[House Report 109-152]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-152

======================================================================



 
      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                       APPROPRIATIONS BILL, 2006

                                _______
                                

 June 24, 2005.--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. 3057]

    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, 2006, and 
for other purposes.

                        INDEX TO BILL AND REPORT

_______________________________________________________________________


                                                            Page number

                                                            Bill Report
Summary of the Bill........................................     1
                                                                      2
Committee Recommendations..................................

Title I--Export and Investment Assistance:
        Export-Import Bank of the United States............     2
                                                                      5
        Overseas Private Investment Corporation............     4
                                                                      6
        Trade and Development Agency.......................     6
                                                                      7
Title II--Bilateral Economic Assistance:
        Child Survival and Health Programs Fund............     6
                                                                      8
        Development Assistance.............................    12
                                                                     15
        International Disaster and Famine Assistance.......    13
                                                                     28
        Transition Initiatives.............................    13
                                                                     29
        Development Credit Authority.......................    14
                                                                     29
        Payment to the Foreign Service Retirement and 
            Disability Fund................................    16
                                                                     29
        Operating Expenses of the United States Agency for 
            International Development (USAID)..............    16
                                                                     30
        Capital Investment Fund............................    18
                                                                     32
        Operating Expenses of the Agency for International 
            Development, Office of the Inspector General...    19
                                                                     34
        Economic Support Fund..............................    19
                                                                     34
        International Fund for Ireland.....................    22
                                                                     44
        Assistance for Eastern Europe and the Baltic States    22
                                                                     44
        Assistance for the Independent States of the Former 
            Soviet Union...................................    24
                                                                     46
Independent Agencies:
        Inter-American Foundation..........................    26
                                                                     48
        African Development Foundation.....................    27
                                                                     48
        Peace Corps........................................    27
                                                                     49
        Millennium Challenge Corporation...................    28
                                                                     49
Department of State:
        Global HIV/AIDS Initiative.........................    29
                                                                     53
        International Narcotics Control and Law Enforcement    30
                                                                     59
        Andean Counterdrug Initiative......................    31
                                                                     62
        Migration and Refugee Assistance...................    33
                                                                     65
        Emergency Refugee and Migration Assistance Fund....    34
                                                                     67
        Nonproliferation, Anti-terrorism, Demining and 
            Related Programs...............................    34
                                                                     67
Department of the Treasury:
        International Affairs Technical Assistance.........    36
                                                                     69
        Debt Restructuring.................................    36
                                                                     69
Title III--Military Assistance:
        International Military Education and Training......    40
                                                                     70
        Foreign Military Financing Program.................    40
                                                                     71
        Peacekeeping Operations............................    44
                                                                     74
Title IV--Multilateral Economic Assistance:
        Global Environment Facility........................
                                                                     75
        International Development Association (IDA)........    44
                                                                     75
        Multilateral Investment Guarantee Agency...........    44
                                                                     77
        Inter-American Investment Corporation..............    45
                                                                     77
        Multilateral Investment Fund.......................    45
                                                                     78
        Asian Development Fund (ADF).......................    45
                                                                     78
        African Development Bank...........................    45
                                                                     78
        African Development Fund (AFDF)....................    46
                                                                     78
        European Bank for Reconstruction and Development 
            (EBRD).........................................    46
                                                                     79
        International Fund for Agricultural Development 
            (IFAD).........................................    47
                                                                     79
        International Organizations and Programs...........    47
                                                                     79
Title V--General Provisions:
        House of Representatives Reporting Requirements....
                                                                     84

                                Overview

    The fiscal year 2006 budget request for the activities 
under the jurisdiction of the Subcommittee on Foreign 
Operations, Export Financing, and Related Programs is 
$22,826,245,000 in new discretionary budget authority. The 
section 302(b) allocation for the Subcommittee is 
$20,270,000,000, $2,556,245,000 below the budget request.
    The recommendation of $20,269,977,000 in discretionary 
budget authority provided in H.R. 3057 and detailed in this 
accompanying report, reflects three priorities of the 
Committee:
    1. Responding to the global HIV/AIDS pandemic;
    2. Supporting our allies in the War on Terrorism; and
    3. Supporting innovative approaches to foreign assistance 
through the Millennium Challenge Corporation.

                     EMERGENCY PLAN FOR AIDS RELIEF

    The Committee recommendation includes $2,695,000,000 for 
the third year of the Emergency Plan for AIDS Relief, 
$131,000,000 more than requested by the President and 
$502,000,000 more than in fiscal year 2005. Of this, 
$2,319,000,000 is provided for HIV/AIDS programs, $234,000,000 
is for malaria programs, and $142,000,000 is for tuberculosis 
programs. Not less than $400,000,000, twice that requested by 
the President, is available for a United States contribution to 
the Global Fund to Fight AIDS, Tuberculosis and Malaria.
    These funds support the largest program ever by any 
government to address a health issue. As of June, 2005, the 
Emergency Plan is supporting more than 230,000 people in the 
developing world on AIDS medication, up from 50,000 at the 
Plan's inception in early 2004. More than one million HIV-
infected people and AIDS orphans are receiving care and 
support, and millions more potential cases of AIDS have been 
averted.

             SUPPORT TO OUR ALLIES IN THE WAR ON TERRORISM

    The fiscal year 2006 budget request included a total of 
$3,036,000,000 for Economic Support Fund (ESF) programs and 
$4,589,000,000 for Foreign Military Financing (FMF) programs. 
The vast majority of the ESF and FMF programs support ongoing 
and new assistance for our allies in the War on Terror. These 
funds support traditional methods of providing United States 
taxpayer assistance in the form of programs, projects, and 
activities to improve quality of life, support of existing 
military systems such as radios and spare parts for aircraft 
and trucks, as well as the purchase of new systems such as 
aircraft and radar systems.
    The Committee recommends a total of $2,558,525,000 for ESF 
programs, $477,850,000 below the 2006 request and 
$4,442,300,000 for FMF programs, $146,300,000 below the 2006 
request. The Committee notes the allocation of funds was simply 
insufficient to appropriate the total request to meet 
requirements identified by the Administration. Furthermore, 
circumstances not anticipated when the 2006 budget was 
submitted led the Committee to re-evaluate the 2006 request and 
appropriate reductions in funding were made.

                    MILLENNIUM CHALLENGE CORPORATION

    The President's budget includes the third year of funding 
for the Millennium Challenge Corporation (MCC). The Committee 
strongly supports the goals and policies of the MCC in fighting 
poverty and raising the standard of living for millions of the 
world's poorest people through locally proposed programs 
designed to increase economic growth. The President is 
requesting a total of $3,000,000,000 for the MCC for fiscal 
year 2006, an increase of $1,512,000,000 from the enacted 
fiscal year 2005 level. The constraints of the 302(b) 
allocation do not provide the Committee with the flexibility to 
fully fund this important initiative, however $1,750,000,000 is 
recommended for the MCC in an effort to respond positively to 
the President's proposal.

                    OVERSIGHT OF FOREIGN ASSISTANCE

    The Committee is concerned about the recent trend of 
providing foreign assistance through budgetary support or cash 
transfers in lieu of project level support or other forms of 
foreign assistance that provide greater accountability for the 
use of funds.
    Budgetary assistance in the form of cash transfers, if 
excessive or frequent, can undermine the principle of 
encouraging countries to become fiscally responsible and good 
stewards of internal resources. Furthermore, it thwarts the 
Committee's ability to effectively monitor implementation of 
taxpayer assistance and to ensure effective expenditure of 
appropriated dollars. To the extent that the Department of 
State or USAID may consider providing budgetary support by 
means of cash transfers to individual countries, both 
organizations must highlight such intent with the submission of 
the budget.
    The Committee urges the Secretary of State and the Board of 
the Millennium Challenge Corporation to be particularly 
cognizant of these concerns as it seeks to create innovative 
mechanisms for the implementation of assistance under a 
compact.

                            FUNDING FOR IRAQ

    The President requested $458,500,000 for Iraq in fiscal 
year 2006. The Committee recommends no funding for Iraq 
programs in this Act given that over $5,000,000,000 in funds 
previously appropriated for Iraq relief and reconstruction 
remain unobligated and could be used to fund the requirements 
presented in the fiscal year 2006 request. Therefore the 
Committee directs the Department of State to use funds 
originally appropriated in the Iraq Relief and Reconstruction 
Fund in the Emergency Supplemental Appropriations Act for 
Defense and Reconstruction of Iraq and Afghanistan (Public Law 
108-106) as necessary to finance the following Iraq programs in 
the fiscal year 2006 request:




Economic Support Funds................................      $360,000,000
Nonproliferation, Antiterrorism, and Demining.........        29,000,000
International Narcotics Control and Law Enforcement...        26,500,000
Migration and Refugee Assistance......................        43,000,000
                                                       -----------------
    Total Iraq funding................................       458,500,000


                         IMPORTANCE OF RESULTS

    The Committee recognizes that an effective foreign 
assistance program must set transparent goals and measure 
progress toward or achievement of those goals in tangible ways. 
Results, rather than resource levels, should be the yardstick 
for measuring United States assistance programs. An effective 
foreign aid program must take into account the host country 
context, especially those government policies that affect 
sectors in which United States assistance operates. It must 
also take into account the private sector, including foreign 
capital and trade flows, as well as assistance provided by 
other donors, both official and unofficial. The Committee 
encourages the State Department and USAID to continue and 
improve upon the analytical work that sets tangible, realistic 
goals and measures progress toward those goals.

               TITLE I--EXPORT AND INVESTMENT ASSISTANCE


                Export-Import Bank of the United States


                         SUBSIDY APPROPRIATION

Fiscal year 2005 level..................................     $59,322,000
Fiscal year 2006 request................................     186,500,000
Committee recommendation................................     125,000,000

                        ADMINISTRATIVE EXPENSES

Fiscal year 2005 level..................................     $72,614,000
Fiscal year 2006 request................................      73,200,000
Committee recommendation................................      73,200,000

    The Committee recommends a level of $125,000,000 for the 
subsidy appropriation.
    The Committee directs the President of the Export-Import 
Bank to report quarterly to the Committee on the level of 
authorizations, subsidy used, and subsidy balances from current 
and prior years.
    In addition, the Committee provides $73,200,000 for 
administrative expenses, the same as the request and $586,000 
above the fiscal year 2005 enacted level. The Committee 
recommends no appropriation for establishing a new office of 
inspector general.
    The Committee provides 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 still expects that none of the funds 
appropriated by prior acts for tied-aid credits or grants may 
be used for any other purpose except through the regular 
notification procedures of the Committees on Appropriations.
    The Committee has continued prior year language limiting 
the export of nuclear technology or fuel to certain countries.
    Again this year, the Committee recommends a one-year 
extension of the Export-Import Bank's dual use authority, which 
originally 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 which must be 
non-lethal in nature and shall be used predominantly by 
civilian authorities.
    The Committee is aware of several pending applications at 
the Export-Import Bank of the United States. The Export-Import 
Bank should act promptly on all applications for assistance. 
The Committee therefore requests that Bank to report to the 
Committee within 60 days of enactment of this Act on the status 
of pending applications. The Committee also requests an 
explanation for any rejection of requests for assistance, 
specifically applications affecting the semiconductor industry. 
The Committee also expects to be kept informed of possible 
transactions affecting world soda ash production.

                      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 this Act, Limitation on 
Assistance to Countries in Default, 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 directs the Export-Import Bank to continue to follow 
the inter-agency agreement.

                   CONTROLLED ENVIRONMENT AGRICULTURE

    Controlled environment agriculture, which includes 
commercial greenhouse facilities and other related 
technologies, is an efficient and environmentally beneficial 
method of producing many fruits, vegetables, and floral crops. 
Some companies in the United States are exporting such 
technologies, products, and services to developing nations, 
thereby creating jobs for American agricultural technology 
experts and educators, manufacturers of greenhouses, steel, 
plastics, irrigation products, ventilation systems, 
fertilizers, seeds, environmental control computers, and 
related hardware items. The Committee urges the Export-Import 
Bank to continually evaluate opportunities to support the 
export of controlled environment agriculture technology to 
developing nations, including facilitating the use of export 
finance.

                Overseas Private Investment Corporation


                           NONCREDIT ACCOUNT

Fiscal year 2005 level..................................     $42,542,000
Fiscal year 2006 request................................      42,274,000
Committee recommendation................................      42,274,000

                            PROGRAM ACCOUNT

Fiscal year 2005 level..................................     $23,808,000
Fiscal year 2006 request................................      20,276,000
Committee recommendation................................      20,276,000

    The Committee provides $42,274,000 for OPIC's 
administrative expenses, a level equal to the request and 
$268,000 lower than last year's enacted level. The Committee is 
recommending a $20,276,000 subsidy appropriation for the 
Overseas Private Investment Corporation's (OPIC) direct and 
guaranteed loan credit programs, the same level as the request 
and $3,532,000 less than the fiscal year 2005 level.
    The Committee continues prior year language required by the 
Federal Credit Reform Act and addressing representation 
expenses and availability of funds.
    As in prior years, 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 six months; and any 
additional observations that OPIC may want to include. The 
Committee commends OPIC for its judicious management of its 
investment fund portfolio.
    The Committee commends the managers of OPIC for exploring 
new ways of meeting OPIC's development mandate, but during 
times of high political risk and instability in some countries, 
OPIC also must fulfill its mandate of facilitating increased 
United States direct investment abroad and increase exports 
from the United States. The Committee is aware of OPIC's policy 
that it only provides insurance for a project after a company 
has attempted to access the private market, and this policy has 
solidified OPIC's role as insurer of last resort. With global 
risk remaining high for foreign direct investment, and 
investment's primary role in creating jobs and raising income 
levels in the developing world, the Committee expects OPIC to 
retain its strong role as insurer of last resort for political 
risk insurance, including terrorism insurance, for United 
States companies.
    Additionally, the Committee remains concerned about OPIC's 
coordination with the other United States Government agencies 
that operate overseas. To ensure that foreign assistance and 
credit is not provided to countries on different terms by 
different agencies (including financing that could be 
considered debt by the Paris Club), the Committee again expects 
OPIC to coordinate with USAID, the Millennium Challenge 
Corporation, the Treasury Department, the Office of Management 
and Budget and other agencies of the United States Government 
with which OPIC may overlap in providing assistance.
    The Committee directs OPIC to consult with the Committee 
before exercising local currency loan guaranty authority, and 
to provide to the Committee, prior to the consultation, 
justification for the need to exercise such authority, the use 
of OPIC subsidy required, the degree to which the United States 
would be exposed to additional risk as a result of such 
transactions, and which other United States Government agencies 
have been consulted.
    The Committee directs the President of OPIC to continue 
current policy and consult with the Committee on Appropriations 
before any future financing for nongovernmental organizations 
or private and voluntary organizations is approved.

                  Funds Appropriated to the President


                      Trade and Development Agency

Fiscal year 2005 level..................................     $51,088,000
Fiscal year 2006 request................................      48,900,000
Committee recommendation................................      50,900,000

    The Committee is recommending $50,900,000 for the Trade and 
Development Agency (TDA), a decrease of $188,000 below the 2005 
level and $2,000,000 above the request. The Committee commends 
TDA for its trade capacity building activities and its efforts 
to keep the Committee informed of its programs.
    The Committee commends TDA for its efforts to assist 
countries in improving their aviation safety and security 
systems, which have had a positive effect on enhancing United 
States trade for our aviation and aerospace industries. The 
Committee has provided $1,500,000 above the request for TDA to 
conduct a development and training program to assist countries 
with meeting their obligations for international aviation 
security and safety standards.
    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.
    Additionally, the Committee expects TDA to continue to 
comply with language in the Joint Explanatory Statement of the 
Committee of Conference accompanying P.L. 108-106, the 
emergency supplemental appropriations act of 2004 and report 
quarterly to the Committee during fiscal year 2006 regarding 
the agency's activities in Iraq.

                TITLE II--BILATERAL ECONOMIC ASSISTANCE


                  Funds Appropriated to the President


                  AGENCY FOR INTERNATIONAL DEVELOPMENT

              STRUCTURE OF DEVELOPMENT ASSISTANCE ACCOUNTS

    The Committee appropriates funding for longer-term 
development assistance programs managed by the United States 
Agency for International Development (USAID) in two accounts. 
As in previous fiscal years, the Act 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. Other 
accounts, such as the ``Global HIV/AIDS Initiative'' account, 
are largely implemented by USAID.
    Three existing regional accounts jointly managed by the 
Department of State and the Agency for International 
Development are included elsewhere in title II. The Committee 
utilizes the regional accounts to fund most economic and 
political cooperation with Russia, the independent states of 
the former Soviet Union, Central and Eastern European States, 
and several Andean countries.
    Finally, authority is provided for the United States to 
make contributions from the Child Survival and Health Programs 
Fund to two international health funds: the Global Fund to 
Fight AIDS, Malaria and Tuberculosis (the ``Global Fund'') and 
The Vaccine Fund (associated with the Global Alliance for 
Vaccines and Immunizations).

                Child Survival and Health Programs Fund


[including transfer of funds]

Fiscal year 2005 level..................................  $1,537,500,000
Fiscal year 2006 request................................   1,251,500,000
Committee recommendation................................   1,497,000,000

    The Committee recommends $1,497,000,000 for the ``Child 
Survival and Health Programs Fund'', an amount that is 
$245,500,000 above the request and $40,600,000 below the amount 
enacted for fiscal year 2005.
    The Committee has made available a total of $2,695,000,000 
in this Act for HIV/AIDS, tuberculosis (TB), and malaria, of 
which $720,000,000 is funded through the Child Survival and 
Health (CSH) Programs Fund, $1,920,000,000 is funded under the 
``Global HIV/AIDS Initiative'' account, and $55,000,000 is 
provided from other accounts, such as the Economic Support 
Fund, International Disaster Assistance, and regional accounts 
for Eastern Europe and the former Soviet Union.

         ALLOCATION OF CHILD SURVIVAL AND HEALTH PROGRAMS FUND

    Unless modifications are subsequently notified and agreed 
to by the Committees on Appropriations, fiscal year 2006 
appropriations for the Child Survival and Health Programs Fund 
are deemed to be allocated as follows:


                       Category                            Allocation

Child Survival and Maternal Health....................      $347,000,000
Vulnerable children...................................        25,000,000
HIV/AIDS (bilateral)..................................       350,000,000
Other Infectious Diseases (including TB and malaria)..       200,000,000
Reproductive Health/Voluntary Family Planning.........       375,000,000
Global Fund to Fight AIDS, TB, and Malaria............       200,000,000
                                                       -----------------
      Total in Child Survival and Health Programs Fund     1,497,000,000
Other health activities in Global HIV/AIDS Initiative.     1,920,000,000
Other health activities in ESF........................       145,000,000
Other health activities in regional accounts..........        97,000,000
                                                       -----------------
      Total in all Foreign Operations accounts........     3,659,000,000


    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 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: SUMMARY

    The Committee directs USAID to allocate $347,000,000 for 
child survival and maternal health, $21,000,000 more than 
requested.

           CHILD SURVIVAL AND MATERNAL HEALTH: MICRONUTRIENTS

    The Committee recognizes that more than 2.8 million 
children die each year from causes related to Vitamin A 
deficiency. The Committee recommends at least $30,000,000 from 
all accounts for USAID's overall micronutrient program, 
including at least $20,000,000 for activities related to 
Vitamin A deficiency.
    Iodine deficiency disorder (IDD) is the leading preventable 
cause of mental retardation in children. The Committee 
recommends that USAID provide at least $2,000,000 for the 
Kiwanis/UNICEF IDD partnership from the ``Child Survival and 
Health Programs Fund'' and at least $1,000,000 from Europe and 
Eurasia regional accounts.

         CHILD SURVIVAL AND MATERNAL HEALTH: POLIO ERADICATION

    The Committee is aware that the global effort to eradicate 
polio has faced significant challenges over the last two years. 
However, the importance of this drive for the millions of young 
people still at risk from this disease, mostly in the 
developing world, has not diminished. The Committee continues 
its strong support and recommends a fiscal year 2006 level of 
$32,000,000 within this allocation for the program initiated by 
the Committee nearly ten years ago, in fiscal year 1996.

     CHILD SURVIVAL AND MATERNAL HEALTH: VACCINES AND IMMUNIZATION

    The Committee is aware that at least 3 million lives could 
be saved each year if every child received lifesaving 
immunizations. The Vaccine Fund/Global Alliance for Vaccines 
and Immunization is working to close the gap between children 
who receive immunizations and those who do not. Since its 
initiation five years ago, more than $1,200,000,000 for 74 
countries has been committed for immunization programs--
potentially saving more than two million lives and reducing 
many vaccine costs by half. The Bill and Melinda Gates 
Foundation has pledged an additional $750,000,000 for this 
effort and the Committee recommendation includes $65,000,000 
for The Vaccine Fund in fiscal year 2006.

                          VULNERABLE CHILDREN

    The Committee directs USAID to allocate $25,000,000 for 
displaced children and orphans and blind children in fiscal 
year 2006, $15,000,000 more than requested. As in previous 
years, the Committee addresses assistance for children affected 
by HIV/AIDS elsewhere.
    The Committee is concerned that one and a half million 
children are currently blind, and another 7 million suffer from 
poor vision. The Committee recognizes the work done by Helen 
Keller International and other organizations such as CBMI to 
assist these children, who can often be helped through simple 
and inexpensive methods of prevention and low cost care. The 
Committee recommends that the USAID program for children's 
blindness be funded at $1,800,000. The Committee also 
encourages USAID to consider applications from international 
organizations which address hearing loss, including through 
technology appropriate for developing countries.
    The Committee is aware that unintentional injury is a 
growing cause of child death worldwide. The Committee urges 
USAID to consider applications from organizations, such as 
SAFEKIDS Worldwide, that have a proven record in designing and 
implementing cost-effective programs to reduce overall child 
morbidity and mortality.
    The Committee supports initiatives such as the work of 
Kidsave International and encourages USAID to consider the 
Kidsave Family Visit Model in Latin America, Eastern Europe, 
Africa, and Asia.

                     HIV/AIDS: SUMMARY AND OVERVIEW

    The Committee directs USAID to allocate $350,000,000 for 
HIV/AIDS from this account in fiscal year 2006. Additional 
language addressing United States bilateral HIV/AIDS funding is 
found under the ``Global HIV/AIDS Initiative'' heading.
    As in fiscal year 2005, no funding for the ``focus'' 
countries is included in ``Child Survival and Health Programs 
Fund'' and funding for the United Nations Joint Programme on 
HIV/AIDS (UNAIDS) is included in the Global HIV/AIDS Initiative 
account. The Committee has included $50,000,000 for the ``non-
focus'' countries in the recommendation for the Global HIV/AIDS 
Initiative account and recognizes the formal process by which 
these funds are allocated to agencies.

                            HIV/AIDS: MEDIA

    The Committee notes that local and national media can play 
an effective role in combating HIV/AIDS, including the 
dissemination of knowledge through accurate and unbiased 
coverage of the disease. The Committee once again recommends 
that USAID at a minimum sustain its current media programs and 
consider expanding to other countries, especially to India and 
countries in Africa.

                HIV/AIDS: COUNTRY AND REGIONAL PROGRAMS

    The Committee strongly supports the decentralized approach 
USAID and the Office of the Global AIDS Coordinator have 
developed to select and implement programs at the country 
level. The Committee recommends that the relevant country team 
consider an application from the Health Education for Africa 
Resource Team (HEART) Model Village Project.
    The Committee supports efforts to provide prevention, 
treatment and care interventions to HIV/AIDS affected 
communities in rural areas of focus countries and urges the 
Office of the Global HIV/AIDS Coordinator to explore programs 
that reach affected rural communities. The Committee further 
urges the country team in Nigeria to consider as part of the 
country plan a $700,000 proposal for African World Expo to 
partner with Health Concerns and Counseling Center in Nigeria 
for an HIV/AIDS rural intervention program in Nigeria.
    The Committee understands the difficulty of establishing 
regional solutions to challenges involving the delivery of safe 
and effective HIV/AIDS treatments. The Committee urges USAID to 
consider opportunities to support such regional solutions, 
including a proposal by TREAT Asia, a regional collaborative 
research, education, and training network in the Asia and 
Pacific region.

           HIV/AIDS: ROLE OF VOLUNTEERS AND COMMUNITY SERVICE

    The Committee appreciates the value of community service in 
providing opportunities for young people to play an active role 
in fighting HIV/AIDS, such as by fighting stigma and 
discrimination. The Committee encourages USAID to consider 
funding opportunities for young people to promote behavior 
change and to assist with home-based care including through 
support for Innovations in Civic Participation for their 
initiative on creating an African Youth Corps.

          OTHER INFECTIOUS DISEASES, INCLUDING TB AND MALARIA

    The Committee directs USAID to allocate $200,000,000 for 
other infectious diseases, including tuberculosis (TB) and 
malaria, $61,000,000 more than requested.
    The Committee's recommendation includes $90,000,000 for 
malaria from this account. The Committee recommends that an 
additional $20,000,000 be provided from other accounts, 
including regional accounts, and estimates that an additional 
$124,000,000 of the recommended contribution to the Global Fund 
would benefit malaria programs. Overall, the Committee 
recommendation includes $234,000,000 from all accounts for 
malaria programs.
    The Committee's recommendation also includes $80,000,000 
for TB from this account. The Committee recommends that an 
additional $10,000,000 be provided from other accounts, 
including regional accounts, and estimates that an additional 
$52,000,000 of the recommended contribution to the Global Fund 
would benefit TB programs. Overall, the Committee 
recommendation includes $142,000,000 from all accounts for TB 
programs.
    The Global TB Drug Facility (GDF) supports expanded access 
to, and availability of, high-quality TB drugs to facilitate 
expanded treatment against the disease. The Committee 
encourages the increased cooperation between GDF and the Global 
Fund to Fight AIDS, TB and Malaria, and urges USAID to provide 
support to the GDF of not less than the level provided in 
fiscal year 2005.

                     REPRODUCTIVE HEALTH: OVERVIEW

    The Committee recommends $432,000,000 for reproductive 
health/voluntary family planning, $7,000,000 more than 
requested by the President. The Committee expects that 
$375,000,000 of this total will be derived from the Child 
Survival and Health Programs Fund.

      REPRODUCTIVE HEALTH/VOLUNTARY FAMILY PLANNING: RESTRICTIONS

    The Committee has continued prior year language that 
requires that none of the funds appropriated in this Act, 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 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 that offer, either 
directly or through referral, information about access to a 
broad range of family planning methods and services. An 
additional provision 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 Act is to alter any existing 
statutory prohibitions against abortion that 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 has continued prior year language requiring that 
information on condom use provided by programs supported by 
funds made available by this Act shall be medically accurate 
and shall include the public health benefits and failure rates 
of such use.

                        RESEARCH AND DEVELOPMENT

    The Committee notes that USAID is increasingly called upon 
to support research and development of products, including 
vaccines and therapies. The Committee received with 
appreciation the June, 2005, report ``Health-Related Research 
and Development Activities at USAID'', which made clear that 
funding for research has increased from $112,000,000 in fiscal 
year 2002 to $155,000,000 in fiscal year 2004.
    The Committee feels strongly that other agencies, such as 
the Department of Health and Human Services and its National 
Institutes for Health, have the institutional expertise and 
resources to take the lead on basic research. With its 
experience in the developing world, USAID does and should play 
a valuable role in facilitating international clinical trials, 
consolidating markets, and finding new opportunities to speed 
the discovery, development, and delivery of products to improve 
the lives of those in the developing world.
    At times, however, basic scientific discoveries that could 
lead to improvements in health in the developing world are not 
pursued. The Committee is aware of ongoing initiatives, such as 
the HIV Vaccine Trial Network, which are attempting to overcome 
this deficiency. As the June report describes, USAID spends 
roughly 28 percent of its research and development dollars on 
creating or improving interventions and technologies; 45 
percent on facilitating the adoption or implementation of 
strategies and technologies; and 27 percent on problem 
identification and priority setting.
    The Committee notes with appreciation the quality of the 
June report. The Committee now requests USAID to develop a 
proactive strategy for the use of its fiscal year 2006 research 
and development funds. The Committee requests the Administrator 
of USAID, in conjunction with other officials such as the 
Global AIDS Coordinator and the Secretary of Health and Human 
Services, to consult with the Committee and submit, not later 
than 180 days following enactment of this Act, a plan for 
stimulating the research and development of key products to 
address diseases affecting the developing world. This plan 
should clearly articulate the targeted diseases and illnesses, 
collaborating partners, and USAID's role. The Committee 
requests USAID to include similar information in its budget 
justification for fiscal year 2007. USAID should make every 
effort to include current research and development partners, 
including those mentioned below, in the plan.
    Given the impact of HIV/AIDS, TB, and malaria on developing 
countries, the Committee expects USAID to include these 
diseases in its research and development strategy. As part of 
this strategy, the Committee recommends that USAID continue 
funding for current partners such as the International AIDS 
Vaccine Initiative, Medicines for Malaria Venture and the 
Malaria Vaccine Initiative at not less than fiscal year 2005 
recommended levels. The Committee also recommends that USAID 
consider support for the Aeras Global TB Vaccine Foundation.
    The Committee also expects USAID to continue its strong 
support for microbicide research and development. An effective 
microbicide could be developed by the end of the decade and, 
once available, could change the course of the epidemic. The 
Committee recommends not less than $36,000,000 in bilateral 
HIV/AIDS funds for such efforts, including funding for the 
International Partnership for Microbicides.

 VOLUNTARY CONTRIBUTION TO THE GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS 
                              AND MALARIA

    The President has requested $200,000,000 for the Global 
Fund in this Act and an additional $100,000,000 for the Global 
Fund from the Act providing appropriations for the Department 
of Health and Human Services. The Committee recommendation 
includes not less than $400,000,000 from this Act including 
$200,000,000 from this account to support the Global Fund. 
Further information about the Committee's recommendation is 
found under the heading ``Global HIV/AIDS Initiative''.
    The Committee notes that USAID has been one of the foremost 
contributors of technical assistance to the Global Fund and has 
helped to establish and sustain Country Coordinating 
Mechanisms, monitor grants, and otherwise improve the 
functioning of the Global Fund. Under ``Global HIV/AIDS 
Initiative'', the Committee requests a report describing the 
support USAID has provided for the Global Fund and how such 
support is coordinated with the Global Fund and with other 
bilateral initiatives.

                         HEALTH CARE IN AFRICA

    The Committee continues to be concerned about the 
debilitation and ostracism caused by obstetric fistula, which 
affects an estimated 3 million women in the developing world. 
This condition can often be prevented altogether by trained 
birth attendants and improved medical care. The Committee notes 
that USAID has rapidly increased its funding for fistula 
programs from their inception in fiscal year 2004. The 
Committee includes $6,000,000 for obstetric fistula, and 
instructs USAID to consult with the Committee not later than 60 
days following enactment of this Act on how these funds will be 
programmed.
    While improving the health of Africans is a long-term 
prospect, alleviating human suffering is a pressing imperative. 
Groups that combine immediate health services with longer-term 
training can make a lasting difference for those in need. One 
such group, Mercy Ships, provides obstetric fistula operations, 
orthopedic and ophthalmic surgeries, primary healthcare 
education, and sanitation and pure water programs. The 
Committee understands that Mercy Ships has specific operational 
needs of up to $9,500,000, and urges USAID to consider and, 
where feasible, provide support to an application from this 
organization. The Committee also recommends that USAID consider 
cooperation with the West African Health Organization.
    The Committee continues to be concerned about the lack of 
capacity and coordination to address the manifold and complex 
health challenges facing sub-Saharan Africa. The Committee 
requests USAID, in collaboration with the Department of Health 
and Human Services and the Office of the Global AIDS 
Coordinator, and in consultation with the Committee, to submit 
a report, not later than 180 days after the enactment of this 
Act, describing existing cooperation between the United States 
and regional entities in Africa to strengthen health 
infrastructure, policy and programs in sub-Saharan Africa. The 
report should also identify recommendations for increasing 
United States support to such efforts.
    The Committee is aware that the conflict in Sudan has left 
a very serious impact on education in South Sudan, especially 
in the Nuba Mountains, and urges USAID to emphasize 
strengthening the health system, including training of health 
workers, in its redevelopment assistance plan.

                 HEALTH CARE IN THE WESTERN HEMISPHERE

    The Committee is concerned that poor health infrastructure 
in Mexico places expensive and unsupportable burdens upon 
health facilities in the United States, specifically along the 
United States side of the border. The Committee notes that 
maternity services are in especially high demand. The Committee 
provides $3,000,000 to USAID to establish a pilot program to 
support public private partnerships that address the need for 
improved healthcare facilities on the Mexican side of the 
border. Improved health care facilities in Mexico will reduce 
the requirement for care that is provided to undocumented 
migrants within the United States. The grants should be awarded 
on a competitive basis and expended in Mexico. The Committee 
urges USAID to limit the process to hospitals located in United 
States states bordering Mexico who would agree to a twinning 
concept of technical support with a Mexican hospital or health 
clinic.
    The Committee commends USAID's efforts to strengthen 
bilateral cooperation to fight HIV/AIDS in Mexico. The 
Committee urges USAID to continue such efforts.
    The Committee is concerned by recent reports that informed 
consent problems continue in Peru. In fiscal year 2001 the 
Committee asked USAID to conduct an investigation into these 
allegations and report its findings. The Committee directs 
USAID to provide the Committee with an update of Peru's policy 
of informed consent and any substantiated claims of its 
violation.
    The Committee again notes that the hospital Bienfaisance de 
Pignon in Pignon, Haiti, a 60-bed hospital with four outlying 
medical clinics, is providing much needed quality health care 
to the people of Haiti. The Committee urges USAID to continue 
its support for this important medical service.

                         DEVELOPMENT ASSISTANCE

[including transfers of funds]

Fiscal year 2005 level..................................  $1,448,320,000
Fiscal year 2006 request................................   1,103,233,000
Committee recommendation................................   1,460,000,000

    The Committee recommends $1,460,000,000 for the general 
account for development assistance for economic growth, trade 
and environment. The amount recommended is $346,767,000 above 
the budget request and $1,680,000 above the fiscal year 2005 
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.

                         IMPORTANCE OF RESULTS

    The Committee recognizes an effective foreign assistance 
program must set transparent goals and measure progress toward 
or achievement of those goals in tangible ways. Results rather 
than resource levels should be the yardstick for measuring 
United States assistance programs. An effective foreign aid 
program must take account of the host country context, most 
especially those governmental policies that affect sectors in 
which United States assistance operates. It must also take into 
account the private sector, including foreign capital and trade 
flows, as well as assistance provided by other donors, both 
official and unofficial. The Committee encourages the State 
Department and USAID to continue and improve upon the 
analytical work that sets tangible, realistic goals and 
measures progress toward those goals.

                       ECONOMIC GROWTH: OVERVIEW

    The Committee considers sustainable economic growth--which 
can only happen in the context of free markets--USAID's most 
important long term objective. Without sustained economic 
growth, USAID's development programs for health, population, 
environment and other purposes, can have only marginal or 
transitory benefits in poor countries. Lasting improvement in 
social conditions can come only when countries themselves are 
able to generate the necessary resources to invest in their 
people.
    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 citizens. Therefore, the Committee encourages USAID 
to increase funding for free market economic development in its 
development programs.
    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 that stifle local entrepreneurs and which 
deter foreign United States investment. In addition, USAID 
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, USAID must continue to search out reform-
minded government leaders without whom these programs cannot 
succeed. The Millennium Challenge Corporation is based on this 
approach.
    The Committee supports the efforts of USAID to better 
coordinate with the United States 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.

                HUMAN CAPACITY BUILDING: BASIC EDUCATION

    Education is the foundation for sustained economic growth 
and the creation of democratic institutions in developing 
countries. For that reason, the Committee has been extremely 
supportive of increased funding for basic education, increasing 
it from $126,000,000 in fiscal year 2001 to $400,000,000 in 
fiscal year 2005. This year, the Committee recommends 
$465,000,000 for basic education.
    Both last year and the year before, the Committee 
recommended the Secretary of State articulate a strategy for 
the use of basic education funds, particularly with reference 
to country strategies. The State Department should have an 
evident interest in education, particularly as a sound 
education assistance program is a frontal attack on ignorance, 
one of the major breeding causes of terrorism. In June 2002, 
President Bush stated that ``education is the foundation of 
development and democracy--in every culture, on every 
continent.'' Nonetheless, the State Department has not produced 
a strategy for United States education assistance in developing 
countries.
    USAID did release a report in April 2005 (``Education 
Strategy''). The report conveys the importance of education to 
development and the many benefits that stem from education, 
such as faster economic growth, improved income distribution, 
enhanced public revenues, democracy promotion and the like. 
Unfortunately, the report does not provide any relevant 
information or data about education strategies in countries 
that receive United States assistance. One apparent problem is 
that USAID itself does not collect information about its 
educational assistance programs in a consistent manner from all 
of its organizational units. Clearly, USAID should collect 
information about its education assistance programs in a 
consistent manner. More fundamentally, the USAID report does 
not address country funding levels or project descriptions, how 
the assistance is used, who implements the programs or what 
impact the assistance programs have on education levels in the 
recipient countries.
    The Committee has therefore decided to task the Government 
Accountability Office with preparing a report that covers basic 
information, such as country and project breakdowns of United 
States assistance, an analysis of host country contributions to 
education, an analysis of what assistance other donors are 
providing in the education sector and what can be done to 
improve United States assistance to education in developing 
countries. The report should also provide an analysis of the 
effectiveness of the current basic education funding strategy 
and include recommendations for improving program delivery.
    Last year, the Committee supported creation of a pilot 
program to address the issues caused by fees that many 
developing countries require of families whose children attend 
school. Such fees are a major barrier to school enrollment 
among lower income children, especially girls. However, 
removing the fees also reduces the financial resources for 
education, leading to shortages of teachers and school supplies 
as well as inadequate school infrastructure. The Committee set 
aside $15,000,000 in fiscal year 2005 to design and fund 
innovative pilot programs in Africa. In fiscal year 2006, the 
Committee provides an additional $15,000,000 to extend and 
expand these programs.
    The Committee urges USAID to increase its support for Books 
for Africa, an organization that participates in USAID basic 
education programs by transporting donated books to needy 
African schools and the Sabre Foundation, which works closely 
with a network of indigenous partner organizations in 
identifying and meeting the educational needs of developing and 
transitional countries.
    The Committee supports the work of Alfalit International, 
an educational interdenominational nonprofit organization that 
provides children and adults with basic education and literacy 
programs that promote health, nutrition and community 
development in Africa and Latin America.

          HUMAN CAPACITY BUILDING: WOMEN'S LEADERSHIP TRAINING

    The Committee continues to believe a Women in Development 
(WID) office empowered to monitor, assess, and make 
recommendations regarding the quality of gender integration at 
USAID could be of great benefit to the agency. The Committee 
strongly recommends that the Office be funded at $15,500,000 in 
fiscal year 2006.

                        TRADE CAPACITY BUILDING

    Trade capacity building (TCB) programs are critical 
elements of development assistance because of their large 
multiplier effects on economic growth, poverty reduction and 
promotion of the rule of law. These programs help developing 
countries participate in and benefit from the global trading 
system. Economic growth provides much needed resources to 
finance social investments in developing countries. Over time, 
growth through trade reduces dependency on official aid.
    For fiscal year 2006, the Committee provides $214,000,000 
for trade capacity building efforts, an amount that is 
$15,000,000 above last year. The Committee requests that USAID 
prioritize these resources where economic growth can best be 
achieved particularly in the context of building developing 
country capacity to implement and benefit from special trade 
arrangements with the United States. Programs of particular 
importance include trade facilitation through improvements in 
customs, sanitary and phyto-sanitary measures; improvements in 
governance and transparency regarding government procurement; 
and related regulatory reforms that may be necessary for the 
developing country to benefit fully from the trading 
arrangement.
    Programs should also include trade policy and related 
training for government officials, such as customs officers, 
environmental analysts, trade and investment policy officials, 
patent and copyright officials, food safety inspectors, and 
financial service regulators; technical assistance for 
environmental reviews; technical assistance and other 
initiatives that foster trade policy coordination among 
government agencies to improve effectiveness and transparency, 
and to improve outreach to civil society and the private 
sector; and technical assistance to improve government 
agencies' statistical and analytical capabilities in the areas 
of trade, investment and services.
    The Committee expects that these resources will be used to 
respond to developing country requests for assistance.
    Inter-agency coordination is key to the creation and 
implementation of practical and effective TCB work plans. The 
Committee encourages USAID to continue to exercise leadership 
and participation in the interagency process and to be an 
active partner in TCB action plans created by developing 
countries. Where appropriate and throughout all regions, the 
Committee supports USAID's efforts to use these resources in 
inter-agency agreements or otherwise to accomplish development 
objectives, particularly in the context of labor and 
environmental cooperation related to special trading 
arrangements with the United States. These efforts do not 
specifically need to be related to trade capacity building. 
This is particularly true in the context of the African Growth 
and Opportunity Act and free trade agreements the United States 
is negotiating.
    The Committee recognizes that, more than other forms of 
development assistance, trade capacity building programs 
require increased flexibility because their implementation must 
track the ever-changing dynamics at multilateral, regional and 
bilateral levels. Therefore, the Committee urges USAID to be 
able to account for the shifting nature of developing country 
efforts to integrate into the global economy by being able to 
make continual adjustments to five-year strategic plans that 
run the risk of being outdated.
    In resource allocation and programming, USAID should also 
consult with the Office of Trade Capacity Building of the 
United States Trade Representative. When responding to trade 
capacity building proposals or action plans by developing 
countries, USAID also should solicit expertise from relevant 
federal agencies such as Customs, Department of Commerce's 
Commercial Law Development Program, United States Food and Drug 
Administration, the Department of Agriculture's Animal and 
Plant Health and Inspection Service, and the International 
Trade Commission.
    In its report accompanying the fiscal year 2004 
appropriations bill, the Committee identified the importance of 
identifying aid effectiveness in the context of TCB programs. 
In February, 2005 the Government Accountability Office (GAO) 
issued a report recommending that the Administrator of USAID 
develop a cost effective strategy to systematically monitor and 
measure program results and to evaluate the effectiveness of 
TCB activities. The Committee asks USAID to provide a report 
180 days after the beginning of the fiscal year on the 
implementation of TCB performance indicators to be used by 
field missions and agency bureaus in on-going or future TCB 
programs.
    The Committee recognizes USAID's government-wide surveys 
over the last several years that document United States 
assistance for TCB activities. Through these surveys, USAID has 
demonstrated that the United States is the policy and resource 
leader in the provision of this form of assistance. 
Nevertheless, despite this leadership, USAID lacks a clearly 
defined, annual budget process that identifies TCB activities 
as a component of the President's budget request. As it has in 
the past, the Committee continues to encourage USAID to 
implement a budget planning process that is prospective in 
nature. Allocation decisions of TCB assistance should be linked 
to opportunities for aid effectiveness.

                             URBAN PROGRAMS

    The Committee is aware that urban populations in developing 
nations are growing rapidly, threatening the quality of life 
for billions of individuals. Within less than ten years, more 
people will be living in the world's cities than 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.

     GLOBAL ISSUES: CLEANER ENERGY, HYDROPOWER AND THE ENVIRONMENT

    The Committee recommends a renewed emphasis on hydropower 
with a grant of up to $3,000,000 to promote the development of 
overseas markets for environmentally-friendly hydropower 
technology manufactured in the United States. The Committee 
commends consideration of funding for a specialized non-
governmental organization representing the United States 
hydropower industry to provide project development and 
implementation services. The Committee directs USAID to consult 
with the Committee on its plans for the allocation of these 
funds. 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.

       GLOBAL ISSUES: ACCESS TO CLEAN WATER AND WATER MANAGEMENT

    Competition for scarce fresh water is predicted to be a 
major source of international conflict during the twenty-first 
century, as it is now within the Middle East. Elsewhere, intra-
regional cooperative programs for 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.
    In Africa, especially in communities severely impacted by 
HIV/AIDS, ready access to clean water is lacking, resulting, in 
increasing rates of water-borne diseases and higher infant 
mortality rates. The Committee urges the President to direct 
not less than $50,000,000 from this Act to build wells in rural 
areas, and secure water delivery systems in urban areas, of 
African communities that lack access to fresh water. Within 
this level, the Committee recommends $15,000,000 for programs 
in east Africa.

                      GLOBAL ISSUES: BIODIVERSITY

    The Committee applauds the accomplishments of USAID in 
integrating biodiversity and forest management in its economic 
and social development programs. The Committee urges USAID to 
provide not less than $110,000,000 in fiscal year 2006 for its 
biodiversity and related environment programs.
    Concerned with contributions to regional instability from 
resource scarcity and other issues of environmental security, 
the Committee continues to support the work of centers of 
expertise. In this regard, the Committee continues to support 
the work of the Foundation for Environment Security and 
Sustainability to address critical United States security 
interests in the context of regional instability arising from 
resource scarcity and management practices, natural hazards and 
other environmental stresses.
    The Committee recommends $550,000 for projects in southern 
Africa that help protect the population of wild cheetah. 
Harvesting otherwise undesirable species of brush and 
processing them into fuel can prevent the ruinous encroachment 
of the brush into woodland savannah where cheetahs hunt for 
food.
    The Committee also supports the USAID Parks in Peril 
program, a partnership with the Nature Conservancy, which has 
leveraged hundreds of millions of dollars in non-United States 
Government funds for conservation of imperiled ecosystems 
throughout Latin America.
    The Committee is concerned about environmental degradation 
along the United States/Mexico border. The Committee requests 
USAID to consider programs in Mexico that will help ameliorate 
border region pollution.
    The Committee recognizes the work of Trees for the Future 
in helping the Arcadine Coast and Terrible Mountain communities 
of Haiti restore ecological resources and increasing economic 
viability, and urges USAID to consider funding for this 
organization.
    The Committee notes the trend toward Payment for Ecological 
Services programs by which landowners are paid for the 
environmental services they provide to the larger society. For 
example, small farmers are paid to protect trees that are vital 
to a watershed for a city, or to conserve biological diversity 
that attracts tourism. Such programs have great potential to 
create reliable, long-term streams of domestically generated 
funds for conservation. The Committee urges USAID to expand its 
support for this area.

        ECONOMIC GROWTH: COLLABORATIVE RESEARCH SUPPORT PROGRAMS

    The Committee recognizes the important contributions the 
Collaborative Research Support Programs (CRSPs) have made in 
the area of agricultural development and human capacity 
building. The Committee believes CRSPs are excellent 
investments and urges USAID to support efforts by the CRSPs to 
expand their activities in Africa and South Asia. The Committee 
recommends USAID support the creation of a new CRSP to focus on 
water issues and expand its current horticulture assessment 
into a CRSP. The Committee strongly recommends USAID fund CRSPs 
in fiscal year 2006 at $28,000,000.

                    ECONOMIC GROWTH: MICROENTERPRISE

    In most developing countries, small, informally organized 
businesses--microenterprises--constitute the vast majority of 
business enterprises. Microenterprises are the source of 
employment and income for hundreds of millions of people in 
developing countries. To flourish, microenterprises need a 
supportive policy environment and growing markets, as well as 
capital and technical assistance. The Committee expects USAID's 
programs to reach the largest possible number of 
microenterprises, whether through grants to private, non-
governmental organizations that on-lend to microenterprises or 
by sponsoring economic policy reforms that directly stimulate 
such enterprises. The Committee recommends USAID achieve a 
level of $200,000,000 for microenterprise programs. 
Furthermore, the Committee recommends $30,000,000 be available 
to USAID's Office of Microenterprise through a central funding 
mechanism for contracts, cooperative agreements and grants. The 
Committee directs USAID to take measures to preserve the 
viability of the leading private NGO Microfinance Networks, and 
to consult with the Committee on these measures.

              CREDIT UNIONS, COOPERATIVES AND PARTNERSHIPS

    The Committee recognizes the important role that 
cooperatives and credit unions play in overseas programs. The 
Committee recommends that priority be given to funding overseas 
cooperatives working in the areas of agriculture, financial 
systems, rural electric and telecommunications infrastructure, 
housing and health.
    The Committee supports the principles of the Sullivan 
Summit, which emphasizes the need to build partnerships between 
American and African businesses, healthcare professionals, 
educators, financial institutions and clergy. The Committee 
recommends USAID support these partnerships.

                        LATIN AMERICA: OVERVIEW

    The Committee is disappointed that USAID has ignored 
Committee report language from prior years urging that greater 
emphasis be provided for programs in Latin America. The 
Committee notes that the President's request for this region 
from Development Assistance and the Child Survival and Health 
Programs Fund is substantially less than the combined level for 
both accounts enacted and allocated in fiscal year 2004. The 
Committee is concerned that the Central American nations 
received disproportionate reductions in the request and does 
not believe that this reflects the priorities of United States 
economic, trade, humanitarian and immigration policies with 
these neighboring countries. Therefore, the Committee directs 
USAID to provide assistance to Central American nations from 
Development Assistance and the Child Survival and Health 
Programs Fund at a combined level not less than that provided 
in fiscal year 2005. This calculation should include resources 
programmed in the regional account.
    In fiscal year 2006, USAID should exercise flexibility in 
allocating this higher level of resources among the Central 
American countries recognizing that some countries are 
receiving Millennium Challenge Corporation resources. The 
allocation of resources should be shaped by the following high 
priorities: improved labor rights and environmental capacity, 
basic education, child and maternal health, empowerment of the 
poor through private property rights, and opportunities for 
farmers to participate in the formal economy. Foreign 
assistance can facilitate the efforts of these countries to 
integrate into the global economy and leverage trade for 
development. Furthermore, such assistance can encourage Central 
American countries to undertake the changes necessary to become 
eligible for a compact in subsequent years if such countries 
meet the eligibility requirements of the MCC.

             MEXICO: PARTNERSHIP FOR PROSPERITY INITIATIVE

    The Committee requests a report from USAID that outlines in 
detail the national security and development justification of 
the President's Partnership for Prosperity Initiative and 
describes the linkages between all United States Government 
efforts and their relationship with the initiative. In the 
context of helping reduce the pressures of illegal immigration, 
the report should discuss the importance of rural development, 
property rights for the poor and formalizing the extra legal 
sector, access to financial services through such mechanisms as 
micro-credit institutions, and effective public finance and the 
rule of law. The Committee requests that USAID consult with the 
Committee thirty days after enactment and provide a report to 
the Committee no later than February 15, 2006.

          LATIN AMERICA AND THE CARIBBEAN: SCHOLARSHIP PROGRAM

    The Committee strongly supports the work of the Cooperative 
Association of States for Scholarships (CASS) for its effective 
approaches to providing individuals with the skills that enable 
them to contribute effectively to the economic growth of their 
communities and nations. The Committee notes that the CASS 
program has offered technical education, job training, and 
leadership skills to young adults and leaders from communities 
of Central America and the Caribbean in fields such as 
agriculture, education, business, construction, environmental 
science, health care and technology training. The Committee 
expects USAID to fully fund the current CASS agreement. The 
Committee also notes that the CASS program is undertaking new 
activities in Mexico in support of the Administration's efforts 
to strengthen the United States-Mexico relationship, and 
believes the program's long history in Haiti could contribute 
significantly to USAID efforts in that nation, particularly in 
the field of health care training.

                 AMERICAN SCHOOLS AND HOSPITALS ABROAD

    The Committee directs USAID to provide up to $20,000,000 
for the American Schools and Hospitals Abroad (ASHA) program in 
fiscal year 2006. The Committee further expects that support 
will be continued, as new resources are needed, for traditional 
recipients in the Middle East. The Committee expects USAID to 
keep it well 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.
    The Committee notes that innovative medical technology such 
as haptic medical simulation can help train medical personnel 
in medically underserved developing countries. Such technology 
can provide a safe alternative to practicing on human subjects 
for a variety of procedures, such as intravenous therapy and 
endoscopy, and should be considered for use where appropriate.

       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. Over the past 
year, Department of State has allocated significant resources 
from the Economic Support Fund in order to improve the economic 
and social situation of women in the Middle East.

                           DAIRY DEVELOPMENT

    The Committee continues its strong support for dairy 
industry development as an effective economic development tool. 
The Committee urges USAID to obligate new funding for dairy 
industry development project activities at a minimum of 
$15,000,000 in fiscal year 2006 to strengthen the agency's 
economic growth, rural development and trade initiatives. The 
Committee particularly urges USAID to use no less than 
$7,500,000 of this amount to fund new centrally funded projects 
that initiate activities in countries not previously engaged in 
dairy development.
    The program has assisted producers, cooperatives, 
processors and industry associations in recipient countries to 
increase incomes, create jobs and improve the nutritional 
status of the population. While the Committee encourages the 
use of creative program mechanisms, it is important that dairy 
programs under this provision address both United States dairy 
industry needs as well as developmental goals.

                       TORTURE TREATMENT CENTERS

    The Torture Victims Relief Act of 1998 states that 
assistance to foreign treatment centers ``shall be provided in 
the form of grants to treatment centers and programs in foreign 
countries that are carrying out projects or activities 
specifically designed to treat victims of torture for the 
physical and psychological effects of the torture.'' The 
Committee urges USAID to ensure that this program complies with 
the congressional authorization. By so doing, USAID will be 
helping to ensure the growth of indigenous institutions 
providing culturally appropriate care to their torture victims 
and seeking to prevent and eventually eliminate the practice of 
torture in their country. The Committee recommends that USAID 
devote $12,000,000 for this program in fiscal year 2006. The 
Committee requests that USAID report on implementation of these 
recommendations not later than 60 days of enactment of this 
Act.

                              ESTHER'S AID

    The Committee notes the good work of Esther's Aid for Needy 
and Abandoned Children, a faith-based NGO active in Rwanda, in 
protecting and rehabilitating the children of Rwanda through 
educational, health, and income-generation activities. USAID is 
directed to provide $150,000 to Esther's Aid to support these 
activities.

       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 United States 
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 USAID to give priority to proposals that 
have technical merit, realistic budgets, and achievable 
objectives.
    No later than March 1, 2006, the Administrator of USAID 
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 USAID or the Department of State on funding the 
activity, including the proposed funding level; and (5) any 
other relevant information deemed important by USAID or the 
Department of State. The Committee also expects to receive a 
second report on the status of these proposals no later than 
September 1, 2006. In addition, the Committee requests that 
USAID 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 USAID's active consideration:
    A proposal by Alabama A&M University to develop textbooks 
and teaching materials in Africa;
    A proposal by the University of Alabama to conduct a 
feasibility study to establish a Central American Food Export 
Trade Association at the University;
    A proposal by the University of South Alabama to initiate a 
birth defects monitoring program in the Ukraine;
    A project from the University of Arizona and Mexico's 
Consejo Nacional de Ciencia Y Technologia to support a United 
States-Mexico binational optics program with the purpose of 
establishing a program to improve Mexico's competitiveness;
    A proposal by the University of Arkansas for a logistics 
assessment and a pilot project for telemedicine;
    A proposal by the University of Arkansas Medical School to 
work in partnership with Russian institutions on critical 
health problems in Russia;
    A proposal by the University of California at San Diego's 
Scripps Institute of Oceanography to assess the impact of air 
pollution and persistent brown haze in Asia;
    A proposal by California Western University School of Law 
to help Latin American countries reform their judicial systems;
    Proposals by Loma Linda University, California, to expand 
its medical education and health care programs in developing 
countries, including the refurbishment of the Wazir Akbar Khan 
Hospital in Kabul, Afghanistan;
    A proposal by the University of California at Los Angeles 
to support the WorldSpace Health Communications Initiative;
    A proposal by Morehouse College to help build 
infrastructure for Sub-Saharan African leadership development, 
education and training;
    A proposal by Northwestern University, Illinois, in 
association with partner organizations through the Consortium 
for Development Partnerships, to respond to the slow pace of 
economic development, democratization, and conflict resolution 
in many African countries;
    Proposals by DePaul University, Illinois, to provide 
training for diplomats and 30 to 45 police officials, 
prosecutors, judges, defense attorneys, prison officials and to 
establish a Summer Human Rights Law Intensive program to 
provide training in international human rights and humanitarian 
law for diplomats;
    A proposal by the Kansas State University Plant 
Biotechnology Center to solve intractable problems of cereal 
crop production in developing countries;
    A proposal by Tulane University and Xavier University, 
Louisiana, to work with the West African Health Organization to 
prevent and treat HIV/AIDS in the militaries of the Economic 
Community of Western African States;
    A proposal by the Louisiana State University Law Center to 
support intra-hemispheric trade through partnerships with law 
schools in Latin America;
    A proposal by St. Mary's College of Maryland with the 
University of The Gambia to assist in up-grading the 
University;
    A proposal by the John Joseph Moakley Center for Law, 
Justice, and Human Rights at Boston College, Massachusetts, to 
support programs that promote justice and human rights around 
the world through the College's undergraduate and graduate 
international programs;
    A proposal by the John W. McCormack Graduate School of 
Policy Studies at the University of Massachusetts to assist 
countries with developing democracies to set up sound legal 
systems;
    A proposal by Brandeis University and the Al-Quds 
University to strengthen academic excellence and educational 
opportunities and to support the Heller School's Sustainable 
International Development Program;
    A proposal by Bemidji State University, Minnesota, to 
create a Central Asian Institute to facilitate cross-cultural 
understanding and enhance the education of citizens in Central 
Asia;
    A proposal by the University of Montana and the Montana 
World Trade Center to help increase the capacity of developing 
countries to reach international trade agreements with the 
United States;
    A proposal by the University of Nebraska-Lincoln to 
establish a global standard joint undergraduate and MBA 
programs at Jordanian universities;
    A proposal by the University of Nebraska Omaha to jump 
start teacher training and vocational education programs in 
Afghanistan;
    A proposal by the University of Nebraska Lincoln to 
initiate collaborative programs for teaching, research and 
outreach in Jordan;
    A proposal by Rutgers University, Thomas Edison State 
College and the SAS Institute to jointly provide a post 
graduate program in non-profit business and government 
administration;
    Proposals by Monmouth University to establish opportunities 
for Armenian students in the United States and to support an 
anti-trafficking in persons training program;
     A proposal by Ohio University to train Afghans in the 
development of rural infrastructure;
    A proposal by the Pacem In Terris Institute at La Roche 
College, Pennsylvania, for an international scholarship 
program;
    A proposal by Chestnut Hill College to establish a working 
relationship with the International Center for Education and 
Research Distance Learning Center in Ukraine;
    A proposal by the American University in Kosovo to educate 
the future political and economic leaders;
    A proposal by George Mason University, Virginia, to support 
continued operations of the Center for World Religions and 
Conflict Resolution to support an initiative to reduce 
violence;
    Proposals by the South Dakota School of Mines and 
Technology to provide educational opportunities for foreign 
students, particularly from developing nations, to provide 
engineering services to water and sanitation programs in India, 
to enhance its relationship with the University of Belgrade and 
to enhance its relationship with the Mongolia University of 
Science and Technology;
    A proposal by Austin Peay State University, Tennessee, to 
enhance the international curriculum to meet the needs of 
military personnel at Fort Campbell, Kentucky;
    A proposal coordinated by the Texas A&M University and 
other partnering universities for the Norman E. Borlaug 
International Science and Technology Fellows Program;
    A proposal by Texas A&M University and other Alabama and 
Texas institutions of higher learning to expand research in the 
United States, Ghana and other cooperating countries to further 
refine the technology for remediating the effects of mycotoxins 
in food and feed;
    A proposal by George Mason University, Virginia, to support 
continued operations of the Center for World Religions, 
Diplomacy and Conflict Resolution to support an initiative to 
reduce violence in the name of religion;
    A proposal by Washington State University to address 
challenges in water management and the environment;
    A proposal by City University, Washington, to improve and 
expand information technology infrastructure for Central and 
Eastern European distance learning programs;
    A proposal by the Asian University for Women, Bangladesh, 
to educate disadvantaged women from diverse backgrounds around 
Asia in a non-sectarian environment;
    A proposal by the American University of Bulgaria to 
support liberal arts education and the core values of an open, 
democratic society;
    A proposal on behalf of the George Washington Academy in 
Morocco for additional buildings and equipment; and
    A proposal on behalf of universities in Nigeria to 
establish cyber centers and technical training facilities.
    A proposal by the Mrs. Helena Kaushik Women's College, 
India, to increase opportunities for women to receive 
undergraduate and graduate degrees;
    A proposal by universities on behalf of the Caribbean 
American Mission for Education Research and Action (CAMERA).

              International Disaster and Famine Assistance

Fiscal year 2005 level..................................    $367,040,000
Emergency supplemental funding..........................     207,850,000
Fiscal year 2006 request................................     655,500,000
Committee recommendation................................     356,000,000

    The Committee recommends $356,000,000 for the International 
Disaster Assistance and Famine Assistance account.
    The President's budget request for fiscal year 2006 for 
this account included $300,000,000 that in previous years would 
have been included in the request for PL-480 Title II grants. 
The President's budget sought the reallocation of these 
resources because USAID wished to purchase commodities overseas 
whereas PL-480 Title II grants must be used to purchase 
commodities in the United States.
    Because of insufficient resources, the Committee does not 
support the proposed reallocation of resources. If food 
security, poverty reduction or other life saving objectives 
would be better served through the purchase of local or 
regional commodities, the Committee notes that USAID has 
existing authority in this and other accounts to meet those 
objectives.
    The Committee includes $20,000,000 of funding for early 
intervention to prevent or mitigate the effects of famine.
    The Committee notes the Famine Early Warning System Network 
and other collaborations USAID has undertaken to lower the 
occurrence of famine caused by drought or floods. Access by 
decision-makers to accurate, timely information and data on 
vegetation, rainfall, and agricultural conditions affecting 
global food security is crucial for appropriate interventions, 
and the Committee recognizes the role of the United States 
Geological Survey in collecting, managing, and archiving such 
data.
    The Committee recommendation includes $390,000,000 for 
Sudan from all accounts. Despite some positive developments in 
Darfur, the Committee continues to be gravely concerned about 
the ongoing atrocities against the citizens of that region. In 
section 569, the Committee continues its prohibition against 
funding from this Act for that government or for initiatives to 
alleviate Khartoum's debt burden unless the Secretary of State 
makes a certification outlined in subsection (c). Humanitarian 
assistance, assistance provided to the Darfur region and to the 
area outside of the control of the north, and support to the 
Comprehensive Peace Agreement are specifically not restricted 
by section 569. Funding for Sudan is also explicitly restricted 
elsewhere in this Act, including under ``Debt Restructuring'' 
and ``Foreign Military Financing Program''.
    The Committee also requests that the President, not later 
than 60 days following enactment of this Act, consult with the 
Committee and submit a plan for supporting the political and 
economic development of South Sudan.
    This plan should describe sectoral strategies and include 
all ongoing and proposed programs, projects, and activities. It 
should also describe how the United States sectors, programs, 
projects, and activities are coordinated with those supported 
by funding from other multilateral and bilateral donors, as 
well as by the financial resources of South Sudan. This plan 
shall be updated quarterly and each update shall clearly note 
changes from the previous submission.

                         Transition Initiatives

Fiscal year 2005 level..................................     $48,608,000
Fiscal year 2006 request................................     325,000,000
Committee recommendation................................      50,000,000

    The Committee recommends $50,000,000 for this account.
    The President's fiscal year 2006 budget request included 
$275,000,000 for Afghanistan, Sudan, Haiti and Ethiopia that in 
previous years would have been requested in the Development 
Assistance account. Such an increase would have allowed USAID 
to use the authorities underpinning this account, including 
availability of funds until expended and so-called 
``notwithstanding'' authority. The Committee does not agree 
with the scope of the proposed change. The potent authorities 
of this account were granted for use in limited and carefully 
targeted situations where flexibility and nimbleness were vital 
to successful transition. They were not intended to cover all 
USAID assistance to a given country. With respect to work in 
countries in transition, the Committee acknowledges the 
contributions of the International Crisis Group (ICG), which 
has conducted field-based, high-quality analysis of the causes 
of conflict in more than 40 countries around the world. 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]

                                                           (by transfer)
Program account:
Fiscal year 2005 level..................................   ($20,876,000)
Fiscal year 2006 request................................    (21,000,000)
Committee recommendation................................    (21,000,000)

Administrative expenses:
Fiscal year 2005 level..................................       7,936,000
Fiscal year 2006 request................................       8,000,000
Committee recommendation................................       8,000,000

    The Committee recommends a ceiling of $21,000,000 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 Committee recommends $8,000,000 for administrative 
expenses, the same as the requested level.

     Payment to the Foreign Service Retirement and Disability Fund

Fiscal year 2005 level..................................     $42,500,000
Fiscal year 2006 request................................      41,700,000
Committee recommendation................................      41,700,000

    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


(including transfer of funds)

Fiscal year 2005 level..................................    $613,056,000
Emergency supplemental funding..........................      24,400,000
Fiscal year 2006 request................................     680,735,000
Committee recommendation................................     630,000,000

    The Committee has recommended funding for United States 
Agency for International Development operating expenses at a 
level of $630,000,000, which is $16,944,000 above last year's 
level.

                USAID MANAGEMENT OF ITS HUMAN RESOURCES

    USAID is making progress in managing its employees. The 
President's fiscal year 2006 budget request gives USAID a 
``green'' mark for progress in human capital. In April 2005, 
USAID submitted a report to the Committee that provides 
considerable detail on the USAID workforce and operating 
expenses at each of its overseas missions. The data in the 
report are useful and provide an excellent basis for discussion 
about the right size, cost and allocation of USAID's workforce.
    Further work, however, is necessary. The April 2005 report 
draws comparisons among USAID's bureaus and missions, thereby 
providing a relative measure of mission cost, but it does not 
provide an absolute measure. In other words, one USAID mission 
may be more effective than another mission in another country 
but that does not mean that it is as effective as it could be. 
The challenge is to provide USAID missions with incentives and 
benchmarks for efficient management.
    To that end, the Committee supports USAID's efforts to 
introduce management incentives by looking at ways to allocate 
overhead expenditures in areas such as personnel, technology 
and office space. These expenditures are currently paid for and 
allocated centrally, which leaves little incentive for managers 
at individual offices and missions to use these resources to 
maximum advantage. The Committee understands that USAID is 
undertaking a ``shadow budget'' to provide individual managers 
with these incentives. The Committee requests a consultation no 
later than December 15, 2005, to review progress on the fiscal 
year 2006 ``shadow budget''. The consultation should address 
the formula used to determine decentralized costs and a long-
term plan, including benchmarks with relevant timeline. In 
addition, the Committee requests an updated version of the 
administrative cost analysis report, initially presented in 
April, 2005, broken out by country.
    The Committee continues to seek to provide flexibility so 
that Agency management will be better able to meet the 
development assistance challenges of the future. For example, 
in section 577, the Committee has included bill language 
allowing USAID to use temporary Foreign Service Office (FSO) 
appointments overseas, funded by program accounts, so the 
agency will employ FSO's responsible to the Administrator and 
the USAID management structure, rather than the current 
tendency to hire and rely on Personal Service Contractors 
(PSCs). These PSC's are too often entrusted with managing 
USAID's Foreign Service National workforce and, in some cases, 
managing the entire United States foreign assistance programs 
in countries, including representing the United States in 
discussion and negotiations with foreign governments.

                   USAID CONTRACTING AND PROCUREMENT

    Last year, the Committee directed USAID to prepare a 
detailed and comprehensive analysis of its procurement process. 
USAID presented its analysis of spending in May to the 
Committee. The report divided USAID spending into two broad 
categories: (1) ``acquisition instruments'', composed of 
contracts, contract modifications and task orders; and (2) 
``assistance instruments'', composed of grants, grant 
modifications, cooperative agreements and inter-agency 
agreements. USAID noted that in preparing the report, it 
discovered that data it collected centrally was both incomplete 
and not of the highest quality. Bearing those caveats in mind, 
the report noted that USAID/Washington used assistance 
instruments for 82 percent of its spending in fiscal year 2004, 
with only about 18 percent going to acquisition instruments. 
Conversely, USAID missions overseas used assistance instruments 
for only 26 percent of their spending in the same year, with 74 
percent going to acquisition instruments.
    In discussions about procurement, USAID also noted it had 
about $20,000,000 in face value of outstanding Indefinite 
Quantity Contracts (IQC), although the full scope of agency use 
of IQCs is unknown as only an initial amount of IQC contracts 
are obligated. IQCs are contracts that provide for indefinite 
quantities of supplies or services over a fixed period of time. 
Most IQCs are either Cost-Plus-Fixed-Fee contracts or Fixed 
Daily Rate contracts. USAID argues that IQCs are competitively 
awarded and that in addition the task orders--the mechanisms 
through which USAID uses the IQCs--are also competitively 
selected.
    The goal of all government procurement should be to achieve 
desired results at lowest cost to the taxpayer. The Committee 
therefore requests that USAID do additional analysis of its 
procurement process. The new analysis should fill in the 
quality and completeness gaps in data of the first report, as 
USAID itself recognized. The report should also delve more 
completely into the competitive process by which USAID awards 
its grants and contracts. The Committee firmly supports full, 
fair and open competition as a means of lowering costs and 
getting better products. USAID should do everything it can to 
stimulate this competition. The Committee requests the report 
analyze the metrics the USAID uses to evaluate the 
competitiveness, efficiency, long term structural openness to 
new entrants, and procurement vehicle consistency with the 
strategic objective. The new report should be presented to the 
Committee on November 1, 2005.
    The Committee recognizes that waivers of federal 
acquisition rules are sometimes necessary, but it believes such 
waivers should be rare and issued in a fully transparent 
manner. The Committee requests the Administrator of USAID 
provide the Committee with an annual report not later than five 
months after the end of the fiscal year, on the extent and 
detail during the preceding fiscal year of USAID's sole-source 
and limited competition awards for contracts, cooperative 
agreements, and grants in excess of $100,000. USAID's should 
consult with the Committee before beginning to draft the 
report.
    The Committee is aware of the difficult adjustment facing 
many of USAID's long-serving and effective implementing 
organizations, especially private voluntary organizations 
(PVOs), micro-enterprise networks, cooperatives and small 
disadvantaged and minority firms.
    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 initiatives to train minority firms 
in leading US export cities to better compete for USAID awards, 
and requests that sufficient resources be allocated over the 
next two years to train small, minority, and disadvantaged 
firms in leading export cities for such purposes.
    The Committee recommends that those entities competing for 
the training contract have prior experience in working with 
small, minority and disadvantaged firms in increasing their 
ability in doing business in the international arena.
    The Committee is also aware that USAID maintains a national 
database of qualified small, disadvantaged, and minority firms. 
This database should be expanded to include firms who benefit 
from the outreach initiative. In addition, information from the 
database should be disseminated on a regular basis to all USAID 
overseas missions, relevant Washington, DC staff, and USAID 
prime contractors.
    The Committee supports USAID's continuing efforts to 
improve its procurement efforts. The Committee supports a human 
capital strategy for USAID's procurement office, both to 
increase the number of contracting officers and to improve 
their training. Further, the Committee directs USAID to set up 
a task force to make recommendations about how its procurement 
and contracting can be further improved. The task force should 
be composed of members of the PVO community, the business 
community and outside experts on procurement and development. 
The task force should examine how USAID's procurement and 
contracting processes can be made more transparent, more 
competitive and more expeditious. The task force should also 
examine how USAID's acquisition and assistance tools can be 
best fit to the relevant development context. The Committee 
expects the task force to make its recommendations by March 
1,2006.

                        Capital Investment Fund

Fiscal year 2005 level..................................     $58,528,000
Fiscal year 2006 request................................      77,700,000
Committee recommendation................................      77,700,000

    The Committee is recommending $77,700,000 for the Capital 
Investment Fund for fiscal year 2006, the same as the 
President's request. In total, the Committee recommendation 
includes $55,800,000 for USAID participation in the Capital 
Cost-Sharing Program, under which all agencies with overseas 
staff operating under Chief of Mission authority will 
contribute toward the costs of constructing secure embassy 
compounds. The Committee supports the concept of Capital Cost 
Sharing but wants to ensure that all agencies are treated 
equitably.
    The Committee continues to support the implementation of 
the Procurement Systems Improvement Project (PSIP), a worldwide 
upgrade and implementation of acquisition and assistance 
software and report tools. In the report accompanying the 
Foreign Operations Appropriations Act, 2003, the Committee 
urged USAID to develop a world wide procurement tracking system 
that would allow the agency to evaluate regularly its 
procurement process and ultimately allow data to be integrated 
into its financial management system. The Committee recognizes 
USAID-identified PSIP objectives, but also encourages USAID to 
use the system as a means to improve the competitiveness of 
procurement as well as to measure the continuous opportunity of 
new entrants as third party implementers.
    All funds made available under the Capital Investment Fund, 
including the obligation of offsetting collections, and the 
capital appropriation in the Economic Support Fund, are subject 
to the regular notification procedures of the Committees on 
Appropriations. The Committee also has included bill language 
under Operating Expenses of the United States Agency for 
International Development that requires notification before 
USAID commits to new overseas missions that will require 
additional capital investments.

                          FINANCIAL MANAGEMENT

    In October, 2004, the Inspector General issued for the 
second year in a row clean, unqualified opinions on all five of 
USAID's fiscal year 2004 financial statements. The Committee 
recognizes this significant progress was achieved through the 
hard work of both USAID and its Inspector General. These clean 
opinions show vast improvement over fiscal year 2001, when 
three of USAID's financial statements were given qualified 
approval, and two were given a disclaimer.
    The Committee is intensely interested in the roll out of 
USAID's financial management system, known as Phoenix. The 
Committee appreciates USAID's commitment to complete deployment 
of Phoenix to all of the field missions by mid fiscal year 
2006. The Committee maintains its desire to be kept informed on 
a routine basis of major milestones accomplished and encourages 
adequate planning in order to avoid any further delay in 
implementation. The Committee is aware USAID faces increased 
challenges as the rollout continues to those areas of the world 
where telecommunications are less than optimal. As the system 
is implemented, the Committee wishes to emphasize the 
importance of USAID missions' commitment to using the system.
    Although clean, unqualified opinions on USAID's annual 
financial statements are important, the Committee repeats its 
stress on the paramount importance of USAID managers having 
timely, reliable and complete financial and performance data on 
foreign assistance programs on a consistent basis. USAID's 
managers will not have this data as long as there is no 
worldwide, integrated financial system.
    Consistent with the President's budget request, the 
Committee funds $21,900,000 of information technology 
improvements, of which $2,600,000 is for Phoenix, the financial 
management system.

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

Fiscal year 2005 level..................................     $34,720,000
Fiscal year 2006 request................................      36,000,000
Committee recommendation................................      36,000,000

    The Committee has recommended $36,000,000 for the Office of 
the Inspector General of USAID for fiscal year 2006, which is 
the same as the budget request. The Committee again commends 
the Inspector General for his cooperation with the Committee in 
its oversight of USAID management. Not later than 120 days 
after the date of the enactment of this Act, the Inspector 
General of USAID is requested to prepare and submit to the 
Committee a report that describes and evaluates the extent to 
which the task ordering process carried out by mission 
directors of USAID affects USAID's ability to meet the goals 
established by the Small Business Administration relating to 
contracting with small businesses.

                  Other Bilateral Economic Assistance


                         Economic Support Fund

Fiscal year 2005 level..................................  $2,462,640,000
Emergency supplemental funding..........................   1,433,600,000
Fiscal year 2006 request................................   3,036,375,000
Committee recommendation................................   2,558,525,000


    The Committee recommends a total of $2,558,525,000 for the 
Economic Support Fund (ESF), an amount that is $477,850,000 
below the request and $95,885,000 above the amount enacted for 
fiscal year 2005, excluding emergency supplemental 
appropriations.

                            ISRAEL PROGRAMS

    The Committee recommends funding for Israel programs at the 
President's request of $240,000,000, which is $120,000,000 
below the funding level for 2005.

                         ELEM YOUTH IN DISTRESS

    The Committee recognizes the work of ELEM/Youth in 
Distress, which works with Israeli, Palestinian, Druze, and 
Bedouin youth living on the streets. The Committee urges the 
State Department and USAID to consider funding for this 
organization.

                          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 a provision (sec. 
535) addressing the Arab League boycott of Israel. The 
Committee strongly opposes this boycott and believes that the 
Department of State must take strong action to combat this 
practice. This provision has been modified to recognize the 
recent return of some Arab League members to normalized 
relations with Israel.

                             EGYPT PROGRAMS

    The Committee recommends funding for Egypt programs at the 
President's request of $495,000,000, which is $40,000,000 below 
the funding level for 2005.
    The Committee recommends that not less than 50 percent of 
the funds provided for Egypt for democracy, governance, and 
human rights be provided through nongovernmental organizations 
for the purpose of strengthening Egyptian civil society 
organizations, enhancing their participation in the political 
process, and enhancing their ability to promote and monitor 
human rights. The Committee further recommends that not less 
than 50 percent of the funds provided for Egypt for education 
be used to improve access to basic education. The remainder of 
the funds provided for education shall be used to strengthen 
institutions of higher education, promote academic freedom, and 
fund educational and cultural exchange programs.
    The Committee understands that the Department of State has 
recently reached an agreement with the Egyptian government with 
respect to cash transfer assistance. This agreement includes a 
requirement that the Government of Egypt commit to achieving 
specific goals by specific dates. The Committee believes that 
in order for assurances that the fiscal year 2006 assistance 
will be properly disbursed, the Department of State should 
ensure these goals are met and shall immediately notify the 
Committee if the Egyptian government fails to comply with its 
commitment to achieve these goals.

                        RELIGIOUS FREEDOM--EGYPT

    The Department of State 2003 International Religious 
Freedom Report notes that there has been some improvement in 
the Egyptian Government's respect for religious freedom, such 
as greater recognition and tolerance of Coptic Christians. 
However, the Government has not yet brought to justice those 
responsible for the death of Christians in the village of Al-
Kush in January 2000. The Committee remains concerned about the 
problems faced by Egypt's Coptic Christian community and 
believes the Government of Egypt needs to do everything 
possible to provide full opportunity for Coptic Christians in 
employment and educational opportunities. The Committee expects 
the Department of State to make every effort to reinforce the 
importance of actively enforcing the religious freedoms that 
are, in fact, provided for in the Egyptian Constitution.

                       WOMEN'S EMPOWERMENT--EGYPT

    The Committee recognizes that promoting women's 
empowerment, education and full participation in the social, 
political and economic life is a critical part of promoting 
democracy. The Committee recommends support for programs and 
organizations that seek to strengthen the role and capacity of 
women to be full participants in Egyptian society including 
$150,000 for the National Council for Women in Egypt.

                          AFGHANISTAN PROGRAMS

    The Committee recommends funding for Afghanistan programs 
at the President's request of $430,000,000, which is 
$205,000,000 above the funding level for 2005. The Committee 
has included language that limits the expenditure of these 
funds to not more than $225,000,000 until the Secretary of 
State certifies to the Committee on Appropriations, that the 
Government of Afghanistan at both the national and local level, 
is cooperating fully with United States funded eradication and 
interdiction efforts in Afghanistan. Understanding the 
certification may include sensitive or classified information 
the Department of State may submit the certification to the 
Committee in the form of a classified report.
    The Committee is greatly concerned that the Government of 
Afghanistan, at both the national and local level, is not fully 
supporting efforts to eradicate poppy growth and interdict the 
heroin byproduct of these poppies. Without full cooperation and 
support of the government for eradication and interdiction 
programs, the Committee believes the illegal drug trade of 
Afghanistan will flourish. The Committee cannot condone 
increasing assistance for Afghanistan if the government is not 
willing to fully participate in ending the growth and trade of 
an illegal drug that tears apart the fabric of society and has 
the potential to undermine the legitimacy of the government.
    Within the $225,000,000 that may be expended immediately, 
the Committee urges funding of up to $5,000,000 to refurbish 
the existing Wazir Akbar Kahn Hospital with its American 
partner and to initiate the start-up program for managing and 
providing health care delivery in Kabul. The Committee requests 
that the Department of State, no later than March 1, 2006, 
issue a report detailing its progress in addressing this 
matter.

                         AFGHAN WOMEN AND GIRLS

    The Committee recommendation includes $50,000,000 in fiscal 
year 2006 funds to support programs for Afghan women and girls. 
With these funds, $10,000,000 is for women's legal rights and 
$5,000,000 is for programs that provide economic opportunity 
for women. The Committee strongly encourages the recipients of 
these funds to partner with local, women-led organizations in 
the implementation of these activities.

                  AFGHANISTAN HUMAN RIGHTS COMMISSION

    The Committee recommends that $5,000,000 be used to support 
the Afghan Independent Human Rights Commission.

                   WOMEN'S LEADERSHIP IN AFGHANISTAN

    The Committee commends the work of the Refugee Women in 
Development organization. This organization focuses on 
providing capacity building and strengthening women leaders to 
advance education, health, advocacy, and human rights programs 
in Afghanistan.

                           PAKISTAN PROGRAMS

    The Committee recommends funding for Pakistan programs at 
the President's request of $300,000,000, the same as the 2005 
funding level.
    The Committee urges that within the amount provided, 
$10,000,000 be used for rural access, health and education 
needs in South and North Waziristan Provinces.

                            JORDAN PROGRAMS

    The Committee recommends funding for Jordan programs at the 
President's request of $250,000,000, the same as the 2005 
funding level. The Committee notes appreciation for that 
nation's strong support for the United States and our military 
forces during the recent conflict in Iraq. Jordan has played a 
leadership role in facilitating efforts to bring peace between 
Israelis and Palestinians. The Committee notes that ESF 
assistance will help Jordan deal with economic impacts from 
increased oil prices, and it will help the Kingdom continue to 
modernize information technology investments and education.

                     MIDDLE EAST REGIONAL PROGRAMS

    The need for fresh water is a reality for all parties in 
the Middle East. Fresh water is essential for economic 
development, agriculture, health, and improving the quality of 
life for everyone in the region. 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 urges USAID to make available $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.

                             IRAQ PROGRAMS

    The Committee recommends no funding for Iraq programs, 
instead of $360,000,000 as requested. The Committee has not 
included these funds based on an understanding that over 
$5,000,000,000 in funds previously appropriated for Iraq 
reconstruction and relief remain unobligated and could be used 
to fund the requirements presented in the fiscal year 2006 
request. Therefore, as an alternative to the appropriation of 
additional taxpayer dollars for this requirement, the Committee 
directs the Department of State to ensure that unobligated 
balances from funds originally appropriated for the Iraq Relief 
and Reconstruction Fund (IRRF) in the Emergency Supplemental 
Appropriations Act for Defense and Reconstruction of Iraq and 
Afghanistan (Public Law 108-106) be used as necessary to 
finance the Iraq program requirements presented in the fiscal 
year 2006 budget request.

                           IRISH VISA PROGRAM

    The Committee recommends funding for the Walsh Irish Visa 
program of $3,500,000, as requested. This program, authorized 
since 1998, assists young people who are residents of Northern 
Ireland and the border counties of Ireland with developing job 
skills and conflict resolution abilities. Eligible youth 
receive non-immigrant visas that enable them to work for up to 
three years in the United States.

                       WEST BANK AND GAZA PROGRAM

    The Committee recommends funding for the West Bank and Gaza 
program at the President's request of $150,000,000. The 
Committee recommends retaining language that prohibits funds in 
this Act from being obligated or expended directly to the 
Palestinian Authority (Sec 550). The Committee recommends 
retaining language that requires the Secretary of State to 
exercise oversight and ensure that such assistance is not 
diverted to individuals, entities, or educational institutions 
that engage, have engaged, advocate or sponsor terrorist 
activity (Sec 559(b)).
    In order to maintain proper oversight of grants and 
contracts issued under the West Bank and Gaza program, the 
Committee recommends retaining language that requires annual 
audits of all contractors and grantees, and significant 
subcontractors and sub-grantees (Sec 559). Prior to the 
obligation of funds for the West Bank and Gaza program, the 
Secretary of State is required to take all appropriate steps to 
ensure that such assistance is not provided through any 
individual, private or government entity, or educational 
institution, that the Secretary knows or has reason to believe 
advocates, plans, sponsors, engages in, or has engaged in, 
terrorist activity and requires the Secretary of State to 
terminate any assistance to any individual, entity, or 
educational institution found to be involved in or advocating 
terrorist activity. The Committee also recommends retaining 
language that provides up to $1,000,000 for the Inspector 
General of the United States Agency for International 
Development for audits, inspections, and other activities in 
furtherance of this provision.
    The Secretary of State shall submit to the Committee on 
Appropriations not later than December 1, 2005, and prior to 
the initial obligation of funds appropriated for the West Bank 
and Gaza program, a financial plan that details the proposed 
use of the funds on a project-by-project basis for which the 
obligation of these funds is anticipated. The Committee directs 
that this financial plan of the West Bank and Gaza program be 
updated on a quarterly basis and submitted to the Committee 
noting any changes from the previous financial plan.
    The Committee directs the President to submit to Congress, 
a report detailing the information requested in Section 2106 of 
PL 109-13 no later than 60 days after enactment of this Act and 
provide updates of this report on a quarterly basis throughout 
fiscal year 2006.
    The Committee understands that the fiscal year 2006 request 
for the West Bank and Gaza program is associated with programs, 
projects, and activities administered by the United States 
Agency for International Development (USAID) and does not 
include funds for direct budgetary assistance for the 
Palestinian Authority.

              HEALTH AND WELFARE OF THE PALESTINIAN PEOPLE

    The Committee notes 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 that 
potentially exist among the Palestinian people. The Committee 
urges USAID to work through the West Bank and Gaza Program, to 
help Al Quds and the Kuvin Center implement this proposal.
    The Committee recognizes the work of Save a Child's Heart, 
an Israeli organization, dedicated to treating children in 
developing nations who are suffering from heart disease. The 
Committee supports the organization's efforts to expand its 
activities among Palestinian children, and urges the 
organization to explore ways in which its volunteer surgeons 
can help build indigenous Palestinian medical expertise in this 
field.

                            LEBANON PROGRAM

    The Committee recommends $40,000,000 for Lebanon programs, 
$5,000,000 over the request. The Committee directs that not 
less than $6,000,000 should be used for scholarships and other 
direct support of the American educational institutions in 
Lebanon. Providing an American education to the young people of 
Lebanon and the region makes a unique contribution to the long 
term development of political and economic stability in that 
country. Broadening understanding of American values in the 
Middle East is particularly important to United States efforts 
to counter violence and terrorism.

                   MIDDLE EAST PARTNERSHIP INITIATIVE

    The Committee recommends $85,000,000 for the Middle East 
Partnership Initiative (MEPI), $35,000,000 less than the 
request and $10,000,000 over the 2005 funding level. The 
Committee is concerned that the large funding request of 
$120,000,000, up from $75,000,000 provided in 2005, would prove 
difficult to effectively expend.
    The Committee directs that within the funds provided for 
MEPI, up to $4,500,000 be set aside to establish a scholarship 
program to educate students from countries with significant 
Muslim populations at the American educational institutions in 
those countries. The American educational institutions are 
uniquely positioned to improve understanding and strengthen 
shared values with the Muslim world.
    The Committee recognizes the work of Carnegie Hall in 
promoting cross-cultural exchanges through music, and urges the 
State Department to consider these programs in the Middle East 
for funding through the MEPI program.

                               INDONESIA

    The Committee recommends $67,500,000 for Indonesia, an 
increase of $2,500,000 over the 2005 level and $2,500,000 less 
than the 2006 request. Within the $15,000,000 provided for 
education programs, the Committee recommends funds be provided 
as necessary to re-establish midwifery education systems 
throughout Aceh, Indonesia.

        COMPLETION OF FINANCIAL COMMITMENT--YITZHAK RABIN CENTER

    The Committee notes that direction was provided in fiscal 
year 2004 that up to $5,000,000 be provided for the Yitzhak 
Rabin Center in Tel Aviv, Israel, to assist in the creation of 
the Israel Society and Democracy Educational Center. The 
Committee understands that the Rabin Center has not yet 
received the entire $5,000,000 as identified in House Report 
108-401. The Committee urges the Department of State to 
complete the $5,000,000 financial commitment for the Yitzhak 
Rabin Center.

                               EAST TIMOR

    The Committee recommends $13,500,000 for programs in East 
Timor, as requested, to support income producing projects and 
other reconstruction activities.
    The Committee notes that East Timor is eligible under the 
Threshold Country Assistance Program funded within the 
Millennium Challenge Corporation (MCC) account. The MCC 
estimates that East Timor is eligible for an estimated 
$5,000,000 to $7,000,000 in assistance, which would bring the 
total for East Timor provided in this bill to approximately 
$18,500,000 to $20,500,000.

                                 TIBET

    The Committee recommends not less than $4,000,000 in 
assistance for programs that preserve cultural traditions, and 
promote economic 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 recommends that $2,000,000 
of these funds should be provided to the Bridge Fund.
    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. The Committee 
supports the use of a greater portion of the funds made 
available, for activities that have a primary impact inside 
Tibet, to the extent practicable. The Committee encourages the 
Bureau for Democracy, Human Rights and Labor to work closely 
with the Office of the Special Coordinator on Tibetan Issues in 
carrying out these programs.
    At the same time, the Committee encourages organizations 
involved in China rule of law programs to seek out 
opportunities to conduct programs that can improve the human 
rights situation and the administration of justice in Tibetan 
areas, including Tibetan areas outside the Tibetan Autonomous 
Region (TAR).

                                 CYPRUS

    The Committee recommends $20,000,000 for Cyprus as 
requested only for educational and other bicommunal projects. 
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. These funds 
provide funding for Fulbright scholarships, the Bicommunal 
Support Program, the United Nations Office for Project Service, 
and other related activities. The Committee believes that the 
key to successful mutual cooperation is balanced economic 
growth throughout Cyprus.

     LABOR AND ENVIRONMENTAL COOPERATION EFFORTS IN CENTRAL AMERICA

    The Committee is recommending a continuation of a minimum 
regional allocation of $20,000,000 for labor and environmental 
capacity building activities relating to the free trade 
agreement with the countries of Central America and the 
Dominican Republic. This amount is the same as last year. The 
Committee expects these funds to be coordinated with the Office 
of Trade Capacity Building of the United States Trade 
Representative's Office and other agencies integral to 
cooperation in the context of special trading arrangements.

  INTER-AGENCY COORDINATION AND CAPACITY BUILDING IN TRADE AND OTHER 
                                 AREAS

    The Committee supports the utilization of Economic Support 
Funds to build capacity in trade, labor and the environment, 
and other areas identified by the United States and developing 
countries. Specifically, given the fluid nature of cooperation 
related to special trading arrangements with the United States, 
the Committee places a premium on interagency coordination to 
provide the Department of State the latest insight into what 
constitutes the most appropriate cooperation. For this reason, 
the Committee continues to encourage the Department of State to 
consult with the Office for Trade Capacity Building of the 
Office of the United States Trade Representative (USTR) in 
resource allocation and programming. For this fiscal year, the 
Committee requests that the Department of State, in 
coordination with USTR, report not later than 120 days after 
enactment on the allocation of fiscal year 2006 resources (by 
region and country) used to support these special trading 
relationships in the furtherance of United States foreign 
policy objectives. The report should provide perspective on the 
Department's ability to prospectively budget for trade capacity 
building assistance and to evaluate aid effectiveness.

               FOUNDATION FOR SECURITY AND SUSTAINABILITY

    The Committee recommends that up to $3,000,000 be provided 
to continue regional stability, conflict management and 
mitigation efforts. The Committee continues to support the work 
of the Foundation for Environmental Security and Sustainability 
(FESS) to address critical United States national security 
interests in the context of regional instability arising from 
resource scarcity and management practices, natural hazards, 
and other environmental stresses. The Committee recognizes the 
continuing importance of FESS's conflict management and 
mitigation efforts, in particular, FESS's new initiative to 
develop a regional/global approach for extractive industries 
that promote stability and security in some of the most 
troubled areas of the world.

                        PARLIAMENTARY EXCHANGES

    The Committee recognizes that recent political changes, 
especially in Eastern Europe and Central Asia, have created new 
opportunities for broadening democracy. The Committee believes 
that parliamentary exchanges with the Congress can provide 
mutual benefits by facilitating the exchange of information and 
knowledge. The Committee is aware that United States government 
programs have been working for years to provide support to 
legislatures and notes in particular the ``Open World'' program 
operated by the Library of Congress and ongoing programs 
operated through the State Department and USAID.
    The House Democracy Assistance Commission was recently 
created to facilitate international legislative exchanges, and 
the Committee urges this new Commission to complement ongoing 
programs. The Committee recommendation includes $1,000,000 to 
support the work of the Commission. The Committee understands 
that this $1,000,000 is not contained in the congressional 
budget justification for fiscal year 2006 and is thus subject 
to the notification requirements of section 515.

                       REGIONAL TOLERANCE CENTERS

    The Committee commends the work of the Bay Area's Climate 
of Trust Program and notes that it desires to expand exchanges 
between United States and Russian law enforcement authorities, 
expand the number of Russian Regional Tolerance Centers, and 
implement activities in Central Asia.

                                  IRAN

    The Committee commends the work of many organizations, 
including the Iran Freedom Foundation (IFF), that seek to 
educate the Iranian people about American solidarity with their 
freedom efforts by providing access to accurate information. 
The Committee urges funding from ESF for these efforts.

                    HUMAN RIGHTS AND DEMOCRACY FUND

    The Committee recommends $27,000,000 for the Human Rights 
and Democracy Fund as requested and recommends that $1,200,000 
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, and helps keep 
alive the legacy of our former President.

                     SOUTH PACIFIC FISHERIES 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 
$21,000,000 in economic assistance be provided annually to the 
South Pacific Islands. Therefore, the Committee recommends that 
the treaty obligations be met through the payment of 
$21,000,000 in fiscal year 2006.

            CONFLICT RESOLUTION AND RECONCILIATION PROGRAMS

    The Committee recognizes the importance of conflict 
resolution and reconciliation programs as a tool for creating a 
climate of peace in regions of conflict. The Committee is 
recommending $15,000,000 in bill language to support 
reconciliation programs and activities, which bring together 
individuals of different ethnic, religious, and political 
backgrounds from areas of civil conflict and war. Funding 
should be made available through an established process for 
organizations that provide such programming. The Committee 
recommends the Department of State actively consider proposals 
submitted by the following organizations: Playing for Peace; 
Interfaith Encounter Association; REDPRODEPAZ; Interns for 
Peace; Seeds of Peace; Arava Institute; Jerusalem International 
YMCA Project Children; Cooperation Ireland; OneVoice; Middle 
East Children's Association; Hand-in-Hand Center; Abildso 
Foundation Middle East Program for Young Leaders; Humanity in 
Action; Givat Haviva; Self Reliance Foundation/Salaam Olam; 
and, Facing History and Ourselves.
    The Committee requests that the Department of State 
initiate an annual report on the status of applications and 
funding for these and other organizations supported through 
this program. Such report should be provided to the Committee 
not later than May 1 of each year.

                                 MEXICO

    The Committee supports the Administration's request for 
foreign assistance to Mexico, particularly the Training, 
Internships, Exchanges, and Scholarships (TIES) program. The 
Committee urges a special emphasis in this program on public 
policy training essential to creating the incentives for 
Mexican migrants to repatriate voluntarily from the United 
States, including the creation of effective micro-credit or 
other financial services in rural areas and strengthening 
property rights for home ownership and mortgage lending.
    The Committee requests the Secretary of the State withhold 
$3,000,000 in United States bilateral programs contained in 
Title II for improved Mexican border health infrastructure 
until the Secretary of State advises the Committee in a report 
that the Government of Mexico is cooperating in efforts to 
increase control of its northern and southern borders, to 
create incentives for Mexican citizens to return to Mexico 
after illegally immigrating to the United States, and to reduce 
non-Mexican illegal immigration. Along the northern border, the 
Secretary of State should particularly evaluate and describe 
humanitarian efforts to reduce border deaths from unsafe travel 
as well as efforts to reduce organized crime. The Committee 
expects the report no later then February 15, 2006.

                                 BURMA

    The Committee recommends $8,000,000 for Burma, to be made 
available to support democracy activities in Burma, including 
continuation of newspapers, publications, and media activities 
along the Burma-Thailand border and the provision of 
humanitarian assistance to displaced Burmese along Burma's 
borders. The Committee also recommends $3,000,000 be allocated 
from Migration and Refugee Assistance to community-based 
organizations operating in Thailand to provide food, medical 
and other humanitarian assistance to internally displaced 
peoples in eastern Burma.

                ALLOCATION OF FUNDS RELATIVE TO REQUEST

    The Committee recommends the following adjustments to the 
President's budget request, not referenced above:
           $12,000,000 for the Trafficking in Persons 
        initiative;
           No funding for the new line item entitled 
        Hemispheric Cooperation Program. The projects that 
        would otherwise be funded here are included in the 
        Committee's recommendation of $20,000,000 for trade 
        capacity;
           A reduction of $17,000,000, to be assessed 
        against country-level and programmatic increases 
        identified in the President's budget request for East 
        Asia and the Pacific, and the Near East (excluding 
        Israel, Egypt, and Jordan).

                     International Fund for Ireland


Fiscal year 2005 level................................       $18,500,000
Fiscal year 2006 request..............................       (8,500,000)
Committee recommendation..............................        13,500,000


    The Committee recommends $13,500,000 for the International 
Fund for Ireland in support of the Anglo-Irish Accord, 
$5,000,000 less than the 2005 level and $5,000,000 above the 
2006 request. Funding for this activity was requested as part 
of the Economic Support Fund appropriation. The Committee 
recommendation restores the separate appropriation account for 
assistance to Ireland.

          Assistance for Eastern Europe and the Baltic States

Fiscal year 2005 level..................................    $393,427,000
Fiscal year 2006 request................................     382,000,000
Committee recommendation................................     357,000,000

    The Committee recommends $357,000,000 for Assistance for 
Eastern Europe and the Baltic States, an amount that is 
$36,427,000 below the level provided in fiscal year 2005 and 
$25,000,000 below the budget request. The Committee intends 
that funding for democracy programs through the National 
Endowment for Democracy continue at a level not less than that 
commensurate with the reduction in the account when compared to 
funding provided in fiscal year 2005, and be provided as a 
transfer of funds pursuant to section 632(a) of the Foreign 
Assistance Act.
    The Committee has recommended the same bill language as in 
the fiscal year 2005 Act that 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.

                               MONTENEGRO

    The Committee strongly supports assistance for the Republic 
of Montenegro, and notes the strong support given by the 
Republic to the foreign policy of the United States during the 
latter years of the Milosevic regime in Serbia. It urges the 
Administration to make every effort to assist the Government of 
the Republic. The Committee recommendation includes $15,000,000 
for Montenegro, a reduction of $5,000,000 below fiscal year 
2005. The Committee expects the Department of State and USAID 
to consult with the Committee prior to the programming of funds 
for Montenegro for fiscal year 2006.

                           REGIONAL PROGRAMS

    The Committee recommendation includes $45,000,000 for 
regional programs. This category funds environmental 
infrastructure, independent media support, civil society and 
rule of law, health promotion and care, economic development 
and other programs. While specific amounts are not earmarked 
for the Baltic States, the Committee notes that projects and 
programs are authorized for, and should continue in, Estonia, 
Latvia and Lithuania.
    The Committee supports efforts to establish a Museum of the 
History of Polish Jews in Warsaw, Poland, and believes that 
such a museum would make a valuable contribution to teaching 
tolerance and respect for ethnic differences.

                              RULE OF LAW

    The Committee views efforts to promote the rule of law 
worldwide as a critical component of United States foreign 
policy. The Committee strongly supports the public service 
projects initiated by the American Bar Association (ABA) to 
strengthen democracy through programs that promote the rule of 
law in transitional countries. These effective programs rely 
predominantly on the volunteer efforts of American lawyers and 
have achieved sustainable results.
    The Central European and Eurasian Law Initiative (CEELI), 
created in 1990, has been successful in 27 countries in Eastern 
Europe and the former Soviet Union. The Committee recommends 
that funding for these programs continues at a level not less 
than that commensurate with the reduction in the account when 
compared to funding provided in fiscal year 2005. The ABA has 
expanded its public service project into Asia, Africa, Latin 
America and the Middle East. The Committee recommends expanded 
funding for ABA programs in these regions.

  TRAINING AND EXCHANGES IN THE FORMER SOVIET UNION AND CENTRAL EUROPE

    The Committee recommendation includes funding for the 
Russian, Eurasian, and East European Research and Training 
Program (Title VIII) at not less than the fiscal year 2005 
level. The Committee also encourages the use of Title VIII 
funds to include comparative research and language training 
concerning Eurasian countries critical to the war against 
terrorism.
    The Committee notes that the USAID-supported East Central 
European Scholarship Program (ECESP) has provided public- and 
private-sector leaders in East Central Europe with the skills 
to assist in democratic and economic reforms. The Committee 
believes that ECESP can make a valuable contribution to the 
Community Connections Program, which will be operated by USAID 
in fiscal year 2006. The Committee urges USAID incorporate 
ECESP into the implementation of the Community Connections 
Program and requests USAID to submit a report not later than 90 
days after the enactment of this Act on specific projects that 
USAID is implementing with the support of ECESP.

                            SEX TRAFFICKING

    The Committee is aware that several countries in this 
region and the former Soviet Union are struggling with sex 
trafficking. The Committee urges the Department of State to 
consider funding for groups, such as Different and Equal and 
MiraMed Institute, that are working to find lasting solutions 
to this problem.

    Assistance for the Independent States of the Former Soviet Union

Fiscal year 2005 level..................................    $555,520,000
Emergency Supplemental..................................      70,000,000
Fiscal year 2006 request................................     482,000,000
Committee recommendation................................     477,000,000

    The Committee recommends $477,000,000 for the Independent 
States of the Former Soviet Union. This is $5,000,000 below the 
request and $78,520,000 less than the fiscal year 2005 level.
    The Committee has included in subsection (a) prior year 
language 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.

                       CHILD SURVIVAL AND HEALTH

    The Committee continues to be concerned about adverse 
maternal and environmental health conditions and the increasing 
incidence of TB/HIV in Russia, Ukraine, and the Central Asian 
Republics. The health and child survival sector can effectively 
absorb increased resources, with an immediate and personal 
impact on the stressed citizens of these nations. As this 
account is phasing down, however, investments in these 
activities are made from a smaller base. In order to 
demonstrate its support for these high priority activities, the 
Committee has included bill language allocating not less than 
$52,000,000 for health and child survival activities. For 
instance, the Primary Health Care Initiative of the World 
Council of Hellenes is an important project, and the Committee 
urges USAID to increase support for this program in fiscal year 
2006. In addition, the Committee notes that the Firefly 
Children's Network is working in Russia to help children with 
disabilities.

                              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 disturbed by reports that 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, represents 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

    The Committee strongly supports the efforts of President 
Yushchenko to lead his country toward a stronger economy and 
closer ties with the international community. During this 
period of transition, the Committee recognizes the need to 
support the consolidation of democracy at the central and local 
government levels, fight corruption, and promote economic 
reform, especially within the agricultural sector. The 
Committee urges the State Department to consider proposals from 
organizations, such as the U.S.-Ukraine Foundation and Ukranian 
Congress Committee of Armenia, with existing experience in 
Ukraine in one or more of these sectors.
    The Committee recommends that all efforts be made to 
cooperate with public and private efforts to return confiscated 
religious property to their confessions. The Committee also 
supports the goals of the Ohio-Kharkiv Initiative, and commends 
the Department of State, the State of Ohio, and the Kharkiv 
Oblast for working with the Great Lakes Consortium as the 
primary facilitator.

       SUPPORT OF PEACEFUL RESOLUTION OF SOUTH CAUCASUS CONFLICTS

    The Committee reiterates its view that 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 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 expects the State Department to use its authority 
under section 498B of the Foreign Assistance Act as necessary 
to carry out such programs.
    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.
    The Committee continues to be concerned about the plight of 
the victims of the Nagorno-Karabakh conflict, and recommends 
that up to $5,000,000 should be made available to address 
ongoing humanitarian needs in the Nagorno-Karabakh region.

                                ARMENIA

    The Committee directs that $67,500,000 be made available 
from funding sources in this title for Armenia. Funding for 
this increase should be derived by reducing the funding 
available for countries that have recently received emergency 
supplemental funding.

                       DEMOCRACY AND HUMAN RIGHTS

    The Committee is encouraged by democratic developments in 
the region, especially in Ukraine and Georgia. The Committee 
nonetheless continues to be concerned by the risks to democracy 
and human rights in other former Soviet states, particularly 
Russia, Belarus, and Uzbekistan. The Moscow School of Political 
Studies has performed valuable work to educate young Russian 
professionals and public servants on how to participate 
honestly and productively in running their own country. The 
Committee encourages the State Department to consider an 
application from this School in the amount of $500,000.
    The Committee notes the many accomplishments of the 
Civilian Research and Development Foundation (CRDF), which has, 
for the last decade, helped to channel the research activities 
of weapons scientists in the Former Soviet Union (FSU) in 
constructive directions. The Committee also notes that CRDF has 
recently initiated program for scientists and engineers from 
FSU and Baltic Countries to work collaboratively on HIV/AIDS 
and co-infection research and development, and urges the 
Administration to continue robust funding for CRDF.

                          Independent Agencies


                       Inter-American Foundation

Fiscal year 2005 level..................................     $17,856,000
Fiscal year 2006 request................................      17,826,000
Committee recommendation................................      19,500,000

    The Committee recommends $19,500,000 for the Inter-American 
Foundation, $1,674,000 above the request and $1,644,000 above 
the fiscal year 2005 level.

                     African Development Foundation

Fiscal year 2005 level..................................     $18,848,000
Fiscal year 2006 request................................      18,850,000
Committee recommendation................................      20,500,000

    The Committee recommends $20,500,000 for the African 
Development Foundation, $1,650,000 above the request and 
$1,652,000 over the fiscal year 2005 level.
    The Committee supports the African Development Foundation's 
efforts to identify and leverage nonappropriated resources. The 
Committee requests the President of the Foundation to include 
in his annual report to the Committee the amount and use of any 
non-appropriated funds received.

                              Peace Corps

Fiscal year 2005 level..................................    $317,440,000
Fiscal year 2006 request................................     345,000,000
Committee recommendation................................     325,000,000

    The Committee recommends $325,000,000 for the Peace Corps, 
an amount that is $20,000,000 below the budget request and 
$7,560,000 above the amount enacted for fiscal year 2005.
    The Committee has included language permitting the Peace 
Corps Director to transfer up to $2,000,000 to establish an 
account to help mitigate the effects of currency exchange 
fluctuation. The Committee also expects the Peace Corps to 
transfer into this account net gains due to beneficial currency 
fluctuations when applicable.
    The Committee expects the Peace Corps to consult with the 
Committee, not later than 15 days before transferring money 
into this account, on the reporting mechanism that the Peace 
Corps will use to provide the Committee with regular updates on 
the use of this account.
    The Committee notes the strengthened safety and security 
system Peace Corps has implemented over the previous two years. 
The Committee urges Peace Corps to incorporate into its 
emergency planning and response system a global volunteer 
mapping system to store and maintain country level information 
about volunteer locations and emergency assets.

                    Millennium Challenge Corporation

Fiscal year 2005 level..................................  $1,488,000,000
Fiscal year 2006 request................................   3,000,000,000
Committee recommendation................................   1,750,000,000

    The Committee recommends $1,750,000,000 for the Millennium 
Challenge Corporation (MCC), an amount that is $1,250,000,000 
below the request and $262,000,000 more than the fiscal year 
2005 enacted level. The recommended reduction solely reflects 
the constrained budgetary situation in fiscal year 2006, and 
more specifically the Committee's allocation relative to the 
President's request and the need to address funding increases 
for other Presidential initiatives for fiscal year 2006. 
Additionally, a funding limitation of $75,000,000 is set for 
administrative expenses.
    The Committee believes that the MCC provides the United 
States with an opportunity to demonstrate global leadership in 
helping poor countries generate broad based economic growth and 
reduce poverty. Within United States bilateral assistance, the 
MCC provides the strongest opportunity for the United States 
Government to respond to the need for local ownership in the 
development process as well as the strongest incentives for 
encouraging countries to invest in health and education, to 
strengthen economic freedom, and to govern justly. The 
Committee recognizes that no other foreign assistance account 
creates the same incentive effect. The Committee believes that 
the MCC therefore is an appropriate complement to other 
critical foreign assistance efforts undertaken through the 
Development Assistance and the Child Survival and Health 
accounts.
    The Committee notes that for fiscal year 2006, fully 
funding the budget request would have provided funding for 10 
compacts, 3 amendments to existing compacts, continuation of 
the threshold country program, and administrative and audit 
expenses. With the reduction in funding necessary in fiscal 
year 2006, the Committee expects the MCC to eliminate funding 
for compact amendments in order to maximize the number of 
compacts for which funding will be available.
    The Committee commends the MCC for consulting with the 
Committee as it has begun operations and initiated negotiating 
compacts with selected countries and urges the MCC to continue 
these consultations.

                       MCC COUNTRY DETERMINATIONS

    The Committee recognizes that the MCC identified the 
following countries as eligible for MCC assistance in fiscal 
years 2004 and 2005: Armenia, Benin, Bolivia, Cape Verde, 
Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia, 
Morocco, Mozambique, Nicaragua, Senegal, Sri Lanka, and 
Vanuatu.
    To the extent that prior year resources are insufficient to 
fund quality compacts approved by the MCC Board, the Committee 
understands that these countries, as well as other countries 
not yet determined eligible, will compete for MCC eligibility 
and funding from the fiscal year 2006 appropriation. In July, 
2004, the MCC identified 68 candidate countries competing for 
such resources, and the Committee understands that an even 
greater number of countries will be competing in fiscal year 
2006.
    The Committee continues to support MCC eligibility criteria 
and methodology for selecting eligible countries. The Committee 
expects that country selection by the MCC Board should continue 
to be an objective, non-politicized process to distinguish 
countries that are committed to sound development policies and 
that can use aid effectively from those countries that are not.

  IMPORTANCE OF REDUCING POVERTY AND GENERATING BROAD BASED ECONOMIC 
                                 GROWTH

    The Committee notes that the populations of the 17 eligible 
countries selected in fiscal years 2004 and 2005 total 170 
million people with over 90 million living on less than $2 per 
day. Despite this poverty, these 17 countries are demonstrating 
a commitment to fighting corruption, investing in girls' 
education, allowing businesses to form and operate, and 
creating a better rule of law. The Committee notes that the MCC 
has created effective incentives in an additional 13 countries 
through its threshold country program affecting another 240 
million of the world's poorest people.

                          THRESHOLD COUNTRIES

    The Committee has included a provision providing for 
authority to provide assistance to certain countries that miss 
MCC eligibility as defined in section 616 of the Millennium 
Challenge Act of 2003. The Committee has included a limitation 
of 10 percent of funds again in 2006 for such activities.
    The Committee reaffirms prior year report language on 
effective inter-agency cooperation and implementation of the 
threshold country assistance. In fiscal years 2004 and 2005, 
the Committee notes that the MCC identified the following 
countries as potential recipients of MCC threshold country 
assistance: Albania, Burkina Faso, East Timor, Guyana, Kenya, 
Malawi, Paraguay, the Philippines, Sao Tome and Principe, 
Tanzania, Uganda, Yemen, and Zambia.
    The Committee understands that threshold country assistance 
will be used to help countries address issues impeding MCC 
eligibility, and that these countries may earn eligibility 
status in fiscal year 2006 or subsequent fiscal years. The 
Committee expects threshold country assistance to reaffirm the 
incentives of the MCC eligibility process. The Committee 
directs the MCC and USAID to transparently disclose this 
process and justify it in the fiscal year 2007 budget 
submission.

                   CONGRESSIONAL BUDGET JUSTIFICATION

    The Committee continues to be concerned with the minimal 
budget information included in the MCC's Congressional Budget 
Justification (CBJ). For the fiscal year 2007 CBJ submission, 
the Committee directs the MCC to include actual and estimated 
information regarding the following information for fiscal 
years 2004, 2005, 2006 and 2007: 1) number of employees and 
detailed estimates of administrative expenses, 2) number of 
compacts and details for each compact that include: funding at 
the program, project or activity level (including level of 
funding and activity per recipient), 3) level of funds 
transferred to other United States Government agencies, and 4) 
funds provided for threshold countries by country and program, 
project or activity. Additionally, the justification should 
identify countries in preceding fiscal years who were 
determined eligible by the Board and who expressed commitment, 
but for which the MCC was unable to engage in a compact 
negotiation because of limited resources. At a general level, 
the justification should describe the opportunity to generate 
economic growth and reduce poverty as well as how the country 
met or exceeded the eligibility criteria. The Committee directs 
the MCC to consult with the Committee prior to the submission 
of the CBJ to ensure that the preceding requirements are met.

                          MULTI-YEAR COMPACTS

    The Committee includes again a provision that requires the 
MCC to only enter into compacts for which it has complete 
funding available from existing appropriations. The Committee 
does not want the MCC to commit future Congresses to funding 
prior year compacts.

                             MCC OPERATIONS

    The Committee recognizes that one objective of the MCC is 
reliance on country-led processes and proposals. The President 
and the Congress authorized and encouraged the MCC to pursue 
this approach, and the Committee continues to support this 
process as long as the MCC and developing countries recognize 
that it occurs in a context of accountability and effective use 
of foreign assistance. In the event of under-performance or 
misuse of MCC resources, the Committee directs the MCC Board to 
fully identify in advance the internal and external procedures 
it will use for purposes of suspension or termination of MCC 
assistance. The MCC shall consult with the Committee on such 
procedures by January 31, 2006 and provide supporting 
documentation.

                     LOWER MIDDLE INCOME COUNTRIES

    Fiscal year 2006 is the first year in which the MCC will 
have the flexibility to begin a separate window of assistance 
of up to 25 percent of the appropriation for lower middle 
income countries. The Committee recognizes that this second 
group of countries would compete for grants among themselves, 
not with any countries in the first group, the least developed 
countries. The Committee requests that the MCC consult with the 
Committee on the number of lower middle income countries that 
could be considered candidate countries and the justification 
in terms of achievable poverty reduction prior to the 
announcement of candidate countries, consistent with the terms 
of the authorization Act.
    The Committee believes that it is important for the MCC to 
provide a separate window of assistance for lower middle income 
countries even if the number of compacts is limited due to the 
scarcity of resources. The Committee understands that sharp 
disparities in income within developing countries can mask 
extreme poverty, yet the Committee believes that MCC can 
provide targeted interventions that would greatly reduce 
poverty. Because of their slightly greater income status, the 
Committee continues to support the requirement under section 
609(b)(2) of the Millennium Challenge Act of 2003, which 
requires such countries to make an incremental contribution 
relative to their national budget in support of the poverty 
reduction objectives of the compact.

                   COMPACTS WITH REGIONAL GOVERNMENTS

    The Committee is concerned about eligible countries in 
which the MCC must negotiate a compact around the national 
government because of corruption and deficiencies in the 
country's commitment to the rule of law. The Committee is aware 
that the MCC is currently negotiating the terms and 
implementation of a compact with the regional and local 
government in a specific country instead of the national 
government. The Committee believes that such negotiations in 
future must be limited or eliminated, therefore, upon enactment 
of this Act, the Committee directs the MCC to negotiate 
primarily with the national governments of eligible countries. 
In instances where the MCC determines that the national 
government of an eligible country is not an appropriate partner 
with which to negotiate compacts, the MCC must consult with the 
Committee immediately. For such countries, the Committee 
expects the MCC to further evaluate the appropriateness of its 
indicators and in these situations, the Committee directs the 
MCC to consider not only indexes of surveys, but also to assess 
current conditions and events.

                          PRIVATE EQUITY FUNDS

    The Committee remains concerned about the use of limited 
resources for the establishment of private equity funds, 
investment funds, or so-called development funds given the 
Committee's past experience and their historically low impact 
on the development of a country. Additionally, as required by 
the Millennium Challenge Act of 2003, compact funds may only be 
disbursed on a grant basis, thereby further distorting the 
investment incentives of a fund.
    However, the Committee has agreed to the establishment of 
one pilot equity fund as part of one compact. The Committee 
expects to exercise its full oversight to determine if the fund 
is managed prudently, administrative costs are kept to a 
reasonable minimum, and investment in the country is stimulated 
as a result. Therefore the Committee directs the MCC to keep 
the Committee fully informed of the management and operation of 
this fund, as well as benchmarks and evaluations set up by the 
MCC, so that a future determination can be made.

                        LOCAL CAPACITY BUILDING

    The Committee expects that assistance provided to countries 
through compacts and the threshold country program be provided 
in a manner that focuses on establishing and upgrading the 
institutional capacities of developing countries. The Committee 
believes that long-term development cannot occur in a country 
without increasing local capacity, and therefore the Committee 
supports a focus on the creation of development programs that 
increase recipient-country participation in the planning of 
those programs, promote recipient-country ownership of 
programs, and build capacity within the recipient-country.

                      CIVIL SOCIETY PARTICIPATION

    The Committee understands that strong participation from 
local civil society organizations is critical to increasing 
public support for and ensuring that the MCC successfully meets 
its intended goals of economic growth and poverty reduction. 
Such participation would also strengthen the nascent democratic 
processes in eligible countries and contribute to the MCC 
criteria of good governance. Meaningful civil society 
participation entails timely availability and access to 
critical information, organizing public fora to identify, 
discuss, and suggest civil society priorities and independent 
monitoring of government use of MCC funding. The Committee 
urges the MCC to use existing authorities and resources, if 
appropriate, to generate meaningful and independent 
participation of local civil society organizations, 
particularly during the compact development and oversight 
stage.

                          Department of State


                       Global HIV/AIDS Initiative

Fiscal year 2005 level..................................  $1,373,920,000
Fiscal year 2006 request................................   1,970,000,000
Committee recommendation................................   1,920,000,000

                  GLOBAL HIV/AIDS INITIATIVE: SUMMARY

    The Committee appropriates $1,920,000,000 for the ``Global 
HIV/AIDS Initiative'' account, $546,080,000 more than enacted 
in fiscal year 2005 and $50,000,000 less than requested by the 
President. As in the previous year, the Committee appropriates 
all funding for the fifteen focus countries in this account.
    The Committee notes that this account is the primary source 
of funding for the Emergency Plan for AIDS Relief. Amounts 
under Child Survival and Health Programs Fund, other accounts 
in this Act, and funding provided from other appropriations 
Acts are also included.
    The Committee has included total Emergency Plan funding of 
$2,695,000,000 from all titles in this Act, $131,000,000 more 
than requested by the President and $502,000,000 more than in 
fiscal year 2005. The Committee notes that the President has 
requested another $596,000,000 in his budget request for the 
Department of Health and Human Services. The Committee has 
included a recommended contribution of $400,000,000 for the 
Global Fund to Fight AIDS, Tuberculosis and Malaria in this 
Act, $200,000,000 more than requested by the President.
    The Committee includes $2,319,000,000 for HIV/AIDS from all 
accounts in this Act:




Global HIV/AIDS Initiative (bilateral)................    $1,720,000,000
Child Survival and Health (bilateral).................       350,000,000
Global Fund to Fight AIDS, TB, and Malaria (estimated)       224,000,000
Other accounts........................................        25,000,000
                                                       -----------------
    Total.............................................     2,319,000,000


    In addition to this funding for HIV/AIDS, the Committee 
recommendation includes $142,000,000 and $234,000,000 for TB 
and malaria programs, respectively. These amounts are more 
fully described under the heading ``Child Survival and Health 
Programs Fund''. As elsewhere in this report, the amounts of 
the Global Fund grant estimated to be allocated to HIV/AIDS, 
TB, and malaria programs are determined using historical Global 
Fund grant approval trends.
    The Committee commends the Office of the Global AIDS 
Coordinator for its efforts at transparency. The Committee 
notes that the Office of the Global AIDS Coordinator's website 
makes available to the public the current fiscal year 
operational plan, and that plans are underway to make available 
to each focus country's operational plan. The Committee 
requests the Office of the Global AIDS Coordinator to continue 
to submit quarterly obligation and transfer reports as required 
in prior years.

                          NON-FOCUS COUNTRIES

    The Committee has included not less than $50,000,000 in 
this account for ``non-focus'' country programs. The Committee 
requests that the Office of the Global AIDS Coordinator submit 
to the Committee within 60 days of enactment a list of the non-
focus countries that will receive additional ``Global HIV/AIDS 
Initiative'' funding in fiscal year 2006. The Committee expects 
that for fiscal year 2007 this information will be incorporated 
into the Office of the Global AIDS Coordinator's congressional 
budget justification for that year, as well as the report 
required by section 653(a) of the Foreign Assistance Act.

 VOLUNTARY CONTRIBUTION TO THE GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS 
                              AND MALARIA

    The President has requested $200,000,000 for the Global 
Fund in this Act and an additional $100,000,000 from the Act 
providing appropriations for the Department of Health and Human 
Services. The Committee recommendation includes not less than 
$400,000,000 from this Act to support the Global Fund: 
$200,000,000 from this account and $200,000,000 from the 
``Child Survival and Health Programs Fund''.
    This funding is subject to provisions in Public Law 108-25, 
including the ``matching funding'' provision, and to additional 
provisions contained in this Act. Any funding not released to 
the Global Fund due to the provisions in this Act or Public Law 
108-25 should be used by the Office of the Global AIDS 
Coordinator for programs to strengthen the Global Fund and for 
bilateral activities, including additional funding to ``non-
focus'' countries. The Committee expects the Office of the 
Global AIDS Coordinator to consult with the Committee on the 
use of such funds.
    The Committee is aware that some participants at the 
November, 2004, Global Fund Board meeting in Arusha advocated 
to move the Global Fund from project support to budget support, 
to soften the Global Fund's insistence on progress benchmarks 
and results-based disbursement, and to halt the Global Fund's 
responsible Comprehensive Funding Policy. The Committee is 
strongly opposed to each of these proposals and notes that any 
movement along these lines may jeopardize Congressional support 
for the Fund. The Committee directs the Office of the Global 
AIDS Coordinator to notify the Committee of any proposal that 
would move the Global Fund from project support to budget 
support, erode the Global Fund's results-based disbursement 
structure, or jeopardize the Comprehensive Funding Policy, and 
to use its position as United States Representative on the 
Global Fund Board to oppose such proposals.
    In the fiscal year 2005 Act, Congress conditioned 25 
percent of the United States contribution to the Global Fund on 
certain steps the Global Fund needed to take to improve its 
efficiency, transparency, and accountability. Both the Interim 
Assessment issued by the Office of the Global AIDS Coordinator 
on June 12, 2005, and the June 10, 2005 Government 
Accountability Office (GAO) report found that the Global Fund 
has taken several significant steps to improve its operations 
as urged in the fiscal year 2005 Act. In particular, the 
Committee notes the establishment of an independent Inspector 
General and the adoption of strong guidelines for the 
inclusiveness and transparency of Country Coordinating 
Mechanisms (CCMs). The Committee will continue to closely 
monitor the implementation of these decisions and urges the 
Office of the Global AIDS Coordinator to provide updates to the 
Committee on the development of the Global Fund's Office of 
Inspector General, the implementation of the CCM guidelines, 
and coordination of technical assistance.
    Nonetheless, both the Interim Assessment and the GAO report 
found reason for continued strong Congressional oversight of 
the operations of the Global Fund. Specifically, both documents 
reported serious deficiencies with the Global Fund's 
performance-based funding decision-making processes. While both 
documents also found that the Fund has been strengthening this 
process, the Committee is gravely concerned about this finding 
and has in section 525 conditioned funding for 2006 on the 
Global Fund's addressing this deficiency.
    Both documents also expressed concern relevant to Local 
Fund Agents (LFAs). The Office of the Global AIDS Coordinator's 
Interim Assessment reported that the Global Fund Secretariat 
may not be providing sufficient resources or policy guidance to 
enable the LFAs to carry out their work. The GAO report found 
that information submitted by LFAs, especially information upon 
which Phase II renewal decisions should be based, is often 
inadequate. The Committee strongly supports the role of LFAs as 
the local monitor of grant implementation and has in section 
525 conditioned funding for 2006 on the Global Fund's 
addressing this deficiency.
    Additionally, the Committee remains concerned that 
technical assistance to the Global Fund and its activities is 
not well-organized or coordinated. The Committee supports the 
Global Fund's decision to allow funding for technical 
assistance to CCMs, and urges the Global Fund to complete its 
comprehensive ``Early Warning System''.
    The Committee notes with concern recent decisions taken by 
the Global Fund Board regarding the renewal of Phase II grants. 
While the Committee strongly concurs that the Global Fund Board 
should have the final decision in major financial matters such 
as approvals of grants and grant renewals, the Committee is 
also concerned that geopolitical considerations are influencing 
decisions of which grants should be continued and discontinued.
    The Committee notes that in the past fiscal year, funding 
for such technical assistance was drawn from bilateral child 
survival funding for non-focus countries. The Committee is 
concerned that such use of these funds will draw resources from 
ongoing programs in non-focus countries and therefore 
recommends that such funds be used as a last resort for 
providing technical assistance for Global Fund activities.
    The Committee again provides permissive authority for a 
portion of the funding allocated for a Global Fund contribution 
to be used to provide technical assistance related to Global 
Fund activities. The Committee directs that this funding should 
not be used to provide assistance for writing applications 
since other donors provide such assistance. The Committee 
requests that the Office of the Global AIDS Coordinator, in 
coordination with USAID and the Secretary of Health and Human 
Services, submit a report to the Committee describing United 
States support to the Global Fund in addition to the United 
States financial contribution, such as technical assistance and 
diplomatic support.

                                 UNAIDS

    The Committee reiterates its commitment to ensuring 
coordination of all donor assistance for HIV/AIDS at the 
country level, and acknowledges the important role of UNAIDS in 
ensuring in-country coordination, capacity building, and 
monitoring and evaluation activities. These are critical 
functions which must be expanded to keep pace with both the 
epidemic and the growing global response to it. The Committee 
therefore expects that the Global AIDS Coordinator will provide 
not less than the fiscal year 2005 level of support to UNAIDS.

                        research and development

    While the Committee strongly supports the Emergency Plan's 
five-year goals, it believes that these efforts should include 
support for the research and development of new prevention and 
treatment technologies and products. The worthy treatment goals 
that the office of the Coordinator is pursuing will not stop 
the spread of the disease and, perversely, the spread of 
treatment to those in need will likely speed the development of 
drug-resistance strains of HIV. New drugs must be developed. At 
the same time, more effective prevention strategies and 
products must be developed to keep people from being infected, 
and a search for a cure and vaccine must continue. The Office 
of the Global AIDS Coordinator, working with USAID and the 
Department of Health and Human Services, is well positioned to 
use its political, diplomatic, and financial resources to spur 
the research and development of these products and other 
interventions.
    The Committee includes under the heading ``Child Survival 
and Health Programs Fund'' direction for the USAID, working in 
collaboration with the Office of the Global AIDS Coordinator 
and the Secretary of Health and Human Services, to develop a 
strategy to stimulate the research and development of products 
and interventions for diseases affecting the developing world. 
The Committee strongly urges the Office of the Global AIDS 
Coordinator to take a proactive role in shaping the HIV/AIDS 
portion of that strategy.

                        SUPPLY CHAIN MANAGEMENT

    The Committee is aware of claims that products on USAID's 
eligible list for procurement with United States taxpayer funds 
do not undergo screening for quality, and that criteria for 
purchase inadequately take into account such factors as 
appropriateness of use in a developing country context, 
programmatic advantages, and quality assurance. The Committee 
requests the Office of the Global AIDS Coordinator to submit, 
in coordination with USAID and the Department of Health and 
Human Services, an explanation of how products are screened for 
eligibility and what factors are used to determine which 
products are purchased. The Committee expects this explanation 
to include information on rapid HIV-tests, including both blood 
and oral fluid tests.

                               EDUCATION

    The Committee notes that a negative correlation exists 
between levels of basic education and HIV infection rates. The 
Committee believes that the Office of the Global AIDS 
Coordinator should work closely with the basic education 
programs operated by USAID to identify opportunities for 
collaboration. The Committee requests the Office of the Global 
AIDS Coordinator, working with USAID, to provide a report not 
later than 120 days after enactment of this Act on how the 
Emergency Plan is collaborating with USAID on such programs.

                         GENDER-BASED VIOLENCE

    The Committee understands that physical and sexual 
violence, coercion, and other factors increase women's 
vulnerability to HIV infection and pose barriers for women who 
are HIV-positive to accessing care and treatment. The Committee 
notes that programs to address social and societal factors such 
as access to employment, income, property and inheritance 
rights, and attitudes toward violence are core components to 
addressing the underlying causes of HIV-infection. The 
Committee requests the Office of the Global AIDS Coordinator, 
working with USAID and other offices of the State Department, 
to submit a report not later than 120 days after enactment of 
this Act on the funding and range of programs the United States 
Government is supporting to address gender-based violence and 
treatment of HIV-positive victims of such violence.

                      MOTHER-TO-CHILD TRANSMISSION

    The Committee continues to strongly support funding for 
programs to prevent mother-to-child transmission (MTCT) of HIV 
as an integral component of a comprehensive approach to 
fighting HIV/AIDS. To facilitate expansion and to provide more 
access to MTCT services and expanded care and treatment 
programs, infrastructure improvements and education and 
training of health care workers are needed as well as better 
linkages between MTCT and comprehensive care and treatment 
services. The Committee urges the Office of the Global AIDS 
Coordinator to continue its work to expand access to MTCT 
services and encourage stronger linkages between MTCT and care 
and treatment programs.

                        TREATMENT AND PREVENTION

    The Committee encourages the Office of the Global AIDS 
Coordinator to allocate appropriate resources for pediatric 
treatment needs, including the development and purchase of 
high-quality, low-cost pediatric formulations of anti-
retrovirals and other HIV/AIDS medicines; pediatric-specific 
training for doctors and other appropriate personnel; and the 
purchase of pediatric-appropriate diagnostic technologies.
    The Committee notes that as of this fiscal year, not less 
than one-third of all United States funds for the prevention of 
HIV/AIDS globally must be reserved for ``abstinence until 
marriage'' programs. The Committee is pleased to see that the 
Emergency Plan already is supporting a wide range of 
interventions that promote skill-building strategies to empower 
young people to more effectively practice abstinence. The 
Committee concurs with the Office of the Global AIDS 
Coordinator's strategy that United States funds should be 
available for programs and interventions that most efficiently 
delay sexual debut and, among those already sexually 
experienced, increase faithfulness.

               REFUGEES AND INTERNALLY DISPLACED PERSONS

    The Committee notes that the Global AIDS Coordinator has 
not yet developed a ``comprehensive approach to addressing the 
special HIV/AIDS needs of refugees and IDPs'', as requested in 
last year's House report. The Committee therefore directs the 
Global AIDS Coordinator, in coordination with USAID, the Bureau 
of Population, Refugees, and Migration, and other stakeholders, 
to consult with the Committee not later than 30 days following 
enactment of this Act on the development of this approach, and 
expects the Global AIDS Coordinator to submit the approach not 
later than 60 days following enactment of this Act.

                          SAFE BLOOD SUPPLIES

    The Committee is concerned about the problem of unsafe or 
contaminated blood as a source of infection for HIV. The 
Committee is encouraged that the Office of the Global AIDS 
Coordinator has made safe blood programs a central part of its 
strategy and recommends increased funding in fiscal year 2006 
for such programs, especially in Africa. The Committee expects 
the Office of the Global AIDS Coordinator and USAID to consider 
joint funding for a $2,000,000 multi-country program, such as 
one proposed by Safe Blood for Africa, to provide blood free of 
malaria, HIV, and other blood-borne diseases, and to train 
healthcare professionals in proper medical procedures and 
practices for blood transfusions.
    The Committee further asks that 120 days after enactment, 
the Office of the Global AIDS Coordinator, in coordination with 
USAID, the Centers for Disease Control and the World Health 
Organization, provide a report to the Committees on 
Appropriations on the magnitude of the problem posed by unsafe 
blood supplies, the level of resources required to address the 
problem, the feasibility of a non-incremental approach and the 
cost effectiveness of implementing a Safe Blood Program in 
reducing rates of infection.

          International Narcotics Control and Law Enforcement

Fiscal year 2005 level..................................    $326,189,000
Emergency supplemental funding..........................     620,000,000
Fiscal year 2006 request................................     523,874,000
Committee recommendation................................     437,400,000

    The Committee recommends $437,400,000 for ``International 
Narcotics Control and Law Enforcement''. This is $86,474,000 
less than the budget request and $111,211,000 above the fiscal 
year 2005 level, excluding the emergency supplemental 
appropriations Act. A limitation of $33,484,000 is recommended 
for administrative expenses.
    The Committee assumes all funding for Indonesian police 
training will remain in the Economic Support Fund as it has in 
previous years. The Committee recommends $31,500,000 for 
Pakistan from funds under this heading and notes that 
$30,000,000 of fiscal year 2005 emergency supplemental funds 
for Pakistan remain unobligated and are available for the same 
purpose.

                        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.

                             IRAQ PROGRAMS

    The Committee recommends no funding for Iraq programs, 
instead of $26,500,000 as requested. The Committee has not 
included these funds based on an understanding that over $5 
billion in funds previously appropriated for Iraq 
reconstruction and relief remain unobligated and could be used 
to fund the requirements presented in the fiscal year 2006 
request. Therefore, as an alternative to the appropriation of 
additional taxpayer dollars for this requirement, the Committee 
directs the Department of State to ensure that unobligated 
balances from funds originally appropriated for the Iraq Relief 
and Reconstruction Fund (IRRF) in the Emergency Supplemental 
Appropriations Act for Defense and Reconstruction of Iraq and 
Afghanistan (Public Law 108-106) be used as necessary to 
finance the Iraq program requirements presented in the fiscal 
year 2006 budget request.

               MEXICO, CENTRAL AMERICA AND THE CARIBBEAN

    The President's request includes decreases for ongoing 
programs in Mexico, Central American countries and the 
Caribbean. The Committee disagrees with the Administration's 
funding allocation by country given the direct positive impact 
on the United States of narcotics eradication, drug 
interdiction and border security in these neighboring nations. 
Therefore, the Committee recommends funding in fiscal year 2006 
at a level not less than the fiscal year 2005 level for each of 
these countries.

                                 MEXICO

    The Committee provides $40,000,000 for programs in Mexico, 
$10,000,000 above the President's request. The Committee 
supports the recent Security and Prosperity Partnership 
Initiative agreed to by the Presidents of Mexico and the United 
States as well as the Prime Minister of Canada. The Committee 
recommends an increase above the President's request 
specifically for additional non-intrusive inspection equipment, 
SENTRI lanes, or other physical infrastructure at United 
States/Mexico border crossing points with high volumes of 
agricultural trade, specifically fresh produce. The Committee 
requests a consultation on the use of these funds prior to 
their obligation.

                      AFGHANISTAN COUNTERNARCOTICS

    The Committee notes that $220,000,000 was provided to the 
Department of State in the fiscal year 2005 emergency 
supplemental appropriations Act for opium poppy eradication, 
and heroin interdiction in Afghanistan. An additional 
$245,000,000 was provided under the heading ``Economic Support 
Fund'' in the same Act for alternative livelihoods in 
Afghanistan. According to the State Department, the fiscal year 
2005 funds would allow the State trained eradication teams to 
eradicate manually 15,000 hectares in 2005. The Committee is 
aware that a lack of cooperation by the Afghan government at 
the local level and a lack of support by the Afghan government 
at the national level for United States-funded eradication 
teams has produced a situation in Afghanistan where the State 
Department eradication goals cannot feasibly be met.
    The Committee therefore does not support fully funding the 
fiscal year 2006 request of $184,000,000 for counternarcotics 
support in Afghanistan and recommends a level of $135,000,000 
in fiscal year 2006. The Committee directs the Secretary of 
State, in consultation with the Secretary of Defense and the 
Administrator of USAID, prior to the obligation of funds for 
this purpose to provide the Committee a report, with a 
classified annex if necessary, including the following 
information: the multi-year strategy of the United States 
Government in assisting the Government of Afghanistan in the 
fight against poppy cultivation and heroin trafficking 
including the provision of alternative livelihoods; a detailed 
list of the different responsibilities of the Department of 
Defense versus the Department of State as it relates to police 
training and assistance programs and counternarcotic programs; 
a description of the policy and program aimed at disrupting 
laboratories and shipments of opium paste and heroin; a 
description of the policy and program to train and deploy 
heliborne troops and laborers to conduct manual eradication; 
the status of the Afghan Government and State Department 
policies regarding aerial eradication; eradication goals 
estimated for each year; a detailed accounting of other donor 
assistance in the preceding 12 months for eradication, 
interdiction and the provision of alternative livelihoods; and 
a detailed accounting of air assets and operation and 
maintenance costs budgeted in its entirety for fiscal years 
2005 and 2006.
    The Committee notes that increased security, government 
presence in rural areas, and rural economic development in 
Afghanistan are the only long-term solutions for significant 
reduction of poppy production in Afghanistan.
    The Committee directs the Secretary of State to consult 
with the Committee before participating in any renewed opium 
farmer compensation program in Afghanistan from funds under 
this heading or funds in this or prior appropriations Acts.

                         AFGHAN POLICE TRAINING

    The Committee notes that $360,000,000 was provided in 
fiscal year 2005 emergency supplemental funds for police 
training programs in Afghanistan, yet funds for this same 
purpose in the fiscal year 2006 request are requested under the 
Department of Defense. The Committee expects that any funds in 
this or any prior Act that were appropriated under this heading 
for Afghanistan police training remain the fiscal and 
operational responsibility of the Department of State.

                            DEMAND REDUCTION

    The Committee again includes a provision that $10,000,000 
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 would be used to contribute to the preservation of 
the stability of societies threatened by increasing drug abuse 
and minimizing the impact of international crime.

                         INTELLECTUAL PROPERTY

    The Committee supports the President's request of 
$5,000,000 for programs to combat intellectual property piracy.

                                  CUBA

    The Committee has again included a general provision, 
section 572, prohibiting counternarcotics assistance to the 
Government of Cuba. Full reporting and transparency by the 
Cuban Government and United States monitoring of the use of 
counternarcotics assistance in Cuba would be difficult if not 
impossible, according to the State Department, given Cuban 
general hostility toward the United States Government. 
Additionally, provision of assistance to the maritime drug 
interdiction force (the TGF) would, according to both Amnesty 
International and the State Department's Country Reports on 
Human Rights Practices, violate section 551 of this Act, the 
so-called Leahy amendment.

                        ANTICORRUPTION COMPACTS

    The Committee notes that the concept of anticorruption 
compacts was developed as a multilateral form of assistance at 
the G-8 Evian Summit in June 2003, yet funding for these 
compacts is requested again in 2006 as a bilateral program. 
While fighting corruption is integral to promoting economic 
growth overseas, the Committee remains concerned that the 
anticorruption compact concept was developed outside of the 
context of the Millennium Challenge Corporation (MCC). 
Therefore the Committee has included no funds for this activity 
under this heading partly as a reflection of the Committee's 
allocation relative to the President's request and the need to 
address funding increases for other Presidential initiatives 
for 2006.

                     Andean Counterdrug Initiative

Fiscal year 2005 level..................................    $725,152,000
Fiscal year 2006 request................................     734,500,000
Committee recommendation................................     734,500,000

    The Committee recommends $734,500,000 for the Andean 
Counterdrug Initiative, an amount equal to the request and 
$9,348,000 more than the 2005 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 $19,015,000 is recommended for administrative 
expenses for the Department of State and $7,500,000 for USAID.
    The Committee rejects the Administration's requested 16 
percent reduction for eradication, interdiction and alternative 
development programs in Peru and expects last year's level of 
funding to be provided through reductions in the air bridge 
denial program and the new air assets program for Colombia and 
Bolivia.
    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.
    The Committee requests that the Secretary of State 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. Additionally, the Committee requires that 
the personnel cap and Plan Colombia reports as required in the 
fiscal year 2000 emergency supplemental also be submitted to 
the Committees on Appropriations.

                                COLOMBIA

    The Committee notes the successes of Plan Colombia and the 
measurable improvements that have resulted in the everyday 
lives of the Colombian people. Since the start of Plan 
Colombia, coca cultivation has been reduced by one-third, the 
Government of Colombia has increased its security and police 
forces by 11,000 people since 2000, and for the first time in 
Colombian history, there is a police presence in all 
municipalities of the country. The improved security situation 
of Colombia cannot be doubted as the number of violent crimes 
has fallen drastically in the last five years. This increased 
security coupled with strong economic growth is proof that 
United States assistance to Colombia has shown measurable 
results.
    The Committee notes that Plan Colombia was proposed and 
implemented as a 6-year program, to be complete by the end of 
2005, yet the Committee has not been consulted by the 
Administration on its follow-up program to Plan Colombia. 
Therefore, the Committee directs the Secretary of State, in 
consultation with the Secretary of Defense and the 
Administrator of USAID, to report to the Committee no later 
than 60 days after enactment of this Act on the future, multi-
year strategy of the United States assistance program to 
Colombia. The Committee expects this strategy to include all 
aspects of current and future United States assistance and 
detailed explanations for how the Colombian government will 
assume responsibility for maintaining more of Plan Colombia's 
assets.
    The Committee again 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 
directs the Secretary of State to consult with the Committee if 
the implementation of the expanded authorities changes from 
that described in the May 2003 report to Congress.
    The Committee is concerned about the many levels of 
bureaucratic approval needed before the State Department's air 
assets can be used for program support or rescue operations, 
which is hindering efficient operations and possibly 
endangering human welfare. Additionally, the Committee has held 
the longstanding view that the Colombian Government immediately 
should begin the process of assuming the operational and 
maintenance functions of Plan Colombia's assets. Therefore, the 
Committee directs the Secretary of State to report back to the 
Committee no later than 60 days after the enactment of this 
Act, what actions are being taken by the Departments of State 
and Defense to transfer responsibilities for programs funded in 
this Act currently being executed by United States contractors 
to Colombian nationals.
    The Committee notes the increased cost of oil and fuel as a 
leading factor in higher operating costs of the Colombian 
counternarcotics program. The Committee also notes that 
Colombia is a net exporter of oil with revenues from oil 
approaching $4,500,000,000 annually. Given that United States 
foreign assistance is being used to safeguard the Colombian oil 
supplies and pipelines, including $17,300,000 in fiscal year 
2006 to operate air assets protecting the Arauca pipeline, the 
Committee expects the Government of Colombia to offset some of 
these increased costs given the increased revenues the 
Government of Colombia has collected as the price of oil has 
risen. The Committee directs the Secretary of State to report 
back to the Committee no later than 90 days after enactment of 
this Act on levels of revenue the Government of Colombia is 
devoting to offsetting the increased fuel prices borne by the 
United States as a result of Plan Colombia.
    The Committee notes that there are no funds in the fiscal 
year 2006 budget request for demobilization of paramilitaries. 
The Committee has retained language requiring consultation and 
notification before the obligation of funds for this purpose.
    The Committee directs the Secretary of State to transfer 
$5,000,000 to the Department of State's Bureau for Population, 
Refugees, and Migration to continue programs benefiting 
internally displaced persons programs in Colombia.
    The Committee strongly supports USAID's continuing 
alternative development strategy that focuses on the historic 
underdevelopment of Colombia's outlying regions. The programs 
concentrate on local infrastructure needs (roads, electricity, 
water) and delivery of services at the community level. This 
focus on an entire community increases the social pressure for 
eradication and also helps organize the community to identify 
and prioritize local needs. It is the Committee's view that 
alternative development integrated with the presence of the 
state and the presence of law enforcement and security are 
fundamentally the key to long term peace and security in 
Colombia.
    The Committee directs USAID to report back to the Committee 
no later than 60 days after enactment of this Act what detailed 
steps the Government of Colombia is taking to develop a 
comprehensive rural development strategy.
    The Committee has not recommended funding for a new, fourth 
eradication team for Colombia because the President did not 
request this funding in fiscal year 2006 and due to the 
Committee's restrictive budgetary allocation relative to the 
President's request. The Committee notes that this 
recommendation is made without prejudice and is solely a result 
of pressures to fund other Presidential priorities.

                                  PERU

    The Committee is alarmed at the Administration's request 
for a 16 percent cut to eradication, interdiction and 
alternative development programs in Peru, especially at a time 
when there are reports of an upsurge in coca cultivation and 
new opium poppy cultivation in Peru. Therefore, the Committee 
directs that not less than $114,000,000 shall be available from 
funds under this heading for assistance for Peru, of which 
$61,000,000 shall be available for eradication and interdiction 
and $53,000,000 shall be available for alternative development 
and institution building. The Committee notes its support for 
``autoeradication'', a pilot policy of voluntary eradication 
combined with the use of community development projects as an 
incentive for cooperation.
    The Committee urges USAID to continue working with The 
Field Museum of Chicago on the Cordillera Azul National Park 
project in central Peru, an alternative community development 
and conservation education project that has already 
demonstrated effective use of ACI funds to prevent coca 
cultivation. The Committee directs that the balance of the 
grant, $1,398,000,000 in fiscal year 2006, be programmed over 
the remaining duration of the agreement to support community 
capacity building, education, land-use planning and zoning, 
park protection, and park maintenance.

                              HUMAN RIGHTS

    The Committee calls on the Department of State to ensure 
that all United States laws regarding human rights, including 
section 551 of this Act, are strictly applied in Colombia and 
each of the Andean nations. The Committee again includes a 
general provision requiring that the Secretary of State certify 
that certain human rights conditions have been met before 25 
percent of funds may be made available for assistance for the 
Colombian Armed Forces.

                    Migration and Refugee Assistance

Fiscal year 2005 level..................................    $763,840,000
Fiscal year 2006 request................................     892,770,000
Committee recommendation................................     790,720,000

    The Committee recommends $790,720,000 for Migration and 
Refugee Assistance, an amount that is $102,050,000 below the 
request and $26,880,000 more than the amount enacted for fiscal 
year 2005. A limitation of $22,000,000 is recommended for 
administrative expenses.

                             IRAQ PROGRAMS

    The Committee recommends no funding in this account for 
Iraq programs, instead of $43,000,000 as requested. The 
Committee has not included these funds based on an 
understanding that over $5,000,000,000 in funds previously 
appropriated for Iraq reconstruction and relief remain 
unobligated and could be used to fund the requirements 
presented in the fiscal year 2006 request. Therefore, as an 
alternative to the appropriation of additional taxpayer dollars 
for this requirement, the Committee directs the Department of 
State ensure that unobligated balances from funds originally 
appropriated for the Iraq Relief and Reconstruction Fund (IRRF) 
in the Emergency Supplemental Appropriations Act for Defense 
and Reconstruction of Iraq and Afghanistan (Public Law 108-106) 
be used as necessary to finance the Iraq program requirements 
presented in the fiscal year 2006 budget request.

                            TIBETAN REFUGEES

    The Committee recommends not less than $2,000,000 from this 
account for Tibetan refugees in Nepal and India. The Committee 
remains concerned about the situation of Tibetan refugees 
transiting through Nepal to resettlement in India, and in 
particular the recent decision by Nepal to close two Tibetan-
run offices in Kathmandu that provide vital services to 
refugees. In light of recent events in Nepal, the Committee 
expects that the Government of Nepal will fulfill its 
commitment to provide safe passage to Tibetans fleeing 
repression in their homeland, and respect the rights of the 
legally resident Tibetan refugee community that lives in Nepal.

                         RESETTLEMENT IN ISRAEL

    The Committee supports $40,000,000 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 such migrants. The Committee remains 
strongly committed to assisting the resettlement of Russian, 
Ethiopian and other humanitarian migrants in Israel. The 
Committee notes that the number of migrants resettling in 
Israel has dramatically declined in recent years, from nearly 
54,000 in the year 2000 to a projected 13,000 in 2005. The 
Committee commends the Jewish Agency for Israel for its 
decision--in coordination with the Government of Israel--to 
bring to Israel over the next three years all eligible 
humanitarian migrants still residing in Ethiopia.

                         GENDER-BASED VIOLENCE

    As the humanitarian emergencies in Darfur, the Democratic 
Republic of Congo, and Uganda demonstrate, sexual exploitation 
and violence against women and girls is a continuing problem 
among internally displaced and refugee populations. The 
Committee urges the Department of State to scale up resources 
to address these critical issues, and requests that the 
Department provide, not later than 120 days following enactment 
of this Act, a report on United States Government funding from 
this account during fiscal year 2005 and proposed during fiscal 
year 2006 for programs that target gender-based violence.

                        MAGEN DAVID ADOM SOCIETY

    The Committee is disappointed again this year that the 
International Committee of the Red Cross (ICRC) has not 
admitted the Magen David Adom Society of Israel to the 
International Red Cross and Red Crescent Movement, but notes 
that steps have been taken in this direction. The Committee is 
recommending a continuation of bill language that would 
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.

             UNITED NATIONS RELIEF AND WORKS AGENCY (UNRWA)

    While long-term stability in the Gaza Strip requires the 
Palestinian Authority to be the main provider of services to 
the Palestinian people, the Committee recognizes that progress 
toward stability and development in the Palestinian territories 
must involve the cooperation and participation of UNRWA. The 
Committee also urges the Department of State to work with 
UNRWA, the Palestinian Authority, and other bilateral donors to 
ensure coordination in the development plan for the Palestinian 
Territories, especially the Gaza Strip.

     United States Emergency Refugee and Migration Assistance Fund

Fiscal year 2005 level..................................     $29,760,000
Fiscal year 2006 request................................      40,000,000
Committee recommendation................................      30,000,000

    The Committee recommends $30,000,000 for the Emergency 
Refugee and Migration Assistance (ERMA) Fund, which is $240,000 
more than the 2005 enacted level and $10,000,000 less than the 
request.

    Nonproliferation, Anti-Terrorism, Demining and Related Programs

Fiscal year 2005 level..................................    $398,784,000
Emergency supplemental appropriations...................      24,600,000
Fiscal year 2006 request................................     440,100,000
Committee recommendation................................     400,350,000

    The Committee recommends a total appropriation of 
$400,350,000 for ``Nonproliferation, Anti-terrorism, Demining 
and Related Programs'', an amount that is $39,750,000 below the 
request and $1,566,000 above the fiscal year 2005 enacted 
level, excluding emergency supplemental appropriations.
    The following table compares fiscal year 2005 funding for 
the programs covered by this account, as well as the 
President's request for fiscal year 2006 and the Committee 
recommendation:

    Nonproliferation, Anti-Terrorism, Demining and Related Programs


----------------------------------------------------------------------------------------------------------------
                                                                                                Fiscal year 2006
                                                            Fiscal year 2005  Fiscal year 2006      Committee
                                                                 enacted           request       recommendation
----------------------------------------------------------------------------------------------------------------
Nonproliferation Programs:
  Nonproliferation and Disarmament Fund...................        31,744,000        37,500,000        37,500,000
  Export Control & Border Security........................        37,696,000        44,400,000        43,400,000
  Science Centers/Nonproliferation of WMD.................        50,096,000        52,600,000        52,600,000
  IAEA Voluntary Contribution.............................        52,576,000        50,000,000        50,000,000
  International Monitoring System.........................        18,848,000        14,350,000        14,350,000
                                                           -----------------------------------------------------
    Subtotal Nonproliferation.............................       190,960,000       198,850,000       197,850,000
                                                           =====================================================

Anti-Terrorism Programs:
  Anti-terrorism Assistance...............................       117,800,000       133,500,000       122,500,000
  Counterterrorism Financing..............................         7,192,000         7,500,000         7,500,000
  Terrorist Interdiction Program..........................         4,960,000         7,500,000         5,500,000
  CT Engagement w/Allies..................................         1,984,000         2,000,000         1,000,000
                                                           -----------------------------------------------------
    Subtotal Anti-Terrorism...............................       131,936,000       150,500,000       136,500,000
                                                           =====================================================

Regional Stability and Humanitarian Assistance:
  Humanitarian Demining...................................        59,024,000        72,000,000        56,000,000
  International Trust Fund................................         9,920,000        10,000,000        10,000,000
  Small Arms/Light Weapons Destruction....................         6,944,000         8,750,000  ................
                                                           -----------------------------------------------------
    Subtotal Regional Stability/Humanitarian Assistance...        75,888,000        90,750,000        66,000,000
                                                           =====================================================
    Total.................................................   \1\ 398,784,000       440,100,000      400,350,000
----------------------------------------------------------------------------------------------------------------
\1\ In addition, $24,600,000 in emergency supplemental appropriations were provided for this account.

                                  IRAQ

    The Committee recommends no funding for Iraq programs, 
instead of $29,000,000 as requested. The Committee has not 
included these funds based on an understanding that over 
$5,000,000,000 in funds previously appropriated for Iraq 
reconstruction and relief remain unobligated and could be used 
to fund the requirements presented in the fiscal year 2006 
request. Therefore, as an alternative to the appropriation of 
additional taxpayer dollars for this requirement, the Committee 
directs the Department of State ensure that unobligated 
balances from funds originally appropriated for the Iraq Relief 
and Reconstruction Fund (IRRF) in the Emergency Supplemental 
Appropriations Act for Defense and Reconstruction of Iraq and 
Afghanistan (Public Law 108-106) be used as necessary to 
finance the Iraq program requirements presented in the fiscal 
year 2006 budget request.

                       ANTI-TERRORISM ASSISTANCE

    The Committee recommends $122,500,000 for Anti-Terrorism 
Assistance, an increase of $4,700,000 over the fiscal year 2005 
enacted level. This program, run by the State Department's 
Diplomatic Security officials under the policy direction of the 
Coordinator for Counterterrorism, provides training and skills, 
technical assistance, and equipment to improve professionalism 
and capability in the War on Terrorism.

                                DEMINING

    The Committee recommends $10,000,000 for the Slovenian 
International Trust Fund, the same as the budget request. The 
Committee continues to support the work of the International 
Trust Fund for Demining and Mine Victim Assistance to make the 
Balkans mine-safe. The Committee directs that such amounts may 
be deposited into that fund only to the extent matching amounts 
are deposited by other governments, entities, or persons. In 
addition, these funds may only be expended by the fund in 
consultation with the United States Government.

                       COUNTERTERRORISM FINANCING

    The Committee continues to support the work of the 
Department of State, the Department of Justice and the 
Department of Treasury in assisting countries whose financial 
systems are assessed to be at risk to terrorist financing. The 
Committee requests that not later than 60 days after enactment, 
the Secretary of State, in consultation with the Secretary of 
Treasury, provide a comprehensive report of all funds in 
function 150 provided for counterterrorism financing in fiscal 
years 2002, 2003, 2004, and 2005 and include an accounting of 
obligations and expenditure rates to date.
    The Committee urges the Secretary of State to consider the 
Department of Treasury's Office of Technical Assistance (OTA) 
as implementers for programs funded with assistance provided 
under this heading given OTA's outstanding history of improving 
financial systems in numerous post-conflict and developing 
countries.

                       Department of the Treasury


               International Affairs Technical Assistance

Fiscal year 2005 level..................................     $18,848,000
Fiscal year 2006 request................................      20,000,000
Committee recommendation................................      20,000,000

    The Committee recommends $20,000,000 under this heading for 
international technical assistance by the Department of the 
Treasury, an amount that is the same as the request and 
$1,152,000 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 (OTA) 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.

                           Debt Restructuring

Fiscal year 2005 level..................................     $99,200,000
Fiscal year 2006 request................................      99,750,000
Committee recommendation................................      65,000,000

    The Committee recommends $65,000,000 under this heading for 
international debt restructuring by the Department of the 
Treasury, an amount that is $34,750,000 less than the request 
and $34,200,000 less than the fiscal year 2005 level. The 
Committee makes $20,000,000 available under this heading for 
the Tropic Forest Conservation Act (TFCA) programs and up to 
$45,000,000 for a contribution to the Heavily Indebted Poor 
Countries (HIPC) Trust fund. Funds in this account are subject 
to the regular notification procedures of the Committees on 
Appropriations.
    The Committee commends the Department of Treasury for fully 
consulting on a periodic basis, as required by law, to review 
the countries eligible for benefits from the Tropical Forest 
Conservation Act (TFCA) programs. The Committee expects the 
Department of Treasury to consult with the Committee 15 days 
prior to the Treasury determination that additional countries 
are found eligible for TFCA.

           HEAVILY INDEBTED POOR COUNTRIES (HIPC) DEBT RELIEF

    The Committee is concerned about the effectiveness of past 
funding provided by the Congress for debt relief. It now 
appears that the HIPC initiative is failing, and instead of 
solving the indebtedness problems of developing countries, it 
has made the situation worse. The $750,000,000 provided in 
prior acts by this Committee for the HIPC initiative can only 
be viewed now as a series of stop-gap measures that did not 
address the perverse incentives for excessive borrowing and the 
lack of oversight provided by the multilateral development 
banks. According to the Treasury Department, from 1989 to 2002, 
$40,000,000,000 in HIPC debt relief was provided while these 
same countries took on new debt in an amount totaling 
$93,000,000,000. Therefore, the Committee will only approve 
funding for further debt relief commitments in future 
appropriations acts if these long term issues are addressed.

                                 CONGO

    The Committee notes that all dispersed funds provided by 
the United States to the HIPC Trust Fund in the fiscal year 
2004 have been made available for debt relief for the 
Democratic Republic of Congo (DRC). Therefore, in fiscal years 
2004 and 2005, the Committee made available $155,000,000 in 
bilateral and multilateral debt relief specifically for the 
DRC.

                     TITLE III--MILITARY ASSISTANCE


                  Funds Appropriated to the President


             International Military Education and Training


Fiscal year 2005 level................................       $89,012,000
Fiscal year 2006 request..............................        86,744,000
Committee recommendation..............................        86,744,000


    The Committee recommends $86,744,000 for the International 
Military Education and Training (IMET) program as requested and 
$2,268,000 below the 2005 level.
    IMET is part of the overall United States security 
assistance program, and through it the United States Government 
provides training to predominantly military students from 
allied and friendly nations. The IMET program exposes students 
to the United States professional military establishment and 
the American way of life, including democratic values and rule 
of law, and respect for individual and human rights. In 1990, 
Congress directed the Department of Defense to establish a 
program within IMET--called Expanded-IMET or ``E-IMET'' focused 
on training foreign civilian and military officials in three 
areas: managing and administering military establishments and 
budgets; creating and maintaining effective military judicial 
systems and military codes of conduct, and fostering greater 
respect for the principle of civilian control of the military.

                               UZBEKISTAN

    The Committee is concerned that the recent uprising in 
Uzbekistan may have been met with a disproportionate military 
response. The Committee understands that there is a potential 
concern that members of the military who may have been involved 
with this response could have been previous recipients of IMET. 
The Committee believes the Department of State and the 
Department of Defense should review this potential concern 
before proceeding with the fiscal year 2006 IMET program for 
Uzbekistan.

                                 GREECE

    The Committee recognizes the country of Greece as a friend 
and ally and urges at least $2,000,000 in funding assistance 
for Greece from the funds appropriated under this heading.

                   Foreign Military Financing Program


Fiscal year 2005 level................................    $4,743,232,000
Emergency supplemental funding........................       250,000,000
Fiscal year 2006 request..............................     4,588,700,000
Committee recommendation..............................     4,442,300,000


    The Committee recommends $4,442,300,000 for the Foreign 
Military Financing Program, $300,732,000 below the fiscal year 
2005 level and $146,400,000 below the fiscal year 2006 request. 
The Foreign Military Financing (FMF) assistance program 
provides grants for the acquisition of United States defense 
equipment, services and training. The FMF program enables key 
allies and friendly nations to improve defensive capabilities, 
and fosters bilateral military relationships with the United 
States and interoperability with United States forces.

                                 ISRAEL

    The Committee recommends a total FMF program of not less 
than $2,280,000,000 in grants for Israel, which shall be 
available within 30 days of enactment of this Act. This amount 
is the same as the fiscal year 2006 budget request and 
$60,000,000 over the fiscal year 2005 level.
    The Committee remains committed to helping Israel maintain 
security. 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.

                                 JORDAN

    The Committee recommends a total FMF program of 
$206,000,000 for Jordan. This amount is the same as the fiscal 
year 2006 budget request and the same as the fiscal year 2005 
level.
    The Committee strongly supports the Administration's 
efforts to improve Jordanian security. Under the 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 FMF program of 
$1,300,000,000 in grants for Egypt, which shall be transferred 
within 30 days of enactment of this Act. This amount is the 
same as the fiscal year 2006 budget request and the same as the 
fiscal year 2005 level.
    The Committee is convinced that continued military 
cooperation between Egypt and the United States remains in the 
national security interests of both countries.

                         ARMENIA AND AZERBAIJAN

    The Committee recommends a FMF program of $5,000,000, as 
requested for each of the countries of Armenia and Azerbaijan. 
In addition, the Committee supports IMET assistance levels of 
$750,000 for both countries as requested.

                                PAKISTAN

    The Committee recommends a total FMF program of 
$220,000,000 for Pakistan, $70,000,000 more than the fiscal 
year 2005 level and $80,000,000 less than the fiscal year 2006 
request.
    The Committees notes that Pakistan has been a reliable ally 
of the United States in the War on Terrorism and this reduction 
is not a reflection of a lessening of the Committee's 
appreciation for Pakistan's support. Rather, the intention of 
the reduction is to call into question what is clearly the 
Administration's plan to incrementally finance Pakistan's 
foreign military acquisition program. It has long been the 
position of the Committee on Appropriations that full funding 
of the acquisition of weapons systems provides budgetary 
accountability, transparency, and accuracy in determining 
taxpayer debt. The Committee directs the Department of State 
and the Department of Defense, to review the Pakistan FMF 
program to ensure full funding of weapons systems acquisition.

                                 TURKEY

    The Committee recommends a total FMF program of $4,400,000 
for Turkey, $29,600,000 less than the fiscal year 2005 level 
and $20,800,000 less than the fiscal year 2006 request.
    The Committee notes that Turkey has been a reliable ally of 
the United States in the War on Terrorism and this reduction is 
not a reflection of a lessening of the Committee's appreciation 
for Turkey's support. Rather, the reduction is applied to the 
logistics support for Turkey's armed forces due to a lack of 
sufficient justification. The Committee hopes that such 
justification will be provided in the future.

                               UZBEKISTAN

    The Committee recommends no FMF program for Uzbekistan, 
$11,000,000 less than the fiscal year 2005 level and $4,000,000 
less than the 2006 request.
    The Committee recommends this reduction based on the 
changing circumstances in Uzbekistan, which the Committee 
believes should not be rewarded with the FMF request contained 
in the 2006 request.

                     ESTONIA, LATVIA AND LITHUANIA

    The Committee recommends a total FMF program of 
$15,000,000, $5,000,000 each, for Estonia, Latvia and 
Lithuania, as requested. 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 for international 
peacekeeping missions.

                               GUATEMALA

    The Committee recommends no FMF program for Guatemala, the 
same as the fiscal year 2005 level and $500,000 less than the 
2006 request. The Committee retains language carried in 
previous legislation that prohibits the expenditure of FMF 
funds to Guatemala.

                               INDONESIA

    The Committee strongly supports the efforts of the civilian 
authorities in Indonesia to promote the rule of law, including 
efforts to exert control over the Indonesian military forces 
(TNI). It is critical that the Government of the United States 
closely monitor the use and dissemination of assistance under 
the FMF program for Indonesia. The restoration of the FMF 
program for Indonesia in no way signals dcreased concern about 
the poor human rights record of the Indonesian military forces 
and is intended only as a sign of measured support for the 
continuing efforts of the civilian Government of Indonesia to 
bring the Indonesian military forces under control. Congress 
has restricted the FMF program for Indonesia since fiscal year 
2000, conditioning the provision of assistance under the FMF 
program for Indonesia on the budget transparency of the 
Indonesian military forces and accountability and justice for 
gross human rights violations. The Committee directs the 
Secretary of State to submit to Congress, not later than 180 
days after the date of the enactment of this Act, a report on 
the progress of the Government of Indonesia in achieving the 
benchmarks specified in section 572 of the Foreign Operations, 
Export Financing, and Related Programs Appropriations Act, 
2005.

                     OPERATION ENDURING FRIENDSHIP

    The Committee recommends no FMF financing of a new 
initiative entitled, Operation Enduring Friendship. The 
Committee believes the justification of this program was not 
sufficient to warrant an appropriation of $5,000,000 as 
requested in 2006.

                        ADMINISTRATIVE EXPENSES

    The Committee recommends $40,500,000 for FMF administrative 
expenses, the same level as 2005 and a reduction of $2,500,000 
from the 2006 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 retains language that requires 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 retains language that prohibits military 
assistance to Guatemala, and Sudan. The Administration did not 
request FMF appropriations for these nations for fiscal year 
2005.

                        Peacekeeping Operations


Fiscal year 2005 level................................      $103,168,000
Emergency supplemental appropriation..................       314,400,000
Fiscal year 2006 request..............................       195,800,000
Committee recommendation..............................       177,800,000


    The Committee recommends $177,800,000 for voluntary 
contributions for international peacekeeping operations, 
$74,632,000 less than the 2005 level not including emergency 
appropriations and $18,000,000 less than the 2006 request.

                     GLOBAL PEACEKEEPING OPERATIONS

    The fiscal year 2006 budget request included $196,000,000 
for United States Peacekeeping Operations to support 
multilateral peacekeeping and regional stability operations 
that are not funded through mechanisms of the United Nations. 
The Committee recommends a total of $177,800,000 for 
Peacekeeping Operations, a reduction of $18,200,000 from the 
request.
    Africa.--Wihin the amount provided, not less than 
$78,800,000, as requested, is for the Africa Regional 
Peacekeeping program and the African Contingency Operations 
Training and Assistance (ACOTA) program.
    Multinational Force Observers (MFO).--Within the amount 
provided, not less than $19,000,000, as requested, is for the 
MFO program to support, among other initiatives, the ongoing 
peace efforts in the Middle East. 2005 level
    Global Peace Operations Initiative (GPOI).--In fiscal year 
2005, the Administration launched a new approach within the 
Peacekeeping Operations account: the Global Peace Operations 
Initiative (GPOI). The goal of this five-year program is to 
increase the capacity of countries to deploy to international 
peace support operations by training 75,000 peace support 
troops worldwide, increase the number of gendarme units 
deployable to international operations and facilitate 
deployments by providing equipment and transportation for these 
peacekeeping units. In fiscal year 2006, the budget included a 
total request of $114,400,000 for GPOI. The Committee 
recommends a total of $96,400,000, a reduction of $18,000,000 
from the request for this effort.
    The Committee's reduction should not be viewed as a 
disapproval of this initiative because the Committee is 
supportive of the effort to expand the number of peace support 
troops and gendarme units for multilateral peacekeeping and 
regional stability operations. The Committee believes that 
through this effort, the United States can reduce the emphasis 
on the use of military troops for these operations. The 
reduction of $18,000,000 from the request is simply a 
recognition of issues associated with the establishment of a 
new initiative and the view that not all of the $63,000,000 
requested for equipment and transportation requirements for the 
``beyond Africa'' component of GPOI can be obligated and 
expended in 2006.

               TITLE IV--MULTILATERAL ECONOMIC ASSISTANCE


                  International Financial Institutions


                      Global Environment Facility

Fiscal year 2005 level..................................    $106,640,000
Fiscal year 2006 request................................     107,500,000
Committee recommendation................................           - 0 -

    The Committee recommends no appropriation in fiscal year 
2006 for the Global Environment Facility (GEF), administered by 
the World Bank. The Committee is disappointed to learn that the 
GEF has backed away from its 2002 multilateral agreement to 
implement a performance-based allocation system. The GEF is a 
grant-making international financial institution, and every 
concessional international financial institution of which the 
United States is a donor is implementing a system where 
governance, performance, and other measurable results are key 
determinants in how each institution distributes its grants. 
Without such a system, the Committee has no assurance that 
United States taxpayer's dollars are being used efficiently, 
effectively or in a transparent manner. Given the difficulty 
with which the United States Government conducts oversight of 
multilateral institutions, it is imperative that each 
institution, including the GEF, implement the series of reforms 
to which it has agreed. Until the GEF adopts a performance-
based allocation system, the Committee can recommend no funding 
for this institution.

       Contribution to the International Development Association

Fiscal year 2005 level..................................    $843,200,000
Fiscal year 2006 request................................     950,000,000
Committee recommendation................................     950,000,000

    The Committee is providing $950,000,000 for the entire 
regularly scheduled United States contribution to the 
International Development Association (IDA), the same as the 
request and $106,800,000 more than the 2005 enacted level. The 
recommended level is intended for the first of three payments 
under the United States commitment to the fourteenth 
replenishment of IDA.

                                 GRANTS

    The Committee supports the President's goal to designated 
50 percent of IDA resources for grants to the poorest nations 
for critical needs such as health and education spending and 
100 percent grants for HIPC countries. Given the unending cycle 
of unsustainable debt levels in the poorest countries, the 
Committee supports the Secretary of Treasury's position in the 
negotiations for the fourteenth replenishment of IDA. Grants 
programs are well-established in IDA and the African 
Development Fund (AfDF), and the Committee is encouraged by the 
new grant program in the Asian Development Fund (AsDF).

                               OBJECTIVES

    The Committee remains concerned about the expansion of the 
Bank's focus from development functions to humanitarian 
lending, health activities, cultural projects, disarmament 
activities, and post-conflict reconstruction. Without a focus, 
the Bank risks losing any comparative advantage in the 
developing world, will duplicate bilateral donor assistance, 
and reduce its effectiveness. The Committee continues to 
believe that 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 on raising 
per capita income and economic growth.

           CONCERNS ABOUT THE MULTILATERAL DEVELOPMENT BANKS

                      AVAILABILITY OF INFORMATION

    The Committee again requests copies of all annual reports 
and information about the basic functions of each institution 
as they become available, including the European Bank for 
Reconstruction and Development and the International Fund for 
Agricultural Development. Future and continued support for the 
banks cannot be guaranteed unless future requests are justified 
by the Department of Treasury as well as the management of each 
individual institution.

                             BUDGET SUPPORT

    The Committee is concerned about the recent trend of 
providing World Bank loans and grants through budget support in 
lieu of project level support. The Committee believes that 
providing assistance by means of budget support should be 
employed only as an emergency measure and, if excessive or 
frequent, can undermine the principle of encouraging countries 
to become fiscally responsible and good stewards of internal 
resources. Furthermore, it thwarts the Committee's ability to 
effectively monitor implementation of foreign assistance to 
ensure effective expenditure of appropriated dollars. Future 
support for funding increases of the World Bank and the other 
MDBs cannot be guaranteed if the MDBs increase their reliance 
further on budget support. The Committee directs the Secretary 
of Treasury to consult with the Committee before any changes in 
budget support ceilings are adopted by any of the MDBs.

                       ANTICORRUPTION PROVISIONS

    The Committee has been pleased at the level of transparency 
reforms that the Secretary of the Treasury has instigated at 
the multilateral development banks. Specifically these reforms 
have been key in the fight against corruption at all levels of 
the Bank's operations. However, the Committee is dismayed to 
learn that the World Bank is considering the implementation of 
the proposal paper entitled ``Increasing the Use of Country 
Systems in Procurement'' that would effectively reverse the 
trend by the World Bank to standardize and harmonize 
procurement procedures among the regional MDBs. The Committee 
had been encouraged by the development of the World Bank's 
procurement guidelines over the last few years, that while not 
perfect, have helped create an international standard for 
procurement that is focused on transparency, international 
competitive bidding, and fair dispute resolution. The Committee 
was encouraged by recent efforts by the InterAmerican 
Development Bank and the Asian Development Bank to begin 
adopting these standard procedures.
    The Committee has long determined that transparent 
procurement procedures are the primary means to fight and 
lessen corruption at the MDBs. Any backtracking on such 
transparency and uniformity in such guidelines will be viewed 
by the Committee as an attempt by the World Bank to lessen 
anticorruption measures.
    The language included in section 582 of this Act would 
withhold 25 percent of the funds for the World Bank's 
International Development Association until the Secretary of 
Treasury certifies that the proposal to use local country 
procurement rules and systems for World Bank loans and grants 
is not being implemented. Additionally, section 582 would 
reinforce a strong central procurement office at the World 
Bank, and an office that has lost staff and influence over the 
past 10 years, and an office that is necessary in a context 
where corruption and graft can flourish. Additionally section 
582 would require the World Bank to establish procurement 
thresholds for international competitive bidding. Such 
thresholds have eroded over the past few years, thereby 
allowing de facto local country procurement to occur at a 
greater pace. Finally, section 582 would require advertisement 
of bank-funded tenders on a much broader basis, something that 
is currently limited to international competitive bidding. The 
Committee expects that transparency should be the goal of all 
World Bank procurement not just that which is internationally 
bid.
    The Committee expects that the term ``loans'' as used in 
section 582 is defined to include IBRD loans as well as IDA 
credit agreement or grants and project preparation advances, 
and ``World Bank procurement guidelines'' include following 
World Bank Guidelines: Procurement Under IBRD Loans and IDA 
Credits; Guidelines: Selection and Employment of Consultants by 
World Bank Borrowers; and, all relevant Standard Bidding 
Documents applicable to World Bank-funded tenders.

      Contribution to the Multilateral Investment Guarantee Agency

Fiscal year 2005 level..................................             -0-
Fiscal year 2006 request................................      $1,742,000
Committee recommendation................................       1,742,000

(Limitation on callable capital subscriptions)
Fiscal year 2005 level..................................          ($ 0 )
Fiscal year 2006 request................................    ($8,127,000)
Committee recommendation................................     (8,127,000)

    The Committee is providing $1,742,000 for past payments due 
to the Multilateral Investment Guaranty Agency (MIGA), the same 
as the request and $1,742,000 more than the 2005 enacted level.

       Contribution to the Inter-American Investment Corporation

Fiscal year 2005 level..................................             -0-
Fiscal year 2006 request................................      $1,742,000
Committee recommendation................................       1,742,000

    The Committee recommends an appropriation of $1,742,000 for 
past due payments for the Inter-American Investment Corporation 
(IIC), the private sector lending facility of the Inter-
American Development Bank. The recommendation is the same as 
the request and $1,742,000 above the 2005 enacted level.

Contribution to the Enterprise for the Americas Multilateral Investment 
                                  Fund

Fiscal year 2005 level..................................     $10,912,000
Fiscal year 2006 request................................       1,742,000
Committee recommendation................................       1,742,000

    The Committee recommends an appropriation of $1,742,000 for 
past due payments for the Multilateral Investment Fund (MIF). 
The recommendation is the same as the request and $9,170,000 
below the 2005 enacted level.

               Contribution to the Asian Development Fund

Fiscal year 2005 level..................................     $99,200,000
Fiscal year 2006 request................................     115,250,000
Committee recommendation................................     115,250,000

    The Committee recommends an appropriation of $115,250,000 
for the Asian Development Fund, the concessional facility of 
the Asian Development Bank (AsDB), an amount that is the same 
as the level requested and $16,050,000 more than the fiscal 
year 2005 enacted level. The Committee recommends the full 
amount be made available for the second scheduled payment to 
the ninth replenishment of the Asian Development Fund.

              Contribution to the African Development Bank

Fiscal year 2005 level..................................      $4,067,000
Fiscal year 2006 request................................       5,638,000
Committee recommendation................................       5,638,000

(Limitation on callable capital subscriptions)
Fiscal year 2005 level..................................  ($106,000,000)
Fiscal year 2006 request................................    (88,334,000)
Committee recommendation................................    (88,334,000)

    The Committee recommends an appropriation of $5,638,000 for 
the African Development Bank for the scheduled United States 
contribution to the African Development Bank, an amount that is 
$1,571,000 above the amount provided in fiscal year 2005 and 
the same as the amount requested.

              Contribution to the African Development Fund

Fiscal year 2005 level..................................    $105,152,000
Fiscal year 2006 request................................     135,700,000
Committee recommendation................................     135,700,000

    The recommendation for the concessional African Development 
Fund is $135,700,000, an amount that is $30,548,000 more than 
the amount provided in fiscal year 2005 and the same level as 
the request.

  Contribution to the European Bank for Reconstruction and Development

Fiscal year 2005 level..................................     $35,148,000
Fiscal year 2006 request................................       1,016,000
Committee recommendation................................       1,016,000

(Limitation on callable capital subscriptions)
Fiscal year 2005 level..................................  ($121,997,000)
Fiscal year 2006 request................................     (2,250,000)
Committee recommendation................................     (2,250,000)

    The Committee is recommending $1,016,000 for the European 
Bank for Reconstruction and Development (EBRD). This amount is 
the same as the President's request and $34,132,000 less than 
the appropriation provided in fiscal year 2005.

  Contribution to the International Fund for Agricultural Development

Fiscal year 2005 level.......................................$14,880,000
Fiscal year 2006 request......................................15,000,000
Committee recommendation......................................15,000,000

    The fiscal year 2005 recommendation for the International 
Fund for Agricultural Development (IFAD) is $15,000,000, the 
same as the request and $120,000 below the amount provided in 
fiscal year 2005.
    The Committee is concerned about the decisions by IFAD 
management to sit on the board of directors of groups that 
advocate and lobby donor governments. The Committee believes 
that such board membership is inappropriate for a multilateral 
organization that must represent the view of all its nation 
donors and directs the Secretary of Treasury to report to the 
Committee no later than 30 days after enactment of this Act, a 
list of all advocacy groups on which the IFAD is a sitting 
member.

                International Organizations and Programs

Fiscal year 2005 level..................................    $325,767,000
Fiscal year 2006 request................................     281,908,000
Committee recommendation................................     328,958,000

    The Committee has recommended $328,958,000 for 
International Organizations and Programs. This is $3,191,000 
above the fiscal year 2005 level and $47,050,000 above the 
President's request. The United Nations Population Fund (UNFPA) 
is discussed in section 560.
    The Committee recommendation also continues prior year bill 
language prohibiting the use of funds for the International 
Atomic Energy Agency (IAEA). Funding for IAEA is addressed 
elsewhere.

                   UNITED NATIONS DEVELOPMENT PROGRAM

    The Committee recommends a level not less than $110,000,000 
in International Organizations and Programs funding be used to 
support the United Nations Development Program (UNDP), 
$15,000,000 more than the request and $1,872,000 more than 
provided in 2004.

                     UNITED NATIONS CHILDREN'S FUND

    UNICEF is an essential partner of the United States in 
achieving child survival and health objectives, especially 
those in the areas of immunization, HIV/AIDS, and early 
childhood development. The Committee recommendation includes 
not less than $127,000,000 for a contribution to UNICEF. This 
does not preclude USAID from providing additional funding for 
specific UNICEF projects.

               UNITED NATIONS DEVELOPMENT FUND FOR WOMEN

    The Committee supports a total of $5,000,000 for the United 
Nations Development Fund for Women (UNIFEM) including a 
$3,500,000 contribution to the Fund and a $1,500,000 
contribution to the Trust Fund in Support of Actions to 
Eliminate Violence Against Women. This level is $4,050,000 
above the request and $2,020,000 more than provided in the 2005 
Act.

                   UNITED NATIONS ENVIRONMENT PROGRAM

    The Committee notes the importance of UNEP's work in 
restoring and preserving environmental quality in the 
Palestinian territories.

                               ANGKOR WAT

    The Committee notes the historical and archeological value 
of the restoration of the Phnom Bakheng temple in the Angkor 
Wat complex in Siem Reap, Cambodia, and supports continued 
United States government funding to this critical international 
effort.

                      TITLE V--GENERAL PROVISIONS

    The Committee recommends that 20 of the general provisions 
carried in the fiscal year 2005 Act be deleted. These 
provisions (sections 531, 572, 573, 575, 576, 577, 578, 579, 
580, 582, 583, 585, 586, 587, 589, 590, 592, 593, 594, and 595) 
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. 507, ``Prohibition Against Direct Funding for Certain 
Countries'', is modified by exempting Libya from the 
prohibition against Export-Import Bank programs.
    Sec. 517, ``Independent States of the Former Soviet Union'' 
is modified by including subsection (a) of the fiscal year 2005 
House bill, and by deleting ``Georgia'' and ``Ukraine'' and 
adding ``Kazakhstan'' and ``Uzbekistan'' to the list of 
notification countries.
    Sec. 520, ``Special Notification Requirements'' is modified 
to delete Liberia and Cambodia.
    Sec. 522, ``Child Survival and Health Activities'' is 
revised by deleting the earmark for family planning/
reproductive health.
    Sec. 523, ``Afghanistan'' is modified by changing the 
number to $954,000,000 and by deleting all earmarks except 
$50,000,000 for Afghan women and girls.
    Sec. 525, ``HIV/AIDS'' is modified by requiring an 
assessment based on strengthening the results-based 
disbursement system and support to country-level monitoring 
mechanisms.
    Sec. 526, ``Democracy Programs'' is modified by reverting 
to language, similar to subsections (d) and (e) of the fiscal 
year 2005 Act, providing not less than $27,000,000 of Economic 
Support Funds for the Human Rights and Democracy Fund; up to 
$1,200,000 for the Reagan/Fascell Democracy Fellows Program; up 
to $1,500,000 for democracy and human rights program in Iran 
and Syria, including through the National Endowment for 
Democracy.
    Sec. 531, ``Financial Market Assistance in Transition 
Countries'' is a new general provision that designates a 
minimum level of $40,000,000 to be provided for helping 
countries in transition build and improve capital markets and 
financial market systems. Effective and efficient financial 
markets are vital cornerstones of economic development. 
Countries in transition need technical assistance building and 
developing stock exchanges, central banks, financial regulatory 
institutions and private financial intermediaries. The 
Committee strongly supports the work of not for profit 
organizations and volunteers with experience in the private 
sector in developing countries.
    Among the work that outside technical experts can help with 
is developing a legal and regulatory framework for financial 
systems, advancing sound policies and procedures for corporate 
governance, developing payments systems, promoting pension 
system reforms and combating money laundering. The Committee 
affirms the principle of rigorous competitive selection of 
proposals based on technical merit.
    Sec. 534, ``Special Authorities'', is modified by including 
a new subsection (j), ``Extension of Authority'', which 
provides technical changes to Public Law 107-57, and by 
deleting subsections (i) through (p) of the fiscal year 2005 
Act.
    Sec. 535, ``Arab League Boycott of Israel'', is modified by 
to take into account that some Arab League countries have 
normalized relations with Israel since the passage of the 
fiscal year 2005 Act.
    Sec. 539, ``Prohibition on Publicity and Propaganda'', is 
modified by deleting the limitation of $750,000 to carry out 
section 316 of Public Law 96-533.
    Sec. 549, ``Haiti'' is modified by reverting to fiscal year 
2005 House language.
    Sec. 552, ``Authorization Requirement'', is modified by 
deleting ``Millennium Challenge Corporation''.
    Sec. 554, ``Cambodia'' is modified by deleting all after 
the first subsection in the 2005 Act.
    Sec. 556, ``Colombia'' is modified by deleting the 
notwithstanding authority provided in subsection (a) of the 
2005 Act.
    Sec. 559, ``West Bank and Gaza Program'', is modified to 
conform to amendments made in the fiscal year 2005 emergency 
supplemental, providing for a mandatory GAO audit of fiscal 
year 2006 Economic Support Funds for the West Bank and Gaza 
Program.
    Sec. 560, ``Contributions to the United Nations Population 
Fund'' is identical to section 560 of the fiscal year 2005 Act 
except for technical date changes and the deletion of a 
subsection providing for reprogramming of fiscal year 2003 and 
2004 funds.
    Sec. 567, ``Basic Education'' is modified to establish a 
minimum level within title II of this Act for basic education 
programs of $465,000,000 and to require an analysis of United 
States basic education programs.
    Sec. 568, ``Reconciliation Programs'' is modified by 
changing a ``shall'' to a ``should'' and raising the figure to 
$15,000,000.
    Sec. 569, ``Sudan'' is modified by raising the dollar 
figure to $367,000,000 from title II, exempting support for the 
Comprehensive Peace Agreement from restrictions under this 
section, deleting a notification requirement, and clarifying 
regional definitions. Subsections (g) and (h) of the fiscal 
year 2005 Act, making available emergency appropriations and 
providing for technical changes, are deleted.
    Sec. 570, ``Trade Capacity Building'' is modified to 
establish a minimum level of $522,000,000 from certain accounts 
of this Act.
    Sec. 571, ``Excess Defense Articles for Central and South 
European Countries and Certain Other Countries'' is modified by 
adding ``Afghanistan'' and ``Iraq''.
    Sec. 572, ``Cuba'' is the same general provision as 
included in the House-Reported Foreign Operations, Export 
Financing and Related Programs Bill, 2005 and prohibits 
counternarcotics assistance in this Act to the Government of 
Cuba.
    Sec. 573, ``Gender-Based Violence Training'' is a new 
general provision requiring that police, judicial and military 
training funded by this Act shall include training on gender-
based violence. A report on the implementation of this section 
is required.
    Sec. 574, ``Limitation on Economic Support Fund Assistance 
for Certain Foreign Governments That Are Parties to the 
International Criminal Court'' is modified by including a 
Presidential national interest waiver authority.
    Sec. 575, ``Tibet'' is modified by deleting the earmark for 
the National Endowment for Democracy in subsection (b).
    Sec. 576, ``Central America'' is modified by deleting all 
after subsection (a) of the fiscal year 2005 Act.
    Sec. 577, ``United States Agency for International 
Development Management'', is modified by increasing the level 
in subsection (a) to $75,000,000, deleting the limitation on 
employment in the United States, deleting the consultation 
requirement of subsection (c)(2), and removing the clarifying 
authority of subsection (g).
    Sec. 578, ``HIPC Debt Reduction'' is modified to include, 
for Liberia, debt under the Lend-Lease Act of 1941.
    Sec. 579, ``OPIC Transfer Authority'' is a new general 
provision that allows up to $20,000,000 appropriated under 
Title II of this Act to be transferred to and merged with funds 
appropriated to OPIC's Program Account.
    Sec. 580, ``Conflict Response'', is a new general provision 
clarifying that the Secretary of State may transfer up to 
$100,000,000 in order to support reconstruction and 
stabilization assistance.
    Sec. 581, ``Rescission'', is a new general provision 
rescinding $64,000,000 in previously appropriated funds.
    Sec. 582, ``Anticorruption Provisions'', is a new general 
provision conditioning 25 percent of ``International 
Development Association'' funding on a certification that the 
World Bank is not changing its procurement system in ways which 
reduce transparency, accountability, and competition.

               PROVISIONS RETAINED FROM FISCAL YEAR 2005

    The following general provisions from the fiscal year 2005 
Act are retained in the fiscal year 2006 Act unchanged except 
for technical corrections, references to fiscal year 2006, and 
new section numbers where appropriate:
    Sec. 501. Compensation for United States Executive 
Directors to International Financial Institutions.
    Sec. 502. Restrictions on Voluntary Contributions to United 
Nations Agencies.
    Sec. 503. Limitation on Residence Expenses.
    Sec. 504. Limitation on Expenses.
    Sec. 505. Limitation on Representational Allowances.
    Sec. 506. Prohibition on Taxation of United States 
Assistance.
    Sec. 508. Military Coups.
    Sec. 509. Transfers.
    Sec. 510. Commercial Leasing of Defense Articles.
    Sec. 511. Availability of Funds.
    Sec. 512. Limitation on Assistance to Countries in Default.
    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. 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. 527. Prohibition on Bilateral Assistance to Terrorist 
Countries.
    Sec. 528. Debt-For-Development.
    Sec. 529. Separate Accounts.
    Sec. 530. Enterprise Fund Restrictions.
    Sec. 532. Authorities for the Peace Corps, Inter-American 
Foundation and African Development Foundation.
    Sec. 533. Impact on Jobs in the United States.
    Sec. 536. Eligibility for Assistance.
    Sec. 537. Reservations of Funds.
    Sec. 538. Ceilings and Earmarks.
    Sec. 540. Prohibition of Payments to United Nations 
Members.
    Sec. 541. Nongovernmental Organizations--Documentation.
    Sec. 542. Prohibition on Assistance to Foreign Governments 
that Export Lethal Military Equipment to Countries Supporting 
International Terrorism.
    Sec. 543. Withholding of Assistance for Parking Fines Owed 
by Foreign Governments.
    Sec. 544. Limitation on Assistance for the PLO for the West 
Bank and Gaza.
    Sec. 545. War Crimes Tribunals Drawdown.
    Sec. 546. Landmines.
    Sec. 547. Restrictions Concerning the Palestinian 
Authority.
    Sec. 548. Prohibition of Payment of Certain Expenses.
    Sec. 550. Limitation on Assistance to the Palestinian 
Authority.
    Sec. 551. Limitation on Assistance to Security Forces.
    Sec. 552. Foreign Military Training Report.
    Sec. 555. Palestinian Statehood.
    Sec. 557. Illegal Armed Groups.
    Sec. 558. Prohibition on Assistance to the Palestinian 
Broadcasting Corporation.
    Sec. 561. War Criminals.
    Sec. 562. User Fees.
    Sec. 563. Serbia.
    Sec. 564. Community Based Police Assistance.
    Sec. 565. Special Debt Relief for the Poorest.
    Sec. 566. Authority to Engage in Debt Buybacks or Sales.

              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'' up to 
$6,000,000 may be transferred to and merged with funds under 
the heading ``Operating Expenses of the United States Agency 
for International Development.''
    Under ``Development Credit Authority'' up to $21,000,000 is 
authorized to be transferred to the account from a variety of 
sources. In addition, $8,000,000 may be transferred to and 
merged with funds appropriated under the heading ``Operating 
Expenses of the United States Agency for International 
Development''.
    Under ``Peace Corps'', not to exceed $2,000,000 may be 
transferred to the Foreign Currency Fluctuations Account to 
help mitigated exchange rate losses.
    Under section 579, ``OPIC Transfer Authority'', up to 
$20,000,000 of funds under title II may be transferred to funds 
appropriated by this Act for the Overseas Private Investment 
Corporation Program Account.
    Under section 580, ``Conflict Response'', up to 
$100,000,000 may be transferred within accounts of the 
Department of State and to other Federal agencies as necessary 
to support reconstruction and stabilization assistance.

                              Rescissions

    Pursuant to clause 3(f)(2) of the rule XIII of the Rules of 
the House of Representatives, the following is submitted 
describing the rescissions recommended in the accompanying 
bill:
    Under ``General Provisions'' in title V, section 581 
rescinds $64,000,000 of funds provided under the heading 
``Other Bilateral Economic Assistance, Economic Support Fund'' 
in title II of Public Law 108-447.

                  Rescissions Recommended in the Bill



                                                             Amounts
                  Department or Activity                 recommended for
                                                           rescission

Other Bilateral Economic Assistance, Economic Support        $64,000,000
 Fund title II of Public Law 108-447..................


                        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 2006 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 few 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'', 
authority is provided for Sections 1(a) and (b) of Public Law 
103-428 to remain in effect until October 1, 2006. Under 
``Export-Import Bank of the United States, Subsidy 
Appropriations'', funds are appropriated for the cost of direct 
loans, loan guarantees, insurance, and tied-aid grants. Such 
costs shall be as defined in section 502 of the Congressional 
Budget Act of 1974 and may be used for the disbursement of 
direct loans, loan guarantees, insurance and tied-aid grants 
obligated in fiscal years 2006, 2007, 2008, and 2009. These 
funds are available for obligation until September 30, 2024.
    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 2006 and 2007. 
These funds are available for obligation until 2014 and 2015, 
depending on the initial date of obligation.
    6. Under ``Child Survival and Health Programs Fund'' 
language is provided that indicates how the funds should be 
allocated among various activities; not to exceed $250,000, 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 $65,000,000 is 
authorized to be made available for a contribution to The 
Vaccine Fund; and language is included that provides not less 
than $200,000,000, subject to matching contributions, for a 
contribution to the Global Fund to Fight AIDS, Tuberculosis and 
Malaria, which shall be expended at the minimum rate necessary 
to make timely payments for projects and activities.
    7. Under ``Development Assistance'', language is provided 
that indicates how the funds should be allocated among various 
activities, including $214,000,000 for trade capacity building 
including $20,000,000 for certain activities, $365,000,000 for 
basic education, and $15,000,000 for drinking water supply 
projects in east Africa. Also, $15,0000,000 shall be made 
available only for programs to improve women's leadership 
capacity in recipient countries.
    8. Under ``Transition Initiatives'', authority is provided 
to utilize up to $15,000,000 of funds appropriated to carry out 
part I of the Foreign Assistance Act of 1961 in excess of funds 
appropriated under this heading.
    9. 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 $21,000,000.
    10. Under ``Capital Investment Fund'', 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; and the assignment of employees or contractors to 
buildings is subject to the concurrence of the Administrator of 
USAID. Language is included that limits funding for 
implementing the Capital Security Cost Sharing Program to 
$55,800,000.
    11. Under ``Economic Support Fund'', not less than 
$240,000,000 is made available only for Israel and is required 
to be disbursed as a cash grant within 30 days of enactment of 
this Act; and not less than $495,000,000 is made available only 
for Egypt of which not less than $50,000,000 is for democracy 
programs and not less than $50,000,000 is for education; 
$250,000,000 should be made available only for assistance for 
Jordan; not less than $40,000,000 should be available for 
Lebanon of which not less than $6,000,000 should be available 
for American educational institutions for scholarships and 
other programs; and not less than $20,000,000 should be 
available for Cyprus. Also fences $225,000,000 in funding for 
Afghanistan until the Government of Afghanistan is fully 
cooperating with the United States on poppy eradication and 
interdiction efforts.
    12. Under ``Assistance for the Independent States of the 
Former Soviet Union'', limits to administrative expenses for 
programs under section 807 of Public Law 102-511 to 6 percent, 
and directs that not less than $52,000,000 should be made 
available for assistance for child survival and health 
activities.
    13. 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.
    14. Under ``Peace Corps'', permits the Director to transfer 
up to $2,000,000 to help mitigate exchange rate losses.
    15. Under ``Millennium Challenge Corporation'', language is 
included allowing up to 10 percent of funds for assistance to 
threshold countries but restricting the availability of funds 
until after the submission of a report describing the proposed 
implementation of the threshold program for fiscal year 2006. 
Section 605(e)(4) is also applied to funds appropriated under 
this heading. Administrative expenses are limited to 
$75,000,000. Language is included requiring the MCC to fully 
fund compacts.
    16. Under ``Global HIV/AIDS Initiative'', not less than 
$200,000,000 is made available for a contribution to the Global 
Fund to Fight AIDS, Tuberculosis and Malaria, which shall be 
expended at the minimum rate necessary to make timely payments 
for projects and activities. Also, administrative expenses are 
limited to not more than $12,000,000.
    17. Under ``International Narcotics Control and Law 
Enforcement'', the Department of State is given the authority 
to use section 608 of the Foreign Assistance Act of 1961 to 
provide excess property to a foreign country; the account funds 
demand reduction programs at $10,000,000; and a limitation of 
$33,484,000 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; section 482(b) of the Foreign Assistance 
Act is waived, subject to notification; 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 $19,015,000 is placed on 
administrative expenses of the Department of State, and not 
more than $7,800,000 may be available for administrative 
expenses of the United States Agency for International 
Development.
    19. Under ``Nonproliferation, Anti-terrorism, Demining, and 
Related Programs'', a limitation of $37,500,000 is placed on 
funding for the Nonproliferation and Disarmament Fund with 
authority to use such funds outside of the Independent States 
of the former Soviet Union and international organizations when 
it is in the national security interests of the United States 
to do so; administrative expenses for operation and management 
of the demining program are limited to $705,000; and extends 
availability of ``Anti-terrorism Assistance'' and ``Export 
Control and Border Security'' funding to 2007.
    20. Under ``Debt Restructuring'' funds are provided for the 
cost of selling, reducing or canceling debts owed to the United 
States, of modifying concessional credit agreements with least 
developed countries, and of canceling amounts owed as a result 
of loans or guarantees. In addition funds are provided for the 
Secretary of Treasury to pay the Heavily Indebted Poor 
Countries Trust Fund amounts for the benefits of countries that 
are eligible for debt reduction.
    21. Under ``Foreign Military Financing Program'', not less 
than $2,280,000,000 is appropriated for Israel, of which not 
less than $595,000,000 shall be available for the procurement 
in Israel of defense articles and defense services and that all 
funds for Israel must be disbursed within 30 days of enactment 
of this Act; $1,300,000,000 shall be made available for grants 
only for Egypt; a limitation of $41,600,000 is provided for 
administrative expenses; $206,000,000 should be made available 
for Jordan; and a limitation of $373,000,000 from certain other 
funds may be obligated for expenses incurred pursuant to 
section 43(b) of the Arms Export Control Act.
    22. 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.
    23. Under ``General Provisions'':
    Sec. 517, ``Independent States of the Former Soviet Union'' 
is modified by including subsection (a) from the fiscal year 
2005 House bill, and by deleting ``Georgia'' and ``Ukraine'' 
and adding ``Kazakhstan'' and ``Uzbekistan'' to the list of 
notification countries.
    Sec. 520, ``Special Notification Requirements'' is modified 
to delete Liberia and Cambodia.
    Sec. 522, ``Child Survival and Health Activities'' is 
revised by deleting the earmark for family planning/
reproductive health.
    Sec. 523, ``Afghanistan'' is modified by changing the 
number to $954,000,000 and by deleting all earmarks except 
$50,000,000 for Afghan women and girls.
    Sec. 525, ``HIV/AIDS'' is a modified by requiring an 
assessment based on a results-based disbursement system and 
support to country-level monitoring mechanisms.
    Sec. 526, ``Democracy Programs'' is modified by reverting 
to language, similar to subsections (d) and (e) of the fiscal 
year 2005 Act, providing not less than $27,000,000 of Economic 
Support Funds for the Human Rights and Democracy Fund; up to 
$1,200,000 for the Reagan/Fascell Democracy Fellows Program; up 
to $1,500,000 for democracy and human rights program in Iran 
and Syria, including through the National Endowment for 
Democracy.
    Sec. 531, ``Financial Market Assistance in Transition 
Countries'' is a new general provision that designates a 
minimum level of $40,000,000 to be provided for helping 
countries in transition build and improve capital markets and 
financial market systems. Effective and efficient financial 
markets are vital cornerstones of economic development. 
Countries in transition need technical assistance building and 
developing stock exchanges, central banks, financial regulatory 
institutions and private financial intermediaries. The 
Committee strongly supports the work of non-profit 
organizations and volunteers with experience in the private 
sector in developing countries. The Committee affirms the 
principle of competitive selection of proposals based on 
technical merit.
    Sec. 534, ``Special Authorities'', is modified by including 
a new subsection (j), ``Extension of Authority'', which 
provides technical changes to public law 107-57, and by 
deleting subsections (i) through (p) of the fiscal year 2005 
Act.
    Sec. 535, ``Arab League Boycott of Israel'', is modified to 
take into account that some Arab League countries have 
normalized relations with Israel since the passage of the 
fiscal year 2005 Act.
    Sec. 539, ``Prohibition on Publicity and Propaganda'', is 
modified by deleting the limitation of $750,000 to carry out 
section 316 of Public Law 96-533.
    Sec. 549, ``Haiti'' is modified by reverting to fiscal year 
2005 House language.
    Sec. 552, ``Authorization Requirement'', is modified by 
deleting ``Millennium Challenge Corporation'' .
    Sec. 554, ``Cambodia'' is modified by deleting all after 
the first subsection in the 2005 Act.
    Sec. 556, ``Colombia'' is modified by deleting the 
notwithstanding authority provided in subsection (a) of the 
2005 Act.
    Sec. 559, ``West Bank and Gaza Program'', is modified to 
conform to amendments made in the fiscal year 2005 emergency 
supplemental, providing for a mandatory GAO audit of fiscal 
year 2006 Economic Support Funds for the West Bank and Gaza 
Program.
    Sec. 560, ``Contributions to the United Nations Population 
Fund'' is identical to section 560 of the fiscal year 2005 Act 
except for technical date changes and the deletion of a 
subsection providing for reprogramming of fiscal year 2003 and 
2004 funds.
    Sec. 567, ``Basic Education'' is modified to establish a 
minimum level within title II of this Act for basic education 
programs of $465,000,000 and to require an analysis of United 
States basic education programs.
    Sec. 568, ``Reconciliation Programs'' is modified by 
changing a ``shall'' to a ``should'' and raising the figure to 
$15,000,000.
    Sec. 569, ``Sudan'' is modified by raising the dollar 
figure to $367,000,000 from title II, exempting support for the 
Comprehensive Peace Agreement from restrictions under this 
section, deleting a notification requirement, and clarifying 
regional definitions. Subsections (g) and (h) of the fiscal 
year 2005 Act, making available emergency appropriations and 
providing for technical changes, are deleted.
    Sec. 570, ``Trade Capacity Building'' is modified to 
establish a minimum level of $522,000,000 from certain accounts 
of this Act.
    Sec. 571, ``Excess Defense Articles for Central and South 
European Countries and Certain Other Countries'' is modified by 
adding ``Afghanistan'' and ``Iraq''.
    Sec. 572, ``Cuba'' is the same general provision as 
included in the House-Reported Foreign Operations, Export 
Financing and Related Programs Bill, 2005 and prohibits 
counternarcotics assistance in this Act to the Government of 
Cuba.
    Sec. 573, ``Gender-Based Violence Training'' is a new 
general provision requiring that police, judicial and military 
training funded by this Act shall include training on gender-
based violence. A report on the implementation of this section 
is required.
    Sec. 574, ``Limitation on Economic Support Fund Assistance 
for Certain Foreign Governments That Are Parties to the 
International Criminal Court'' is modified by including a 
Presidential national interest waiver authority.
    Sec. 575, ``Tibet'' is modified by deleting the earmark for 
the National Endowment for Democracy in subsection (b).
    Sec. 576, ``Central America'' is modified by deleting all 
after subsection (a) of the fiscal year 2005 Act.
    Sec. 577, ``United States Agency for International 
Development Management'', is modified by increasing the level 
in subsection (a) to $75,000,000, deleting the limitation on 
employment in the United States, deleting the consultation 
requirement of subsection (c)(2), and removing the clarifying 
authority of subsection (g).
    Sec. 578, ``HIPC Debt Reduction'' is modified to include, 
for Liberia, debt under the Lend-Lease Act of 1941.
    Sec. 579, ``OPIC Transfer Authority'' is a new general 
provision that allows up to $20,000,000 appropriated under 
Title II of this Act to be transferred to and merged with funds 
appropriated to OPIC's Program Account.
    Sec. 580, ``Conflict Response'', is a new general provision 
clarifying that the Secretary of State may transfer up to 
$100,000,000 in order to support reconstruction and 
stabilization assistance.
    Sec. 581, ``Rescission'', is a new general provision 
rescinding $64,000,000 in previously appropriated funds.
    Sec. 582, ``Anticorruption Provisions'', is a new general 
provision conditioning 25 percent of ``International 
Development Association'' funding on a certification that the 
World Bank is not changing its procurement system in ways which 
reduce transparency, accountability, and competition.

                  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
----------------------------------------------------------------------------------------------------------------
Overseas Private Investment       2003..............  Such sums as may    $39,626,000.......  $42,274,000
 Corporation Administrative                            be necessary.
 Expenses.
Overseas Private Investment       2003..............  Such sums as may    $23,844,000.......  $20,276,000
 Corporation Noncredit Account.                        be necessary.
Child Survival and Health         Population (1987);  Population          Population          $1,497,000,000
 Programs Fund (See note below).   Health and          ($290,000,000);     ($234,625,000);     (includes
                                   Disease             Health and          Health and          $375,000,000 for
                                   Prevention          Disease             Disease             population)
                                   (1987); Child       Prevention          Prevention
                                   Survival Fund       ($180,000,000);     ($166,762,500);
                                   (1987).             Child Survival      Child Survival
                                                       Fund                Fund II
                                                       ($75,000,000).      ($75,000,000).
Development Assistance (See note  Agriculture         Agriculture         Agriculture         $1,460,000,000
 below).                           (1987); Education   ($760,000,000);     ($639,613,000);     (includes
                                   (1987); Energy      Education           Education           $365,000,000 for
                                   and selected        ($180,000,000);     ($155,000,000);     basic education;
                                   development         Energy and          Energy and          other programs
                                   activities (1987).  selected            selected            difficult to
                                                       development         development         determine due to
                                                       activities          activities          changing
                                                       ($207,000,000).     ($149,990,000).     definitions of
                                                                                               programs since
                                                                                               last authorized)
International Disaster and        1987..............  $25,000,000.......  $70,000,000.......  $356,000,000
 Famine Assistance.
Transition initiatives..........  None (same          ..................  ..................  $50,000,000
                                   authorities as
                                   international
                                   disaster
                                   assistance).
Development credit authority....  None..............  ..................  ..................  ($21,000,000)
Development credit authority      None..............  ..................  ..................  $8,000,000
 administrative expenses.
Payment to the Foreign Service    None; mandatory     ..................  ..................  $41,700,000
 Retirement and Disability Fund.   item.
Operating Expenses of the United  1987..............  $387,000,000......  $340,600,000......  $630,000,000
 States Agency for International
 Development.
Capital Investment Fund.........  None..............  ..................  ..................  $77,700,000
Operating Expenses of the United  1987..............  $21,750,000.......  $21,000,000.......  $36,000,000
 States Agency for International
 Development Inspector General.
Economic Support Fund...........  1987..............  $3,800,000,000....  $3,555,000,000....  $2,558,525,000
International Fund for Ireland..  1988..............  $35,000,000.......  $35,000,000.......  $13,500,000
Assistance for Eastern Europe     None..............  ..................  ..................  $357,000,000
 and the Baltic States (See note
 below).
Assistance for the Independent    1993..............  $410,000,000......  $417,000,000......  $477,000,000
 States of the Former Soviet
 Union.
Inter-American Foundation.......  1993..............  $31,000,000.......  $30,960,000.......  $19,500,000
African Development Foundation..  1987..............  $3,872,000........  $6,500,000........  $20,500,000
Peace Corps.....................  2003..............  $365,000,000......  $295,069,000......  $325,000,000
Millennium Challenge Corporation  2005..............  Such sums as may    $1,488,000,000....  $1,750,000,000
                                                       be necessary.
International Narcotics Control   1994..............  $171,500,000......  $100,000,000......  $437,400,000
 and Law Enforcement.
Andean Counterdrug Initiative...  None..............  ..................  ..................  $734,500,000
Migration and Refugee Assistance  2003..............  $820,000,000......  $781,884,000......  $790,720,000
U.S. Emergency Refugee and        1962..............  Such amounts as     N/A...............  $30,000,000
 Migration Assistance Fund (See                        may be necessary.
 note below).
Nonproliferation, Anti-           None..............  ..................  ..................  $400,350,000
 terrorism, demining and related
 programs (See note below).
International Affairs Technical   1999..............  $5,000,000........  $1,500,000........  $20,000,000
 Assistance.
Debt restructuring (See note      2001..............  $435,000,000......  $448,000,000        $65,000,000 (Note:
 below).                                                                   (included up to     section 578
                                                                           $435,000,000 for    includes
                                                                           Heavily Indebted    additional
                                                                           Poor Countries      authorization for
                                                                           (HIPC) debt         HIPC debt relief,
                                                                           relief;             consistent with
                                                                           additional sums     appropriations
                                                                           for unauthorized    recommendation
                                                                           bilateral debt      for this account)
                                                                           relief).
International Military Education  2003..............  $85,000,000.......  $79,480,000.......  $86,744,000
 and Training.
Foreign Military Financing        2003..............  $4,107,000,000....  $6,104,632,000....  $4,442,300,000
 Program.
Peacekeeping operations.........  1999..............  $83,000,000.......  $76,500,000.......  $177,800,000
----------------------------------------------------------------------------------------------------------------
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. Microenterprise programs were
  reauthorized in 2004, covering the period through 2009.
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.--Funds for the United States Emergency Refugee and Migration Assistance Program (ERMA) are authorized in
  such amounts as may be necessary; however, appropriations which would result in a balance in the fund of more
  than $100,000,000 are prohibited (22 U.S.C. 2601 (c)) absent a waiver of this provision of law.
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.
Note.--The Tropical Forest Conservation Act of 1998 was reauthorized in 2004, including program authorization
  through 2007.

                   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...................................          20,270          20,080          20,270          25,065
Mandatory.......................................              42              42              42              42
----------------------------------------------------------------------------------------------------------------

                      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, in millions of dollars, associated with 
the budget authority provided in the accompanying bill:

Fiscal year 2006..................................................$8,016
Fiscal year 2007.................................................. 6,548
Fiscal year 2008.................................................. 3,053
Fiscal year 2009.................................................. 1,340
Fiscal year 2010 and future years................................. 1,176

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House 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.

          Financial 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 financial 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 (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                           PUBLIC LAW 106-113


 AN ACT Making consolidated appropriations for the fiscal year ending 
              September 30, 2000, and for other purposes.

(H.R. 3425, as introduced on November 17, 1999 and enacted into law by 
section 1000(a)(5) of division B of Public Law 106-113)

           *       *       *       *       *       *       *


                   TITLE V--INTERNATIONAL DEBT RELIEF


SEC. 501. ACTIONS TO PROVIDE BILATERAL DEBT RELIEF.

    (a) * * *
    (b) Provisions of Law.--The provisions of law referred to 
in subsection (a) are the following:
          (1) * * *

           *       *       *       *       *       *       *

          (5) The Act of March 11, 1941 (Chapter 11; 55 Stat. 
        31; 22 U.S.C. 411 et seq.; commonly known as the 
        ``Lend-Lease Act'').

           *       *       *       *       *       *       *


                          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:


    There were no rollcall votes.

                            ADDITIONAL VIEWS

    The total amount recommended in the House Fiscal Year 2006 
appropriations bill is $20.27 billion, $2.56 billion below the 
President's request for this fiscal year. While I believe that 
this bill reflects, for the most part, a bipartisan compromise 
on the distribution of resources, I feel that this allocation 
fails to meet our overall foreign policy and national security 
needs at a time when the world is facing greater instability 
due to disease, deprivation and conflict.
    The world's attention is currently focused on meeting the 
Millennium Development Goals and on the upcoming G8 Summit, at 
which wealthy nations will announce new commitments to achieve 
development progress. At this time, when the United States 
should be playing a leading role in generating the 
international political will and resources to tackle the myriad 
of global challenges, we have been presented with a budget 
request and a budget resolution that allow for no substantial 
new commitments of resources. I am deeply disappointed that we 
will miss this tremendous opportunity.
    I am pleased that the bill at least maintains last year's 
levels for Child Survival and Health programs and Development 
Assistance programs, and provides increased funding for HIV/
AIDS assistance, Basic Education and the Millennium Challenge 
Account over the Fiscal Year 2005 enacted levels.
    In light of the continuing emergency on the African 
continent and the fast spread of HIV/AIDS in many parts of 
Asia, Eastern Europe and Latin America, I wish we could have 
devoted greater resources toward combating this deadly disease, 
particularly through the Global Fund. However, I note that this 
bill allocates $400 million for the Global Fund, double the 
amount requested by the Administration.
    While the bill cuts $1.25 billion from the President's 
request for the Millennium Challenge Corporation, the program 
receives a total of $1.75 billion in FY2006, an increase of 
$250 million over the FY2005 enacted level. I continue to be 
concerned both by the slow progress of the MCC in approving and 
funding programs and by the fact that the President continues 
to request increases for this Presidential initiative while 
cutting funding for core development programs.
    I am also concerned that the bill provides no funding for 
the Global Environmental Facility (GEF). The GEF is the largest 
single funder of projects to improve the global environment, 
and every dollar invested by the U.S. in the GEF leverages $14 
from other sources.
    I understand that the Chairman has proposed this cut due to 
concerns that the GEF has not implemented a performance-based 
allocation system. While I support the Chairman's desire to 
spur management reforms at the GEF, I believe withholding our 
funding for the GEF is the wrong way to accomplish this.
    While we have conditioned all assistance to the GEF on the 
completion of specific reforms, we have removed conditionality 
currently in law on U.S. military assistance to Indonesia. For 
the first time since Indonesian military-backed militias laid 
waste to East Timor in the wake of its August, 1999 
independence referendum, we will provide FMF to Indonesia free 
of any conditions. And, despite the Guatemalan government's 
noncompliance with military reforms stipulated in the Peace 
Accords, we have removed IMET restrictions on that country as 
well.
    I also regret that the bill does not fully fund the 
President's requests for refugees and peacekeeping and reduces 
funding for the International Fund for Ireland from FY2005 
levels. I do note, however, that additional funds for refugees 
and peacekeeping were included in the FY2005 Emergency 
Supplemental Appropriations bill.
    I am pleased that that this bill does restore funding for 
reproductive health programs which were cut in the President's 
request. It increases bilateral family planning assistance to 
$432 million, the FY2005 House-passed level, and earmarks an 
additional $25 million in International Organizations and 
Programs funds for the United Nations Population Fund (UNFPA.) 
The bill further specifies that any funds for UNFPA that cannot 
be spent should be transferred to USAID specifically for 
bilateral family planning programs--a provision that was 
carried in the FY2005 bill as well.
    This bill also provides a total of $465 million for basic 
education, $65 million more than the FY05 level, including $15 
million for a pilot program to eliminate school fees. It also 
requires a GAO study on our education programs to ensure we 
maximize the effectiveness of our aid dollars.
    Importantly, Israel's annual economic and military aid 
package is fully funded in this bill, including early disbursal 
of these funds within 30 days of the bill's passage. The bill 
includes language carried in previous years placing conditions 
on U.S. support for any future Palestinian state. This year, 
the bill includes an additional provision requiring a GAO audit 
of the FY06 West Bank and Gaza program, as well as a project-
by-project plan from the State Department on how these funds 
are being spent. It also extends a requirement from the FY05 
Supplemental for regular reports on Palestinian progress toward 
reforming security services, ending violence and incitement, 
and other key steps toward peace. These provisions will help 
ensure that U.S. assistance is properly monitored and is 
achieving the intended results.
    An amendment offered by Ranking Member Obey and adopted 
during full Committee consideration of the bill will focus 
greater attention on democracy and education programs in Egypt. 
This provision, which earmarks $50 million for democracy, 
governance, rule of law and human rights programs and $50 
million to improve access to primary and higher education, 
promote academic freedom and expand educational exchange 
programs, is intended to strengthen Egyptian civil society, 
enhance political participation, and spur democratic reforms. 
While the provision does not specify from where this additional 
funding should be drawn within overall economic assistance to 
Egypt, I urge that it be offset from cash transfer assistance 
and not from other project assistance.
    I am also pleased that the bill and report carry a number 
of provisions aimed at increasing the U.S. commitment to 
fighting gender-based violence around the world, including in 
areas with high HIV infection rates and in areas undergoing 
conflict and civil strife. I thank the Chairman for including a 
provision in the bill requiring that police, judicial, and 
military training programs funded in the bill develop training 
curricula on how to prevent and deal with victims of gender-
based violence. I also note that the bill increases funding for 
UNIFEM and the UNIFEM Trust Fund for a total of $5 million.
    I commend the Chairman of the Subcommittee on Foreign 
Operations for working with me to put together a bipartisan 
bill within an unfortunately tight budget.
                                   Nita M. Lowey.

                                  
