[House Report 109-563]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-563

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



 
            MILLENNIUM CHALLENGE REAUTHORIZATION ACT OF 2006

                                _______
                                

 July 13, 2006.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 4014]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on International Relations, to whom was 
referred the bill (H.R. 4014) to reauthorize the Millennium 
Challenge Act of 2003, and for other purposes, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.

                           TABLE OF CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose..........................................................     4
Background and Summary...........................................     5
Hearings.........................................................     7
Committee Consideration..........................................     7
Votes of the Committee...........................................     7
Committee Oversight Findings.....................................     7
New Budget Authority and Tax Expenditures........................     7
Congressional Budget Office Cost Estimate........................     8
Constitutional Authority Statement...............................    10
Section-by-Section Analysis and Discussion.......................    10
New Advisory Committees..........................................    16
Congressional Accountability Act.................................    16
Federal Mandates.................................................    16
Changes in Existing Law Made by the Bill, as Reported............    17

                             The Amendment

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Millennium 
Challenge Reauthorization Act of 2006''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Establishment and management of Millennium Challenge 
Corporation.
Sec. 4. Authorization of assistance.
Sec. 5. Millennium Challenge Compact.
Sec. 6. Congressional and public notification of Compact.
Sec. 7. Annual report.
Sec. 8. Powers of the Corporation; related provisions.
Sec. 9. Assistance to certain candidate countries.
Sec. 10. Authorization of appropriations.

SEC. 2. PURPOSES.

    Section 602(2) of the Millennium Challenge Act of 2003 (22 U.S.C. 
7701(2)) is amended by striking ``economic growth'' and all that 
follows and inserting the following: ``the reduction of poverty through 
sustainable, broad-based economic growth, including by strengthening 
good governance, promoting economic opportunities, and investing in 
people, as needed.''.

SEC. 3. ESTABLISHMENT AND MANAGEMENT OF MILLENNIUM CHALLENGE 
                    CORPORATION.

    Section 604(b)(2) of the Millennium Challenge Act of 2003 (22 
U.S.C. 7703(b)(2)) is amended--
            (1) by striking ``Appointment'' and all that follows 
        through ``the Chief Executive Officer shall be appointed'' and 
        inserting the following: ``Appointment.--The Chief Executive 
        Officer shall be appointed''; and
            (2) by striking subparagraph (B).

SEC. 4. AUTHORIZATION OF ASSISTANCE.

    (a) Assistance.--Section 605(a) of the Millennium Challenge Act of 
2003 (22 U.S.C. 7704(a)) is amended by striking ``in achieving lasting 
economic growth and poverty reduction'' and inserting ``in reducing 
poverty through sustainable, broad-based economic growth, including by 
strengthening good governance, promoting economic opportunities, and 
investing in people, as needed,''.
    (b) Limitations.--Section 605(e)(4) of the Millennium Challenge Act 
of 2003 (22 U.S.C. 7704(e)(4)) is amended in the second sentence--
            (1) by striking ``eleventh and fourteenth provisos'' and 
        inserting ``eighth and twelfth provisos'';
            (2) by striking ``division E of Public Law 108-7 (117 Stat. 
        162)'' and inserting ``Public Law 109-102 (119 Stat. 2174-
        2176)''; and
            (3) by striking ``2004'' and inserting ``2007''.

SEC. 5. MILLENNIUM CHALLENGE COMPACT.

    (a) Elements.--Section 609(b)(1) of the Millennium Challenge Act of 
2003 (22 U.S.C. 7708(b)(1)) is amended--
            (1) in subparagraph (D), by adding at the end before the 
        semicolon the following: ``, and an analysis of how the 
        intended beneficiaries will participate in, or be impacted by, 
        each project'';
            (2) in subparagraph (J), by striking ``and'' at the end;
            (3) in subparagraph (K), by striking the period at the end 
        and inserting ``; and'' ; and
            (4) by adding at the end the following new subparagraph:
                    ``(L) an analysis of the extent to which each 
                project carried out under the Compact will contribute 
                to reducing poverty through sustainable, broad-based 
                economic growth, including by strengthening good 
                governance, promoting economic opportunities, and 
                investing in people, as needed.''.
    (b) Local Input.--Section 609(d) of the Millennium Challenge Act of 
2003 (22 U.S.C. 7708(d)) is amended--
            (1) in paragraph (1), by striking ``and'' at the end;
            (2) by redesignating paragraph (2) as paragraph (3); and
            (3) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) consults with the national legislature of the 
        eligible country; and''.
    (c) Duration of Compact.--Section 609(j) of the Millennium 
Challenge Act of 2003 (22 U.S.C. 7708(j)) is amended--
            (1) by striking ``The duration'' and inserting the 
        following:
            ``(1) In general.--Except as provided in paragraph (2), the 
        duration''; and
            (2) by adding at the end the following new paragraph:
            ``(2) Exception.--
                    ``(A) In general.--A Compact shall not include a 
                project with a duration of more than 5 years unless the 
                Board--
                            ``(i) determines that the project cannot be 
                        completed in 5 years or less; and
                            ``(ii) approves a duration for the project 
                        of not more than 10 years.
                    ``(B) Congressional notification.--Not later than 
                15 days after the Board approves a duration for a 
                project pursuant to subparagraph (A)(ii), the Board, 
                acting through the Chief Executive Officer, shall 
                submit to the appropriate congressional committees a 
                notification of such approval, including a detailed 
                explanation for the determination and approval.''.
    (d) Concurrent and Subsequent Compacts.--Section 609 of the 
Millennium Challenge Act of 2003 (22 U.S.C. 7708) is amended--
            (1) by striking subsection (k); and
            (2) by inserting at the end the following new subsection:
    ``(k) Concurrent and Subsequent Compacts.--
            ``(1) In general.--Subject to the requirements of paragraph 
        (2), and in accordance with the requirements of this title, an 
        eligible country and the United States--
                    ``(A) may enter into and have in effect not more 
                than two Compacts at any given time under this section; 
                and
                    ``(B) may enter into subsequent Compacts after the 
                expiration of the existing Compact or Compacts.
            ``(2) Requirements.--
                    ``(A) Concurrent compacts.--An eligible country and 
                the United States may enter into a concurrent Compact 
                only if the Board determines that the country is making 
                considerable and demonstrable progress in implementing 
                the terms of its existing Compact and supplementary 
                agreements thereto.
                    ``(B) Subsequent compacts.--An eligible country and 
                the United States may enter into subsequent Compacts if 
                the Board determines that the country substantially met 
                the objectives of prior Compacts between the country 
                and the United States and supplementary agreements 
                thereto.''.
    (e) Effective Dates.--
            (1) Amendments relating to entry into compact.--The 
        amendments made by subsections (a) and (b) apply with respect 
        to Compacts entered into between the United States and an 
        eligible country under the Millennium Challenge Act of 2003 (22 
        U.S.C. 7701 et seq.) on or after October 1, 2006, or the date 
        of the enactment of this Act, whichever occurs later.
            (2) Amendments relating to duration and type of compact.--
        The amendments made by subsections (c) and (d) apply with 
        respect to Compacts entered into between the United States and 
        an eligible country under the Millennium Challenge Act of 2003 
        (22 U.S.C. 7701 et seq.) before, on, or after the date of the 
        enactment of this Act.

SEC. 6. CONGRESSIONAL AND PUBLIC NOTIFICATION OF COMPACT.

    (a) Congressional Notification Prior to Signing a Compact.--Section 
610 of the Millennium Challenge Act of 2003 (22 U.S.C. 7709(a)) is 
amended--
            (1) by redesignating subsection (b) as subsection (c); and
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Congressional Notification Prior to Signing a Compact.--Not 
later than 15 days prior to signing a Compact with an eligible country, 
the Board, acting through the Chief Executive Officer, shall provide 
notification of the proposed Compact, including a detailed summary of 
the Compact and a copy of the text of the Compact, to the appropriate 
congressional committees in accordance with the procedures applicable 
to reprogramming notifications under section 634A of the Foreign 
Assistance Act of 1961.''.
    (b) Public Notification After Entering Into a Compact.--Section 
610(c) of the Millennium Challenge Act of 2003 (as redesignated by 
subsection (a)(1) of this section) is amended by striking ``Chief 
Executive Officer'' and all that follows and inserting ``Chief 
Executive Officer shall publish such detailed summary of the Compact in 
the Federal Register and shall publish such detailed summary and the 
text of the Compact (including a copy of any annexes or supplementary 
agreements thereto) on the Internet website of the Corporation.''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
apply with respect to Compacts approved pursuant to section 609(h) of 
the Millennium Challenge Act of 2003 (22 U.S.C. 7708(h)) on or after 
the date of the enactment of this Act.

SEC. 7. ANNUAL REPORT.

    (a) Amendment.--Section 613(b) of the Millennium Challenge Act of 
2003 (22 U.S.C. 7712(b)) is amended by adding at the end the following 
new paragraphs:
            ``(6) A description of recruitment and employment of 
        members of minority groups at the Corporation, including, to 
        the maximum extent practicable, the numbers and percentages of 
        members of all minority groups who have been recruited by and 
        employed at the Corporation during the prior fiscal year.
            ``(7) A description of the extent to which the requirement 
        of section 614(h) has been met for the prior fiscal year, 
        including, to the maximum extent practicable, information on--
                    ``(A) the numbers and percentages of small, 
                minority-owned, or disadvantaged business enterprises 
                that provide goods and services that are financed with 
                funds made available under section 609(g), section 
                614(g), and section 616 during such prior fiscal year;
                    ``(B) the total number of contracts with such 
                business enterprises for such purposes during such 
                prior fiscal year;
                    ``(C) the total dollar value of such contracts; and
                    ``(D) the percentage value represented by such 
                contracts proportionate to the total value of all 
                contracts held by the Corporation that are financed 
                with funds made available under section 609(g), section 
                614(g), and section 616 during such prior fiscal 
                year.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
with respect to the report required to be submitted to Congress under 
section 613 of the Millennium Challenge Act of 2003 (22 U.S.C. 7712) 
for fiscal year 2007 and each subsequent fiscal year.

SEC. 8. POWERS OF THE CORPORATION; RELATED PROVISIONS.

    (a) Amendment.--Section 614 of the Millennium Challenge Act of 2003 
(22 U.S.C. 7713) is amended by adding at the end the following new 
subsection:
    ``(h) Participation of Certain United States Businesses.--To the 
maximum extent practicable, the President, acting through the Chief 
Executive Officer, shall ensure that United States small, minority-
owned, and disadvantaged business enterprises fully participate in the 
provision of goods and services that are financed with funds made 
available under section 609(g), subsection (g) of this section, and 
section 616.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
with respect to funds made available under the Millennium Challenge Act 
of 2003 (22 U.S.C. 7701 et seq.) for fiscal year 2007 and each 
subsequent fiscal year.

SEC. 9. ASSISTANCE TO CERTAIN CANDIDATE COUNTRIES.

    Section 616(d) of the Millennium Challenge Act of 2003 (22 U.S.C. 
7715(d)) is amended by striking ``for fiscal year 2004'' and inserting 
``for a fiscal year''.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

    (a) Amendment.--Section 619(a) of the Millennium Challenge Act of 
2003 (22 U.S.C. 7718(a)) is amended by striking ``fiscal years 2004 and 
2005'' and inserting ``fiscal years 2007 through 2009''.
    (b) Rule of Construction.--The amendment made by subsection (a) 
shall not be construed to affect the availability of funds appropriated 
pursuant to the authorization of appropriations under section 619 of 
the Millennium Challenge Act of 2003 (22 U.S.C. 7718(a)) before the 
date of the enactment of this Act.

                                Purpose

    The Millennium Challenge Reauthorization Act of 2006 (H.R. 
4014) reauthorizes Millennium Challenge Account (MCA) funding 
for fiscal years 2007 through 2009. Three years into the 
implementation of this new foreign assistance program, it also 
provides minimal technical corrections and other changes to 
facilitate the efforts of the Millennium Challenge Corporation 
(MCC) to reduce poverty through sustainable, broad-based 
economic growth. The legislation updates and harmonizes 
language regarding Millennium Challenge objectives, and 
increases programming flexibility. It requires a clear 
articulation of effects on beneficiaries and an analysis of 
expected poverty reduction. It also ensures normal 
Congressional oversight and authorizes threshold country 
programs that assist countries to become eligible for 
Millennium Challenge assistance.

                         Background and Summary

    Nearly half the world's population lives on less than two 
dollars a day. The U.S interest in global poverty reduction 
ranges from humanitarian and global economic objectives to 
ensuring stable democratic partners and long-term national 
security. Persistent poverty breeds frustration, conflict and--
as observed in the Middle East, South Asia and elsewhere--
provides fertile ground for the spread of extremism.
    In this era of costly national security priorities and 
budget constraints, the debate concerning U.S. foreign 
assistance is now focused on achieving results. Despite decades 
of donor assistance in the economic, political and social 
sectors, poverty persists throughout the developing world. In 
March of 2002, President George W. Bush stated that the 
``growing divide between wealth and poverty, between 
opportunity and misery, is both a challenge to our compassion 
and a source of instability . . . [w]e must confront it . . . 
[w]e must include every African, every Asian, every Latin 
American, every Muslim in an expanding circle of development.'' 
The Millennium Challenge program is a bold experiment towards 
achieving this goal.
    Governments in low and lower-middle income countries 
routinely suffer from three mutually reinforcing problems--weak 
commitment to reform, low institutional capacity, and pervasive 
corruption. The Millennium Challenge program provides a strong 
incentive for commitment to change by promising significant 
funding levels conditioned on meeting performance-based 
criteria in the areas of ruling justly, investing in people, 
and promoting economic freedom. The prospect of Millennium 
Challenge assistance has already leveraged reforms in ways that 
smaller or politically constrained bilateral development 
programs cannot. The MCC builds country capacity and ownership 
by requiring eligible countries to propose, design and manage 
their own projects. The Millennium Challenge program supports 
the fight against corruption. Country partners are required to 
meet a clear standard on corruption to achieve eligibility, and 
then must establish transparent fiscal, procurement and program 
management mechanisms to manage Millennium Challenge 
assistance. To further enhance these incentives towards 
accountability, transparency and local ownership, the 
legislation encourages consultation with national legislatures 
in addition to the civil society, business and donor 
stakeholders currently consulted regarding Compact projects.
    It is hoped that the Millennium Challenge approach will 
prove more effective than previous efforts at helping countries 
to move beyond donor dependency. Looking outward, it aims to 
spur economic growth by strengthening links between markets at 
the local, national, regional and global level. It then aims to 
extend this growth inward to create sustainable economic 
opportunities for the poor. On average, rural poverty makes up 
about 70 percent of total poverty across the developing world. 
Economic growth over the last decade has left many of the poor 
behind, particularly those in rural areas who are largely cut 
off from the non-agricultural sectors where growth is taking 
place. Poverty reduction that is sustained through economic 
growth will require creating growth in sectors where the poor 
live and work, or linking the poor into sectors where growth is 
occurring. The legislation strengthens these linkages by adding 
to compact elements an analysis of the participation by, or 
impact on, project beneficiaries, as well as an analysis of the 
extent to which Compact projects contribute to poverty 
reduction.
    Drawing on previous Millennium Challenge legislation as 
well as on current MCC statements and practice, the legislation 
updates and harmonizes policy language in the ``purposes,'' 
``authorization of assistance'' and ``compact elements'' 
sections of the Millennium Challenge Act of 2003 (P.L. 108-
199). The language acknowledges that poverty reduction through 
sustainable, broad-based economic growth is the overarching 
focus of the Millennium Challenge initiative. It also indicates 
that direct investments in other sectors may be needed to 
increase the poverty reduction or economic growth impact of a 
given Compact. For example, projects in the health and 
education sectors are now being developed for upcoming 
Compacts. Other examples of activities that help link the poor 
to economic growth include--in addition to investments in rural 
infrastructure and other economic activities--investments in 
training or education to build workforce capacity and 
incentives, in health to ensure the ability to work, in local 
government capacity or civil society watchdog groups, or in 
reforms that increase access to labor markets, including access 
and assets for women.
    The legislation matches the authorization for the Threshold 
Country Program to that of the overall Millennium Challenge 
Account. The Threshold Country Program authorizes the MCC Board 
to allocate up to ten percent of MCA funding to help non-
eligible but committed countries, or ``threshold countries,'' 
improve their performance on eligibility indicators that they 
failed to pass, so that they can become eligible for Compacts.
    To increase the ability of the MCC and eligible countries 
to select the best projects, adjust programs and ensure optimal 
impact, the legislation makes two adjustments based on lessons 
learned from MCC operations to date and results-based 
development assistance more broadly. The first allows for 
Compact duration beyond the five year limit (but not to exceed 
ten years), subject to an MCC Board determination. The second 
allows for concurrent and subsequent Compacts, subject to a 
Board determination of demonstrable progress.
    As it increases MCC programming flexibility, the 
legislation also strengthens Congressional oversight by 
requiring a fifteen day advance notification of the intent to 
obligate funds. This harmonizes notification requirements in 
recent Foreign Operations Appropriations Acts with 
Congressional recipient stipulations contained in the 2003 Act.
    Technical and other changes in the legislation eliminate 
the provision for an interim MCC Chief Executive Officer, which 
was intended for start-up, and save costs by permitting 
publication of Compact summaries in the Federal Register and 
allowing full Compacts to be published on the MCC website. 
Consistent with limitations on MCA funding in the FY 2006 
Foreign Operations, Export Financing, and Related Programs 
Appropriations Act (P.L. 109-102) and with House and Senate 
Foreign Operations Appropriations bills for FY 2007 (H.R. 
5522), the legislation renews a prohibition in the 2003 Act on 
use of funds for abortion and involuntary sterilization for FY 
2007. The legislation adds a reporting requirement regarding 
minority staffing and minority and disadvantaged representation 
in MCC procurement contracts. It also adds a requirement that 
encourages minority and disadvantaged representation in the 
provision of U.S. goods and services to the MCC, including for 
Compact feasibility studies, data research, and threshold 
country programs.
    Finally, the legislation indicates strong Congressional 
support by extending the authorization of MCA appropriations 
for three additional fiscal years (through FY09).

                                Hearings

    The Committee held two hearings in the 109th Congress 
related to the Millennium Challenge Corporation. On April 27, 
2005, the Committee held a hearing entitled, ``The Millennium 
Challenge Account: Does the Program Match the Vision?'' 
Testimony was received from four witnesses: The Honorable Paul 
Applegarth, then-CEO of the MCC; Mr. Steven Radelet, Senior 
Fellow, Center for Global Development; David B. Gootnick, M.D., 
Director, International Affairs and Trade Team, Government 
Accountability Office; and Mr. Conor O. Walsh, Country 
Representative for Honduras, Catholic Relief Services. On 
February 16, 2006, the Committee held a hearing on the 
international budget affairs request for FY07. Testimony was 
received from Secretary of State Condoleezza Rice.

                        Committee Consideration

    On June 27, 2006, the Committee on International Relations 
met in open session and ordered favorably reported the bill, 
H.R. 4014, as amended, by voice vote, a quorum being present.

                         Votes of the Committee

    Clause (3)(b) of rule XIII of the Rules of the House of 
Representatives requires that the results of each record vote 
on an amendment or motion to report, together with the names of 
those voting for or against, be printed in the Committee 
Report. There were no votes during consideration of H.R. 4014.

                      Committee Oversight Findings

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

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House Rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 4014, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under Section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 11, 2006.
Hon. Henry J. Hyde, Chairman,
Committee on International Relations,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4014, the 
Millennium Challenge Reauthorization Act of 2006.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sam 
Papenfuss, who can be reached at 226-2840.
            Sincerely,
                         Donald B. Marron, Acting Director.
Enclosure

cc:
        Honorable Tom Lantos
        Ranking Member
H.R. 4014--Millennium Challenge Reauthorization Act of 2006.

                                SUMMARY

    H.R. 4014 would authorize the appropriation of such sums as 
may be necessary for the Millennium Challenge Corporation (MCC) 
for fiscal years 2007 through 2009. The bill also would extend 
the time period for which aid could be provided under 
agreements between the United States and the recipient country. 
Additionally, it would allow for two agreements with one 
country to be in place concurrently. Finally, the bill would 
require the President to report on the recruitment and 
employment of members of minority groups and on the extent of 
contracts that the MCC signs with small businesses, minority-
owned businesses, and business concerns owned by disadvantaged 
individuals.
    CBO estimates that implementing H.R. 4014 would cost about 
$4.4 billion over the 2007-2011 period, assuming appropriation 
of the estimated amounts. Additionally, CBO estimates that, by 
extending the allowable time period for providing aid for 
individual projects, the bill would increase direct spending by 
$10 million in 2007, $50 million over the 2007-2011 period, and 
$100 million over the 2007-2016 period.
    H.R. 4014 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 4014 is shown in the 
following table. The costs of this legislation fall within 
budget function 150 (international affairs).

                                     By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                                              2006     2007     2008     2009     2010     2011
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for the Millennium Challenge
 Corporation
  Estimated Budget Authority \1\                              1,752        0        0        0        0        0
  Estimated Outlays                                             188      375      650      826      463      231

Proposed Changes
  Estimated Authorization Level                                   0    1,785    1,817    1,851        0        0
  Estimated Outlays                                               0      134      628    1,296    1,542      831

Spending Under H.R. 4014 for the Millennium Challenge
 Corporation
  Estimated Authorization Level \1\                           1,752    1,785    1,817    1,851        0        0
  Estimated Outlays                                             188      509    1,278    2,122    2,005    1,062

CHANGES IN DIRECT SPENDING

Budget Authority                                                  0        0        0        0        0        0
Estimated Outlays                                                 0       10       10       10       10       10
----------------------------------------------------------------------------------------------------------------
\1\ The 2006 level is the amount appropriated for that year.

                           BASIS OF ESTIMATE

    For the purposes of this estimate, CBO assumes that H.R. 
4014 will be enacted near the start of fiscal year 2007 and 
that the estimated amounts will be appropriated for each year.
Spending Subject to Appropriation
    H.R. 4014 would authorize the appropriation of such sums as 
may be necessary for the Millennium Challenge Corporation for 
fiscal years 2007 through 2009. The MCC provides foreign 
assistance to countries that meet certain criteria with respect 
to economic freedom, just governance, and provision of public 
services. In 2006, the Congress appropriated more than $1.7 
billion for the MCC. CBO estimates that the 2006 amount, 
adjusted for inflation, would be sufficient to meet the goals 
and objectives of the Millennium Challenge Corporation. The 
first appropriation for the MCC was in 2004 and based on 
spending patterns for other new programs CBO expects that 
spending will gradually increase to levels similar to other 
foreign-aid programs. Accordingly, CBO estimates that 
implementing H.R. 4014 would cost about $130 million in 2007 
and about $4.4 billion over the 2007-2011 period, assuming 
appropriation of the estimated amounts.
Direct Spending
    H.R. 4014 would increase spending of previously 
appropriated funds. Over the 2004-2006 period, the Congress 
appropriated more than $4 billion for the MCC, though only 
about $100 million has been spent through May of 2006. Under 
current law, the MCC cannot provide aid for projects that would 
take longer than five years to complete. Additionally, under 
current law, the MCC can only have one signed compact in effect 
with one country at any given time. Section 5 of H.R. 4014 
would allow the MCC to fund projects that would take up to 10 
years to complete and to have two compacts with one country in 
place concurrently.
    CBO expects that these changes likely would increase 
outlays from the funds already appropriated for the MCC. Based 
on information from the Millennium Challenge Corporation, CBO 
estimates that enacting H.R. 4014 would increase direct 
spending outlays by $10 million in 2007, $50 million over the 
2007-2011 period, and $100 million over the 2007-2016 period.

              INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    H.R. 4014 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would not affect the budgets of 
state, local, or tribal governments.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, Section 8 of the Constitution.

               Section-by-Section Analysis and Discussion

Sec. 1. Short Title; Table of Contents.
    This Section provides the short title of this bill, H.R. 
4014, as introduced October 7, 2005, and a table of contents.
Sec. 2. Purposes.
    This Section amends Section 602(2) of the Millennium 
Challenge Act of 2003 (P.L. 108-199) to clarify, in Section 2 
(``Purposes''), the objective of ``reducing poverty through 
sustainable, broad-based economic growth, including by 
strengthening good governance, promoting economic 
opportunities, and investing in people, as needed.'' This 
formulation combines language from Sections 602(b), 605(a) and 
616 of the 2003 Act, Sections 101, 201 and 202 of H.R. 2441 
(the original 2003 Millennium Challenge legislation as reported 
by the Committee), the MCC's FY 2007 Congressional Budget 
Justification, and subsequent public speeches, statements and 
testimonies by MCC then-CEO John Danilovich and other 
officials.
    Such language adjustments in this and other sections are 
not intended to diminish the Millennium Challenge Corporation's 
mandate of linking poverty reduction to the engine of 
sustainable, broad-based economic growth, for such growth is 
the essential foundation for sustainable poverty reduction. 
Rather, these changes seek to clarify that economic growth 
alone will not necessarily reduce poverty or improve 
inequalities in countries, as the recent history of many Latin 
American and African countries evidence. Rising national and 
personal average incomes--though necessary ingredients for 
improved livelihoods--do not guarantee poverty reduction. 
Countries and their constituent communities may have similar 
economic growth rates and yet may vary widely in how successful 
they are in connecting the poor to growth and thus reducing 
poverty. Persistent poverty and entrenched inequalities can 
slow economic growth in various ways. These include failing to 
capitalize highly profitable investment opportunities among the 
poor; limiting the contribution of some of a country's most 
talented individuals by restricting access to education and 
other avenues for social mobility; and feeding resentments and 
frustrations that can lead to societal instability and diminish 
support for democratic governance.
    It is the Committee's intent that Millennium Challenge 
assistance explicitly foster broad-based and sustainable 
economic growth that directly and demonstrably connects to the 
poor. Policies and programs are often necessary to reduce 
economic, institutional, and social barriers that prevent the 
poor from participating in and benefiting from economic growth. 
Such policies actively facilitate income and employment 
generation for the poor, especially for women and traditionally 
excluded groups. Labor-intensive growth strategies, 
particularly in rural areas and in the agricultural sector, 
tend to be most beneficial to the poor in the short-term. When 
combined with efforts to improve basic infrastructure and 
broaden access to productive assets such as credit, education, 
and property--especially by women and excluded groups--such 
investments can promote sustainable economic growth in ways 
that help break the cycle of poverty.
Sec. 3. Establishment and Management of Millennium Challenge 
        Corporation.
    This Section amends Section 604(b)(2) of the Millennium 
Challenge Act of 2003 to eliminate a start-up provision 
permitting the appointment of an interim Chief Executive 
Officer. It ensures that future CEOs of this multi-billion 
dollar program will serve by Presidential appointment, by and 
with the advice and consent of the Senate. A temporary Acting 
Chief Executive Officer or comparable individual can serve 
between permanent CEO appointments, as was done between the 
tenures of MCC CEOs Applegarth and Danilovich.
Sec. 4. Authorization of Assistance.
    This Section amends Section 605(a) of the 2003 Millennium 
Challenge Act to harmonize policy language with changes made by 
Section 2 above. The legislation also renews for FY 2007 the 
2003 Act prohibition on any U.S. funding related to abortion 
and involuntary sterilization. The FY 2006 and FY 2007 
appropriations bills also include this limitation on MCA 
funding, consistent with Section 104(f) of the Foreign 
Assistance Act of 1961, as amended (P.L. 87-195).
    Natural Resources. Section 605(e)(3) of the 2003 Act 
recognized that the sustainable management of natural resources 
is a critical component of economic growth and poverty 
reduction. The Act prohibits MCA assistance likely to cause a 
significant environmental, health, or safety hazard. The Act 
also directed the MCC to use objective and quantifiable 
indicators to evaluate a candidate country's demonstrated 
commitment to economic policies that promote the sustainable 
management of natural resources. The MCC has conducted a public 
process to identify indicators or indices for use in the 
selection criteria. Two indicators identified by the MCC thus 
far are a Natural Resources Management Index developed by 
Columbia University's Center for International Earth Science 
Information Network (CIESIN), and a Secure Land Tenure 
indicator developed by The International Fund for Agricultural 
Development (IFAD). The Committee encourages the MCC to 
complete the development of quantitative policy indicators for 
sustainable natural resource management and to begin applying 
them to fiscal year 2007 eligibility decisions, and in 
subsequent fiscal years. The Committee notes that the IFAD 
indicator is less of an indicator for natural resource 
protection than for a government's promotion of property 
rights. If the MCC decides after completing its public process 
to add these two new indicators to the eligibility criteria, 
the Committee believes that the CIESIN indicator should be 
placed in the Investing in People category and the IFAD 
indicator should be placed in the Providing Economic 
Opportunities category.
Sec. 5. Millennium Challenge Compact.
    This Section amends Section 609(b)(1)(D) regarding Compact 
elements in the 2003 Millennium Challenge Act by adding a 
requirement for an analysis of participation by, or impact on, 
project beneficiaries. A new section added by the legislation, 
609(b)(1)(L), also requires an analysis of the extent to which 
Compact projects will contribute to poverty reduction.
    Poverty Reduction. To maximize poverty reduction through 
economic growth, recipient countries and the MCC must ground 
the use of Millennium Challenge assistance on baseline data and 
due-diligence analyses that:

         Lidentify the key impediments to growth;
         Lassess the nature and flexibility of the 
        labor market, and the labor-intensity of growth which 
        is more likely to have a positive impact on the 
        livelihoods of the poor;
         Lidentify the intended beneficiaries, 
        disaggregated by income level, gender and age, and 
        analyze how and whether the intended beneficiaries will 
        participate in, or be impacted by, each project;
         Lassess the mechanisms in place to link the 
        poor to economic growth, in particular mechanisms that 
        facilitate access to sectors where growth is occurring 
        and that foster growth in sectors where the poor are 
        located;
         Levaluate whether the poor have the skills and 
        assets necessary to participate in and benefit from 
        expected economic growth, in particular, levels of 
        health and education as well as infrastructure and 
        credit, among others;
         Lassess the degree to which women have equal 
        access to mechanisms and assets necessary to connect to 
        and benefit from economic growth; and
         Lassess the extent of political will in 
        recipient countries to connect the poor to economic 
        growth.

    Summaries of the analysis of key issues outlined above 
should be included in each country Compact and linked to the 
consultation and decision processes reflected in the final set 
of funded projects. Public dissemination of such analyses will 
facilitate greater clarity regarding MCC and country funding 
decisions. If a Compact does not include investments in the 
productive capacity of the eligible country's poor which are 
needed for them to participate in and benefit from the economic 
growth generated by a Compact, the Committee strongly 
encourages the MCC to include in the Compact either a 
description of the eligible country's plans to finance any 
necessary health, education or other linkages, or a description 
of similar plans by the U.S. Agency for International 
Development or other donors to meet these gaps.
    Local Consultation--National Legislatures. Section 609(d) 
is amended to encourage the government of an eligible country 
to consult with the national legislature of the country in the 
course of developing the Compact. The Committee believes that 
an essential component of local input is the studied opinions 
of leaders of the national legislatures of eligible countries. 
Formally incorporating these leaders into the consultative 
processes which result in the development of Compacts helps 
ensure that the perspectives of potential beneficiaries are 
taken into account during the design of the Compact's 
programming. Soliciting the advice of these local leaders on a 
substantial international development assistance package also 
helps promote legislative oversight over executive branch 
decisions in these countries and begins the process of securing 
legislative approval for the Compacts. Almost all of the 
national legislatures in eligible countries which have 
concluded Compacts with the MCC will ratify or otherwise 
approve their respective Compacts. It is the sense of the 
Committee that legislative oversight should be encouraged as 
part of local capacity-building, as well as for the purposes of 
increasing local ownership, transparency and accountability.
    Local Consultation--Ensuring Meaningful Participation. 
Section 609(d) of the 2003 Act requires the MCC to ensure that 
eligible country governments take into account the input of 
local private and voluntary organizations, the business 
community, and other donors in the country. The Committee 
intended that such consultations be meaningful, so as to 
increase public support and avoid flaws in project design and 
implementation. Over the course of the last two years, the 
Committee received reports that the MCC had not ensured that 
the input of a wide range of local stakeholders and intended 
beneficiaries was fully included in the consultative process. 
The MCC's publication of ``Guidance for the Consultative 
Process'' was a very positive development in this regard, and 
full compliance with the guidance can begin to ensure 
meaningful consultation.
    However, the financial limitation of many eligible 
countries has reportedly continued to limit consultative 
efforts between the governments, key stakeholders, and intended 
beneficiaries in eligible countries. During oversight travels 
to MCA-eligible countries, the Committee has confirmed reports 
by local and international nongovernmental organizations that 
the governments of some countries, due to resource constraints, 
have not been able to engage in a broad and robust consultative 
process. In Mali, for example, Committee staff found that 
consultations would not have been possible absent a $400,000 
grant by the UN Development Program to the Malian government to 
establish the Technical Team, hire new staff and equip the MCC/
Mali office to manage activities and liaise with MCC/Washington 
on the Compact proposal. Such resource constraints can prevent 
full compliance with Section 609(d).
    Section 609(g) of the 2003 Act authorizes the MCC CEO to 
``enter into contracts or make grants for any eligible country 
for the purpose of facilitating the development and 
implementation'' of Compacts. The Committee strongly encourages 
the MCC CEO to dedicate funds through Section 609(g) for the 
purpose of supporting meaningful participation by these groups 
in the development and implementation of Compacts in eligible 
countries.
    Compact Duration and Concurrent and Subsequent Compacts. 
Section 609(j) is amended to allow Compact duration to extend 
beyond five years (but not beyond ten), subject to an MCC Board 
determination. Section 609(k) is amended to allow concurrent 
Compacts, subject to demonstrable progress and to conformity 
with Compact requirements in the 2003 Act. These amendments 
will increase the ability of the MCC and eligible countries to 
select the best projects, adjust programs and ensure optimal 
impact.
    The Committee believes that the Chief Executive Officer of 
the Millennium Challenge Corporation should enter into a 
concurrent Compact with an eligible country only if that 
country has demonstrated that it is making considerable 
progress toward meeting the objectives established in the 
existing Compact. Similarly, subsequent Compacts, or all 
Compacts after the first Compact for an eligible country, 
should only be concluded if the Board of Directors of the 
Corporation determines that the eligible country has 
substantially met the objectives of previous Compacts. The 
purpose behind both the ``considerable and demonstrable 
progress'' and the ``substantially met'' standards is to 
amplify the ``MCC-incentive effect'' by rewarding only those 
eligible countries that are performing or have performed well 
under the program.
    The Committee distinguishes between an extension of time 
under Section 609(i) of the 2003 Act and an increase in the 
duration of a Compact under Section 5 of this Act. A Section 
609(i) extension is meant to address those instances when, 
during the course of Compact implementation and due to 
unforeseeable circumstances, the successful completion of a 
Compact requires more time than was allotted in the original 
grant agreement. In contrast, Section 5 of this Act permits the 
Board of Directors of the Corporation to approve projects or 
programs which have durations that last longer than 5 years to 
be included in a pre-signed Compact. Under both Section 609 (i) 
and Section 5, the default duration of a Compact or any project 
or program contained therein is five years, and the maximum 
amount of time that can be allotted under either Section to any 
project or program is ten years.
    The Committee hopes that the extension of duration for 
Compacts from five to ten years will enable eligible countries 
and the Corporation not to exclude those projects and programs 
which have longer time horizons for producing results but are 
critical for reducing poverty through sustainable and broad-
based economic growth.
Sec. 6. Congressional and Public Notification of Compact.
    The legislation amends Section 610 of the 2003 Act to 
require notification of authorizing and Appropriations 
committees fifteen days prior to fund obligation. This does not 
add a new requirement, because the FY 2006 Foreign Operations, 
Export Financing, and Related Programs Appropriations Act (P.L. 
109-102) and the House and Senate Foreign Operations 
Appropriations bills for FY 2007 (H.R. 5522) already require 
fifteen day prior notification of fund obligation, but this 
notification is limited to the Appropriations committees. The 
legislation adds authorizing committees to this requirement, as 
consistent with the definition of ``appropriate Congressional 
committees'' in Section 603(1) of the 2003 Millennium Challenge 
Act, and consistent with Section 634A of the Foreign Assistance 
Act of 1961, as amended (P.L. 87-195).
    Compact negotiations between the MCC and an eligible 
country may require weeks or even months. The 2003 Millennium 
Challenge Act currently requires Congressional consultations 
fifteen days prior to starting Compact negotiations between the 
MCC and an eligible countries, but notification of obligation 
is not required until ten days following a Compact's entry into 
force. These requirements provide no indication of important 
Compact changes made during weeks or months of negotiation, 
until after obligation of funds and entry into force are 
accomplished. The Committee recognizes the President's foreign 
policy role in entering into agreements with other countries. 
However, Compacts between the MCC and an eligible country are 
also foreign assistance grants of the sort normally subject to 
existing laws, regulations, and practices governing their 
design, reprogramming, obligation, and expenditure. The 
Committee intends to exercise full and responsible oversight 
concerning this new program, as is the norm for foreign 
assistance programs of this size and importance.
    Federal Register Publication. Section 610(c) of the 2003 
Act is amended to permit publication of the Compact summary in 
the Federal Register, while making the full text available to 
the public on the MCC website. The savings potential is 
estimated at between $25,000 and $50,000 per Compact.
Sec. 7. Annual Report.
    Staffing. This Section amends Section 613(b) of the 2003 
Millennium Challenge Act by adding to the annual report 
reporting requirements regarding minority staffing and minority 
and disadvantaged representation in procurement contracts. 
These reporting requirements shall apply to contracting actions 
awarded and administered directly by the MCC.
Sec. 8. Powers of the Corporation; Related Provisions.
    Procurement. This Section amends Section 614 of the 2003 
Millennium Challenge Act by adding a requirement that ensures 
minority and disadvantaged representation in the provision of 
goods and services to the MCC, including Compact feasibility 
studies, data research and threshold programs managed by USAID 
to help countries reach eligibility.
    Branding. A large percentage of MCC investment thus far is 
financing large infrastructure projects and other tangible 
structures. The Committee believes that the successful 
completion of these projects can advance U.S. public diplomacy 
objectives, and strongly recommends that the CEO (or the CEO's 
designee)--pursuant to Section 641 of the Foreign Assistance 
Act of 1961 and in consultation with the Administrator of the 
United States Agency for International Development and the 
heads of other appropriate departments and agencies--establish 
a policy to ensure that programs, projects and activities, 
including public communications and commodities, partially or 
fully funded by the Millennium Challenge Corporation indicate 
that they are funded by the American people.
Sec. 9. Assistance to Certain Candidate Countries.
    Threshold Country Programs. This Section amends Section 
616(d) of the Millennium Challenge Act of 2003 to match the 
authorization for Threshold Country Programs to that of the 
overall Millennium Challenge Account. The Threshold Program 
authorizes the MCC Board to allocate up to ten percent of MCA 
funding to help non-eligible but committed countries, or 
``threshold countries,'' improve their performance on 
eligibility indicators that they failed to pass, so that they 
can become eligible for Compacts.
    Bangladesh. The Committee recognizes that Bangladesh does 
not currently meet the threshold status to participate in the 
Millennium Challenge Account but is encouraged by Bangladesh's 
efforts to improve its capacity to absorb foreign aid as well 
as its efforts to ensure effective implementation of 
international assistance. Bangladesh is steadily meeting its 
targets towards ultimately achieving the Millennium Development 
Goals. The Committee encourages the U.S. Agency for 
International Development to work with the Government of 
Bangladesh to help achieve threshold status and future 
graduation into the Millennium Challenge Account program.
Sec. 10. Authorization of Appropriations.
    This Section amends Section 619(a) of the 2003 Millennium 
Challenge Act to extend the authorization of appropriations for 
three years--through FY09. The authorization of appropriations 
expired in FY 2005 and was waived in the FY 2006 Foreign 
Operations Appropriations Act (P.L. 109-102). It is the sense 
of the Committee that the Millennium Challenge program should 
continue beyond the end of the current Administration.
Additional Issues.
    Currency Fluctuation. MCC has provided the examples of Cape 
Verde and South Africa as countries that may slip in and out of 
eligibility due solely to currency fluctuations, rather than 
changes in their economic fundamentals. The Committee awaits 
MCC input, coordinated with other agencies as appropriate, so 
that Section 606 of the 2003 Act may be amended to remedy the 
effect of distortional currency fluctuation on eligibility for 
MCA funding.
    Refugee Treatment. The Committee would also encourage the 
MCC to take into consideration a candidate country's respect 
for the rights of refugees when determining eligibility for 
funding. The use of additional data sources could help inform 
this consideration.

                        New Advisory Committees

    H.R. 4014 does not establish or authorize any new advisory 
committees.

                    Congressional Accountability Act

    H.R. 4014 does not apply to the legislative branch.

                            Federal Mandates

    H.R. 4014 provides no Federal mandates.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                    MILLENNIUM CHALLENGE ACT OF 2003

               TITLE VI--MILLENNIUM CHALLENGE ACT OF 2003

SEC. 601. SHORT TITLE.

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

SEC. 602. PURPOSES.

    The purposes of this title are--
            (1) * * *
            (2) to provide such assistance in a manner that 
        promotes [economic growth and the elimination of 
        extreme poverty and strengthens good governance, 
        economic freedom, and investments in people.] the 
        reduction of poverty through sustainable, broad-based 
        economic growth, including by strengthening good 
        governance, promoting economic opportunities, and 
        investing in people, as needed.

           *       *       *       *       *       *       *


SEC. 604. ESTABLISHMENT AND MANAGEMENT OF THE MILLENNIUM CHALLENGE 
                    CORPORATION.

    (a) * * *
    (b) Chief Executive Officer.--
            (1) * * *
            (2) [Appointment.--
                    [(A) In general.--Except as provided in 
                subparagraph (B), the Chief Executive Officer 
                shall be appointed] Appointment.--The Chief 
                Executive Officer shall be appointed by the 
                President, by and with the advice and consent 
                of the Senate.
                    [(B) Interim ceo.--The members of the Board 
                of Directors described in subsection (c)(3)(A) 
                may designate by unanimous consent in writing 
                an individual who is an officer within any 
                Federal department or agency (and who has been 
                appointed to such position by the President, by 
                and with the advice and consent of the Senate) 
                to carry out the duties described in this 
                subsection until the Chief Executive Officer is 
                appointed pursuant to subparagraph (A).]

           *       *       *       *       *       *       *


SEC. 605. AUTHORIZATION OF ASSISTANCE.

    (a) Assistance.--Notwithstanding any other provision of law 
(other than a provision of this title), the Board, acting 
through the Chief Executive Officer, is authorized to provide 
assistance under this section for each country that enters into 
a Millennium Challenge Compact with the United States pursuant 
to section 609 to support policies and programs that advance 
the progress of the country [in achieving lasting economic 
growth and poverty reduction] in reducing poverty through 
sustainable, broad-based economic growth, including by 
strengthening good governance, promoting economic 
opportunities, and investing in people, as needed, and are in 
furtherance of the purposes of this title.

           *       *       *       *       *       *       *

    (e) Limitations.--
            (1) * * *

           *       *       *       *       *       *       *

            (4) Prohibition on use of funds for abortions and 
        involuntary sterilizations.--The prohibitions on use of 
        funds contained in paragraphs (1) through (3) of 
        section 104(f) of the Foreign Assistance Act of 1961 
        (22 U.S.C. 2151b(f)(1)-(3)) shall apply to funds made 
        available to carry out this section to the same extent 
        and in the same manner as such prohibitions apply to 
        funds made available to carry out part I of such Act. 
        The prohibition on use of funds contained in any 
        provision of law comparable to the [eleventh and 
        fourteenth provisos] eighth and twelfth provisos under 
        the heading ``Child Survival and Health Programs Fund'' 
        of [division E of Public Law 108-7 (117 Stat. 162)] 
        Public Law 109-102 (119 Stat. 2174-2176) shall apply to 
        funds made available to carry out this section for 
        fiscal year [2004] 2007.

           *       *       *       *       *       *       *


SEC. 609. MILLENNIUM CHALLENGE COMPACT.

    (a) * * *
    (b) Elements.--
            (1) In general.--The Compact should take into 
        account the national development strategy of the 
        eligible country and shall contain--
                    (A) * * *

           *       *       *       *       *       *       *

                    (D) an identification of the intended 
                beneficiaries, disaggregated by income level, 
                gender, and age, to the maximum extent 
                practicable, and an analysis of how the 
                intended beneficiaries will participate in, or 
                be impacted by, each project;

           *       *       *       *       *       *       *

                    (J) the strategy of the eligible country to 
                sustain progress made toward achieving such 
                objectives after expiration of the Compact; 
                [and]
                    (K) a description of the role of the United 
                States Agency for International Development in 
                any design, implementation, and monitoring of 
                programs and activities funded under the 
                Compact[.]; and
                    (L) an analysis of the extent to which each 
                project carried out under the Compact will 
                contribute to reducing poverty through 
                sustainable, broad-based economic growth, 
                including by strengthening good governance, 
                promoting economic opportunities, and investing 
                in people, as needed.

           *       *       *       *       *       *       *

    (d) Local Input.--In entering into a Compact, the United 
States shall seek to ensure that the government of an eligible 
country--
            (1) takes into account the local-level perspectives 
        of the rural and urban poor, including women, in the 
        eligible country; [and]
            (2) consults with the national legislature of the 
        eligible country; and
            [(2)] (3) consults with private and voluntary 
        organizations, the business community, and other donors 
        in the eligible country.

           *       *       *       *       *       *       *

    (j) Duration of Compact.--[The duration]
            (1) In general.--Except as provided in paragraph 
        (2), the duration of a Compact shall not exceed 5 
        years.
            (2) Exception.--
                    (A) In general.--A Compact shall not 
                include a project with a duration of more than 
                5 years unless the Board--
                            (i) determines that the project 
                        cannot be completed in 5 years or less; 
                        and
                            (ii) approves a duration for the 
                        project of not more than 10 years.
                    (B) Congressional notification.--Not later 
                than 15 days after the Board approves a 
                duration for a project pursuant to subparagraph 
                (A)(ii), the Board, acting through the Chief 
                Executive Officer, shall submit to the 
                appropriate congressional committees a 
                notification of such approval, including a 
                detailed explanation for the determination and 
                approval.
    [(k) Subsequent Compacts.--An eligible country and the 
United States may enter into and have in effect only one 
Compact at any given time under this section. An eligible 
country and the United States may enter into one or more 
subsequent Compacts in accordance with the requirements of this 
title after the expiration of the existing Compact.]
    (k) Concurrent and Subsequent Compacts.--
            (1) In general.--Subject to the requirements of 
        paragraph (2), and in accordance with the requirements 
        of this title, an eligible country and the United 
        States--
                    (A) may enter into and have in effect not 
                more than two Compacts at any given time under 
                this section; and
                    (B) may enter into subsequent Compacts 
                after the expiration of the existing Compact or 
                Compacts.
            (2) Requirements.--
                    (A) Concurrent compacts.--An eligible 
                country and the United States may enter into a 
                concurrent Compact only if the Board determines 
                that the country is making considerable and 
                demonstrable progress in implementing the terms 
                of its existing Compact and supplementary 
                agreements thereto.
                    (B) Subsequent compacts.--An eligible 
                country and the United States may enter into 
                subsequent Compacts if the Board determines 
                that the country substantially met the 
                objectives of prior Compacts between the 
                country and the United States and supplementary 
                agreements thereto.

SEC. 610. CONGRESSIONAL AND PUBLIC NOTIFICATION OF COMPACT.

    (a) * * *
    (b) Congressional Notification Prior to Signing a 
Compact.--Not later than 15 days prior to signing a Compact 
with an eligible country, the Board, acting through the Chief 
Executive Officer, shall provide notification of the proposed 
Compact, including a detailed summary of the Compact and a copy 
of the text of the Compact, to the appropriate congressional 
committees in accordance with the procedures applicable to 
reprogramming notifications under section 634A of the Foreign 
Assistance Act of 1961.
    [(b)] (c) Congressional and Public Notification After 
Entering Into a Compact.--Not later than 10 days after entering 
into a Compact with an eligible country, the Board, acting 
through the [Chief Executive Officer--
            [(1) shall provide notification of the Compact to 
        the appropriate congressional committees, including a 
        detailed summary of the Compact and a copy of the text 
        of the Compact; and
            [(2) shall publish such detailed summary and the 
        text of the Compact in the Federal Register and on the 
        Internet website of the Corporation.] Chief Executive 
        Officer shall publish such detailed summary of the 
        Compact in the Federal Register and shall publish such 
        detailed summary and the text of the Compact (including 
        a copy of any annexes or supplementary agreements 
        thereto) on the Internet website of the Corporation.

           *       *       *       *       *       *       *


SEC. 613. ANNUAL REPORT.

    (a) * * *
    (b) Contents.--The report shall include the following:
            (1) * * *

           *       *       *       *       *       *       *

            (6) A description of recruitment and employment of 
        members of minority groups at the Corporation, 
        including, to the maximum extent practicable, the 
        numbers and percentages of members of all minority 
        groups who have been recruited by and employed at the 
        Corporation during the prior fiscal year.
            (7) A description of the extent to which the 
        requirement of section 614(h) has been met for the 
        prior fiscal year, including, to the maximum extent 
        practicable, information on--
                    (A) the numbers and percentages of small, 
                minority-owned, or disadvantaged business 
                enterprises that provide goods and services 
                that are financed with funds made available 
                under section 609(g), section 614(g), and 
                section 616 during such prior fiscal year;
                    (B) the total number of contracts with such 
                business enterprises for such purposes during 
                such prior fiscal year;
                    (C) the total dollar value of such 
                contracts; and
                    (D) the percentage value represented by 
                such contracts proportionate to the total value 
                of all contracts held by the Corporation that 
                are financed with funds made available under 
                section 609(g), section 614(g), and section 616 
                during such prior fiscal year.

SEC. 614. POWERS OF THE CORPORATION; RELATED PROVISIONS.

    (a) * * *

           *       *       *       *       *       *       *

    (h) Participation of Certain United States Businesses.--To 
the maximum extent practicable, the President, acting through 
the Chief Executive Officer, shall ensure that United States 
small, minority-owned, and disadvantaged business enterprises 
fully participate in the provision of goods and services that 
are financed with funds made available under section 609(g), 
subsection (g) of this section, and section 616.

           *       *       *       *       *       *       *


SEC. 616. ASSISTANCE TO CERTAIN CANDIDATE COUNTRIES.

    (a) * * *

           *       *       *       *       *       *       *

    (d) Funding.--Not more than 10 percent of the amount 
appropriated pursuant to the authorization of appropriations 
under section 619(a) [for fiscal year 2004] for a fiscal year 
is authorized to be made available to carry out this section.

           *       *       *       *       *       *       *


SEC. 619. AUTHORIZATION OF APPROPRIATIONS.

    (a) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this title such sums as may be 
necessary for each of the [fiscal years 2004 and 2005] fiscal 
years 2007 through 2009.

           *       *       *       *       *       *       *


                                  
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