[105th Congress Public Law 214]
[From the U.S. Government Printing Office]
<DOC>
[DOCID: f:publ214.105]
[[Page 112 STAT. 885]]
Public Law 105-214
105th Congress
An Act
To amend the Foreign Assistance Act of 1961 to facilitate protection of
tropical forests through debt reduction with developing countries with
tropical forests. <<NOTE: July 29, 1998 - [H.R. 2870]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. DEBT REDUCTION FOR DEVELOPING COUNTRIES WITH TROPICAL
FORESTS.
The Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.) is
amended by adding at the end the following:
``PART V--DEBT <<NOTE: Tropical Forest Conservation Act of
1998.>> REDUCTION FOR DEVELOPING COUNTRIES WITH TROPICAL FORESTS
``SEC. <<NOTE: 22 USC 2151 note.>> 801. SHORT TITLE.
``This part may be cited as the `Tropical Forest Conservation Act of
1998'.
``SEC. <<NOTE: 22 USC 2431.>> 802. FINDINGS AND PURPOSES.
``(a) Findings.--The Congress finds the following:
``(1) It is the established policy of the United States to
support and seek protection of tropical forests around the
world.
``(2) Tropical forests provide a wide range of benefits to
humankind by--
``(A) harboring a major share of the Earth's
biological and terrestrial resources, which are the
basis for developing pharmaceutical products and
revitalizing agricultural crops;
``(B) playing a critical role as carbon sinks in
reducing greenhouse gases in the atmosphere, thus
moderating potential global climate change; and
``(C) regulating hydrological cycles on which far-
flung agricultural and coastal resources depend.
``(3) International negotiations and assistance programs to
conserve forest resources have proliferated over the past
decade, but the rapid rate of tropical deforestation continues
unabated.
``(4) Developing countries with urgent needs for investment
and capital for development have allocated a significant amount
of their forests to logging concessions.
``(5) Poverty and economic pressures on the populations of
developing countries have, over time, resulted in clearing of
vast areas of forest for conversion to agriculture, which is
often unsustainable in the poor soils underlying tropical
forests.
[[Page 112 STAT. 886]]
``(6) Debt reduction can reduce economic pressures on
developing countries and result in increased protection for
tropical forests.
``(7) Finding economic benefits to local communities from
sustainable uses of tropical forests is critical to the
protection of tropical forests.
``(b) Purposes.--The purposes of this part are--
``(1) to recognize the values received by United States
citizens from protection of tropical forests;
``(2) to facilitate greater protection of tropical forests
(and to give priority to protecting tropical forests with the
highest levels of biodiversity and under the most severe threat)
by providing for the alleviation of debt in countries where
tropical forests are located, thus allowing the use of
additional resources to protect these critical resources and
reduce economic pressures that have led to deforestation;
``(3) to ensure that resources freed from debt in such
countries are targeted to protection of tropical forests and
their associated values; and
``(4) to rechannel existing resources to facilitate the
protection of tropical forests.
``SEC. <<NOTE: 22 USC 2431a.>> 803. DEFINITIONS.
``As used in this part:
``(1) Administering body.--The term `administering body'
means the entity provided for in section 809(c).
``(2) Appropriate congressional committees.--The term
`appropriate congressional committees' means--
``(A) the Committee on International Relations and
the Committee on Appropriations of the House of
Representatives; and
``(B) the Committee on Foreign Relations and the
Committee on Appropriations of the Senate.
``(3) Beneficiary country.--The term `beneficiary country'
means an eligible country with respect to which the authority of
section 806(a)(1), section 807(a)(1), or paragraph (1) or (2) of
section 808(a) is exercised.
``(4) Board.--The term `Board' means the board referred to
in section 811.
``(5) Developing country with a tropical forest.--The term
`developing country with a tropical forest' means--
``(A)(i) a country that has a per capita income of
$725 or less in 1994 United States dollars (commonly
referred to as `low-income country'), as determined and
adjusted on an annual basis by the International Bank
for Reconstruction and Development in its World
Development Report; or
``(ii) a country that has a per capita income of
more than $725 but less than $8,956 in 1994 United
States dollars (commonly referred to as `middle-income
country'), as determined and adjusted on an annual basis
by the International Bank for Reconstruction and
Development in its World Development Report; and
``(B) a country that contains at least one tropical
forest that is globally outstanding in terms of its
biological diversity or represents one of the larger
intact blocks of tropical forests left, on a regional,
continental, or global scale.
[[Page 112 STAT. 887]]
``(6) Eligible country.--The term `eligible country' means a
country designated by the President in accordance with
section 805.
``(7) Tropical forest agreement.--The term `Tropical
Forest Agreement' or `Agreement' means a Tropical Forest
Agreement provided for in section 809.
``(8) Tropical forest facility.--The term `Tropical Forest
Facility' or `Facility' means the Tropical Forest Facility
established in the Department of the Treasury by section 804.
``(9) Tropical forest fund.--The term `Tropical Forest Fund'
or `Fund' means a Tropical Forest Fund provided for in section
810.
``SEC. <<NOTE: 22 USC 2431b.>> 804. ESTABLISHMENT OF THE FACILITY.
``There is established in the Department of the Treasury an entity
to be known as the `Tropical Forest Facility' for the purpose of
providing for the administration of debt reduction in accordance with
this part.
``SEC. <<NOTE: 22 USC 2431c.>> 805. ELIGIBILITY FOR BENEFITS.
``(a) In General.--To be eligible for benefits from the Facility
under this part, a country shall be a developing country with a tropical
forest--
``(1) whose government meets the requirements applicable to
Latin American or Caribbean countries under paragraphs (1)
through (5) and (7) of section 703(a) of this Act; and
``(2) that has put in place major investment reforms, as
evidenced by the conclusion of a bilateral investment treaty
with the United States, implementation of an investment sector
loan with the Inter-American Development Bank, World
Bank-supported investment reforms, or other measures, as
appropriate.
``(b) Eligibility <<NOTE: President.>> Determinations.--
``(1) In general.--Consistent with subsection (a), the
President shall determine whether a country is eligible to
receive benefits under this part.
``(2) Congressional notification.--The President shall
notify the appropriate congressional committees of his intention
to designate a country as an eligible country at least 15 days
in advance of any formal determination.
``SEC. 806. <<NOTE: 22 USC 2431d.>> REDUCTION OF DEBT OWED TO THE UNITED
STATES AS A RESULT OF CONCESSIONAL LOANS UNDER THE
FOREIGN ASSISTANCE ACT OF 1961.
``(a) Authority To Reduce Debt.--
``(1) Authority.--The President may reduce the amount owed
to the United States (or any agency of the United States) that
is outstanding as of January 1, 1998, as a result of
concessional loans made to an eligible country by the United
States under part I of this Act, chapter 4 of part II of this
Act, or predecessor foreign economic assistance legislation.
``(2) Authorization of appropriations.--For the cost (as
defined in section 502(5) of the Federal Credit Reform Act of
1990) for the reduction of any debt pursuant to this section,
there are authorized to be appropriated to the President--
``(A) $25,000,000 for fiscal year 1999;
``(B) $75,000,000 for fiscal year 2000; and
``(C) $100,000,000 for fiscal year 2001.
[[Page 112 STAT. 888]]
``(3) Certain prohibitions inapplicable.--
``(A) In general.--A reduction of debt pursuant to
this section shall not be considered assistance for
purposes of any provision of law limiting assistance to
a country.
``(B) Additional requirement.--The authority of this
section may be exercised notwithstanding section 620(r)
of this Act or section 321 of the International
Development and Food Assistance Act of 1975.
``(b) Implementation of Debt Reduction.--
``(1) In general.--Any debt reduction pursuant to subsection
(a) shall be accomplished at the direction of the Facility by
the exchange of a new obligation for obligations of the type
referred to in subsection (a) outstanding as of the date
specified in subsection (a)(1).
``(2) Exchange of obligations.--
``(A) In <<NOTE: Notification.>> general.--The
Facility shall notify the agency primarily responsible
for administering part I of this Act of an agreement
entered into under paragraph (1) with an eligible
country to exchange a new obligation for outstanding
obligations.
``(B) Additional requirement.--At the direction of
the Facility, the old obligations that are the subject
of the agreement shall be canceled and a new debt
obligation for the country shall be established relating
to the agreement, and the agency primarily responsible
for administering part I of this Act shall make an
adjustment in its accounts to reflect the debt
reduction.
``(c) Additional <<NOTE: Applicability.>> Terms and Conditions.--The
following
additional terms and conditions shall apply to the reduction of debt
under subsection (a)(1) in the same manner as such terms and conditions
apply to the reduction of debt under section 704(a)(1) of this Act:
``(1) The provisions relating to repayment of principal
under section 705 of this Act.
``(2) The provisions relating to interest on new obligations
under section 706 of this Act.
``SEC. 807. <<NOTE: 22 USC 2431e.>> REDUCTION OF DEBT OWED TO THE UNITED
STATES AS A RESULT OF CREDITS EXTENDED UNDER TITLE I OF THE
AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954.
``(a) Authority To Reduce Debt.--
``(1) Authority.--Notwithstanding any other provision of
law, the President may reduce the amount owed to the United
States (or any agency of the United States) that is outstanding
as of January 1, 1998, as a result of any credits extended under
title I of the Agricultural Trade Development and Assistance Act
of 1954 (7 U.S.C. 1701 et seq.) to a country eligible for
benefits from the Facility.
``(2) Authorization of appropriations.--
``(A) In general.--For the cost (as defined in
section 502(5) of the Federal Credit Reform Act of 1990)
for the reduction of any debt pursuant to this section,
there are authorized to be appropriated to the
President--
``(i) $25,000,000 for fiscal year 1999;
``(ii) $50,000,000 for fiscal year 2000; and
``(iii) $50,000,000 for fiscal year 2001.
[[Page 112 STAT. 889]]
``(B) Limitation.--The authority provided by this
section shall be available only to the extent that
appropriations for the cost (as defined in section
502(5) of the Federal Credit Reform Act of 1990) of the
modification of any debt pursuant to this section are
made in advance.
``(b) Implementation of Debt Reduction.--
``(1) In general.--Any debt reduction pursuant to subsection
(a) shall be accomplished at the direction of the Facility by
the exchange of a new obligation for obligations of the type
referred to in subsection (a) outstanding as of the date
specified in subsection (a)(1).
``(2) Exchange <<NOTE: Notification.>> of obligations.--
``(A) In general.--The Facility shall notify the
Commodity Credit Corporation of an agreement entered
into under paragraph (1) with an eligible country to
exchange a new obligation for outstanding obligations.
``(B) Additional requirement.--At the direction of
the Facility, the old obligations that are the subject
of the agreement shall be canceled and a new debt
obligation shall be established for the country relating
to the agreement, and the Commodity Credit Corporation
shall make an adjustment in its accounts to reflect the
debt reduction.
``(c) Additional <<NOTE: Applicability.>> Terms and Conditions.--The
following
additional terms and conditions shall apply to the reduction of debt
under subsection (a)(1) in the same manner as such terms and conditions
apply to the reduction of debt under section 604(a)(1) of the
Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C.
1738c):
``(1) The provisions relating to repayment of principal
under section 605 of such Act.
``(2) The provisions relating to interest on new obligations
under section 606 of such Act.
``SEC. 808. <<NOTE: 22 USC 2431f.>> AUTHORITY TO ENGAGE IN DEBT-FOR-
NATURE SWAPS AND DEBT BUYBACKS.
``(a) Loans and Credits Eligible for Sale, Reduction, or
Cancellation.--
``(1) Debt-for-nature swaps.--
``(A) In general.--Notwithstanding any other
provision of law, the President may, in accordance with
this section, sell to any eligible purchaser described
in subparagraph (B) any concessional loans described in
section 806(a)(1) or any credits described in section
807(a)(1), or on receipt of payment from an eligible
purchaser described in subparagraph (B), reduce or
cancel such loans (or credits) or portion thereof, only
for the purpose of facilitating a debt-for-nature swap
to support eligible activities described in section
809(d).
``(B) Eligible purchaser described.--A loan or
credit may be sold, reduced, or canceled under
subparagraph (A) only to a purchaser who presents plans
satisfactory to the President for using the loan or
credit for the purpose of engaging in debt-for-nature
swaps to support eligible activities described in
section 809(d).
``(C)
Consultation <<NOTE: President.>> requirement.--Before
the sale under subparagraph (A) to any eligible
purchaser described in subparagraph (B), or any
reduction or cancellation under
[[Page 112 STAT. 890]]
such subparagraph (A), of any loan or credit made to an
eligible country, the President shall consult with the
country concerning the amount of loans or credits to be
sold, reduced, or canceled and their uses for debt-for-
nature swaps to support eligible activities described in
section 809(d).
``(D) Authorization of appropriations.--For the cost
(as defined in section 502(5) of the Federal Credit
Reform Act of 1990) for the reduction of any debt
pursuant to subparagraph (A), amounts authorized to
appropriated under sections 806(a)(2) and 807(a)(2)
shall be made available for such reduction of debt
pursuant to subparagraph (A).
``(2) Debt buybacks.--Notwithstanding any other provision of
law, the President may, in accordance with this section, sell to
any eligible country any concessional loans described in section
806(a)(1) or any credits described in section 807(a)(1), or on
receipt of payment from an eligible country, reduce or cancel
such loans (or credits) or portion thereof, only for the purpose
of facilitating a debt buyback by an eligible country of its own
qualified debt, only if the eligible country uses an additional
amount of the local currency of the eligible country, equal to
not less than the lessor of 40 percent of the price paid for
such debt by such eligible country, or the difference between
the price paid for such debt and the face value of such debt, to
support eligible activities described in section 809(d).
``(3) Limitation.--The authority provided by paragraphs (1)
and (2) shall be available only to the extent that
appropriations for the cost (as defined in section 502(5) of the
Federal Credit Reform Act of 1990) of the modification of any
debt pursuant to such paragraphs are made in advance.
``(4) Terms <<NOTE: President.>> and conditions.--
Notwithstanding any other provision of law, the President shall,
in accordance with this section, establish the terms and
conditions under which loans and credits may be sold, reduced,
or canceled pursuant to this section.
``(5) Administration.-- <<NOTE: Notification.>>
``(A) In general.--The Facility shall notify the
administrator of the agency primarily responsible for
administering part I of this Act or the Commodity Credit
Corporation, as the case may be, of eligible purchasers
described in paragraph (1)(B) that the President has
determined to be eligible under paragraph (1), and shall
direct such agency or Corporation, as the case may be,
to carry out the sale, reduction, or cancellation of a
loan pursuant to such paragraph.
``(B) Additional requirement.--Such agency or
Corporation, as the case may be, shall make an
adjustment in its accounts to reflect the sale,
reduction, or cancellation.
``(b) Deposit of Proceeds.--The proceeds from the sale, reduction,
or cancellation of any loan sold, reduced, or canceled pursuant to this
section shall be deposited in the United States Government account or
accounts established for the repayment of such loan.
``SEC. <<NOTE: 22 USC 2431g.>> 809. TROPICAL FOREST AGREEMENT.
``(a) Authority.--
[[Page 112 STAT. 891]]
``(1) In general.--The Secretary of State is authorized, in
consultation with other appropriate officials of the Federal
Government, to enter into a Tropical Forest Agreement with any
eligible country concerning the operation and use of the Fund
for that country.
``(2) Consultation.--In the negotiation of such an
Agreement, the Secretary shall consult with the Board in
accordance with section 811.
``(b) Contents of Agreement.--The requirements contained in section
708(b) of this Act (relating to contents of an agreement) shall apply to
an Agreement in the same manner as such requirements apply to an
Americas Framework Agreement.
``(c) Administering Body.--
``(1) In general.--Amounts disbursed from the Fund in each
beneficiary country shall be administered by a body
constituted under the laws of that country.
``(2) Composition.--
``(A) In general.--The administering body shall
consist of--
``(i) one or more individuals appointed by the
United States Government;
``(ii) one or more individuals appointed by
the government of the beneficiary country; and
``(iii) individuals who represent a broad
range of--
``(I) environmental nongovernmental
organizations of, or active in, the
beneficiary country;
``(II) local community development
nongovernmental organizations of the
beneficiary country; and
``(III) scientific, academic, or
forestry organizations of the
beneficiary country.
``(B) Additional requirement.--A majority of the
members of the administering body shall be individuals
described in subparagraph (A)(iii).
``(3) Responsibilities.--The requirements contained in
section 708(c)(3) of this Act (relating to responsibilities of
the administering body) shall apply to an administering body
described in paragraph (1) in the same manner as such
requirements apply to an administering body described in section
708(c)(1) of this Act.
``(d) Eligible Activities.--Amounts deposited in a Fund shall be
used only to provide grants to conserve, maintain, and restore the
tropical forests in the beneficiary country, through one or more of the
following activities:
``(1) Establishment, restoration, protection, and
maintenance of parks, protected areas, and reserves.
``(2) Development and implementation of scientifically sound
systems of natural resource management, including land and
ecosystem management practices.
``(3) Training programs to increase the scientific,
technical, and managerial capacities of individuals and
organizations involved in conservation efforts.
``(4) Restoration, protection, or sustainable use of diverse
animal and plant species.
``(5) Research and identification of medicinal uses of
tropical forest plant life to treat human diseases, illnesses,
and health related concerns.
[[Page 112 STAT. 892]]
``(6) Development and support of the livelihoods of
individuals living in or near a tropical forest in a manner
consistent with protecting such tropical forest.
``(e) Grant Recipients.--
``(1) In general.--Grants made from a Fund shall be
made to--
``(A) nongovernmental environmental, forestry,
conservation, and indigenous peoples organizations of,
or active in, the beneficiary country;
``(B) other appropriate local or regional entities
of, or active in, the beneficiary country; or
``(C) in exceptional circumstances, the government
of the beneficiary country.
``(2) Priority.--In providing grants under paragraph (1),
priority shall be given to projects that are run by
nongovernmental organizations and other private entities and
that involve local communities in their planning and execution.
``(f) Review of Larger Grants.--Any grant of more than $100,000 from
a Fund shall be subject to veto by the Government of the United States
or the government of the beneficiary country.
``(g) Eligibility Criteria.--In the event that a country ceases to
meet the eligibility requirements set forth in section 805(a), as
determined by the President pursuant to section 805(b), then grants from
the Fund for that country may only be made to nongovernmental
organizations until such time as the President determines that such
country meets the eligibility requirements set forth in section 805(a).
``SEC. <<NOTE: 22 USC 2431h.>> 810. TROPICAL FOREST FUND.
``(a) Establishment.--Each beneficiary country that enters into a
Tropical Forest Agreement under section 809 shall be required to
establish a Tropical Forest Fund to receive payments of interest on new
obligations undertaken by the beneficiary country under this part.
``(b) Requirements Relating to Operation of Fund.--The following
terms and conditions shall apply to the Fund in the same manner as such
terms as conditions apply to an Enterprise for the Americas Fund under
section 707 of this Act:
``(1) The provision relating to deposits under subsection
(b) of such section.
``(2) The provision relating to investments under subsection
(c) of such section.
``(3) The provision relating to disbursements under
subsection (d) of such section.
``SEC. <<NOTE: 22 USC 2431i.>> 811. BOARD.
``(a) Enterprise for the Americas Board.--The Enterprise for the
Americas Board established under section 610(a) of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C. 1738i(a)) shall,
in addition to carrying out the responsibilities of the Board under
section 610(c) of such Act, carry out the duties described in subsection
(c) of this section for the purposes of this part.
``(b) Additional <<NOTE: President.>> Membership.--
``(1) In general.--The Enterprise for the Americas Board
shall be composed of an additional four members appointed by the
President as follows:
[[Page 112 STAT. 893]]
``(A) Two representatives from the United States
Government, including a representative of the
International Forestry Division of the United States
Forest
Service.
``(B) Two representatives from private
nongovernmental environmental, scientific, forestry, or
academic organizations with experience and expertise in
preservation, maintenance, sustainable uses, and
restoration of tropical forests.
``(2) Chairperson.--Notwithstanding section 610(b)(2) of the
Agricultural Trade Development and Assistance Act of 1954 (7
U.S.C. 1738i(b)(2)), the Enterprise for the Americas Board shall
be headed by a chairperson who shall be appointed by the
President from among the representatives appointed under section
610(b)(1)(A) of such Act or paragraph (1)(A) of this subsection.
``(c) Duties.--The duties described in this subsection are as
follows:
``(1) Advise the Secretary of State on the negotiations of
Tropical Forest Agreements.
``(2) Ensure, in consultation with--
``(A) the government of the beneficiary country;
``(B) nongovernmental organizations of the
beneficiary country;
``(C) nongovernmental organizations of the region
(if appropriate);
``(D) environmental, scientific, forestry, and
academic leaders of the beneficiary country; and
``(E) environmental, scientific, forestry, and
academic leaders of the region (as appropriate),
that a suitable administering body is identified for each Fund.
``(3) Review the programs, operations, and fiscal audits of
each administering body.
``SEC. <<NOTE: President. 22 USC 2431j.>> 812. CONSULTATIONS WITH THE
CONGRESS.
``The President shall consult with the appropriate congressional
committees on a periodic basis to review the operation of the Facility
under this part and the eligibility of countries for benefits from the
Facility under this part.
``SEC. 813. ANNUAL REPORTS TO <<NOTE: 22 USC 2431k.>> THE CONGRESS.
``(a) In General.--Not later <<NOTE: Deadline. President.>> than
December 31 of each year, the President shall prepare and transmit to
the Congress an annual report concerning the operation of the Facility
for the prior fiscal year. Such report shall include--
``(1) a description of the activities undertaken by the
Facility during the previous fiscal year;
``(2) a description of any Agreement entered into under this
part;
``(3) a report on any Funds that have been established under
this part and on the operations of such Funds; and
``(4) a description of any grants that have been provided by
administering bodies pursuant to Agreements under this part.
[[Page 112 STAT. 894]]
``(b) Supplemental <<NOTE: Deadline.>> Views in Annual Report.--Not
later than December 15 of each year, each member of the Board shall be
entitled to receive a copy of the report required under subsection (a).
Each member of the Board may prepare and submit supplemental views to
the President on the implementation of this part by December 31 for
inclusion in the annual report when it is transmitted to Congress
pursuant to this section.''.
Approved July 29, 1998.
LEGISLATIVE HISTORY--H.R. 2870 (S. 1758):
---------------------------------------------------------------------------
HOUSE REPORTS: No. 105-443 (Comm. on International Relations).
SENATE REPORTS: No. 105-219 accompanying S. 1758 (Comm. on Foreign
Relations).
CONGRESSIONAL RECORD, Vol. 144 (1998):
Mar. 19, considered and passed House.
July 14, considered and passed Senate, amended.
July 15, House concurred in Senate amendment.
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