IB

Union Calendar No. 363

106TH CONGRESS

2D SESSION H. R. 984

[Report No. 106–519, Part I]

To provide additional trade benefits to certain beneficiary countries in the

Caribbean, to provide assistance to the countries in Central America

and the Caribbean affected by Hurricane Mitch and Hurricane Georges,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 4, 1999

Mr. CRANE (for himself, Mr. KOLBE, Mr. RANGEL, and Mr. MATSUI) introduced the following bill; which was referred to the Committee on Ways

and Means, and in addition to the Committees on International Relations,

Banking and Financial Services, the Judiciary, and Armed Services, for

a period to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of the committee concerned

MARCH 13, 2000

Reported from the Committee on Ways and Means with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

MARCH 13, 2000

Referral to the Committees on International Relations, Banking and Financial

Services, the Judiciary, and Armed Services extended for a period ending

not later than May 26, 2000

MAY 26, 2000

Referral to the Committees on International Relations, Banking and Financial

Services, the Judiciary, and Armed Services extended for a period ending

not later than June 7, 2000

JUNE 7, 2000

Additional sponsors: Mr. JEFFERSON, Mr. HOUGHTON, Mr. DREIER, Mr.

HINOJOSA, Mr. ENGLISH, Mrs. MEEK of Florida, Mr. RUSH, Mrs.

CHRISTENSEN, Mr. MCDERMOTT, Mr. FOLEY, Mr. DOOLEY of California,
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Mr. MORAN of Virginia, Mr. RAMSTAD, Mr. PAYNE, Mr. MILLER of Florida, Mr. TOWNS, Mr. OWENS, Mr. ARMEY, Ms. DUNN, Mr. SHAW, Mr.

MCINNIS, Mr. DAVIS of Virginia, Mr. MEEKS of New York, Mr.

BLUMENAUER, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. HASTINGS

of Florida, Ms. KILPATRICK, Mr. BLILEY, Mr. PORTMAN, Ms. PRYCE of

Ohio, Mr. MCINTOSH, Mr. BENTSEN, Ms. ESHOO, Mr. LATOURETTE,

Mr. LEWIS of California, Mr. CANNON, Mr. BRADY of Texas, Mr.

EHLERS, Mr. NUSSLE, Mr. FRELINGHUYSEN, Mr. DAVIS of Florida, Ms.

JACKSON-LEE of Texas, Mr. RADANOVICH, Mr. FATTAH, Mr. FARR of

California, Mrs. ROUKEMA, Mr. SHIMKUS, Mr. WEINER, Mr. CAMP, Mr.

BARRETT of Nebraska, Mr. CUMMINGS, Mr. ROYCE, Mr. FORD, Mr.

OXLEY, Mrs. MORELLA, Mr. MASCARA, Ms. BERKLEY, Mr. WYNN, Mr.

TALENT, Mr. HILLIARD, Mr. VITTER, Mr. BEREUTER, Mr. DAVIS of Illinois, Mr. GOSS, and Mr. SHAYS

Deleted sponsor: Mr. BOEHNER (added April 27, 1999; deleted May 6, 1999)

JUNE 7, 2000

Committees on International Relations, Banking and Financial Services, the

Judiciary, and Armed Services discharged; committed to the Committee

of the Whole House on the State of the Union and ordered to be printed

[For text of introduced bill, see copy of bill as introduced on March 4, 1999]

A BILL

To provide additional trade benefits to certain beneficiary

countries in the Caribbean, to provide assistance to the

countries in Central America and the Caribbean affected

by Hurricane Mitch and Hurricane Georges, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Caribbean and Central America Relief and Economic Sta6 bilization Act’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Definitions.

TITLE I—UNITED STATES-CARIBBEAN TRADE PARTNERSHIP

Subtitle A—Trade Provisions

Sec. 101. Short title.

Sec. 102. Policy.

Sec. 103. Definitions.

Sec. 104. Temporary provisions to provide NAFTA parity to partnership countries.

Sec. 105. Effect of NAFTA on sugar imports from beneficiary countries.

Sec. 106. Duty-free treatment for certain beverages made with Caribbean rum.

Sec. 107. Meetings of trade ministers and USTR.

Sec. 108. Report on economic development and market oriented reforms in the

Caribbean.

Subtitle B—Revenue Offset

Sec. 111. Limitations on welfare benefit funds of 10 or more employer plans.

Subtitle C—Suspension of Limitation on Cover Over of Tax on Distilled

Spirits

Sec. 121. Suspension of limitation on cover over of tax on distilled spirits.

TITLE II—FOREIGN ASSISTANCE FOR CENTRAL AMERICA AND THE

CARIBBEAN

Subtitle A—Microcredit and Agricultural Assistance

Sec. 201. Declaration of policy.

Sec. 202. Microenterprise assistance.

Sec. 203. Support for producer-owned cooperative marketing associations.

Sec. 204. Agricultural research and extension activities.

Sec. 205. Nonemergency food assistance programs.

Subtitle B—Overseas Private Investment Corporation

Sec. 211. Private sector development activities of OPIC.

Subtitle C—Economic Support Fund Assistance

Sec. 221. Economic support fund assistance.

Sec. 222. Reimbursement of international disaster account.

Sec. 223. Rule of construction; availability of amounts.

TITLE III—DEPARTMENT OF DEFENSE

Sec. 301. Replacement of funds used for disaster relief and reconstruction.
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TITLE IV—IMMIGRATION AND NATURALIZATION SERVICE

Sec. 401. Detention facilities.

TITLE V—DEBT RESCHEDULING AND REDUCTION FOR HONDURAS

AND NICARAGUA; FUNDING FOR THE CENTRAL AMERICAN EMERGENCY TRUST FUND OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

Subtitle A—Debt Rescheduling and Reduction for Honduras and Nicaragua

Sec. 501. Rescheduling of interest payments owed by Honduras and Nicaragua.

Sec. 502. Reduction of debt owed by Honduras.

Subtitle B—Authorization of Funding for the Central American Emergency

Trust Fund of the International Bank for Reconstruction and Development

Sec. 511. Authorization of funding.

1 SEC. 2. FINDINGS.

2 Congress makes the following findings:

3 (1) In October of 1998, Hurricane Mitch dev4 astated areas of the Caribbean and Central America.

5 The National Hurricane Center has called this storm

6 ‘‘the most deadly hurricane in the Atlantic in over

7 200 years’’. Hurricane Mitch killed 9,860 people and

8 left approximately 3,000,000 people homeless in the

9 region.

10 (2) Hurricane Georges hit the Florida Keys, the

11 islands of the Caribbean, and the Gulf coast of the

12 United States in September of 1998, causing more

13 than $1,000,000,000 in damage. The storm killed 250

14 people.

15 (3) The total direct economic impact of Hurri16 cane Mitch and Hurricane Georges on Honduras,

17 Nicaragua, the Dominican Republic, El Salvador and
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1 Guatemala amounts to $4,200,000,000. Honduras’

2 losses represent more than 50 percent of its gross do3 mestic product and Nicaragua lost a quarter of its

4 gross domestic product.

5 (4) The United States must continue to play a

6 leading role in responding to the disaster and encour7 age others to contribute to the recovery effort. For ex8 ample, Taiwan has contributed $50,800,000 in assist9 ance for the construction of roads and housing, the re10 habilitation of agricultural production, and the dis11 tribution of supplies. Sweden, Spain, and France

12 have sent engineering teams to the region to assess

13 damage to roads, and Japan and the European

14 Union have pledged millions of dollars in assistance.

15 The United States praises the efforts of these and

16 other nations in assisting with the rehabilitation of

17 the region.

18 (5) Approximately 356 bridges were destroyed in

19 the region, and 57 percent of the region’s roads were

20 impacted. The United States equivalent of this would

21 be the destruction of 3,900,000 miles of highway.

22 These roads must be reconstructed quickly so that

23 farmers can transport their goods to market and

24 much-needed medical supplies can reach rural areas.
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1 (6) Hurricane Mitch devastated the agricultural

2 sector in the affected areas of Central America and

3 the Caribbean, particularly the countries of Honduras

4 and Guatemala. An estimated 70 percent of Hon5 duras’ crops were destroyed by Hurricane Mitch, in6 cluding 90 percent of the country’s banana and grain

7 crops. In Guatemala, an estimated 95 percent of the

8 nation’s banana crop was damaged, 25-60 percent of

9 the corn, bean, coffee, and sugar crops were destroyed,

10 and 30 percent of the cattle was lost.

11 (7) Approximately 50 percent of Central Amer12 ica and the Caribbean’s workforce is employed in ag13 riculture. The devastation to the agriculture sector by

14 Hurricane Mitch has resulted in a widespread short15 age of food which is likely to continue in the long

16 term unless the region’s agricultural sector is rehabili17 tated.

18 (8) Significant numbers of displaced Central

19 Americans are moving north to the United States in

20 the wake of Hurricane Mitch’s devastation. Border

21 Patrol agents in Brownsville, Texas, report that ap22 prehensions of Hondurans alone increased by 61 per23 cent in the last three months of 1998. The massive in24 flux of immigrants places severe pressures upon the

25 ability of the Immigration and Naturalization Serv-
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1 ice (INS) to detain and remove non-criminal illegal

2 immigrants. At current funding levels, the INS does

3 not have the resources to detain illegal non-criminal

4 border crossers from Central America. If this situa5 tion continues, the INS is concerned that many more

6 people will attempt to illegally cross the border.

7 (9) Partially in an effort to alleviate these pres8 sures, the Attorney General provided temporary pro9 tected status to aliens from Honduras and Nicaragua

10 on December 30, 1998 for a period of 18 months. No

11 such status was provided to immigrants from El Sal12 vador and Guatemala.

13 (10) Agricultural assistance and training and

14 microcredit assistance will provide much needed aid

15 to the affected areas of Central America and the Car16 ibbean as the areas rebuild their agriculture sectors.

17 The immediate distribution of food aid is important

18 in the short term, but it is essential that the region

19 be able to return to self-sufficiency in food production

20 so the citizens of Central America and the Caribbean

21 will be able to feed themselves once again.

22 (11) The goal of United States assistance to the

23 region should focus on, in addition to the short-term

24 disaster assistance, long-term solutions for a success25 ful economic recovery of Central America and the
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1 Caribbean. Successful economic recovery lies in the re2 gion’s ability to expand its international trade with

3 important trading partners such as the United

4 States.

5 (12) Since 1983, the Caribbean Basin Economic

6 Recovery Act has represented a permanent and suc7 cessful commitment by the United States to encourage

8 the development of strong democratic governments

9 and revitalized economies in neighboring countries in

10 the Caribbean Basin.

11 (13) Thirty-four democratically elected leaders

12 agreed at the 1994 Summit of the Americas to con13 clude negotiation of a Free Trade Area of the Amer14 icas (referred to in this Act as ‘‘FTAA’’) by the year

15 2005.

16 (14) The economic security of the countries in

17 the Caribbean Basin will be enhanced by the comple18 tion of the FTAA.

19 (15) Offering temporary benefits to Caribbean

20 Basin countries on the 30 percent of imports from the

21 region that are not currently duty-free under the Car22 ibbean Basin Economic Recovery Act and other trade

23 programs, will promote the growth of free enterprise

24 and economic opportunity in these neighboring coun-
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1 tries and thereby enhance the national security inter2 ests of the United States.

3 (16) Given the greater propensity of countries lo4 cated in the Western Hemisphere to use United States

5 components and to purchase United States products

6 compared to other countries, increased trade and eco7 nomic activity between the United States and coun8 tries in the Western Hemisphere will create new jobs

9 in the United States as a result of expanding export

10 opportunities.

11 SEC. 3. DEFINITIONS.

12 In this Act:

13 (1) ADMINISTRATOR.—The term ‘‘Adminis14 trator’’ means the Administrator of the United States

15 Agency for International Development.

16 (2) AFFECTED AREAS OF CENTRAL AMERICA AND

17 THE CARIBBEAN.—The term ‘‘affected areas of Central

18 America and the Caribbean’’ means areas in the Cen19 tral American countries and the Caribbean countries

20 that incurred damage from Hurricane Georges in

21 September of 1998 and Hurricane Mitch in October

22 of 1998.

23 (3) CARIBBEAN COUNTRIES.—The term ‘‘Carib24 bean countries’’ means any country listed in section

25 212(b) of the Caribbean Basin Economic Recovery
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1 Act (19 U.S.C. 2702(b)) (other than Central Amer2 ican countries).

3 (4) CENTRAL AMERICAN COUNTRIES.—The term

4 ‘‘Central American countries’’ means Belize, Costa

5 Rica, El Salvador, Guatemala, Honduras, Nicaragua,

6 and Panama.

7 (5) OPIC.—The term ‘‘OPIC’’ means the Over8 seas Private Investment Corporation.

9 TITLE I—UNITED STATES-CARIB10 BEAN TRADE PARTNERSHIP

11 Subtitle A—Trade Provisions

12 SEC. 101. SHORT TITLE.

13 This title may be cited as the ‘‘United States-Carib14 bean Trade Partnership Act’’.

15 SEC. 102. POLICY.

16 It is the policy of the United States to offer to the prod17 ucts of Caribbean Basin partnership countries tariffs and

18 quota treatment equivalent to that accorded to certain prod19 ucts of countries that are parties to the NAFTA, and to

20 seek the accession of these partnership countries to the

21 NAFTA or a free trade agreement comparable to the

22 NAFTA at the earliest possible date, with the goal of achiev23 ing full participation in the NAFTA or in a free trade

24 agreement comparable to the NAFTA by all partnership

25 countries by not later than January 1, 2005.
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1 SEC. 103. DEFINITIONS.

2 As used in this title:

3 (1) PARTNERSHIP COUNTRY.—The term ‘‘part4 nership country’’ means a beneficiary country as de5 fined in section 212(a)(1)(A) of the Caribbean Basin

6 Economic Recovery Act (19 U.S.C. 2702(a)(1)(A)).

7 (2) NAFTA.—The term ‘‘NAFTA’’ means the

8 North American Free Trade Agreement entered into

9 between the United States, Mexico, and Canada on

10 December 17, 1992.

11 (3) TRADE REPRESENTATIVE.—The term ‘‘Trade

12 Representative’’ means the United States Trade Rep13 resentative.

14 (4) WTO AND WTO MEMBER.—The terms

15 ‘‘WTO’’ and ‘‘WTO member’’ have the meanings given

16 those terms in section 2 of the Uruguay Round Agree17 ments Act (19 U.S.C. 3501).

18 SEC. 104. TEMPORARY PROVISIONS TO PROVIDE NAFTA

19 PARITY TO PARTNERSHIP COUNTRIES.

20 (a) TEMPORARY PROVISIONS.—Section 213(b) of the

21 Caribbean Basin Economic Recovery Act (19 U.S.C.

22 2703(b)) is amended to read as follows:

23 ‘‘(b) IMPORT-SENSITIVE ARTICLES.—

24 ‘‘(1) IN GENERAL.—Subject to paragraphs (2)

25 through (5), the duty-free treatment provided under

26 this title does not apply to—
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1 ‘‘(A) textile and apparel articles which were

2 not eligible articles for purposes of this title on

3 January 1, 1994, as this title was in effect on

4 that date;

5 ‘‘(B) footwear not designated at the time of

6 the effective date of this title as eligible articles

7 for the purpose of the generalized system of pref8 erences under title V of the Trade Act of 1974;

9 ‘‘(C) tuna, prepared or preserved in any

10 manner, in airtight containers;

11 ‘‘(D) petroleum, or any product derived

12 from petroleum, provided for in headings 2709

13 and 2710 of the HTS;

14 ‘‘(E) watches and watch parts (including

15 cases, bracelets and straps), of whatever type in16 cluding, but not limited to, mechanical, quartz

17 digital, or quartz analog, if such watches or

18 watch parts contain any material which is the

19 product of any country with respect to which

20 HTS column 2 rates of duty apply; or

21 ‘‘(F) articles to which reduced rates of duty

22 apply under subsection (h).

23 ‘‘(2) TRANSITION PERIOD TREATMENT OF CER24 TAIN TEXTILE AND APPAREL ARTICLES.—
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1 ‘‘(A) EQUIVALENT TARIFF AND QUOTA

2 TREATMENT.—During the transition period—

3 ‘‘(i) the tariff treatment accorded at

4 any time to any textile or apparel article

5 that originates in the territory of a partner6 ship country shall be identical to the tariff

7 treatment that is accorded at such time

8 under section 2 of the Annex to an article

9 described in the same 8-digit subheading of

10 the HTS that is a good of Mexico and is

11 imported into the United States;

12 ‘‘(ii) duty-free treatment under this

13 title shall apply to any textile or apparel

14 article that is imported into the United

15 States from a partnership country and

16 that—

17 ‘‘(I) is assembled in a partnership

18 country, from fabrics wholly formed

19 and cut in the United States from

20 yarns formed in the United States, and

21 is entered—

22 ‘‘(aa) under subheading

23 9802.00.80 of the HTS; or

24 ‘‘(bb) under chapter 61, 62,

25 or 63 of the HTS if, after such as-
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1 sembly, the article would have

2 qualified for treatment under sub3 heading 9802.00.80 of the HTS,

4 but for the fact the article was

5 subjected to bleaching, garments

6 dyeing, stone-washing, enzyme7 washing, acid-washing, perma8 pressing, oven-baking, or embroi9 dery;

10 ‘‘(II) is knit-to-shape in a part11 nership country from yarns wholly

12 formed in the United States;

13 ‘‘(III) is made in a partnership

14 country from fabric knit in a partner15 ship country from yarns wholly formed

16 in the United States;

17 ‘‘(IV) is cut and assembled in a

18 partnership country from fabrics whol19 ly formed in the United States from

20 yarns wholly formed in the United

21 States; or

22 ‘‘(V) is identified under subpara23 graph (C) as a handloomed, hand24 made, or folklore article of a partner25 ship country and is certified as such
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1 by the competent authority of such

2 country; and

3 ‘‘(iii) no quantitative restriction or

4 consultation level may be applied to the im5 portation into the United States of any tex6 tile or apparel article that—

7 ‘‘(I) originates in the territory of

8 a partnership country, or

9 ‘‘(II) qualifies for duty-free treat10 ment under subclause (I), (II), (III),

11 (IV), or (V) of clause (ii).

12 ‘‘(B) TRANSITION PERIOD TREATMENT OF

13 OTHER NONORIGINATING TEXTILE AND APPAREL

14 ARTICLES.—

15 ‘‘(i) PREFERENTIAL TARIFF TREAT16 MENT.—Subject to clause (ii), the President

17 may place in effect at any time during the

18 transition period with respect to any textile

19 or apparel article that—

20 ‘‘(I) is a product of a partnership

21 country, but

22 ‘‘(II) does not qualify as a good

23 that originates in the territory of a

24 partnership country or is eligible for

25 benefits under subparagraph (A)(ii),
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1 tariff treatment that is identical to the in2 preference-level tariff treatment accorded at

3 such time under Appendix 6.B of the Annex

4 to an article described in the same 8-digit

5 subheading of the HTS that is a product of

6 Mexico and is imported into the United

7 States. For purposes of this clause, the ‘in8 preference-level tariff treatment’ accorded to

9 an article that is a product of Mexico is the

10 rate of duty applied to that article when

11 imported in quantities less than or equal to

12 the quantities specified in Schedule 6.B.1,

13 6.B.2., or 6.B.3. of the Annex for imports of

14 that article from Mexico into the United

15 States.

16 ‘‘(ii) LIMITATIONS ON ALL ARTI17 CLES.—(I) Tariff treatment under clause (i)

18 may be extended, during any calendar year,

19 to not more than 45,000,000 square meter

20 equivalents of cotton or man-made fiber ap21 parel, to not more than 1,500,000 square

22 meter equivalents of wool apparel, and to

23 not more than 25,000,000 square meter

24 equivalents of goods entered under sub25 heading 9802.00.80 of the HTS.
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1 ‘‘(II) Except as provided in subclause

2 (III), the amounts set forth in subclause (I)

3 shall be allocated among the 7 partnership

4 countries with the largest volume of exports

5 to the United States of textile and apparel

6 goods in calendar year 1997, based upon a

7 pro rata share of the volume of textile and

8 apparel goods of each of those 7 countries

9 that entered the United States under sub10 heading 9802.00.80 of the HTS during the

11 first 12 months of the 14-month period end12 ing on the date of the enactment of the

13 United States-Caribbean Trade Partnership

14 Act.

15 ‘‘(III) Five percent of the amounts set

16 forth in subclause (I) shall be allocated

17 among the partnership countries, other than

18 those to which subclause (II) applies, based

19 upon a pro rata share of the exports to the

20 United States of textile and apparel goods

21 of each of those countries during the first 12

22 months of the 14-month period ending on

23 the date of the enactment of the United

24 States-Caribbean Trade Partnership Act.
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1 ‘‘(iii) PRIOR CONSULTATION.—The

2 President may implement the preferential

3 tariff treatment described in clause (i) only

4 after consultation with representatives of the

5 United States textile and apparel industry

6 and other interested parties regarding—

7 ‘‘(I) the specific articles to which

8 such treatment will be extended,

9 ‘‘(II) the annual quantities of

10 such articles that may be imported at

11 the preferential duty rates described in

12 clause (i), and

13 ‘‘(III) the allocation of such an14 nual quantities among partnership

15 countries.

16 ‘‘(C) HANDLOOMED, HANDMADE, AND FOLK17 LORE ARTICLES.—For purposes of subparagraph

18 (A)(ii)(V), the Trade Representative shall consult

19 with representatives of a partnership country for

20 the purpose of identifying particular textile and

21 apparel goods that are mutually agreed upon as

22 being handloomed, handmade, or folklore goods of

23 a kind described in section 2.3 (a), (b), or (c)

24 or Appendix 3.1.B.11 of the Annex.
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1 ‘‘(D) BILATERAL EMERGENCY ACTIONS.—(i)

2 The President may take—

3 ‘‘(I) bilateral emergency tariff actions

4 of a kind described in section 4 of the

5 Annex with respect to any textile or apparel

6 article imported from a partnership country

7 if the application of tariff treatment under

8 subparagraph (A) to such article results in

9 conditions that would be cause for the tak10 ing of such actions under such section 4

11 with respect to an article described in the

12 same 8-digit subheading of the HTS that is

13 imported from Mexico; or

14 ‘‘(II) bilateral emergency quantitative

15 restriction actions of a kind described in

16 section 5 of the Annex with respect to im17 ports of any textile or apparel article de18 scribed in subparagraphs (B)(i) (I) and (II)

19 if the importation of such article into the

20 United States results in conditions that

21 would be cause for the taking of such ac22 tions under such section 5 with respect to a

23 like article that is a product of Mexico.

24 ‘‘(ii) The requirement in paragraph (5) of

25 section 4 of the Annex (relating to providing
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1 compensation) shall not be deemed to apply to a

2 bilateral emergency action taken under this sub3 paragraph.

4 ‘‘(iii) For purposes of applying bilateral

5 emergency action under this subparagraph—

6 ‘‘(I) the term ‘transition period’ in sec7 tions 4 and 5 of the Annex shall be deemed

8 to be the period defined in paragraph

9 (5)(E); and

10 ‘‘(II) any requirements to consult spec11 ified in section 4 or 5 of the Annex are

12 deemed to be satisfied if the President re13 quests consultations with the partnership

14 country in question and the country does

15 not agree to consult within the time period

16 specified under such section 4 or 5, which17 ever is applicable.

18 ‘‘(3) NAFTA TRANSITION PERIOD TREATMENT

19 OF CERTAIN OTHER ARTICLES ORIGINATING IN BENE20 FICIARY COUNTRIES.—

21 ‘‘(A) EQUIVALENT TARIFF TREATMENT.—

22 ‘‘(i) IN GENERAL.—Subject to clause

23 (ii), the tariff treatment accorded at any

24 time during the transition period to any

25 article referred to in any of subparagraphs
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1 (B) through (F) of paragraph (1) that

2 originates in the territory of a partnership

3 country shall be identical to the tariff treat4 ment that is accorded at such time under

5 Annex 302.2 of the NAFTA to an article de6 scribed in the same 8-digit subheading of

7 the HTS that is a good of Mexico and is

8 imported into the United States.

9 ‘‘(ii) EXCEPTION.—Clause (i) does not

10 apply to any article accorded duty-free

11 treatment under U.S. Note 2(b) to sub12 chapter II of chapter 98 of the HTS.

13 ‘‘(B) RELATIONSHIP TO SUBSECTION (h)

14 DUTY REDUCTIONS.—If at any time during the

15 transition period the rate of duty that would

16 (but for action taken under subparagraph (A)(i)

17 in regard to such period) apply with respect to

18 any article under subsection (h) is a rate of duty

19 that is lower than the rate of duty resulting from

20 such action, then such lower rate of duty shall be

21 applied for the purposes of implementing such

22 action.

23 ‘‘(4) CUSTOMS PROCEDURES.—

24 ‘‘(A) IN GENERAL.—
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1 ‘‘(i) REGULATIONS.—Any importer

2 that claims preferential tariff treatment

3 under paragraph (2) or (3) shall comply

4 with customs procedures similar in all ma5 terial respects to the requirements of Article

6 502(1) of the NAFTA as implemented pur7 suant to United States law, in accordance

8 with regulations promulgated by the Sec9 retary of the Treasury.

10 ‘‘(ii) DETERMINATION.—In order to

11 qualify for such preferential tariff treatment

12 and for a Certificate of Origin to be valid

13 with respect to any article for which such

14 treatment is claimed, there shall be in effect

15 a determination by the President that—

16 ‘‘(I) the partnership country from

17 which the article is exported, and

18 ‘‘(II) each partnership country in

19 which materials used in the production

20 of the article originate or undergo pro21 duction that contributes to a claim

22 that the article qualifies for such pref23 erential tariff treatment,

24 has implemented and follows, or is making

25 substantial progress toward implementing
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1 and following, procedures and requirements

2 similar in all material respects to the rel3 evant procedures and requirements under

4 chapter 5 of the NAFTA.

5 ‘‘(B) CERTIFICATE OF ORIGIN.—The Certifi6 cate of Origin that otherwise would be required

7 pursuant to the provisions of subparagraph (A)

8 shall not be required in the case of an article im9 ported under paragraph (2) or (3) if such Cer10 tificate of Origin would not be required under

11 Article 503 of the NAFTA (as implemented pur12 suant to United States law), if the article were

13 imported from Mexico.

14 ‘‘(C) PENALTIES FOR TRANSSHIPMENTS.—If

15 the President determines, based on sufficient evi16 dence, that an exporter has engaged in willful il17 legal transshipment or willful customs fraud

18 with respect to textile or apparel articles for

19 which preferential tariff treatment under sub20 paragraph (A) or (B) of paragraph (2) is

21 claimed, then the President shall deny all bene22 fits under this title to such exporter, and any

23 successors of such exporter, for a period of 2

24 years.
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1 ‘‘(D) REPORT BY USTR ON COOPERATION OF

2 OTHER COUNTRIES CONCERNING CIRCUMVEN3 TION.—The United States Commissioner of Cus4 toms shall conduct a study analyzing the extent

5 to which each partnership country—

6 ‘‘(i) has cooperated fully with the

7 United States, consistent with its domestic

8 laws and procedures, in instances of cir9 cumvention or alleged circumvention of ex10 isting quotas on imports of textile and ap11 parel goods, to establish necessary relevant

12 facts in the places of import, export, and,

13 where applicable, transshipment, including

14 investigation of circumvention practices, ex15 changes of documents, correspondence, re16 ports, and other relevant information, to the

17 extent such information is available;

18 ‘‘(ii) has taken appropriate measures,

19 consistent with its domestic laws and proce20 dures, against exporters and importers in21 volved in instances of false declaration con22 cerning fiber content, quantities, descrip23 tion, classification, or origin of textile and

24 apparel goods; and
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1 ‘‘(iii) has penalized the individuals

2 and entities involved in any such cir3 cumvention, consistent with its domestic

4 laws and procedures, and has worked closely

5 to seek the cooperation of any third country

6 to prevent such circumvention from taking

7 place in that third country.

8 The Trade Representative shall submit to the

9 Congress, not later than October 1, 1999, a re10 port on the study conducted under this subpara11 graph.

12 ‘‘(5) DEFINITIONS.—For purposes of this

13 subsection—

14 ‘‘(A) The term ‘the Annex’ means Annex

15 300–B of the NAFTA.

16 ‘‘(B) The term ‘NAFTA’ means the North

17 American Free Trade Agreement entered into be18 tween the United States, Mexico, and Canada on

19 December 17, 1992.

20 ‘‘(C) The term ‘partnership country’ means

21 a beneficiary country.

22 ‘‘(D) The term ‘textile or apparel article’

23 means any article referred to in paragraph

24 (1)(A) that is a good listed in Appendix 1.1 of

25 the Annex.
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1 ‘‘(E) The term ‘transition period’ means,

2 with respect to a partnership country, the period

3 that begins on July 1, 2000, and ends on the

4 earlier of—

5 ‘‘(i) August 1, 2002; or

6 ‘‘(ii) the date on which—

7 ‘‘(I) the United States first ap8 plies the NAFTA to the partnership

9 country upon its accession to the

10 NAFTA, or

11 ‘‘(II) there enters into force with

12 respect to the United States and the

13 partnership country a free trade agree14 ment comparable to the NAFTA that

15 makes substantial progress in achiev16 ing the negotiating objectives set forth

17 in section 108(b)(5) of the North Amer18 ican Free Trade Agreement Implemen19 tation Act (19 U.S.C. 3317(b)(5)).

20 ‘‘(F) An article shall be deemed as origi21 nating in the territory of a partnership country

22 if the article meets the rules of origin for a good

23 set forth in chapter 4 of the NAFTA, and, in the

24 case of an article described in Appendix 6.A of

25 the Annex, the requirements stated in such Ap-
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1 pendix 6.A for such article to be treated as if it

2 were an originating good. In applying such

3 chapter 4 or Appendix 6.A with respect to a

4 partnership country for purposes of this

5 subsection—

6 ‘‘(i) no countries other than the United

7 States and partnership countries may be

8 treated as being Parties to the NAFTA,

9 ‘‘(ii) references to trade between the

10 United States and Mexico shall be deemed

11 to refer to trade between the United States

12 and partnership countries, and

13 ‘‘(iii) references to a Party shall be

14 deemed to refer to the United States or a

15 partnership country, and references to the

16 Parties shall be deemed to refer to any com17 bination of partnership countries and the

18 United States.’’.

19 (b) DETERMINATION REGARDING RETENTION OF DES20 IGNATION.—Section 212(e)(1) of the Caribbean Basin Eco21 nomic Recovery Act (19 U.S.C. 2702(e)) is amended—

22 (1) by inserting ‘‘(A)’’ after ‘‘(1)’’;

23 (2) by redesignating subparagraphs (A) and (B)

24 as clauses (i) and (ii), respectively;

25 (3) by adding at the end the following:
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1 ‘‘(B)(i) Based on the President’s review and

2 analysis described in subsection (f), the President

3 may determine if the preferential treatment under

4 section 213(b)(2) and (3) should be withdrawn, sus5 pended, or limited with respect to any article of a

6 partnership country. Such determination shall be in7 cluded in the report required by subsection (f).

8 ‘‘(ii) Withdrawal, suspension, or limitation of

9 the preferential treatment under section 213(b)(2) and

10 (3) with respect to a partnership country shall be

11 taken only after the requirements of subsection (a)(2)

12 and paragraph (2) of this subsection have been met.’’.

13 (c) REPORTING REQUIREMENTS.—Section 212(f) of

14 the Caribbean Basin Economic Recovery Act (19 U.S.C.

15 2702(f)) is amended to read as follows:

16 ‘‘(f) REPORTING REQUIREMENTS.—Not later than 1

17 year after the date of the enactment of the United States18 Caribbean Trade Partnership Act and at the close of each

19 3-year period thereafter, the President shall submit to the

20 Congress a complete report regarding the operation of this

21 title, including—

22 ‘‘(1) with respect to subsections (b) and (c) of

23 this section, the results of a general review of bene24 ficiary countries based on the considerations described

25 in such subsections;
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1 ‘‘(2) with respect to subsection (c)(4), the degree

2 to which a country follows accepted rules of inter3 national trade provided for under the WTO Agree4 ment and the multilateral trade agreements (as such

5 terms are defined in paragraphs (9) and (4), respec6 tively, of section 2 of the Uruguay Round Agreements

7 Act);

8 ‘‘(3) with respect to subsection (c)(9), the extent

9 to which beneficiary countries are providing or taking

10 steps to provide protection of intellectual property

11 rights comparable to the protection provided to the

12 United States in bilateral intellectual property rights

13 agreements;

14 ‘‘(4) with respect to subsection (b)(2) and sub15 section (c)(5), the extent that beneficiary countries are

16 providing or taking steps to provide protection of in17 vestment and investors comparable to the protection

18 provided to the United States in bilateral investment

19 treaties;

20 ‘‘(5) with respect to subsection (c)(3), the extent

21 that beneficiary countries are providing the United

22 States and other WTO members (as such term is de23 fined in section 2(10) of the Uruguay Round Agree24 ments Act (19 U.S.C. 3501(10)) with equitable and
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1 reasonable market access in the product sectors for

2 which benefits are provided under this title;

3 ‘‘(6) with respect to subsection (c)(11), the extent

4 that beneficiary countries are cooperating with the

5 United States in administering the provisions of sec6 tion 213(b); and

7 ‘‘(7) with respect to subsection (c)(8), the extent

8 that beneficiary countries are meeting the inter9 nationally recognized worker rights criteria under

10 such subsection.

11 In the first report under this subsection, the President shall

12 include a review of the implementation of section 213(b),

13 and his analysis of whether the benefits under paragraphs

14 (2) and (3) of such section further the objectives of this

15 title.’’.

16 (d) CONFORMING AMENDMENT.—Section 213(a)(1) of

17 the Caribbean Basin Economic Recovery Act is amended

18 by inserting ‘‘and except as provided in section 213(b)(2)

19 and (3),’’ after ‘‘Tax Reform Act of 1986,’’.

20 SEC. 105. EFFECT OF NAFTA ON SUGAR IMPORTS FROM

21 BENEFICIARY COUNTRIES.

22 The President shall monitor the effects, if any, that the

23 implementation of the NAFTA has on the access of bene24 ficiary countries under the Caribbean Basin Economic Re25 covery Act to the United States market for sugars, syrups,
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1 and molasses. If the President considers that the implemen2 tation of the NAFTA is affecting, or will likely affect, in

3 an adverse manner the access of such countries to the

4 United States market, the President shall promptly—

5 (1) take such actions, after consulting with inter6 ested parties and with the appropriate committees of

7 the House of Representatives and the Senate, or

8 (2) propose to the Congress such legislative ac9 tions,

10 as may be necessary or appropriate to ameliorate such ad11 verse effect.

12 SEC. 106. DUTY-FREE TREATMENT FOR CERTAIN BEV13 ERAGES MADE WITH CARIBBEAN RUM.

14 Section 213(a) of the Caribbean Basin Economic Re15 covery Act (19 U.S.C. 2703(a)) is amended—

16 (1) in paragraph (5), by striking ‘‘chapter’’ and

17 inserting ‘‘title’’; and

18 (2) by adding at the end the following new para19 graph:

20 ‘‘(6) Notwithstanding paragraph (1), the duty-free

21 treatment provided under this title shall apply to liqueurs

22 and spirituous beverages produced in the territory of Can23 ada from rum if—
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1 ‘‘(A) such rum is the growth, product, or manu2 facture of a beneficiary country or of the Virgin Is3 lands of the United States;

4 ‘‘(B) such rum is imported directly from a bene5 ficiary country or the Virgin Islands of the United

6 States into the territory of Canada, and such liqueurs

7 and spirituous beverages are imported directly from

8 the territory of Canada into the customs territory of

9 the United States;

10 ‘‘(C) when imported into the customs territory of

11 the United States, such liqueurs and spirituous bev12 erages are classified in subheading 2208.90 or

13 2208.40 of the HTS; and

14 ‘‘(D) such rum accounts for at least 90 percent

15 by volume of the alcoholic content of such liqueurs

16 and spiritous beverages.’’.

17 SEC. 107. MEETINGS OF TRADE MINISTERS AND USTR.

18 (a) SCHEDULE OF MEETINGS.—The President shall

19 take the necessary steps to convene a meeting with the trade

20 ministers of the partnership countries in order to establish

21 a schedule of regular meetings, to commence as soon as is

22 practicable, of the trade ministers and the Trade Represent23 ative, for the purpose set forth in subsection (b).

24 (b) PURPOSE.—The purpose of the meetings scheduled

25 under subsection (a) is to reach agreement between the
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1 United States and partnership countries on the likely tim2 ing and procedures for initiating negotiations for partner3 ship countries to accede to the NAFTA, or to enter into mu4 tually advantageous free trade agreements with the United

5 States that contain provisions comparable to those in the

6 NAFTA and would make substantial progress in achieving

7 the negotiating objectives set forth in section 108(b)(5) of

8 the North American Free Trade Agreement Implementation

9 Act (19 U.S.C. 3317(b)(5)).

10 SEC. 108. REPORT ON ECONOMIC DEVELOPMENT AND MAR11 KET ORIENTED REFORMS IN THE CARIBBEAN.

12 (a) IN GENERAL.—The Trade Representative shall

13 make an assessment of the economic development efforts and

14 market oriented reforms in each partnership country and

15 the ability of each such country, on the basis of such efforts

16 and reforms, to undertake the obligations of the NAFTA.

17 The Trade Representative shall, not later than 2 years after

18 the date of the enactment of this Act, submit to the President

19 and to the Committee on Finance of the Senate and the

20 Committee on Ways and Means of the House of Representa21 tives a report on that assessment.

22 (b) ACCESSION TO NAFTA.—

23 (1) ABILITY OF COUNTRIES TO IMPLEMENT

24 NAFTA.—The Trade Representative shall include in

25 the report under subsection (a) a discussion of pos-
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1 sible timetables and procedures pursuant to which

2 partnership countries can complete the economic re3 forms necessary to enable them to negotiate accession

4 to the NAFTA. The Trade Representative shall also

5 include an assessment of the potential phase-in peri6 ods that may be necessary for those partnership coun7 tries with less developed economies to implement the

8 obligations of the NAFTA.

9 (2) FACTORS IN ASSESSING ABILITY TO IMPLE10 MENT NAFTA.—In assessing the ability of each part11 nership country to undertake the obligations of the

12 NAFTA, the Trade Representative should consider,

13 among other factors—

14 (A) whether the country has joined the

15 WTO;

16 (B) the extent to which the country provides

17 equitable access to the markets of that country;

18 (C) the degree to which the country uses ex19 port subsidies or imposes export performance re20 quirements or local content requirements;

21 (D) macroeconomic reforms in the country

22 such as the abolition of price controls on traded

23 goods and fiscal discipline;

24 (E) progress the country has made in the

25 protection of intellectual property rights;
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1 (F) progress the country has made in the

2 elimination of barriers to trade in services;

3 (G) whether the country provides national

4 treatment to foreign direct investment;

5 (H) the level of tariffs bound by the country

6 under the WTO (if the country is a WTO mem7 ber);

8 (I) the extent to which the country has

9 taken other trade liberalization measures; and

10 (J) the extent which the country works to

11 accommodate market access objectives of the

12 United States.

13 (c) PARITY REVIEW IN THE EVENT A NEW COUNTRY

14 ACCEDES TO NAFTA.—If—

15 (1) a country or group of countries accedes to the

16 NAFTA, or

17 (2) the United States negotiates a comparable

18 free trade agreement with another country or group

19 of countries,

20 the Trade Representative shall provide to the committees

21 referred to in subsection (a) a separate report on the eco22 nomic impact of the new trade relationship on partnership

23 countries. The report shall include any measures the Trade

24 Representative proposes to minimize the potential for the
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1 diversion of investment from partnership countries to the

2 new NAFTA member or free trade agreement partner.

3 Subtitle B—Revenue Offset

4 SEC. 111. LIMITATIONS ON WELFARE BENEFIT FUNDS OF 10

5 OR MORE EMPLOYER PLANS.

6 (a) BENEFITS TO WHICH EXCEPTION APPLIES.—Sec7 tion 419A(f)(6)(A) of the Internal Revenue Code of 1986

8 (relating to exception for 10 or more employer plans) is

9 amended to read as follows:

10 ‘‘(A) IN GENERAL.—This subpart shall not

11 apply to a welfare benefit fund which is part of

12 a 10 or more employer plan if the only benefits

13 provided through the fund are 1 or more of the

14 following:

15 ‘‘(i) Medical benefits.

16 ‘‘(ii) Disability benefits.

17 ‘‘(iii) Group term life insurance bene18 fits which do not provide for any cash sur19 render value or other money that can be

20 paid, assigned, borrowed, or pledged for col21 lateral for a loan.

22 The preceding sentence shall not apply to any

23 plan which maintains experience-rating arrange24 ments with respect to individual employers.’’
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1 (b) LIMITATION ON USE OF AMOUNTS FOR OTHER

2 PURPOSES.—Section 4976(b) of such Code (defining dis3 qualified benefit) is amended by adding at the end the fol4 lowing new paragraph:

5 ‘‘(5) SPECIAL RULE FOR 10 OR MORE EMPLOYER

6 PLANS EXEMPTED FROM PREFUNDING LIMITS.—For

7 purposes of paragraph (1)(C), if—

8 ‘‘(A) subpart D of part I of subchapter D

9 of chapter 1 does not apply by reason of section

10 419A(f)(6) to contributions to provide 1 or more

11 welfare benefits through a welfare benefit fund

12 under a 10 or more employer plan, and

13 ‘‘(B) any portion of the welfare benefit fund

14 attributable to such contributions is used for a

15 purpose other than that for which the contribu16 tions were made,

17 then such portion shall be treated as reverting to the

18 benefit of the employers maintaining the fund.’’

19 (c) EFFECTIVE DATE.—The amendments made by this

20 section shall apply to contributions paid or accrued after

21 June 8, 1999, in taxable years ending after such date.
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1 Subtitle C—Suspension of Limita2 tion on Cover Over of Tax on

3 Distilled Spirits

4 SEC. 121. SUSPENSION OF LIMITATION ON COVER OVER OF

5 TAX ON DISTILLED SPIRITS.

6 (a) IN GENERAL.—Section 7652(f) of the Internal Rev7 enue Code of 1986 (relating to limitation on cover over of

8 tax on distilled spirits) is amended by adding at the end

9 the following new sentence:

10 ‘‘The preceding sentence shall not apply to articles that are

11 tax-determined after June 30, 1999, and before October 1,

12 1999.’’

13 (b) EFFECTIVE DATE.—

14 (1) IN GENERAL.—The amendment made by this

15 section shall apply to articles that are tax-determined

16 after June 30, 1999.

17 (2) SPECIAL RULE.—

18 (A) IN GENERAL.—The treasury of Puerto

19 Rico shall make a Conservation Trust Fund

20 transfer within 30 days after the date of each

21 cover over payment (made to such treasury

22 under section 7652(e) of the Internal Revenue

23 Code of 1986) to which section 7652(f) of such

24 Code does not apply by reason of the last sen25 tence thereof.
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1 (B) CONSERVATION TRUST FUND TRANS2 FER.—

3 (i) IN GENERAL.—For purposes of this

4 paragraph, the term ‘‘Conservation Trust

5 Fund transfer’’ means a transfer to the

6 Puerto Rico Conservation Trust Fund of an

7 amount equal to 50 cents per proof gallon

8 of the taxes imposed under section 5001 or

9 section 7652 of such Code on distilled spir10 its that are covered over to the treasury of

11 Puerto Rico under section 7652(e) of such

12 Code.

13 (ii) TREATMENT OF TRANSFER.—Each

14 Conservation Trust Fund transfer shall be

15 treated as principal for an endowment, the

16 income from which to be available for use

17 by the Puerto Rico Conservation Trust

18 Fund for the purposes for which the Trust

19 Fund was established.

20 (iii) RESULT OF NONTRANSFER.—

21 (I) IN GENERAL.—Upon notifica22 tion by the Secretary of the Interior

23 that a Conservation Trust Fund trans24 fer has not been made by the treasury

25 of Puerto Rico as required by subpara-
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1 graph (A), the Secretary of the Treas2 ury shall, except as provided in sub3 clause (II), deduct and withhold from

4 the next cover over payment to be made

5 to the treasury of Puerto Rico under

6 section 7652(e) of such Code an

7 amount equal to the appropriate Con8 servation Trust Fund transfer and in9 terest thereon at the underpayment

10 rate established under section 6621 of

11 such Code as of the due date of such

12 transfer. The Secretary of the Treasury

13 shall transfer such amount deducted

14 and withheld, and the interest thereon,

15 directly to the Puerto Rico Conserva16 tion Trust Fund.

17 (II) GOOD CAUSE EXCEPTION.—If

18 the Secretary of the Interior finds,

19 after consultation with the Governor of

20 Puerto Rico, that the failure by the

21 treasury of Puerto Rico to make a re22 quired transfer was for good cause, and

23 notifies the Secretary of the Treasury

24 of the finding of such good cause before

25 the due date of the next cover over pay-
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1 ment following the notification of non2 transfer, then the Secretary of the

3 Treasury shall not deduct the amount

4 of such nontransfer from any cover

5 over payment.

6 (C) PUERTO RICO CONSERVATION TRUST

7 FUND.—For purposes of this paragraph, the term

8 ‘‘Puerto Rico Conservation Trust Fund’’ means

9 the fund established pursuant to a Memorandum

10 of Understanding between the United States De11 partment of the Interior and the Commonwealth

12 of Puerto Rico, dated December 24, 1968.

13 TITLE II—FOREIGN ASSISTANCE

14 FOR CENTRAL AMERICA AND

15 THE CARIBBEAN

16 Subtitle A—Microcredit and

17 Agricultural Assistance

18 SEC. 201. DECLARATION OF POLICY.

19 It is the policy of the United States, consistent with

20 title XII of chapter 2 of part I of the Foreign Assistance

21 Act of 1961 (22 U.S.C. 2220a), to support the governments

22 of Central American countries and Caribbean countries,

23 United States and nongovernmental organizations, univer24 sities, businesses, and international organizations, to help

25 ensure the availability of basic nutrition and economic op-
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1 portunities for individuals in the affected areas of Central

2 America and the Caribbean, through sustainable agri3 culture and rural development.

4 SEC. 202. MICROENTERPRISE ASSISTANCE.

5 (a) BILATERAL ASSISTANCE.—In providing disaster

6 assistance in the aftermath of Hurricane Georges and Hur7 ricane Mitch, the Administrator of the United States Agen8 cy for International Development shall, to the extent prac9 ticable, use credit and microcredit assistance to rehabilitate

10 agriculture production in the affected areas of Central

11 America and the Caribbean. In providing such assistance,

12 the Administrator should use the applied research and tech13 nical assistance capabilities of United States land-grant

14 universities.

15 (b) MULTILATERAL ASSISTANCE.—The Administrator

16 shall continue to work with other countries, international

17 organizations (including multilateral development institu18 tions), and entities assisting microenterprises and shall de19 velop a comprehensive and coordinated strategy for pro20 viding microenterprise assistance for Central America and

21 the Caribbean.

22 SEC. 203. SUPPORT FOR PRODUCER-OWNED COOPERATIVE

23 MARKETING ASSOCIATIONS.

24 (a) PURPOSES.—The purposes of this section are—
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1 (1) to support producer-owned cooperative pur2 chasing and marketing associations in Central Amer3 ica and the Caribbean;

4 (2) to strengthen the capacity of farmers in Cen5 tral America and the Caribbean to participate in na6 tional and international private markets and to pro7 mote rural development in the region;

8 (3) to encourage the efforts of farmers in Central

9 America and the Caribbean to increase their produc10 tivity and income through improved access to farm

11 supplies, seasonal credit, technical expertise; and

12 (4) to support small businesses in Central Amer13 ica and the Caribbean as such businesses grow beyond

14 microenterprises.

15 (b) SUPPORT FOR PRODUCER-OWNED COOPERATIVE

16 MARKETING ASSOCIATIONS.—

17 (1) ACTIVITIES.—The Administrator of the

18 United States Agency for International Development

19 is authorized to utilize relevant foreign assistance

20 programs and initiatives for the Central America and

21 the Caribbean region to support private producer22 owned cooperative marketing associations in the re23 gion, including rural business associations that are

24 owned and controlled by farmer shareholders.
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1 (2) OTHER ACTIVITIES.—In addition to carrying

2 out paragraph (1), the Administrator is encouraged—

3 (A) to cooperate with governments of foreign

4 countries, including governments of political sub5 divisions of such countries, their agricultural re6 search universities, and particularly with United

7 States nongovernmental organizations and

8 United States land-grant universities, that have

9 demonstrated expertise in the development and

10 promotion of successful private producer-owned

11 cooperative marketing associations; and

12 (B) to facilitate partnerships between

13 United States and Central America and the Car14 ibbean cooperatives and private businesses to en15 hance the capacity and technical and marketing

16 expertise of business associations in the Central

17 America and the Caribbean region.

18 SEC. 204. AGRICULTURAL RESEARCH AND EXTENSION AC19 TIVITIES.

20 (a) DEVELOPMENT OF PLAN.—The Administrator of

21 the United States Agency for International Development,

22 in consultation with the Secretary of Agriculture and ap23 propriate other officials in the Department of Agriculture,

24 especially the head of the Cooperative State, Research, Edu25 cation and Extension Service (CSREES), shall develop a
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1 comprehensive plan to coordinate and build on the research

2 and extension activities of United States land-grant univer3 sities, international agricultural research centers, and na4 tional agricultural research and extension centers in Cen5 tral America and the Caribbean.

6 (b) ADDITIONAL REQUIREMENTS.—The plan described

7 in subsection (a) shall seek to ensure that—

8 (1) research and extension activities respond to

9 the needs of the agriculture sectors devastated by Hur10 ricane Georges and Hurricane Mitch while developing

11 the potential and skills of researchers, extension

12 agents, farmers, and agribusiness persons in the re13 gion; and

14 (2) sustainable agricultural methods of farming

15 will be considered together with new technologies in

16 rehabilitating agricultural production in the region.

17 SEC. 205. NONEMERGENCY FOOD ASSISTANCE PROGRAMS.

18 (a) IN GENERAL.—In providing nonemergency assist19 ance under title II of the Agricultural Trade Development

20 and Assistance Act of 1954 (7 U.S.C. 1721 et seq.), the Ad21 ministrator of the United States Agency for International

22 Development shall ensure that—

23 (1) in planning, decisionmaking, and providing

24 assistance, the Administrator takes into consideration

25 local input and participation directly and through
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1 United States and indigenous private and voluntary

2 organizations;

3 (2) each of the nonemergency activities described

4 in paragraphs (2) through (6) of section 201 of such

5 Act (7 U.S.C. 1721), including programs that provide

6 assistance to people of any age group who are other7 wise unable to meet their basic food needs (including

8 feeding programs for the disabled, orphaned, elderly,

9 sick and dying), are carried out; and

10 (3) greater flexibility is provided for program

11 and evaluation plans so that such assistance may be

12 developed to meet local needs, as provided for in sec13 tion 202(f) of such Act (7 U.S.C. 1722(f)).

14 (b) OTHER REQUIREMENTS.—In providing assistance

15 under the Agriculture Trade Development and Assistance

16 Act of 1954, the Secretary of Agriculture and the Adminis17 trator shall ensure that commodities are provided in a man18 ner that is consistent with subsections (a) and (b) of section

19 403 of such Act (7 U.S.C. 1733(a) and (b)).

20 Subtitle B—Overseas Private

21 Investment Corporation

22 SEC. 211. PRIVATE SECTOR DEVELOPMENT ACTIVITIES OF

23 OPIC.

24 (a) PURPOSE.—The purpose of this section is to com25 mend OPIC for its recent initiative to provide financing
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1 and insurance to an investment facility in partnership with

2 Citibank and to encourage OPIC to continue to work with

3 United States businesses and other United States entities

4 to invest in the affected areas of Central America and the

5 Caribbean, particularly in ways that will help promote sus6 tainable development.

7 (b) SENSE OF CONGRESS.—It is the sense of the Con8 gress that OPIC should, in accordance with its mandate

9 to foster private investment and enhance the ability of pri10 vate enterprise to make its full contribution to the develop11 ment process, exercise the authorities it has to further in12 crease efforts to promote and support United States spon13 sored private investment in the affected areas of Central

14 America and the Caribbean, including—

15 (1) issuing loans, guaranties, and insurance, to

16 support infrastructure, agriculture, small business,

17 tourism, and other projects as appropriate; and

18 (2) undertaking a special initiative that

19 includes—

20 (A) sending a needs assessment team to the

21 affected areas of Central America and the Carib22 bean to determine ways in which OPIC can best

23 support the essential investment required to re24 store infrastructure and other critical services in

25 those affected areas;
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1 (B) engaging in an exhaustive outreach pro2 gram to involve United States companies in the

3 recovery process and exploring potential new

4 projects which will assist those affected areas;

5 (C) consulting and coordinating with host

6 country governments to promote private invest7 ment in priority sectors; and

8 (D) utilizing existing equity funds to sup9 port developmental private sector projects.

10 (c) TECHNICAL AMENDMENTS.—Section 234 of the

11 Foreign Assistance Act of 1961 (22 U.S.C. 2194) is

12 amended—

13 (1) by redesignating subsection (c) (the second

14 place it appears) as paragraph (5);

15 (2) by amending the heading of paragraph (5),

16 as redesignated by paragraph (1) of this subsection,

17 to read as follows:

18 ‘‘(5) CREATION OF FUND FOR ACQUISITION OF

19 EQUITY.—’’; and

20 (3) by indenting paragraph (5), as redesignated

21 by paragraph (1) of this subsection, one full measure.
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1 Subtitle C—Economic Support

2 Fund Assistance

3 SEC. 221. ECONOMIC SUPPORT FUND ASSISTANCE.

4 (a) AUTHORIZATION OF APPROPRIATIONS.—There is

5 authorized to be appropriated to the President for fiscal

6 year 1999 $611,000,000 to carry out chapter 4 of part II

7 of the Foreign Assistance Act of 1961 (22 U.S.C. 2346 et

8 seq.) for reconstruction and disaster mitigation assistance

9 for affected areas of Central America and the Caribbean.

10 (b) USE OF AMOUNTS.—Of the amount appropriated

11 under subsection (a), the President shall reserve the fol12 lowing amounts for the following purposes:

13 (1) AGRICULTURE AND RURAL RECONSTRUC14 TION.—$283,000,000 for the construction and repair

15 of rural roads, the provision of micro-enterprise loans,

16 the provision of tools, seed, and fertilizer, and for as17 sistance for rural farmers to adopt sustainable pro18 duction techniques.

19 (2) DISEASE CONTROL, SURVEILLANCE, AND PRE20 VENTION.—$136,000,000 for the reconstruction and

21 rehabilitation of health posts and clinics, the provi22 sion of water and sanitation services, and disease

23 control, surveillance, and prevention.

24 (3) EDUCATION AND HOUSING.—$55,000,000 for

25 construction, repair, and re-equipment of educational
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1 facilities, including the provision of school supplies,

2 and the re-equipment of new housing units.

3 (4) ENVIRONMENTAL MANAGEMENT AND DIS4 ASTER MITIGATION.—$64,000,000 for environmental

5 management and disaster mitigation, including land

6 use planning and resources management.

7 (5) ANTI-CORRUPTION ACTIVITIES.—$22,000,000

8 for the efficient management of local reconstruction

9 assistance, including anti-corruption training for

10 municipal governments, nongovernmental organiza11 tions, and law enforcement.

12 (6) ASSISTANCE FOR THE DOMINICAN REPUBLIC

13 AND OTHER CARIBBEAN COUNTRIES AFFECTED BY

14 HURRICANE GEORGES.—$42,000,000 for reconstruc15 tion assistance related to health, economic revitaliza16 tion, and housing for the Dominican Republic and

17 other Caribbean countries affected by Hurricane

18 Georges.

19 (c) ADMINISTRATIVE EXPENSES.—Of the amount au20 thorized to be appropriated under subsection (a), the Presi21 dent shall reserve $6,000,000 for the operating expenses of

22 the United States Agency for International Development in23 curred in connection with assistance provided under this

24 Act.
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1 SEC. 222. REIMBURSEMENT OF INTERNATIONAL DISASTER

2 ACCOUNT.

3 There is authorized to be appropriated to the President

4 for fiscal year 1999 $25,000,000 to reimburse the inter5 national disaster assistance account for expenses incurred

6 with respect to international disaster assistance provided

7 for affected areas of Central America and the Caribbean

8 under chapter 9 of part I of the Foreign Assistance Act of

9 1961 (22 U.S.C. 2292 et seq.) for recovery from Hurricane

10 Georges and Hurricane Mitch.

11 SEC. 223. RULE OF CONSTRUCTION; AVAILABILITY OF

12 AMOUNTS.

13 (a) RULE OF CONSTRUCTION.—Amounts authorized to

14 be appropriated under this subtitle are in addition to

15 amounts otherwise available for the purposes described in

16 the section of this subtitle involved.

17 (b) AVAILABILITY OF AMOUNTS.—Amounts authorized

18 to be appropriated under this subtitle are authorized to re19 main available until expended.

20 TITLE III—DEPARTMENT OF

21 DEFENSE

22 SEC. 301. REPLACEMENT OF FUNDS USED FOR DISASTER

23 RELIEF AND RECONSTRUCTION.

24 In addition to amounts authorized to be appropriated

25 under any other law for the Department of Defense for fiscal

26 year 1999, funds are hereby authorized to be appropriated
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1 for the use of the Armed Forces and other activities and

2 agencies of the Department of Defense for expenses, not oth3 erwise provided for, for operation and maintenance, in

4 amounts as follows:

5 (1) For replenishment of Department of Defense

6 accounts used in providing disaster relief and recon7 struction to affected areas of Central America and the

8 Caribbean, $135,200,000, of which—

9 (A) $75,000,000 may be used for replenish10 ment of operation and maintenance and mili11 tary personal accounts;

12 (B) $37,500,000 may be used for replenish13 ment of the Overseas Humanitarian Disaster

14 and Civic Aid account (including demining ini15 tiatives); and

16 (C) $20,000,000 may be used for replenish17 ment of the Commanders in Chief (CINC) Initia18 tive Fund.

19 (2) For the New Horizons Program, $56,000,000

20 for expanded National Guard and Reserve exercises in

21 Central American countries and the Dominican Re22 public.
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1 TITLE IV—IMMIGRATION AND

2 NATURALIZATION SERVICE

3 SEC. 401. DETENTION FACILITIES.

4 There is authorized to be appropriated to the President

5 $80,000,000 to be used for Enforcement and Border Affairs

6 within the Immigration and Naturalization Service (INS)

7 to support increased detention requirements for Central

8 American criminal aliens held in detention by the Immi9 gration and Naturalization Service and to address an ex10 pected influx of illegal immigrants from Central America.
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1 TITLE V—DEBT RESCHEDULING

2 AND REDUCTION FOR HON3 DURAS AND NICARAGUA;

4 FUNDING FOR THE CENTRAL

5 AMERICAN EMERGENCY

6 TRUST FUND OF THE

7 INTERNATIONAL BANK FOR

8 RECONSTRUCTION AND DE9 VELOPMENT

10 Subtitle A—Debt Rescheduling and

11 Reduction for Honduras and

12 Nicaragua

13 SEC. 501. RESCHEDULING OF INTEREST PAYMENTS OWED

14 BY HONDURAS AND NICARAGUA.

15 The President is authorized to reschedule the repay16 ment of interest owed to the United States (or any agency

17 of the United States) in fiscal years 1999 and 2000 by the

18 Governments of Honduras and Nicaragua on debt owed by

19 such Governments to the United States that is outstanding

20 as of October 1, 1998.

21 SEC. 502. REDUCTION OF DEBT OWED BY HONDURAS.

22 (a) AUTHORITY.—

23 (1) IN GENERAL.—The President shall reduce the

24 amount owed to the United States (or any agency of

25 the United States) by the Government of Honduras
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1 that is outstanding as of October 1, 1998, as a result

2 of concessional loans made to Honduras by the

3 United States under part I or chapter 4 of part II

4 of the Foreign Assistance Act of 1961, or predecessor

5 foreign economic assistance legislation.

6 (2) APPROPRIATIONS REQUIREMENT.—The au7 thority provided by this section may be exercised only

8 in such amounts or to such extent as is provided in

9 advance by appropriations Acts.

10 (3) CERTAIN PROHIBITIONS INAPPLICABLE.—(A)

11 A reduction of debt pursuant to this section shall not

12 be considered assistance for purposes of any provision

13 of law limiting assistance to a country.

14 (B) The authority of this section may be exer15 cised notwithstanding section 620(r) of the Foreign

16 Assistance Act of 1961 or section 321 of the Inter17 national Development and Food Assistance Act of

18 1975.

19 (b) IMPLEMENTATION OF DEBT REDUCTION.—

20 (1) IN GENERAL.—The debt reduction pursuant

21 to subsection (a) shall be accomplished by the ex22 change of a new obligation for obligations outstanding

23 as of the date specified in subsection (a)(1).

24 (2) EXCHANGE OF OBLIGATIONS.—The President

25 shall notify the agency primarily responsible for ad-
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1 ministering part I of the Foreign Assistance Act of

2 1961 of the agreement with Honduras to exchange a

3 new obligation for outstanding obligations pursuant

4 to this subsection. At the direction of the President,

5 the old obligations shall be canceled and a new debt

6 obligation for the country shall be established, and

7 such agency shall make an adjustment in its accounts

8 to reflect the debt reduction.

9 (c) CURRENCY OF PAYMENT.—The principal amount

10 of each new obligation issued pursuant to subsection (b)

11 shall be repaid in United States dollars.

12 (d) DEPOSIT OF PAYMENTS.—Principal repayments of

13 new obligations shall be deposited in the United States Gov14 ernment account established for principal repayments of the

15 obligations for which those obligations were exchanged.

16 (e) RATE OF INTEREST.—New obligations issued by a

17 beneficiary country pursuant to subsection (b) shall bear

18 interest at concessional rates.

19 (f) AUTHORIZATION OF APPROPRIATIONS.—

20 (1) IN GENERAL.—There is authorized to be ap21 propriated for fiscal year 2000 $16,000,000 to carry

22 out this section.

23 (2) AVAILABILITY.—Amounts authorized to be

24 appropriated under paragraph (1) are authorized to

25 remain available until expended.
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1 Subtitle B—Authorization of Fund2 ing for the Central American

3 Emergency Trust Fund of the

4 International Bank for Recon5 struction and Development

6 SEC. 511. AUTHORIZATION OF FUNDING.

7 The Bretton Woods Agreements Act (22 U.S.C. 286–

8 286nn) is amended by adding at the end the following:

9 ‘‘SEC. 62. SUPPLEMENTAL FUNDING FOR THE CENTRAL

10 AMERICAN EMERGENCY TRUST FUND OF THE

11 INTERNATIONAL BANK FOR RECONSTRUC12 TION AND DEVELOPMENT.

13 ‘‘(a) CONTRIBUTION AUTHORITY.—

14 ‘‘(1) IN GENERAL.—The United States Governor

15 of the Bank may, on behalf of the United States, con16 tribute $25,000,000 to the Central American Emer17 gency Trust Fund of the Bank.

18 ‘‘(2) SUBJECT TO APPROPRIATIONS.—The au19 thority provided by paragraph (1) shall be effective

20 only to such extent or in such amounts as are pro21 vided in advance in appropriations Acts.

22 ‘‘(b) LIMITATIONS ON AUTHORIZATION OF APPROPRIA23 TIONS.—

24 ‘‘(1) IN GENERAL.—For the contribution pro25 vided for in subsection (a), there are authorized to be
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1 appropriated not more than $25,000,000 for fiscal

2 year 1999, for payment by the President of the

3 United States.

4 ‘‘(2) RULE OF CONSTRUCTION.—The authority

5 provided by paragraph (1) is in addition to any ap6 propriations authority otherwise provided by law.

7 ‘‘(c) AVAILABILITY.—Amounts appropriated under

8 subsection (b) are authorized to remain available until ex9 pended.’’.

Union Calendar No. 363

106TH CONGRESS

2D SESSION H. R. 984

[Report No. 106–519, Part I]

A BILL

To provide additional trade benefits to certain beneficiary countries in the Caribbean, to provide assistance to the countries in Central America and

the Caribbean affected by Hurricane Mitch andHurricane Georges, and for other purposes.

JUNE 7, 2000

Committees on International Relations, Banking and Financial Services, the Judiciary, and Armed Services

discharged; committed to the Committee of the WholeHouse on the State of the Union and ordered to beprinted