000,000      50,000,000
CTBT International Monitoring System............................      20,000,000      18,200,000      18,200,000
Korean Peninsula Energy Development Organization................      90,500,000      75,000,000      50,000,000
Anti-terrorism Assistance.......................................      38,000,000      64,200,000      64,200,000
Terrorist Interdiction Program..................................       4,000,000       5,000,000       5,000,000
Humanitarian Demining Program...................................      40,000,000      45,000,000      45,000,000
International Trust Fund........................................  ..............      10,000,000      10,000,000
Small Arms Destruction..........................................       3,000,000       2,000,000       2,000,000
                                                                 -----------------------------------------------
      Total.....................................................     313,500,000     372,400,000    347,400,000
----------------------------------------------------------------------------------------------------------------
Note.--FY 2003 budget consolidates into this account most export control and border security assistance programs
  previously funded in the account ``Assistance for the Independent States of the Former Soviet Union''
  ($20,500,000 estimate for FY 2002), as well as funding for the Biological Warfare Redirect program
  ($15,000,000 estimate for FY 2002). The FY 2002 column in the above table does not include $155,700,000
  allocated to programs in this account from the Emergency Response Fund, or $88,000,000 appropriated for this
  account in the 2002 Supplemental Appropriations Act for Further Recovery From and Response To Terrorist
  Attacks on the United States.

                                  KEDO

    The funding reduction of $25,000,000 for KEDO is being made 
with the expectation the Administration will renew its efforts 
to obtain funding from other donors to help offset the costs 
for the provision of heavy fuel oil for North Korea pursuant to 
the Agreed Framework. In addition, the Committee is concerned 
the President failed to certify in fiscal year 2002 that North 
Korea is in compliance with the Agreed Framework. The provision 
of heavy fuel oil and participation in KEDO is predicated on 
such compliance. In order to clarify this issue, the Committee 
recommendation regarding the general provision on KEDO (section 
559) would not allow the President to waive the requirement for 
compliance with the Agreed Framework in order to obligate funds 
for KEDO.

                                DEMINING

    The Committee is recommending the full request of 
$55,000,000 for humanitarian demining, including $10,000,000 
for the Slovenian International Trust Fund. The Committee 
directs that such amounts may be deposited into that fund only 
to the extent of deposits of matching amounts by other 
governments, entities, or persons. In addition, these funds 
should only be expended by the fund in consultation with the 
United States Government. The Committee further directs that 
deposits into the fund shall be subject to the regular 
notification procedures of the Committees on Appropriations.

                                ALBANIA

    The Committee urges the Department of State to provide up 
to $1,500,000 as a United States contribution to an 
international effort to provide Albania with the means to 
destroy hundreds of tons of excess ammunition. These funds 
would be used to purchase an explosive waste incinerator. The 
project has been initiated under the Partnership for Peace 
(PFP) program. Funding may be derived from this account, or 
from funds appropriated under the headings ``Foreign Military 
Financing Program'' and ``Peacekeeping Operations''.

                       Department of the Treasury


               International Affairs Technical Assistance


Fiscal year 2002 level................................        $6,500,000
Fiscal year 2003 request..............................        10,000,000
Committee recommendation..............................        11,000,000

    The Committee recommends $11,000,000 under this heading for 
international technical assistance by the Department of the 
Treasury, an amount that is $1,000,000 above the request and 
$4,500,000 above last year's level. In operation since 1991, 
Treasury's Office of Technical Assistance provides expert 
fiscal and monetary policy advisors to countries of the former 
Soviet Union and Eastern Europe. Beginning in fiscal year 1999, 
Treasury created the Treasury International Affairs Technical 
Assistance (TIATA) program and expanded the countries to Asia, 
Africa and Latin America. The Committee directs the Office of 
Technical Assistance to notify the Committee prior to the 
obligation of funds for the compensation or travel expenses of 
any individual who is not an employee of the Department of 
Treasury.

                     TITLE III--MILITARY ASSISTANCE


                  Funds Appropriated to the President


             International Military Education and Training


Fiscal year 2002 level................................       $70,000,000
Fiscal year 2003 request..............................        80,000,000
Committee recommendation..............................        80,000,000

    The Committee recommends $80,000,000 for the International 
Military Education and Training program, which represents an 
increase of $10,000,000 above the fiscal year 2002 level and is 
the same as the requested level.
    The Committee has included language in section 534 to allow 
the Administration to obligate funds for military education and 
training for Cambodia, notwithstanding section 557 of this Act. 
The President's fiscal year 2003 budget request includes 
$200,000 for this purpose. In implementing this program, the 
Committee directs that strict vetting procedures be instituted 
for the individuals that will be involved in the program. The 
Committee notes that any program must comply with section 553 
of this Act, ``Limitation on Assistance to Security Forces''.

                               GUATEMALA

    The Committee includes prior year bill language limiting 
Guatemala to Expanded IMET only, subject to notification.

                           IMET AVAILABILITY

    The Committee has retained language from fiscal year 2002, 
which provides that, of the funds made available for IMET, 
$3,000,000 may remain available until expended.

                    FOREIGN MILITARY TRAINING REPORT

    The Committee is pleased the Departments of State and 
Defense responded to the Committee's recommendation and made 
key information public in the most recent Foreign Military 
Training Report. The Committee believes this information should 
remain available to the public in future editions of this 
report.

                               INDONESIA

    The Committee recommendation does not include prior year 
language that would have restricted IMET for Indonesia to 
Expanded IMET (E-IMET). In addition, language in section 564 
(``Indonesia'') has been modified to require certain 
determinations prior to the obligation of funds for assistance 
for Indonesia appropriated in the account ``Foreign Military 
Financing Program'', but the obligation of funds for assistance 
for Indonesia under IMET would not be subject to these 
determinations.

                   Foreign Military Financing Program


                     (INCLUDING TRANSFER OF FUNDS)

Fiscal year 2002 level................................    $3,650,000,000
Emergency supplemental funding........................       357,000,000
Fiscal year 2003 request..............................     4,107,200,000
Committee recommendation..............................     4,080,200,000
    (by transfer).....................................      (98,000,000)

    The Committee recommends $4,080,200,000 in Foreign Military 
Financing grants. This program level is $73,200,000 above the 
fiscal year 2002 level, including emergency supplemental 
appropriations, and $27,000,000 below the President's request. 
The increase above the fiscal year 2002 level is primarily due 
to an increase of $60,000,000 for Israel, as requested by the 
President.
    Funding of $98,000,000 for Colombia is appropriated in this 
account, as requested, but for purposes of program 
implementation bill language is proposed that allows the funds 
to be transferred to ``International Narcotics Control and Law 
Enforcement''. As a result the Committee has also included bill 
language prohibiting the expenditure of other funds 
appropriated under this heading for Colombia for helicopters 
and related support.

                                 ISRAEL

    The Committee recommends a total Foreign Military Financing 
(FMF) program of not less than $2,100,000,000 in grants for 
Israel which shall be available within 30 days of enactment or 
by October 31, 2002, whichever is later.
    It is the Committee's view that while Israel's economy has 
improved in recent years, the security situation in the Middle 
East has significantly worsened. Therefore, the Committee is 
convinced the United States must make every effort to carry out 
its long-standing policy of ensuring that Israel's 
technological edge is maintained. As a result, the Committee 
has provided an increase of $60,000,000 above the fiscal year 
2002 level, as requested by the President. The Committee also 
believes that a sustained military improvement program will be 
required over the next five years, at an annual rate of 
approximately $60,000,000, to assist Israel in responding to 
these emerging security challenges. However, with respect to 
this recommended increase in military assistance, the Committee 
must be very clear that it cannot commit future Congresses to 
the future appropriation of funds. Therefore, future increases 
in military assistance will require the annual review of the 
Congress and will necessarily be based upon an assessment of 
the security situation at the time.
    The Committee also recommends that, to the extent that the 
Government of Israel requests that FMF grant funds for Israel 
be used for such purposes, and as agreed by Israel and the 
United States, funds may be made available for advanced weapons 
systems of which $550,000,000 shall be available for the 
procurement in Israel of defense articles and defense services, 
including research and development. This represents a 
$15,000,000 increase over the fiscal year 2002 level and 
reflects a recognition by the Committee of Israel's need for 
similar annual increases over the next few years in order to 
provide Israel with increased flexibility in meeting the 
emerging security challenges in the Middle East.

                                 JORDAN

    The Committee strongly supports the Administration's 
efforts to improve Jordanian security and therefore recommends 
full funding of the President's request of $198,000,000 for 
Jordan. Under the able leadership of King Abdullah, Jordan 
plays a critical role in supporting peace and security in the 
Middle East. The Committee is well aware that Jordan's security 
requirements are extensive, particularly in the areas of ground 
force modernization and border security.

                                 EGYPT

    The Committee recommends a total of $1,300,000,000 in 
Foreign Military Financing grants for Egypt.
    Pursuant to the President's budget request bill language is 
recommended that would require that funds estimated to be 
outlayed for Egypt during fiscal year 2003 shall be transferred 
to an interest bearing account for Egypt in the Federal Reserve 
Bank of New York within 30 days of enactment of this Act or by 
October 31, 2002, whichever is later. The Committee is 
convinced that continued military cooperation between Egypt and 
the United States remains in the national security interests of 
both countries.

                              THE BALTICS

    The Committee strongly supports at least the Presidents' 
budget request of $21,250,000 for Estonia, Latvia, and 
Lithuania. Previous years' funding has significantly supported 
the commendable efforts of these countries to attain Western 
military standards and to improve their capacities to 
contribute to international security through the provision of 
peacekeepers to international peacekeeping missions.

                                 TURKEY

    The Committee supports the budget request of $17,500,000 
for Turkey with the understanding that it will be used only to 
support that country's command of the International Security 
Assistance Force (ISAF) in Afghanistan and for its military 
role in Operation Enduring Freedom and other areas in the war 
on terrorism. Given these imperatives, the Committee is not 
considering the traditional 10-to-7 ratio of aid to Greece.

                         ARMENIA AND AZERBAIJAN

    The Committee supports the President's budget request of 
$3,000,000 for assistance for Armenia and $3,000,000 for 
assistance for Azerbaijan. In addition, the Committee supports 
IMET assistance levels of $750,000 for both countries as 
requested by the President.

                                 MALTA

    The Committee is recommending that $6,000,000 be made 
available for Malta to enable that country to purchase an 
additional coastal patrol craft and for other military 
assistance. Malta's position in the middle of the Mediterranean 
gives it a crucial role in the interdiction of drug 
trafficking, illegal weapons shipments, and other smuggling 
activities. The Committee is also aware of the great increase 
in recent years in port calls and ship support provided by 
Malta for the United States Navy.

                        ADMINISTRATIVE EXPENSES

    The Committee has recommended a limitation on 
administrative expenses of $38,000,000. This is $1,000,000 
above the level requested by the President and is $1,000,000 
above the fiscal year 2002 level, including $2,000,000 in 
emergency supplemental funds. The increase above the budget 
request is intended to allow the Defense Security Cooperation 
Agency (DSCA) to annualize overseas costs associated with the 
emergency supplemental appropriations act.

                  FOREIGN MILITARY FINANCING SURCHARGE

    The Committee has included a limitation on Foreign Military 
Financing operating costs of $356,000,000. This limitation may 
be waived pursuant to the regular notification procedures of 
the Committees on Appropriations. This is $8,000,000 more than 
the fiscal year 2002 level and the same as the request.

                          FMF EXPENDITURE RATE

    The Committee continues prior year language that requires 
that Foreign Military Financing funds be expended at the 
minimum rate necessary to make timely payments for defense 
articles and services. In addition, it continues language 
providing that such funds shall be obligated upon apportionment 
in order to allow for the orderly execution of program funds.

                         PROCUREMENT AGREEMENTS

    The Committee has continued prior year language requiring 
recipients of Foreign Military Financing grants to sign 
agreements with the United States prior to using FMF funds to 
finance the procurement of any item not sold by the United 
States under the Arms Export Control Act.

                              PROHIBITIONS

    The Committee has included bill language prohibiting 
military assistance to Sudan and Liberia. The Administration 
did not request military assistance for Sudan or Liberia for 
fiscal year 2003.
    The Committee continues to support United States assistance 
to Guatemala to implement the Guatemalan peace accords. 
However, it remains concerned about limited progress in certain 
areas such as reform of the Guatemalan military. Therefore the 
Committee retains the existing ban on Foreign Military 
Financing and International Military Education and Training 
(IMET), with the exception of E-IMET. The Committee expects the 
State Department to continue to press the Guatemalan government 
to address corruption, comply with the peace accords, follow 
through on the recommendations of the Historical Clarification 
Commission, and move forward on important unresolved human 
rights cases.

                        Peacekeeping Operations


Fiscal year 2002 level................................      $135,000,000
Emergency supplemental funding........................        20,000,000
Fiscal year 2003 request..............................       108,250,000
Committee recommendation..............................       125,000,000

    The Committee recommends $125,000,000 for voluntary 
contributions for international peacekeeping operations. This 
amount is $30,000,000 below the level provided in fiscal year 
2002, including emergency supplemental appropriations, and is 
$16,750,000 above the President's request.
    The Committee recommendation reflects recognition of the 
need for additional resources to respond to recent peace 
initiatives in Africa, such as in Sudan.

               TITLE IV--MULTILATERAL ECONOMIC ASSISTANCE


                  International Financial Institutions


                      Global Environment Facility


Fiscal year 2002 level................................      $100,500,000
Fiscal year 2003 request..............................       177,812,533
Committee recommendation..............................       147,812,533

    The Committee recommends $147,812,533 for the Global 
Environment Facility (GEF), administered by the World Bank. Of 
the amount provided, $107,500,000 is intended for the scheduled 
United States annual payment to the third replenishment of GEF 
and $40,312,533 for past payments due. The recommendation is 
$30,000,000 below the request and $47,312,533 more than the 
amount enacted for 2002.

       Contribution to the International Development Association


Fiscal year 2002 level................................      $792,400,000
Fiscal year 2003 request..............................       874,338,333
Committee recommendation..............................       874,338,333

    The Committee is providing $874,338,333 for the U.S. 
contribution to the International Development Association 
(IDA), the same as the request and a $81,938,333 increase above 
the 2002 enacted level. Of the total, $850,000,000 is intended 
for the first of three payments under the United States 
commitment to the thirteenth replenishment of IDA and 
$24,338,333 for past payments due.
    The Committee commends the Department of Treasury in its 
negotiations for the thirteenth replenishment of IDA, and for 
the resulting agreement that would expand the use of grants as 
a part of the World Bank's assistance for the poorest 
countries. 18 to 21 percent of all IDA resources will be 
provided in the form of grants. The Committee strongly holds 
the opinion that countries in Africa, where the HIV/AIDS crisis 
is deepening, should not be forced to take loans to finance 
their health care and education. Grants from the World Bank 
will allow the poorest countries to avoid insupportable levels 
of debt in the future.
    The Committee agrees with the Secretary of Treasury that 
the World Bank must be more rigorous in measuring the results 
of its programs, and programs should focus on economic growth, 
health, education, and the alleviation of poverty. Developing 
benchmarks for assessing aid is not a straightforward or 
precise process, therefore the Committee is concerned about the 
Administration's announcement that it will seek funding 
increased levels of $950,000,000 in fiscal year 2004 and 
$1,050,000,000 in fiscal year 2005 if the World Bank meets 
certain benchmarks. The Committee expects the Department of 
Treasury to consult on an on-going basis with the Committee as 
benchmarks are developed and programs are evaluated.

      Contribution to the Multilateral Investment Guarantee Agency


Fiscal year 2002 level................................        $5,000,000
Fiscal year 2003 request..............................         3,630,696
Committee recommendation..............................         1,630,696

             (LIMITATION ON CALLABLE CAPITAL SUBSCRIPTIONS)

Fiscal year 2002 level................................     ($25,000,000)
Fiscal year 2003 request..............................      (14,825,178)
Committee recommendation..............................       (6,825,178)

    The Committee is providing $1,630,696 for past payments due 
by the United States to the World Bank's Multilateral 
Investment Guarantee Agency, $2,000,000 below the request and 
$3,369,304 less than the 2002 enacted level.

              General Concerns About the World Bank Group


                               OBJECTIVES

    The Committee is concerned that with the many reform 
proposals for the World Bank over the years, few have resulted 
in major changes to the Bank's basic structure or function. The 
Committee believes the World Bank and other multilateral 
development banks should have a clear set of objectives with 
the top priority to raise the standard of living of people 
throughout the world. The Committee supports the Treasury 
Department's attempts to focus the World Bank's core objective 
to raising per capita income and economic growth and the 
Committee urges the Administration to include basic education 
in the scope of activities that fall under this purpose.

                                FORESTS

    The Committee notes the World Bank has revised its forest 
policy, lifting the prohibition against financing of commercial 
logging operations in primary tropical forest and exempting the 
policy's application to the International Finance Corporation 
(IFC) or the Multilateral Investment Guarantee Agency (MIGA), 
the Bank's private-sector arms, and to structural adjustment 
lending. The Committee is concerned with the Bank's record in 
environmentally sensitive sectors and questions the ability of 
the Bank to implement and monitor the provisions of a more 
complex forest policy. The Committee directs the Secretary of 
the Treasury and the United States Executive Director at the 
World Bank to work with management to ensure that Bank 
operations do not jeopardize primary or old growth forests or 
critical natural habitats or the rights and local economies of 
indigenous peoples and long-term forest inhabitants.

                      AVAILABILITY OF INFORMATION

    The Committee is concerned with the lack of contact and 
information provided by the World Bank Group and regional 
development banks. The Committee is disappointed that it must 
request annual reports and information about the basic 
functions of each institution. Future and continued support for 
the banks cannot be guaranteed unless future requests are 
better justified by the Department of Treasury as well as the 
management of each individual institution.

                 Inter-American Investment Corporation


Fiscal year 2002 level................................       $18,000,000
Fiscal year 2003 request..............................        30,351,667
Committee recommendation..............................        30,351,667

    The Committee recommends an appropriation of $30,351,667 
for the Inter-American Investment Corporation, of which 
$25,000,000 is to meet the scheduled United States annual 
purchase of share capital of the Inter-American Investment 
Corporation and $5,351,667 for past due payments. The 
recommendation is the same as the request and $12,351,667 more 
than the 2002 enacted level.
    For the past 10 years, the Inter-American Investment 
Corporation has supported small and medium private enterprises 
in Latin America and the Caribbean through strategic equity 
investments and loans. The small and medium enterprise sector 
is the major source of new jobs and economic growth in the 
region, but is generally overlooked by multilateral banks that 
focus on the public sector and bilateral donor agencies that 
focus on microenterprise credit.

                      Multilateral Investment Fund


Fiscal year 2002 level................................  ................
Fiscal year 2003 request..............................       $29,590,667
Committee recommendation..............................        24,590,667

    The Committee recommends an appropriation of $24,590,667 
for past due payments for the Multilateral Investment Fund 
(MIF). The recommendation is $5,000,000 below the request. 
There was no appropriation in 2002.
    The Multilateral Investment Fund (MIF) is the major source 
of multilateral technical assistance grants for micro and small 
business development in Latin America and the Caribbean.

               Contribution to the Asian Development Fund


Fiscal year 2002 level................................       $98,017,050
Fiscal year 2003 request..............................       147,386,133
Committee recommendation..............................        97,886,133

    The Committee recommends an appropriation of $97,886,133 
for the concessional Asian Development Fund, an amount that is 
$130,917 below the amount provided in fiscal year 2002 and 
$49,500,000 below the amount requested.

              Contribution to the African Development Bank


Fiscal year 2002 level................................        $5,100,000
Fiscal year 2003 request..............................         5,104,473
Committee recommendation..............................         5,104,473

             (LIMITATION ON CALLABLE CAPITAL SUBSCRIPTIONS)

Fiscal year 2002 level................................     ($79,991,500)
Fiscal year 2003 request..............................      (79,602,688)
Committee recommendation..............................      (79,602,688)

    The Committee recommends an appropriation of $5,104,473 for 
the African Development Bank, an amount that is $4,473 above 
the amount provided in fiscal year 2002 and the same as the 
amount requested. The Committee intends that $5,100,000 of the 
amount provided be for the annual United States payment and 
$4,473 for past payments due. The Committee notes the error in 
the Department of Treasury Congressional budget justification 
estimates for this request.

              Contribution to the African Development Fund


Fiscal year 2002 level................................      $100,000,000
Fiscal year 2003 request..............................       118,073,333
Committee recommendation..............................       113,073,333

    The recommendation for the concessional African Development 
Fund is $113,073,333, which is $5,000,000 less than the amount 
requested and $13,073,333 above the amount provided in fiscal 
year 2002.

  Contribution to the European Bank for Reconstruction and Development


Fiscal year 2002 level................................       $35,778,717
Fiscal year 2003 request..............................        35,804,955
Committee recommendation..............................        35,804,955

             (LIMITATION ON CALLABLE CAPITAL SUBSCRIPTIONS)

Fiscal year 2002 level................................    ($123,237,803)
Fiscal year 2003 request..............................     (123,328,178)
Committee recommendation..............................     (123,328,178)

    The Committee is recommending $35,804,955 for the European 
Bank for Reconstruction and Development. This amount is the 
same as the President's request and $26,238 more than the 
appropriation provided in fiscal year 2002.

  Contribution to the International Fund for Agricultural Development


Fiscal year 2002 level................................       $20,000,000
Fiscal year 2003 request..............................        15,004,000
Committee recommendation..............................        15,004,000

    The Committee is again providing a separate appropriation 
for the International Fund for Agricultural Development (IFAD), 
reflecting the assumption of responsibility for this 
multilateral institution by the Department of the Treasury in 
February, 2000. The fiscal year 2003 recommendation is 
$15,004,000, the same as the request and $4,996,000 below the 
amount provided in fiscal year 2002.
    Cooperatives and credit unions should be a critical element 
of IFAD programs in reaching low-income farmers and 
entrepreneurs in developing countries. The Committee encourages 
IFAD to better utilize the technical know-how of, and to 
collaborate with, United States cooperative development 
organizations to build sustainable, member-owned cooperatives 
and credit unions. In particular, the Committee looks favorably 
on IFAD's new Rural Finance Policy, a vital tool in poverty 
reduction and rural development. Cooperatives, credit unions 
and producer-owned associations are essential for providing 
sustainable rural financial and business services, including 
for micro-finance and savings mobilization of small farmers. 
The Committee encourages IFAD to better tap the United States 
cooperative and credit union experience in forming sustainable 
farm credit institutions and rural credit unions.

                International Organizations and Programs


Fiscal year 2002 level................................      $208,500,000
Fiscal year 2003 request..............................       310,400,000
Committee recommendation..............................       190,400,000

    The Committee has recommended $190,400,000 for 
International Organizations and Programs. This is $18,100,000 
less than the fiscal year 2002 level and $120,000,000 less than 
the President's request. As in fiscal year 2002, funding for a 
grant to UNICEF is provided in the ``Child Survival and Disease 
Programs Fund'' under title II. Once this funding is taken into 
account, the Committee recommendation is the same as the 
request. The United Nations Population Fund (UNFPA) is 
discussed in section 568.
    The Committee recommendation also continues prior year bill 
language prohibiting the use of funds for the Korean Peninsula 
Energy Development Organization (KEDO) or the International 
Atomic Energy Agency (IAEA). Both organizations are funded 
under ``Nonproliferation, Anti-Terrorism, Demining and Related 
Programs''.

                   UNITED NATIONS DEVELOPMENT PROGRAM

    The Committee recommends a level not less than $100,000,000 
in International Organizations and Programs funding be set 
aside to support the United Nations Development Program (UNDP).

          UNITED NATIONS VOLUNTARY FUND FOR VICTIMS OF TORTURE

    The Committee supports not less than $5,000,000 for the 
United States contribution to the United Nations Voluntary Fund 
for Victims of Torture. Assisting these centers not only 
reinforces United States opposition to human rights violations 
but has proven to be an effective method for lessening the 
incidence of torture and promotes human rights and democracy 
abroad. The Committee urges the Department of State to 
negotiate with other governments to persuade them to increase 
their contributions to the Fund.

                      TITLE V--GENERAL PROVISIONS

    The Committee recommends that 17 of the general provisions 
carried in the fiscal year 2002 act be deleted. These 
provisions (sections 523, 541, 551, 552, 559, 560, 561, 566, 
579, 583, 585-87, and 589-92) are either addressed elsewhere in 
permanent law, have been considered by the appropriate 
authorizing committee, or are no longer necessary.
    The Committee recommends the following new and revised 
general provisions.
    Sec. 509, ``Transfers Between Accounts'' is modified by 
adding two new subsections: prohibiting transfers of funds made 
available by this Act other than those transfers provided for 
by this Act, any other appropriations Act, or sections 109, 610 
and 632 of the Foreign Assistance Act of 1961; and requiring 
the inspectors general of agencies in receipt of transfers of 
funds provided by this Act to perform and make available to the 
Committee periodic program and financial audits of the use of 
such funds.
    Sec. 512, ``Limitation on Assistance to Countries in 
Default'' is modified by narrowing the application of the 
limitation to assistance to the government of any country in 
default.
    Sec. 520, ``Special Notification Requirements'' is modified 
to delete Serbia and Haiti.
    Sec. 522, ``Child Survival and Health Activities'' is 
revised by reducing from $15,500,000 to $11,000,000 the amount 
from the Child Survival and Health Program Fund that may be 
used to reimburse other agencies, institutions and private 
organizations for the full cost of individual USAID staff who 
would otherwise be compensated from the USAID Operating 
Expenses account; by increasing from $3,000,000 to $3,500,000 
the amount of Development Assistance funds that may be used for 
similar reimbursements relating to operating expenses for 
administration of basic education activities; and by deleting 
the requirement that $446,000,000 shall be made available for 
family planning/reproductive health.
    Sec. 523, ``Afghanistan'' is a new general provision 
providing that not less than $295,500,000 shall be provided for 
humanitarian and reconstruction activities in Afghanistan, of 
which not less than $2,500,000 should be for women's centers.
    Sec. 526, ``Democracy Programs'' is modified by deleting 
language providing that not less than $10,000,000 shall be made 
available for democracy activities in China, but retaining a 
ceiling of $3,000,000 for certain activities in Tibet that are 
undertaken by nongovernmental organizations incorporated 
outside of China; it also modifies a provision regarding 
democracy, rule of law, and women's development programs in 
countries with a significant Muslim population by deleting the 
minimum funding level and all references to the Bureau of 
Democracy, Human Rights and Labor, Department of State.
    Sec. 528, ``Debt-for-Development'' is modified by limiting 
its application to debt exchanges and deleting references to 
endowment and economic assistance activities.
    Sec. 534, ``Special Authorities'' is revised by: in 
subsection (a) expanding its application to all assistance to 
Afghanistan and modifying restrictions on assistance for 
Cambodia; in subsection (c) by reducing the number of 
additional USAID personal service contractors in the United 
States from 25 to 15 and limiting their temporary deployment to 
the offices of Procurement and of Food for Peace and the 
bureaus for Africa and for Asia and the Near East; and by 
adding a new subsection (g) that extends an additional year 
certain authorities contained in section 602 of Public Law 107-
206 regarding the shipment of humanitarian assistance that 
applied only during fiscal year 2002.
    Sec. 538, ``Earmarks'' is modified in subsection (a) by 
replacing the word ``impossible'' with the words ``not 
possible''.
    Sec. 544, ``Withholding of Assistance for Parking Fines 
Owed by Foreign Countries'' is modified in subsection (a) by 
changing a reference to the date of enactment of this Act to 
the date ``September 30, 2002''.
    Sec. 547, ``Landmines'' is modified by deleting the change 
in permanent law that was contained in the proviso.
    Sec. 551, ``Caribbean Basin'' is a new general provision 
that incorporates sec. 554 of the fiscal year 2002 Act and 
provides bilateral economic assistance of not less than the 
following amounts: Haiti (including food aid managed by 
USAID)--$52,500,000; Honduras--$40,130,000 and Nicaragua--
$37,680,000.
    Sec. 555, ``Assistance for the Middle East'' is similar to 
Section 558 of the fiscal year 2002 appropriations act and is 
modified by raising the cap on Middle East spending from 
$5,141,150,000 to $5,466,700,000.
    Sec. 557, ``Cambodia'' is modified by deleting the 
requirement for a determination and report by the Secretary of 
State, a reference to the Ministry of Women and Veteran's 
Affairs, and a requirement for a determination and 
certification by the President regarding a tribunal; funding 
under the Child Survival and Health Programs Fund is authorized 
for Cambodia.
    Sec. 559, ``Korean Peninsula Energy Development 
Organization'' is revised by reducing the funding ceiling from 
$95,000,000 to $50,000,000 and modifying the presidential 
waiver.
    Sec. 560, ``Palestinian Statehood'' is a new general 
provision replacing section 566 from the fiscal year 2002 
appropriations act, ``PLO Compliance Report'' which is deleted. 
This provision prohibits United States assistance for a 
Palestinian state unless certain conditions are met regarding 
democratic reform and cessation of terrorism, but allows 
technical assistance to Palestinian institutions to meet those 
goals without contravening the restriction on direct assistance 
to the Palestinian Authority.
    Sec. 562, ``Iraq'' is modified by removing all of the 
provisos.
    Sec. 563, ``West Bank and Gaza Program'' is revised by the 
addition of two new subsections relating to vetting of 
individuals or entities and to annual audits under the 
oversight of USAID of all contractors and grantees; in 
addition, up to $1,000,000 from the Economic Support Fund may 
be used by the USAID Office of the Inspector General for such 
audits.
    Sec. 564, ``Indonesia'' is modified by limiting its 
application to funds appropriated under the heading ``Foreign 
Military Financing Program''.
    Sec. 566, ``Restrictions on Assistance to Governments 
Destabilizing Sierra Leone'' is similar to section 574 of the 
fiscal year 2002 appropriations act and is modified by deleting 
initial subsection.
    Sec. 568, ``Contributions to the United Nations Population 
Fund'' is identical except for technical date changes to 
section 585 of the fiscal year 2001 Act with two modifications: 
it deletes the term ``not more than'' before the dollar amount; 
and it adds a new condition on availability of funds to UNFPA--
that the UNFPA does not provide any funding for China's State 
Planned-Birth Commission or its regional affiliates.
    Sec. 573, ``Funding for Yugoslavia'' is modified by 
replacing `Serbia' with `Yugoslavia' or `Central Government of 
the Federal Republic of Yugoslavia' where the former term was 
used in the title or subsection (a) of section 584 of the 
fiscal year 2002 Act; also, subsection (d) deletes references 
to Montenegro, Kosovo and municipalities.
    Sec. 574, ``Prohibition on Taxation of United States 
Assistance'' is a new general provision that requires the 
Secretary of State to insert in new bilateral assistance 
agreements a requirement that United States assistance is 
exempt from taxation or that tax collected is promptly 
reimbursed.
    Sec. 575, ``Prohibition on Use of Multilateral Assistance 
to Support Terrorism'' is a new general provision relating to 
compliance, especially by the Department of State and United 
Nations Relief and Works Agency for Palestine Refugees in the 
Near East, with section 301(c) of the Foreign Assistance Act.
    Sec. 576, ``Colombia'' is similar to Section 567 of the 
fiscal year 2002 appropriations act and is modified to require 
the Secretary of State to determine and certify that the 
Colombian Armed Forces are meeting certain human rights 
conditions before all the funds for the Colombian Armed Forces 
are made available.
    Sec. 578, ``Burma'' is a new general provision replacing 
language carried under that heading in title II of the fiscal 
year 2002 Act; subsection (a) is identical, except for updated 
dollar amounts, to language enacted in the fiscal year 1977 
appropriations act; subsection (b) provides that not less than 
$2,000,000 should be made available from the Child Survival and 
Health Programs Fund for Burma.
    Sec. 579, ``Tropical Forest Conservation'' is a new general 
provision requested by the President making available from the 
Development Assistance account $50,000,000 to carry out 
tropical forest conservation activities, of which up to 
$40,000,000 may be used for the subsidy cost of debt reduction 
authorized by the Tropical Forest Conservation Act of 1998.
    Sec. 580, ``Authorizations'' is similar to Section 588 of 
the fiscal year 2002 appropriations act and authorizes the 
Secretary of Treasury to make contributions to certain 
multilateral development banks.
    Sec. 581, ``Cuba'' is a new general provision prohibiting 
counternarcotics assistance in this Act to the Government of 
Cuba.
    Sec. 582, ``Trade Capacity Building'' is a new general 
provision providing that not less than $452,000,000 from five 
specified accounts should be made available for trade capacity 
building assistance.

               PROVISIONS RETAINED FROM FISCAL YEAR 2002

    The following general provisions from the fiscal year 2002 
Act are retained in the fiscal year 2003 Act unchanged except 
for technical corrections, references to fiscal year 2003, and 
new section numbers where appropriate:
    Sec. 501. Obligations During Last Month of Availability.
    Sec. 502. Private and Voluntary Organizations.
    Sec. 503. Limitation on Residence Expenses.
    Sec. 504. Limitation on Expenses.
    Sec. 505. Limitation on Representational Allowances.
    Sec. 506. Prohibition on Financing Nuclear Goods.
    Sec. 507. Prohibition Against Direct Funding for Certain 
Countries.
    Sec. 508. Military Coups.
    Sec. 510. Deobligation/Reobligation Authority.
    Sec. 511. Availability of Funds.
    Sec. 513. Commerce and Trade.
    Sec. 514. Surplus Commodities.
    Sec. 515. Notification Requirements.
    Sec. 516. Limitation on Availability of Funds for 
International Organizations and Programs.
    Sec. 517. Independent States of the Former Soviet Union.
    Sec. 518. Prohibition on Funding for Abortions and 
Involuntary Sterilization.
    Sec. 519. Export Financing Transfer Authorities.
    Sec. 521. Definition of Program, Project, and Activity.
    Sec. 524. Notification of Excess Defense Equipment.
    Sec. 525. Authorization Requirement.
    Sec. 527. Prohibition on Bilateral Assistance to Terrorist 
Countries.
    Sec. 529. Separate Accounts.
    Sec. 530. Compensation for United States Executive 
Directors to International Financial Institutions.
    Sec. 531. Compliance with United Nations Sanctions against 
Iraq.
    Sec. 532. Authorities for the Peace Corps, Inter-American 
Foundation and African Development Foundation.
    Sec. 533. Impact on Jobs in the United States.
    Sec. 535. Policy on Terminating the Arab League Boycott of 
Israel and Normalizing Relations with Israel.
    Sec. 536. Administration of Justice Activities.
    Sec. 537. Eligibility for Assistance.
    Sec. 539. Ceilings and Earmarks.
    Sec. 540. Prohibition on Publicity and Propaganda.
    Sec. 541. Prohibition of Payments to United Nations 
Members.
    Sec. 542. Nongovernmental Organizations--Documentation.
    Sec. 543. Prohibition on Assistance to Foreign Governments 
that Export Lethal Military Equipment to Countries Supporting 
International Terrorism.
    Sec. 545. Limitation on Assistance for the PLO for the West 
Bank and Gaza.
    Sec. 546. War Crimes Tribunals Drawdown.
    Sec. 548. Restrictions Concerning the Palestinian 
Authority.
    Sec. 549. Prohibition of Payment of Certain Expenses.
    Sec. 550. Restrictions on Voluntary Contributions to United 
Nations Agencies.
    Sec. 552. Limitation on Assistance to the Palestinian 
Authority.
    Sec. 553. Limitation on Assistance to Security Forces.
    Sec. 554. Discrimination Against Minority Religious Faiths 
in the Russian Federation.
    Sec. 556. Enterprise Fund Restrictions.
    Sec. 558. Foreign Military Training Report.
    Sec. 561. Prohibition on Assistance to the Palestinian 
Broadcasting Corporation.
    Sec. 565. Briefings on Potential Purchases of Defense 
Articles or Defense Services by Taiwan.
    Sec. 567. Voluntary Separation Incentives.
    Sec. 569. Procurement and Financial Management Reform.
    Sec. 570. Commercial Leasing of Defense Articles.
    Sec. 571. War Criminals.
    Sec. 572. User Fees.
    Sec. 577. Illegal Armed Groups.
    Sec. 583. American Churchwomen and Other Citizens in El 
Salvador and Guatemala.

              House of Representatives Report Requirements


                           TRANSFER OF FUNDS

    Pursuant to clause 3(f)(2) of rule XIII of the Rules of the 
House of Representatives, the following is submitted describing 
the transfer of funds provided in the accompanying bill.
    Under ``Child Survival and Health Programs Fund'' up to 
$6,000,000 may be transferred to and merged with funds 
appropriated under the heading ``Operating Expenses of the 
United States Agency for International Development.''
    Under ``Development credit authority'' up to $24,500,000 is 
authorized to be transferred to the account from a variety of 
sources. In addition, $7,591,000 may be transferred to and 
merged with funds appropriated under the heading ``Operating 
Expenses of the United States Agency for International 
Development''.
    Under ``Economic Support Fund'', up to $200,000,000 may be 
transferred to ``Nonproliferation, Antiterrorism, Demining and 
Related Programs''.
    Under ``Foreign Military Financing Program'', up to 
$98,000,000 may be transferred to ``International Narcotics 
Control and Law Enforcement''.

                              RESCISSIONS

    Clause 3(f)(2) of rule XIII of the Rules of the House of 
Representatives requires a separate listing of rescissions. 
There are no rescissions recommended in the accompanying bill.

                        Constitutional Authority

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives states that:

          Each report of a committee on a bill or joint 
        resolution of a public character, shall include a 
        statement citing the specific powers granted to the 
        Congress in the Constitution to enact the law proposed 
        by the bill or joint resolution.

    The Committee on Appropriations bases its authority to 
report this legislation from Clause 7 of Section 9 of Article I 
of the Constitution of the United States of America which 
states:

          No money shall be drawn from the Treasury but in 
        consequence of Appropriations made by law * * *

    Appropriations contained in this Act are made pursuant to 
this specific power granted by the Constitution.

               Changes in the Application of Existing Law

    Pursuant to clause 3(f), rule XIII of the Rules of the 
House of Representatives, the following statements are 
submitted describing the effects of provisions in the 
accompanying bill which directly or indirectly change the 
application of existing law. Most of the language has been 
provided in previous measures including supplementals for the 
departments and agencies carried in the accompanying bill.
    1. The bill contains appropriations for a number of items 
for which authorizations for fiscal year 2002 have not yet been 
enacted. The bill allows funds appropriated in the bill to be 
obligated in the absence of a prior authorization of 
appropriations.
    2. The bill provides that a number of the appropriations 
shall remain available for obligation beyond the current fiscal 
year. In all cases it is deemed desirable to carry such 
language in order to provide for orderly administration of such 
programs and effective use of funds.
    3. The bill contains a number of general provisions and 
other language that have been carried in the bill in past 
years.
    4. Under ``Export-Import Bank of the United States, 
Administrative Expenses'', authority is provided for the 
Export-Import Bank to accept and use payment or services 
provided by transaction participants for legal, financial, or 
technical services in connection with any transaction for which 
an application for a loan, guarantee or insurance commitment 
has been made. In addition, authority is provided for 
subsection (a) of section 117 to remain in effect until October 
1, 2003.
    5. Under ``Overseas Private Investment Corporation, Program 
Account'', funds are appropriated for the cost of direct and 
guaranteed loans, to be derived by transfer from the Overseas 
Private Investment Corporation Noncredit Account. Such costs 
shall be as defined in section 502 of the Congressional Budget 
Act of 1974 and may be used for direct loan and loan guaranty 
commitments incurred or made during fiscal years 2003 and 2004. 
These funds are available for obligation until 2011 and 2012, 
depending on the initial date of obligation.
    6. Under ``Trade and Development Agency'', an additional 
$5,000,000 is made available for trade capacity building 
assistance and is subject to notification.
    7. Under ``Child Survival and Health Programs Fund'' 
language is provided that indicates how the funds should be 
allocated among various activities; not to exceed $32,500, in 
addition to funds otherwise available for such purposes, may be 
used to monitor and provide oversight of programs for displaced 
and orphaned children and victims of war; up to $60,000,000 is 
authorized to be made available for a contribution to The 
Vaccine Fund; and language is included that provides that not 
less than $250,000,000 should be made available for a 
contribution to the Global Fund to Fight AIDS, Tuberculosis and 
Malaria, and shall be expended at the minimum rate necessary to 
make timely payments for projects and activities, and may not 
exceed the total resources provided by other donors; and 
limitations are placed on transfers to other agencies.
    8. Under ``Development Assistance'', language is provided 
that indicates how the funds should be allocated among various 
activities, including $162,500,000 for trade capacity building 
and $218,000,000 for basic education; and language is included 
that provides that none of the funds appropriated under title 
II of this Act that are managed by or allocated to the United 
States Agency for International Development Secretariat may be 
made available except through the regular notification 
procedures of the Committees on Appropriations.
    9. Under ``International Disaster Assistance'', $50,000,000 
is provided for the West Bank and Gaza, to remain available 
until expended, and language provides that none of the funds 
appropriated for this purpose may be obligated or expended with 
respect to providing funds to the Palestinian Authority, and 
$65,000,000 is made available for Afghanistan for certain 
specified purposes.
    10. Under ``Development Credit Authority'', authorized 
transfers, when added to the funds transferred pursuant to the 
authority contained under this heading in Public Law 107-115, 
shall not exceed $24,500,000.
    11. Under ``Capital Investment Fund'', language is provided 
establishing this new account pursuant to the authority of 
section 667 of the Foreign Assistance Act, for expenses for 
overseas construction and related costs, and for the 
procurement and enhancement of information technology and 
related capital investments; such appropriations are in 
addition to those otherwise available for such purposes; the 
Administrator of USAID is authorized to change fair and 
reasonable rent in buildings constructed using funds 
appropriated under this heading, and such rental payments are 
designated as offsetting collections; obligations of funds 
(including offsetting collections) are subject to notification; 
and the assignment of employees or contractors to buildings is 
subject to the concurrence of the Administrator of USAID.
    12. Under ``Economic Support Fund'', not less than 
$600,000,000 is made available only for Israel and not less 
than $615,000,000 is made available only for Egypt; not less 
than $45,000,000 is made available for Afghanistan for certain 
specified purposes; not less than $35,000,000 should be 
available for Lebanon; and not less than $15,000,000 should be 
available for Cyprus. In addition, $200,000,000 is provided for 
Israel for certain specified purposes with discretionary 
transfer authority.
    13. Under ``Assistance for Eastern Europe and the Baltic 
States'', not less than $5,000,000 should be made available for 
assistance for the Baltic States.
    14. Under ``Assistance for the Independent States of the 
Former Soviet Union'', the Committee has modified limitations 
on the amount of assistance that may be made available for 
various countries, and the limitations for Georgia and Armenia 
apply to funds appropriated in this title rather than under 
this heading, as in current law; in addition, no funds are 
available for the Government of Ukraine if the Secretary of 
State cannot certify that it is in compliance with certain 
specified conditions, subject to several specified exceptions.
    15. Under ``African Development Foundation'', funds made 
available to grantees may be invested for project purposes when 
authorized by the Board of Directors, instead of by the 
President as in current law.
    16. Under ``Peace Corps'', the Director of the Peace Corps 
is allowed to make appointments to permit Peace Corps employees 
to serve in excess of five years in the case of individuals 
whose appointment involves the safety of Peace Corps 
volunteers, notwithstanding section 7 of the Peace Corps Act.
    17. Under ``International Narcotics Control and Law 
Enforcement'', $10,000,000 should be made available for the 
demand reduction program; in addition, a limitation of 
$24,062,000 is placed on administrative expenses.
    18. Under ``Andean Counterdrug Initiative'', assistance for 
Colombia is made available consistent with the provisions 
authorizing and limiting such assistance as are contained in 
Public Law 107-206; the Secretary of State, in consultation 
with the Administrator of USAID, shall provide to the Committee 
45 days after the date of enactment a report on the proposed 
uses of all funds under this heading on a country-by-country 
basis for each proposed program, project or activity; in 
addition, a limitation of $15,680,000 is placed on 
administrative expenses.
    19. Under ``Migration and Refugee Assistance'', a 
limitation of $16,000,000 is placed on administrative expenses.
    20. Under ``Nonproliferation, Anti-terrorism, Demining, and 
Related Programs'', a limitation of $15,000,000 is placed on 
funding for the Nonproliferation and Disarmament Fund.
    21. Under ``International Military Education and 
Training'', assistance for Guatemala is limited to expanded 
military education and training and is subject to notification.
    22. Under ``Foreign Military Financing Program'', authority 
is provided for the transfer of up to $98,000,000 to 
``International Narcotics Control and Law Enforcement'' and no 
other funds may be made available for certain assistance for 
Colombia; not less than $2,100,000,000 is appropriated for 
Israel, of which not less than $550,000,000 shall be available 
for the procurement in Israel of defense articles and defense 
services; a limitation of $38,000,000 is provided for 
administrative expenses; and a limitation of $356,000,000 from 
certain other funds may be obligated for expenses incurred 
pursuant to section 43(b) of the Arms Export Control Act.
    23. Under title IV, funds for a number of international 
financial institutions are made available for contributions; 
funds are made available for the United States share of the 
paid-in portion of the increase in capital stock of certain 
institutions; and limitations are placed on callable capital 
subscriptions.
    24. Under ``Contribution to the Enterprise for the Americas 
Multilateral Investment Fund'', authority is given for the 
Secretary of the Treasury to make a payment to the Multilateral 
Investment Fund, to remain available until expended; this 
account was not contained in the 2002 appropriations act.
    25. Under ``General Provisions'':
    Sec. 509, ``Transfers Between Accounts'' is modified by 
adding two new subsections: prohibiting transfers of funds made 
available by this Act other than those transfers provided for 
by this Act, any other appropriations Act, or sections 109, 610 
and 632 of the Foreign Assistance Act of 1961; and requiring 
the inspectors general of agencies in receipt of transfers of 
funds provided by this Act to perform and make available to the 
Committee periodic program and financial audits of the use of 
such funds.
    Sec. 512, ``Limitation on Assistance to Countries in 
Default'' is modified by narrowing the application of the 
limitation to assistance to the government of any country in 
default.
    Sec. 520, ``Special Notification Requirements'' is modified 
to delete Serbia and Haiti.
    Sec. 522, ``Child Survival and Health Activities'' is 
revised by reducing from $15,500,000 to $11,000,000 the amount 
from the Child Survival and Health Program Fund that may be 
used to reimburse other agencies, institutions and private 
organizations for the full cost of individual USAID staff who 
would otherwise be compensated from the USAID Operating 
Expenses account; by increasing from $3,000,000 to $3,500,000 
the amount of Development Assistance funds that may be used for 
similar reimbursements relating to operating expenses for 
administration of basic education activities; and by deleting 
the requirement that $446,000,000 shall be made available for 
family planning/reproductive health.
    Sec. 523, ``Afghanistan'' is a new general provision 
providing that not less than $295,500,000 shall be provided for 
humanitarian and reconstruction activities in Afghanistan, of 
which not less than $2,500,000 should be for women's centers.
    Sec. 526, ``Democracy Programs'' is modified by deleting 
language providing that not less than $10,000,000 shall be made 
available for democracy activities in China, but retaining a 
ceiling of $3,000,000 for certain activities in Tibet that are 
undertaken by nongovernmental organizations incorporated 
outside of China; it also modifies a provision regarding 
democracy, rule of law, and women's development programs in 
countries with a significant Muslim population by deleting the 
minimum funding level and all references to the Bureau of 
Democracy, Human Rights and Labor, Department of State.
    Sec. 528, ``Debt-for-Development'' is modified by limiting 
its application to debt exchanges and deleting references to 
endowment and economic assistance activities.
    Sec. 534, ``Special Authorities'' is revised by: in 
subsection (a) expanding its application to all assistance to 
Afghanistan and modifying restrictions on assistance for 
Cambodia; in subsection (c) by reducing the number of 
additional USAID personal service contractors in the United 
States from 25 to 15 and limiting their temporary deployment to 
the offices of Procurement and of Food for Peace and the 
bureaus for Africa and for Asia and the Near East; and by 
adding a new subsection (g) that extends an additional year 
certain authorities contained in section 602 of Public Law 107-
206 regarding the shipment of humanitarian assistance that 
applied only during fiscal year 2002.
    Sec. 538, ``Earmarks'' is modified in subsection (a) by 
replacing the word ``impossible'' with the words ``not 
possible''.
    Sec. 544, ``Withholding of Assistance for Parking Fines 
Owed by Foreign Countries'' is modified in subsection (a) by 
changing a reference to the date of enactment of this Act to 
the date ``September 30, 2002''.
    Sec. 547, ``Landmines'' is modified by deleting the change 
in permanent law that was contained in the proviso.
    Sec. 551, ``Caribbean Basin'' is a new general provision 
that incorporates sec. 554 of the fiscal year 2002 Act and 
provides bilateral economic assistance of not less than the 
following amounts: Haiti (including food aid managed by 
USAID)--$52,500,000; Honduras--$40,130,000 and Nicaragua--
$37,680,000.
    Sec. 555, ``Assistance for the Middle East'' is similar to 
section 558 of the fiscal year 2002 appropriations act and is 
modified by raising the cap on Middle East spending from 
$5,141,150,000 to $5,466,700,000.
    Sec. 557, ``Cambodia'' is modified by deleting the 
requirement for a determination and report by the Secretary of 
State, a reference to the Ministry of Women and Veteran's 
Affairs, and a requirement for a determination and 
certification by the President regarding a tribunal.
    Sec. 559, ``Korean Peninsula Energy Development 
Organization'' is revised by reducing the funding ceiling from 
$95,000,000 to $50,000,000 and modifying the presidential 
waiver.
    Sec. 560, ``Palestinian Statehood'' is a new provision that 
prohibits United States assistance for a Palestinian state 
unless certain conditions are met regarding democratic reform 
and cessation of terrorism, but allows technical assistance to 
Palestinian institutions to meet those goals without 
contravening the restriction on direct assistance to the 
Palestinian Authority.
    Sec. 562, ``Iraq'' is modified by removing all of the 
provisos.
    Sec. 563, ``West Bank and Gaza Program'' is revised by the 
addition of two new subsections relating to vetting of 
individuals or entities and to annual audits under the 
oversight of USAID of all contractors and grantees; in 
addition, up to $1,000,000 from the Economic Support Fund may 
be used by the USAID Office of the Inspector General for such 
audits.
    Sec. 564, ``Indonesia'' is modified by limiting its 
application to funds appropriated under the heading ``Foreign 
Military Financing Program''.
    Sec. 566, ``Restrictions on Assistance to Governments 
Destabilizing Sierra Leone'' is similar to section 574 of the 
fiscal year 2002 appropriations act and is modified by deleting 
initial subsection.
    Sec. 568, ``Contributions to the United Nations Population 
Fund'' is identical except for technical date changes to 
section 585 of the fiscal year 2001 Act with two modifications: 
it deletes the term ``not more than'' before the dollar amount; 
and it adds a new condition on availability of funds to UNFPA--
that the UNFPA does not provide any funding for China's State 
Planned-Birth Commission or its regional affiliates.
    Sec. 573, ``Funding for Yugoslavia'' is modified by 
replacing `Serbia' with `Yugoslavia' or `Central Government of 
the Federal Republic of Yugoslavia' where the former term was 
used in the title or subsection (a) of section 584 of the 
fiscal year 2002 Act; also, subsection (d) deletes references 
to Montenegro, Kosovo and municipalities.
    Sec. 574, ``Prohibition on Taxation of United States 
Assistance'' is a new general provision that requires the 
Secretary of State to insert in new bilateral assistance 
agreements a requirement that United States assistance is 
exempt from taxation or that tax that was collected is promptly 
reimbursed.
    Sec. 575, ``Prohibition on Use of Multilateral Assistance 
to Support Terrorism'' is a new general provision relating to 
compliance, especially by the Department of State and United 
Nations Relief and Works Agency for Palestine Refugees in the 
Near East, with section 301(c) of the Foreign Assistance Act.
    Sec. 576, ``Colombia'' is similar to section 561 of the 
fiscal year 2002 appropriations act and is modified to require 
the Secretary of State to determine and certify that the 
Colombian Armed Forces are meeting certain human rights 
conditions before all the funds for the Colombian Armed Forces 
are made available.
    Sec. 578, ``Burma'' is a new general provision replacing 
language carried under that heading in title II of the fiscal 
year 2002 Act; subsection (a) is identical, except for updated 
dollar amounts, to language enacted in the fiscal year 1997 
Act; subsection (b) provides that not less than $2,000,000 
should be made available from the Child Survival and Health 
Programs Fund for Burma.
    Sec. 579, ``Tropical Forest Conservation'' is a new general 
provision requested by the President making available from the 
Development Assistance account $50,000,000 to carry out 
tropical forest conservation activities, of which up to 
$40,000,000 may be used for the subsidy cost of debt reduction 
authorized by the Tropical Forest Conservation Act of 1998.
    Sec. 580, ``Authorizations'' is similar to section 588 of 
the fiscal year 2002 appropriations act and authorizes the 
Secretary of Treasury to make contributions to certain 
multilateral development banks.
    Sec. 581, ``Cuba'' prohibits counternarcotics assistance in 
this Act to the Government of Cuba.
    Sec. 582, ``Trade Capacity Building'' is a new general 
provision providing that not less than $452,000,000 from five 
specified accounts should be made available for trade capacity 
building assistance.

                  Appropriations Not Authorized by Law

    Pursuant to clause 3(f)(1) of rule XIII of the Rules of the 
House of Representatives, the following table lists the 
appropriations in the accompanying bill which, in whole or in 
part, are not authorized by law:

----------------------------------------------------------------------------------------------------------------
                                                                           Appropriations in
                                       Last year         Authorization       last year of      Appropriations in
                                      authorized             level           authorization         this bill
----------------------------------------------------------------------------------------------------------------
Export-Import Bank..............  2001..............  Such sums as may    $865,000,000......  $541,400,000
                                                       be necessary.
Export-Import Bank                2001..............  Such sums as may    $62,000,000.......  $68,300,000
 administrative expenses.                              be necessary.
Child Survival and Health         Population (1987);  Population          Population          $1,710,000,000
 Programs Fund (See note below).   Health and          ($290,000,000);     ($234,625,000);     (includes
                                   Disease             Health and          Health and          $425,000,000 for
                                   Prevention          Disease             Disease             population, of
                                   (1987); Child       Prevention          Prevention          which
                                   Survival Fund       ($180,000,000);     ($166,762,500);     $368,500,000 in
                                   (1987); HIV/AIDS    Child Survival      Child Survival      this account;
                                   (2002).             Fund                Fund                funding for other
                                                       ($75,000,000);      ($75,000,000);      programs, other
                                                       HIV/AIDS            HIV/AIDS            than HIV/AIDS,
                                                       ($300,000,000).     ($474,000,000 in    difficult to
                                                                           fy2002              determine due to
                                                                           recommendation,     changing
                                                                           of which            definitions of
                                                                           $434,000,000 in     programs since
                                                                           this account).      last authorized)
Development Assistance (See note  Agriculture         Agriculture         Agriculture         $1,398,000,000
 below).                           (1987); Education   ($760,000,000);     ($639,613,000);     (includes
                                   (1987); Energy      Education           Education           $250,000,000 for
                                   and selected        ($180,000,000);     ($155,000,000);     basic education,
                                   development         Energy and          Energy and          of which
                                   activities (1987).  selected            selected            $218,000,000 in
                                                       development         development         this account;
                                                       activities          activities          other programs
                                                       ($207,000,000).     ($149,990,000).     difficult to
                                                                                               determine due to
                                                                                               changing
                                                                                               definitions of
                                                                                               programs since
                                                                                               last authorized)
International Disaster            1987..............  $25,000,000.......  $70,000,000.......  $315,500,000
 Assistance.
Transition initiatives..........  None (same          ..................  ..................  $40,000,000
                                   authorities as
                                   international
                                   disaster
                                   assistance).
Development credit authority....  None..............  ..................  ..................  ($12,500,000)
Development credit authority      None..............  ..................  ..................  $7,591,000
 administrative expenses.
Payment to the Foreign Service    None; mandatory     ..................  ..................  $45,200,000
 Retirement and Disability Fund.   item.
Operating expenses of the United  1987..............  $387,000,000......  $340,600,000......  $572,200,000
 States Agency for International
 Development.
Capital Investment Fund.........  None..............  ..................  ..................  $43,000,000
Operating Expenses of the United  1987..............  $21,750,000.......  $21,000,000.......  $33,700,000
 States Agency for International
 Development Inspector General.
Economic Support Fund...........  1987..............  $3,800,000,000....  $3,555,000,000....  $2,445,000,000
International Fund for Ireland..  1988..............  $35,000,000.......  $35,000,000.......  $25,000,000
Assistance for Eastern Europe     None..............  ..................  ..................  $520,000,000
 and the Baltic States (See note
 below).
Assistance for the Independent    1993..............  $410,000,000......  $417,000,000......  $755,000,000
 States of the Former Soviet
 Union.
Inter-American Foundation.......  1987..............  $11,969,000.......  $11,800,000.......  $16,000,000
African Development Foundation..  1987..............  $3,872,000........  $6,500,000........  $19,689,000
International Narcotics Control   1994..............  $171,500,000......  $100,000,000......  $197,000,000
 and Law Enforcement.
Andean Counterdrug Initiative...  None..............  ..................  ..................  $731,000,000
Migration and Refugee Assistance  2001..............  $750,000,000......  $700,000,000......  $800,000,000
Nonproliferation, Anti-           None..............  ..................  ..................  $347,400,000
 terrorism, demining and related
 programs (See note below).
International Affairs Technical   1999..............  $5,000,000........  $1,500,000........  $11,000,000
 Assistance.
Foreign Military Financing        2002..............  $3,627,000,000....  $4,007,000,000....  $4,080,200,000
 Program.
International Military Education  2002..............  $65,000,000.......  $70,000,000.......  $80,000,000
 and Training.
Peacekeeping operations.........  1999..............  $83,000,000.......  $76,500,000.......  $125,000,000
International Development         ..................  $2,410,000,000      $792,400,000......  $874,338,333
 Association.                                          over three years
                                                       (beginning in
                                                       fy2000).
African Development Fund........  ..................  $300,000,000 over   $100,000,000......  $113,073,333
                                                       three years
                                                       (beginning in
                                                       fy2000).
Asian Development Fund..........  2001..............  $400,000,000 over   $72,000,000.......  $97,886,000
                                                       four years
                                                       (beginning in
                                                       fy1998).
International Organizations and   2001..............  Such sums as may    $186,000,000......  $190,400,000
 Programs.                                             be necessary.
----------------------------------------------------------------------------------------------------------------
Note.--Programs recommended herein under ``Child Survival and Health Programs Fund'' and ``Development
  Assistance'' were last authorized under a different account structure than that recommended in this bill; the
  account structure included a number of functional accounts, as described above.
Note.--Programs recommended herein under ``Support for Eastern Europe and the Baltic States'' were last
  authorized in the Support for East European Democracy (SEED) Act of 1989; however, these funds were authorized
  for discrete programs and not for the account as a whole. In fiscal year 1991, the first general
  appropriations act after enactment of the SEED Act included $369,675,000 for this account.
Note.--Programs recommended herein under ``Nonproliferation, Anti-terrorism, Demining, and Related Programs''
  include some major programs for which authorizations of appropriations were provided for fiscal year 2002;
  these programs include $73,000,000 authorized for anti-terrorism assistance and $142,000,000 authorized for
  nonproliferation activities. In addition, some programs now in this account were previously in accounts which
  had authorizations of appropriations in prior years.

                   Comparison With Budget Resolution

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives requires an explanation of compliance with 
section 308(a)(1)(A) of the Congressional Budget and 
Impoundment Control Act of 1974 (Public Law 93-344), as 
amended, which requires that the report accompanying a bill 
providing new budget authority contain a statement detailing 
how the authority compares with the reports submitted under 
section 302 of the Act for the most recently agreed to 
concurrent resolution on the budget for the fiscal year from 
the Committee's section 302(a) allocation.

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                 302(b) allocation--           This bill--
                                                             ---------------------------------------------------
                                                                 Budget                    Budget
                                                               authority     Outlays     authority     Outlays
----------------------------------------------------------------------------------------------------------------
Discretionary...............................................      $16,550       16,571       16,549       16,568
Mandatory...................................................           45           45           45           45
----------------------------------------------------------------------------------------------------------------

                      Five-Year Outlay Projections

    In compliance with section 308(a)(1)(B) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, the following table contains 
five-year projections associated with the budget authority 
provided in the accompanying bill:

Fiscal year 2003......................................             5,963
Fiscal year 2004......................................             5,516
Fiscal year 2005......................................             2,713
Fiscal year 2006......................................             1,082
Fiscal year 2007......................................             1,050

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the following is a statement of 
general performance goals and objectives for which this measure 
authorizes funding:
    The Committee on Appropriations considers program 
performance, including a program's success in developing and 
attaining outcome-related goals and objectives, in developing 
funding recommendations.

               Assistance to State and Local Governments

    In accordance with section 308(a)(1)(C) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, the financing assistance to 
State and local governments is as follows:
    The amounts recommended in the accompanying bill contain no 
budget authority or budget outlays for State or local 
governments.

          Compliance With Rule XIII, Cl. 3(e) (Ramseyer Rule)

    In compliance with clause 3(e) 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 (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

 SECTION 579 OF THE FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED 
                   PROGRAMS APPROPRIATIONS ACT, 2000


  VOLUNTARY SEPARATION INCENTIVES FOR EMPLOYEES OF THE UNITED STATES 
                  AGENCY FOR INTERNATIONAL DEVELOPMENT

    Sec. 579. (a) * * *

           *       *       *       *       *       *       *

    (c) Authority To Provide Voluntary Separation Incentive 
Payments.--
          (1) * * *
          (2) Amount and treatment of payments.--A voluntary 
        separation incentive payment under this section--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) may not be made except in the case of any 
                employee who voluntarily separates (whether by 
                retirement or resignation) on or before 
                [December 31, 2002] December 31, 2003;

           *       *       *       *       *       *       *

                          Full Committee Votes

    Pursuant to the provisions of clause 3(b) of rule XIII of 
the House of Representatives, the results of each rollcall vote 
on an amendment or on the motion to report, together with the 
names of those voting for and those voting against, are printed 
below:

                             ROLLCALL NO. 1

    Date: September 12, 2002.
    Measure: Foreign Operations, Export Financing, and Related 
Programs Appropriations Act, FY 2003.
    Motion by: Mr. Hoyer.
    Description of motion: To modify section 573 of the bill 
pertaining to funding for Yugoslavia, to apply the restrictions 
of that section to all funds to be made available for Serbia 
after March 31, 2003, rather than funds to be made available to 
the Central Government of the Federal Republic of Yugoslavia; 
and to include exemptions from the restrictions for assistance 
for Montenegro and Kosovo, as well as for assistance to promote 
democracy in municipalities.
    Results: Rejected 15 yeas to 30 nays.
        Members Voting Yea            Members Voting Nay
Ms. DeLauro                         Mr. Aderholt
Mr. Edwards                         Mr. Callahan
Mr. Farr                            Mr. Cunningham
Mr. Hinchey                         Mr. Doolittle
Mr. Hoyer                           Mrs. Emerson
Mr. Kennedy                         Mr. Frelinghuysen
Mrs. Lowey                          Mr. Goode
Mr. Moran                           Ms. Granger
Mr. Obey                            Mr. Hobson
Mr. Olver                           Mr. Istook
Mr. Price                           Mr. Kingston
Mr. Rothman                         Mr. Knollenberg
Ms. Roybal-Allard                   Mr. Kolbe
Mr. Sabo                            Mr. LaHood
Mr. Serrano                         Mr. Lewis
                                    Mr. Miller
                                    Mr. Nethercutt
                                    Mrs. Northup
                                    Mr. Regula
                                    Mr. Rogers
                                    Mr. Sherwood
                                    Mr. Skeen
                                    Mr. Sweeney
                                    Mr. Tiahrt
                                    Mr. Vitter
                                    Mr. Walsh
                                    Mr. Wamp
                                    Mr. Wicker
                                    Mr. Wolf
                                    Mr. Young
                                    
                                    

                 ADDITIONAL VIEWS OF HON. NITA M. LOWEY

    While I believe that the FY 2003 Foreign Operations bill 
represents a reasonable, bipartisan compromise, there are 
several areas of disagreement that need comment. I commend the 
Chairman for working with me and for accommodating most of my 
priorities. I intend to work diligently with him, but will seek 
necessary changes as this bill moves through the House floor 
and to Conference.
    The bill provides a total of $16.59 billion, more than $1.2 
billion above the FY 2002-enacted level. We have achieved a 
significant increase in overall assistance levels in this bill. 
However, it should come as no surprise that I still believe 
that the U.S. foreign assistance program is underfunded. We 
must provide enough resources to respond to critical national 
security challenges, including fighting the war on terrorism, 
rebuilding Afghanistan, combating global HIV/AIDS, and reducing 
poverty. While I support the elements of the Administration's 
budget amendment request for $350 million, it arrived the day 
before our subcommittee markup, had no offsets to pay for it, 
and came at a point in the process when it was all but 
impossible to secure additions to the Committee's overall 
allocation. The Committee had no choice but to take funding 
from other subcommittees to pay for a portion of this request. 
The budget amendment followed closely on the heels of the 
President's decision to reject $5.1 billion in Emergency 
Supplemental Appropriations, which had included all the 
elements of this request.
    I am also concerned that the Administration's proposal for 
the Millennium Challenge Account for FY 2004 will put all new 
resources into a lump sum account, and not into core 
development accounts. I want to make clear now that I view 
these accounts as the bread and butter of our programs around 
the world, and will continue to push for increases in them.
    The bill provides nearly $800 million for HIV/AIDS, an 
increase over the President's request, and a significant 
increase over the FY 2002 level. This total includes $250 
million for the Global Fund to fight AIDS, Tuberculosis and 
Malaria, and additional amounts for bilateral programs, 
including mother-to-child transmission and treatment and care 
initiatives. While this may be the best we can do under the 
current allocation, I believe that we should make a more 
dramatic commitment to combating this pandemic.
    I am particularly proud of what we were able to achieve in 
the area of basic education. The Chairman and I worked closely 
to provide a total of $250 million for these initiatives, a 
significant increase over last year's levels, and a 250 percent 
increase over the FY 2001 level. We have also mandated that 
programs in the Middle East and Central Asia for basic 
education be increased.
    I have a few other specific concerns.
    Despite the ongoing and growing needs for reconstruction in 
Afghanistan, the Administration has failed to request funding 
for reconstruction needs there. The United States recently 
committed to fund expensive infrastructure projects and provide 
Presidential security, which are in addition to pledges made to 
fund ongoing development programs. Congress added an additional 
$134 million above the President's request for Afghanistan in 
the FY 2002 Supplemental bill, but the President rejected this 
when he failed to designate the funding emergency spending.
    The President has committed the U.S. to be the major donor 
for reconstruction of the road network in Afghanistan, which 
will cost at least $260 million, an expense for which there has 
been no request. The Committee has also been informed that DOD 
will no longer pay security costs for the protection of 
President Karzai, which will add another $50 million to our 
bill's obligations. In addition, the government of Afghanistan 
will incur a deficit in excess of $350million this year, at 
least half of which remains unfunded by international donors.
    While the Administration continues to ignore the needs of 
Afghanistan, the Committee cannot. The Chairman and I agreed to 
earmark a total of $296 million for these needs. I believe we 
had no option but to designate this funding to meet our 
commitments, and provide real resources in a timely fashion so 
that reconstruction can continue. We cannot allow OMB's narrow-
mindedness to prevent us from providing adequate resources to 
what should be our highest priority.
    The bill before us contains authority to resume full 
military training for Indonesia. In subcommittee, I offered an 
amendment to limit that training to ``Expanded IMET'' only. 
This would have allowed civilian and military authorities in 
Indonesia the opportunity to participate in U.S.-sponsored 
programs to discuss much-needed reform and military respect for 
civilian authority, something which is sorely lacking at the 
moment. The murky circumstances surrounding the recent killing 
of two American employees of the Freeport Mac Moran mining 
operation in Papua, and the continued detention of an American 
citizen without U.S. consular access, vividly demonstrates the 
need for a cautious approach to resuming training. It is my 
intention to offer an amendment when the bill reaches the House 
floor to limit military training for Indonesia.
    With respect to international family planning, I am pleased 
that the bill earmarks funding for the United Nations 
Population Fund (UNFPA), and I appreciate the Chairman's hard 
work in crafting language laying our clear conditions under 
which funding to UNFPA may resume. The Administration's recent 
decision on FY 2002 funding for UNFPA is fundamentally flawed 
and violates the spirit of the agreement reached on that bill. 
I believe strongly that Congress should earmark a higher level 
of funding than is currently in the bill, and that we must 
alter the Kemp-Kasten language in FY 2003. The Senate bill 
includes $50 million for UNFPA, and makes significant changes 
to Kemp-Kasten, which I support. Additionally, I am 
disappointed that the $425 million provided in the bill for 
bilateral family planning is a cut of $21.5 million from last 
year's enacted level, and that this funding is still subject to 
the Mexico City policy.
    With respect to Colombia, Congress agreed to provide 
expanded authority to furnish counter-terror assistance for 
Colombia in the FY02 Supplemental, provided that the new 
Colombian President committed to us in writing to formulating 
comprehensive policies on combating drugs, reforming the armed 
forces and increasing revenues from within Colombia. Those 
assurances have not been forthcoming. I will therefore reserve 
judgment on whether I will support extending these authorities 
for 2003.
    Finally, It is my hope that this bill will reach the floor 
of the House of Representatives before Congress adjourns for 
the year. The full House should have the opportunity to work 
its will, and, more importantly, the bill should be enacted 
into law. It contains many new and important programs, the 
implementation of which will be severely hindered by having to 
operate under a long-term continuing resolution.

                                                        Nita Lowey.