To provide multilateral and bilateral debt relief for developing countries, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as ``Foreign Credit Reform Act of 2004''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Unsustainable debt in the world's poorest countries 
        constitutes a serious impediment to the development of stable 
        democratic political structures, broad-based economic growth, 
        poverty eradication, and food security.
            (2) Financing should be appropriate for the purposes for 
        which it is used and should, to the maximum extent possible, 
        generate a return sufficient to pay the principal and interest 
        due. As such, long-term lending for perishable goods, such as 
        food commodities, may be construed as inappropriate to the 
        extent that it places a long-term debt burden on the recipient 
        country without generating sufficient revenues with which to 
        service the debt.
            (3) Since 1955, the United States has extended more than 
        $27,800,000,000 in loans for food under title I of the 
        Agricultural Trade Development and Assistance Act of 1954 
        (commonly referred to as ``PL 480''), $10,632,858,000 of which 
        remained outstanding at the end of 2002.
            (4) As of December 31, 2002, arrears on principal and 
        interest payments under title I of PL 480 totaled 
        $1,241,472,000.
            (5) Since 1992 the United States provided the independent 
        states of the former Soviet Union with $1,601,500,000 in loans 
        for food under title I of PL 480, for which these countries are 
        estimated to have paid $112,748,000 in principal and interest 
        in 2003. Russia alone has received $1,035,000,000 in credits, 
        paying an estimated $79,695,000 in principal and interest in 
        2003.
            (6) Rising debt stocks and debt-to-export ratios may 
        undermine a country's credit worthiness and jeopardize its 
        ability to borrow from commercial lenders.
            (7) Debt reduction contributes marginally to a country's 
        development prospects if new debt is allowed to create the next 
        generation of heavy indebtedness. Therefore, President Bush's 
        initiative, adopted by Group of Seven (G-7) leaders at the June 
        2002 summit, to increase World Bank grant assistance to the 
        most heavily indebted poor countries is a crucial step toward 
        alleviating poverty, curbing future unsustainable debt, and 
        providing for urgent human needs in countries in which people 
        live on less than one dollar a day. Replacing loans with 
        targeted grants will eliminate the need for governments to 
        repay long-term investments in people, especially for 
        education, health, nutrition, water supply, and sanitation 
        purposes.
            (8) The G-7 agreement at the June 2002 summit to fully fund 
        the remaining costs of the enhanced Heavily Indebted Poor 
        Country (HIPC) initiative is essential to ensuring that 
        eligible debt-distressed nations receive full benefits under 
        the HIPC debt relief measure.
            (9) The United States has been a leading voice for more 
        than a decade in international debt reduction initiatives for 
        poor countries, including a 1991 initiative to cancel 
        $689,000,000 in food loans under title I of PL 480 owed by 15 
        sub-Saharan African countries.
            (10) The United States must continue its leadership role to 
        encourage full participation by all Paris Club creditors in 
        multilateral debt negotiations.
            (11) Several poor countries that are not eligible for 
        enhanced HIPC debt reduction terms face a severe debt overhang 
        that undermines increased resource allocation for development 
        and discourages productive investment.
            (12) The World Bank, which has provided over $1,700,000,000 
        since 1986 to fight the spread of HIV/AIDS, should continue to 
        place the highest priority on programs to combat infectious 
        diseases, including HIV/AIDS, malaria, and tuberculosis.
            (13) Debt reduction is an important, but only partial 
        solution to long-term development. Promoting an environment 
        that will stimulate internal economic growth, promote trade and 
        external investment, and encourage responsible governance are 
        the most important ingredients for sustainable growth.

                   TITLE I--MULTILATERAL DEBT RELIEF

SEC. 101. SUPPORT FOR THE HIPC TRUST FUND.

    Section 801(b)(1) of H.R. 5526 of the 106th Congress, as introduced 
on October 24, 2000, and enacted into law by section 101(a) of Public 
Law 106-429 (and contained in the appendix thereto) is amended by 
striking ``2003, $435,000,000'' and inserting ``2006, such sums as may 
be necessary''.

SEC. 102. DEBT SERVICE REINVESTED INTO THE GLOBAL FUND.

    The Bretton Woods Agreements Act (22 U.S.C. 286-286oo) is further 
amended by adding at the end the following:

``SEC. 64. DEBT SERVICE REINVESTED INTO THE GLOBAL FUND.

    ``(a) Negotiation of Agreement.--The Secretary of the Treasury 
shall seek to negotiate an agreement among the member countries of the 
Bank and the Fund, under which, on approval by the Global Fund of a 
grant proposal originating from an eligible country, the Bank and the 
Fund shall make a contribution to the Global Fund in an amount equal to 
the amount of the grant award for the year, except that the total 
amount of the contributions so made with respect to the country during 
a year shall not exceed the total amount of debt service payments made 
by the country to the Bank and the Fund during the year.
    ``(b) Definitions.--In this section:
            ``(1) Global fund.--The term `Global Fund' means the 
        public-private partnership known as the Global Fund to Fight 
        AIDS, Tuberculosis and Malaria that was established upon the 
        call of the United Nations Secretary General in April 2001.
            ``(2) Eligible country.--The term `eligible country' means 
        a country--
                    ``(A) which has received debt relief under the 
                Enhanced HIPC Initiative; and
                    ``(B) in which the prevalence of HIV/AIDS among 
                individuals who have attained 15 years of age but have 
                not attained 49 years of age is not less than 5 
                percent.
            ``(3) Enhanced hipc initiative.--The term `Enhanced HIPC 
        Initiative' means the multilateral debt initiative for heavily 
        indebted poor countries presented in the Report of G-7 Finance 
        Ministers on the Cologne Debt Initiative to the Cologne 
        Economic Summit, Cologne, June 18-20, 1999.
            ``(4) HIV/AIDS.--The term `HIV/AIDS' means, with respect to 
        an individual, an individual who is infected with HIV or living 
        with AIDS.
            ``(5) HIV.--The term `HIV' means the human immunodeficiency 
        virus, the pathogen that causes AIDS.
            ``(6) AIDS.--The term `AIDS' means the acquired immune 
        deficiency syndrome.''.

                    TITLE II--BILATERAL DEBT RELIEF

SEC. 201. ACTIONS TO PROVIDE BILATERAL DEBT RELIEF.

    Section 501(i) of H.R. 3425 of the 106th Congress, as introduced on 
November 17, 1999, and enacted into law by section 1000(a)(5) of Public 
Law 106-113 (and contained in Appendix E thereto), is amended by 
striking ``2004'' and inserting ``2005''.

SEC. 202. DEBT FORGIVENESS UNDER TITLE I OF PUBLIC LAW 480.

    (a) Debt Forgiveness.--For each of the fiscal years 2005 and 2006, 
the President is authorized and encouraged to use the authority of 
section 411 of the Agricultural Trade Development and Assistance Act of 
1954 (7 U.S.C. 1736e) to waive payments of principal and interest that 
a country described in subsection (b) would otherwise be required to 
make to the Commodity Credit Corporation under dollar sales agreements 
under title I of such Act (7 U.S.C. 1701 et seq.).
    (b) Country Described.--A country referred to in subsection (a) is 
a country--
            (1) which has outstanding public and publicly guaranteed 
        debt, the net present value of which on December 31, 2003, was 
        at least 150 percent of the value of exports of the country in 
        2003; or
            (2) whose debt service payments on public and publicly 
        guaranteed debt exceeded 8 percent of the value of its exports 
        in 2003.
    (c) Applicable Provisions.--Except to the extent inconsistent with 
the provisions of this section, section 411 of the Agricultural Trade 
Development and Assistance Act of 1954 (7 U.S.C. 1736e) (except 
subsection (e) of such section) shall apply with respect to the 
authority to waive payments of principal and interest under this 
section to the same extent and in the same manner as such section 
applies to the authority to waive payments of principal and interest 
under section 411 of such Act.
    (d) Authorization of Appropriations.--For the cost (as defined in 
section 502 of the Federal Credit Reform Act of 1990) for the reduction 
or cancellation of any debt pursuant to this section, there are 
authorized to be appropriated to the President for each of the fiscal 
years 2005 and 2006 such sums as may be necessary.

SEC. 203. MISCELLANEOUS AMENDMENTS.

    (a) Financing Assistance Under Title I of Public Law 480.--Section 
101(b) of the Agricultural Trade Development and Assistance Act of 1954 
(7 U.S.C. 1701(b)) is amended--
            (1) by striking ``To carry out the policies'' and inserting 
        the following:
            ``(1) In general.--To carry out the policies'';
            (2) by striking ``developing countries'' and inserting 
        ``developing countries described in paragraph (2)''; and
            (3) by adding at the end the following:
            ``(2) Developing country described.--A developing country 
        referred to in paragraph (1) is a developing country that meets 
        the following requirements:
                    ``(A) The country is not prohibited from receiving 
                assistance under the Foreign Assistance Act of 1961 by 
                reason of the application of section 620(q) of such Act 
                and irrespective of whether or not the President has 
                determined that assistance to the country is in the 
                national interest of the United States.
                    ``(B) The country is not in default, during a 
                period in excess of six calendar months, in payment to 
                the United States of principal or interest on any loan 
                made to such country under this title or under any 
                other provision of law.
                    ``(C) The country is not a low-income country or 
                lower-middle income country, as defined by the 
                International Bank for Reconstruction and Development 
                in its World Development Indicators Report (issued in 
                April 2004 and updated annually).
                    ``(D) The country is not a severely-indebted 
                country or moderately-indebted country as defined by 
                the International Bank for Reconstruction and 
                Development in its World Development Indicators Report 
                (issued in April 2004 and updated annually).''.
    (b) Economic Assistance Under the Foreign Assistance Act of 1961.--
Section 620(q) of the Foreign Assistance Act of 1961 (22 U.S.C. 
2370(q)) is amended--
            (1) by inserting after ``under this Act'' the second place 
        it appears the following: ``or under title I of the 
        Agricultural Trade Development and Assistance Act of 1954 (7 
        U.S.C. 1701 et seq.)''; and
            (2) by adding at the end the following: ``A determination 
        by the President under the preceding sentence that assistance 
        to a country is in the national interest of the United States 
        shall be effective for a period not to exceed one calendar 
        year.''.

Summary: Foreign Credit Reform Act of 2004 - Amends Federal law to extend authorization of appropriations for the US contribution to the Heavily Indebted Poor Country (HIPC) Trust Fund. Amends the Bretton Woods Agreements Act to direct the Secretary of the Treasury to negotiate an agreement under which the International Bank for Reconstruction and Development and the International Monetary Fund shall contribute to the Global Fund to Fight AIDS, Tuberculosis and Malaria an amount equal to the amount of a country's annual debt service made to the Bank and the Fund. Authorizes the President to waive certain Agricultural Trade Development and Assistance Act of 1954 principal and interest payments owed to the Commodity Credit Corporation by eligible debt-heavy countries for FY 2005 and 2006. Amends such Act to define developing country for purposes of title I assistance.