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[House Report 115-484]
[From the U.S. Government Publishing Office]

115th Congress }                                            { Report
                        HOUSE OF REPRESENTATIVES
 2nd Session   }                                            { 115-484

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

 
    AFRICAN GROWTH AND OPPORTUNITY ACT AND MILLENNIUM CHALLENGE ACT 
                           MODERNIZATION ACT

                                _______
                                

January 3, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Royce of California, from the Committee on Foreign Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3445]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Foreign Affairs, to whom was referred the 
bill (H.R. 3445) to enhance the transparency and accelerate the 
impact of programs under the African Growth and Opportunity Act 
and the Millennium Challenge Corporation, and for other 
purposes, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                           TABLE OF CONTENTS

                                                                   Page
Summary and Purpose..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     7
Committee Consideration..........................................     9
Committee Oversight Findings.....................................     9
New Budget Authority, Tax Expenditures, and Federal Mandates.....     9
Congressional Budget Office Cost Estimate........................     9
Directed Rule Making.............................................    11
Non-Duplication of Federal Programs..............................    11
Performance Goals and Objectives.................................    11
Congressional Accountability Act.................................    11
New Advisory Committees..........................................    12
Earmark Identification...........................................    12
Section-by-Section Analysis......................................    12
Changes in Existing Law Made by the Bill, as Reported............    13

                          Summary and Purpose

    H.R. 3445, the AGOA and MCA Modernization Act, seeks to 
reduce poverty, accelerate economic growth, and enable 
developing countries, particularly in Africa, to transition 
from U.S. foreign aid recipients to U.S. trade partners by 
incentivizing good governance and open market principles, 
building trade capacity, promoting regional economic 
integration, and breaking down barriers to market-based growth. 
First, the bill seeks to expand and accelerate the impact of 
African Growth and Opportunity Act (AGOA)--a trade preference 
program first authorized as Title I of the Trade and 
Development Act of 2000 (P.L. 106-200) and most recently 
renewed by the Trade Preferences Extension Act of 2015 (P.L. 
114-27)--by making information about AGOA, including 
information about technical assistance that may be made 
available to businesses and entrepreneurs through existing U.S. 
trade hubs, available on a single, consolidated, publicly 
available website. Second, it provides the Millennium Challenge 
Corporation (MCC)--a foreign development agency of the United 
States Government established by the Millennium Challenge Act 
of 2003 (Title VI, Division D of the Consolidated 
Appropriations Act, P.L. 108-199)--with the authority to invest 
in concurrent Compacts that promote regional economic 
integration and trade among eligible partner countries. 
Additionally, the bill includes authorizing language that 
stabilizes movement between MCC's ``Low Income'' and ``Lower 
Middle Income'' candidate country pools (carried in annual 
appropriations bills since FY2012) and prohibits the provision 
of assistance to a country in any fiscal year for which that 
country does not qualify as a candidate country (carried in 
annual appropriations bills since FY 2014). Finally, the bill 
improves the transparency and accountability of MCC by 
streamlining, enhancing, and making publicly available reports 
on quarterly expenditures and other program requirements.

                Background and Need for the Legislation

The African Growth and Opportunity Act
    The African Growth and Opportunity Act (AGOA), is a trade 
preference program that incentivizes good governance and pro-
growth policies in sub-Saharan Africa. Enacted at a time when 
development assistance and humanitarian relief drove U.S. 
policies toward the sub-continent, AGOA catalyzed a paradigm 
shift from aid to trade. Through AGOA, marketable goods 
produced in eligible countries in Sub-Saharan Africa enter the 
U.S. market duty-free. Eligibility for this preferential tariff 
treatment is based on several considerations, including the 
prospective AGOA country's commitment to: the rule of law and 
pro-growth policies; the elimination of barriers to U.S. trade 
and investment; economic policies that reduce poverty, expand 
access to health and education, improve infrastructure, and 
promote private enterprise; combatting corruption; the 
protection of worker rights; support for counter-terrorism 
activities; and non-interference with U.S. national security 
and foreign policy efforts. In 2016, 39 of 48 countries in sub-
Saharan Africa were designated as AGOA eligible. Non-oil 
exports to the United States from sub-Saharan Africa have 
nearly tripled since enactment--from $1.4 billion in 2001 to 
$4.1 billion in 2015--mainly due to increased exports of autos 
and parts, apparel, fruits and nuts, cocoa, prepared 
vegetables, footwear, and cut flowers.
    While two-way U.S.-Africa trade has nearly tripled since 
AGOA was established, its full potential has yet to be realized 
because the law's attendant benefits remain underutilized in 
many eligible countries and sectors. A consistent message 
received during fact finding missions to determine why AGOA 
remains underutilized is that timely and accurate information 
about what AGOA is, how it works, and how benefits can be 
directly accessed is difficult to find. Multiple privately-
sponsored websites describe AGOA and the website of the 
International Trade Administration includes an AGOA page with 
some useful links. However, there is no single, comprehensive, 
website managed by the U.S. agencies charged with overseeing 
implementation and providing technical assistance necessary to 
ensure proper utilization. Moreover, embassies in eligible 
countries have been inconsistent in their efforts to promote 
AGOA and the trade hubs in their public affairs and commercial 
outreach. This is a missed opportunity that can easily be 
rectified at little-to-no cost to the United States Government.
    H.R. 3445 establishes that it shall be the policy of the 
United States to improve the rule of law, promote free and fair 
elections, strengthen and expand the private sector, fight 
corruption, and promote the role of women in social, political, 
and economic development in sub-Saharan Africa. It seeks to 
accomplish these policy objectives by increasing opportunities 
for AGOA utilization and encouraging the President to provide 
technical and trade capacity building assistance to businesses 
and entrepreneurs in sub-Saharan Africa. It calls for the 
establishment of a publicly available internet website for the 
collection and dissemination of information about AGOA, 
including information relating to commitments and outcomes of 
each meeting of the U.S.-Sub-Saharan Africa Trade and Economic 
Cooperation Forum. It also calls upon the U.S. embassies in 
eligible countries to link to the AGOA website and promote 
utilization of AGOA benefits.
The Millennium Challenge Corporation.
    The Millennium Challenge Corporation (MCC) is an 
independent Federal agency created by Congress pursuant to the 
Millennium Challenge Act of 2003 to reduce poverty in poor but 
well-governed countries by funding projects and incentivizing 
policy reforms that accelerate economic growth. It is led by a 
Board of Directors that is chaired by the Secretary of State 
and includes the Secretary of Treasury, the U.S. Trade 
Representative, the Administrator of USAID, the Chief Executive 
Officer of MCC, and four private sector members nominated by 
the majority and minority leaders of the House and Senate.
    MCC represents a unique model, centered on a commitment to 
selectivity, country ownership, transparency, accountability, 
and results. By working only with a select number of countries 
that demonstrate continuous commitment to democratic 
governance, economic freedom, and investing in their own 
people, MCC has established itself as a global leader in 
development policy and best practices. It has created an 
important incentive structure that inspires governments to 
undertake difficult reforms. It requires evidence-based 
decision-making and holds itself and its partners accountable 
for delivering results that can be sustained over time. 
Moreover, it builds mechanisms for robust monitoring and 
evaluation into each Compact, so problems can be identified 
early, course corrections can be made, and learning can be 
captured and shared. This learning and accountability agenda 
has positively influenced the policies and programs of other 
development agencies, including the U.S. Agency for 
International Development (USAID).
    MCC has two major categories of investment: Compacts and 
Threshold programs. To be eligible for a Compact, a country 
must be a Low Income Country (LIC) or a Lower Middle Income 
Country (LMIC) that passes a ``scorecard'' measuring 
performance on 20 indicators of that country's commitment to 
economic freedom, ruling justly, and investing in its people. 
Once selected as eligible by the Board, an economic analysis is 
conducted to identify a country's key constraints to growth. 
The partner country is then responsible for developing and 
implementing a Board-approved, MCC monitored, five-year Compact 
to overcome those constraints. Compacts have ranged in size 
from $66 million in Cape Verde to nearly $700 million in 
Morocco and Tanzania, and have included a range of activities 
from agriculture to energy, market access, land titling, and 
major infrastructure. To date, MCC has obligated $10.8 billion 
to support 33 Compacts in 27 countries. There are currently 12 
Compacts in implementation (Benin, Cape Verde, El Salvador, 
Georgia, Ghana, Indonesia, Liberia, Malawi, Morocco, Zambia, 
Niger, and Nepal) and 6 in development (Cote d'Ivoire, Sri 
Lanka, Tunisia, Mongolia, Senegal, Burkina Faso).
    Threshold programs are smaller-scale investments intended 
to help a country become eligible for a Compact. To date, MCC 
has obligated $583.6 million to support 26 Threshold agreements 
with 24 countries, 11 of which subsequently entered into 
Compacts. There are four active Threshold programs (Guatemala, 
Honduras, Kosovo, and Sierra Leone) and two in development 
(Togo and Timor-Leste). Beginning in December 2011, MCC 
refocused its Threshold program and began utilizing an economic 
constraints analysis to more consistently guide investments. As 
a result, Threshold agreements now focus more heavily upon the 
policy reforms necessary to create an enabling environment for 
economic growth.
    According to MCC, these Compact and Threshold investments 
have leveraged more than $6 billion in additional investments 
from the private sector and other development partners to date, 
including $850 million by partner countries themselves.
    Stabilizing MCC Candidate Country Pools. Within the first 
decade of MCC's existence, it became clear that the arbitrary 
line between the LIC and LMIC country candidate pools was not 
working as intended. Only 25 percent of MCC's Compact funds can 
be dedicated to LMICs. This means that during an average fiscal 
year, only one-to-two LMICs can be selected. However, it 
frequently takes more than 18 months to develop a Compact. From 
the point of country selection to Compact approval, a partner 
country that is hovering around the LIC or LMIC per capita 
income limit could cross the income line multiple times. These 
fluctuations bring instability to the selection process, 
disrupt compact development, and push otherwise eligible 
countries out of contention. Congress has addressed this 
challenge by re-defining the LIC and LMIC country candidate 
pools in each appropriations bill since FY2012 and easing a 
country's transition from one category to another in each 
appropriations bill since FY2010. H.R. 3445 amends the MCA of 
2003 to reflect these changes, thereby mitigating the need to 
carry authorization language on appropriations bills.
    Addressing MCC Board Vacancies. The bill also seeks to 
provide a temporary solution to a long-standing problem 
relating to vacancies on MCC's Board of Directors. There are 
four positions on the Board intended to be filled, with the 
advice and consent of the U.S. Senate, by individuals from the 
private sector who have been nominated by the majority and 
minority leaders of the House and Senate, respectively. Such 
Board members may be appointed to serve one three-year term and 
may be reappointed to serve one additional two-year term. 
Unfortunately, delays in nominating and confirming such 
positions have threatened MCC's ability to maintain a quorum at 
quarterly Board meetings. In the absence of a quorum, the Board 
cannot select country partners or approve, suspend, or 
terminate Compact or Threshold agreements. The bill seeks to 
address this problem by allowing a private sector Board member 
to extend his or her term by up to two years until a 
replacement has been nominated and confirmed.
    Country Selection. MCC's selection process starts with the 
identification of countries that are legally eligible to 
receive United States assistance and meet the criteria for 
MCC's two candidate country pools (i.e. LICs, which are defined 
as the 75 countries with the lowest per capita income per the 
International Bank for Reconstruction and Development, and 
LMICs, which are defined as countries with a per capita income 
above the poorest 75 countries but below $4,035). MCC then 
publishes its selection criteria and methodology, which 
includes a description of the ``indicators'' the agency will 
use to measure a candidate country's commitment to ruling 
justly, investing in people, and encouraging economic freedom. 
There are currently 20 indicators used to measure a country's 
performance, all of which are developed by independent third-
party institutions and rely upon objective, publicly available 
data. The indicators are used to generate a ``scorecard,'' 
which shows how a country compares to its peers with in the LIC 
and LMIC candidate country pools. To be eligible for selection, 
a country must ``pass'' (i.e. score above the median when 
compared to its peers) at least half of the indicators overall, 
pass the Control of Corruption indicator, and score above the 
threshold on either the Civil Liberties or Political Rights 
indicators. The Civil Liberties indicator, currently measured 
by Freedom House, rates countries on freedom of expression, 
association and organizational rights, rule of law and human 
rights, and personal autonomy and economic rights. The 
Political Rights indicator rates, also measured by Freedom 
House, rates countries on the quality of electoral processes, 
political pluralism and participation, government corruption 
and transparency, and fair political treatment of ethnic 
groups.
    H.R. 3445 requires MCC to provide Board members with 
information on how civil society organizations are treated 
within a candidate country prior to selection. The committee 
notes that such information consistently has been provided to 
Board members since the start of MCC, particularly in relation 
to discussions of country performance on the Civil Liberties 
and Political Rights indicators during the selection process. 
MCC also has a demonstrated track record of holding partner 
countries accountable for the contraction of democratic space 
post-selection. The committee remains deeply committed to the 
principles of freedom of expression and association, and urges 
MCC to continue to promote United States values toward this 
end.
    Concurrent Compact Authority. H.R. 3445 seeks to intensify 
the impact of MCC investments by enabling the agency to enter 
into concurrent Compacts that promote regional economic 
integration, increased regional trade, and cross-border 
collaboration. Currently, MCC has the authority to sign just 
one Compact at a time with any given partner country. This has 
led many countries to take a largely insular approach toward 
Compact development. In other words, partner countries have 
been more inclined to prioritize the construction of a road or 
other infrastructure within its own physical borders than to 
seek opportunities to connect to markets in neighboring 
countries, even if such neighboring countries are also compact 
eligible. By granting MCC the authority to enter into 
concurrent, regionally-focused Compacts with eligible partner 
countries, the agency will be better positioned to break down 
the barriers to market-based economic growth within and between 
partner countries. For example, MCC selected Cote d'Ivoire as 
eligible to develop a Compact in December 2015. With concurrent 
Compact authority, MCC would be able to work across Cote 
d'Ivoire's borders with neighboring Burkina Faso, Ghana, and 
Liberia--also MCC partner countries--to promote cross-border 
collaboration and stimulate regional trade and investment. H.R. 
3445 provides MCC with concurrent Compact authority, provided 
that each partner country has no more than one Compact and one 
concurrent Compact in operation at any given time and each 
partner country is making significant progress in implementing 
its initial Compact.
    Eligibility for Subsequent, Non-Concurrent Compacts. MCC 
has had the authority to enter into subsequent, non-concurrent 
Compacts with eligible partner countries that demonstrate 
continuous commitment to the eligibility requirements since its 
establishment. Still, MCC engagements were never intended to be 
open-ended, and the bar for entering into a second Compact is 
expected to be even higher than it was for a country's first. 
To this end, MCC developed a strategy, articulated in its 
FY2013 Congressional Budget Justification, to guide Board 
consideration of subsequent, non-concurrent Compacts. To be 
eligible for a subsequent Compact, a country must be able to: 
(1) demonstrate continuous commitment to maintaining and 
improving upon its eligibility ``scorecard''; (2) achieve 
measurable results through implementation of its first Compact; 
and (3) commit to self-financing or attracting private sector 
investment to finance a portion of such subsequent Compact. 
H.R. 3445 formalizes the requirement under MCC's subsequent 
Compact strategy to maintain and improve performance on the 
eligibility criteria prior to be selected for a subsequent 
Compact.
    Enhancing Transparency and Streamlining Reports. H.R. 3445 
amends the MCA of 2003 to consolidate and streamline 
Congressional notification and reporting requirements. It 
requires notifications relating to the intent to negotiate or 
sign a Compact to contain a cost-benefit analysis and include 
information relating to the targeted beneficiary population, 
the expected economic rate of return, and the prospects for 
catalyzing private sector investment. Additionally, not later 
than 60 days prior to signing a concurrent Compact, the CEO 
shall provide Congress with a comprehensive risk management 
plan. The bill requires MCC to make quarterly status reports 
available within 90 days. It also requires MCC to conduct a 
study on the feasibility of entering into Compacts at the sub-
national level.
    Limitations on Threshold Programs. The committee notes that 
the MCA of 2003 included a 10 percent limitation on investment 
in Threshold programs for FY2004, which has been extended 
through annual appropriations bills. In 2011, MCC conducted an 
internal review of its Threshold program and found that 
performance was uneven and results were lacking. That same 
year, the Appropriations Committees reduced the amount 
available for Threshold programs to five percent. This five 
percent limitation has been extended through annual 
appropriations bill ever since. In FY2013, however, MCC 
launched a new Threshold strategy that refocused the program to 
create an enabling policy environment for economic growth prior 
to a country becoming eligible for a full-scale Compact. The 
committee has observed significant improvements in these 
``second generation'' Threshold programs and believes they 
provide an important incentive for countries to undertake 
difficult reforms. The committee therefore recommends restoring 
the 10 percent funding limitation for Threshold agreements that 
was envisioned by Congress from the start.

                                Hearings

    Over the past 2 years, the committee has continued its 
active oversight of U.S. foreign development, economic, and 
trade facilitation programs, including multiple hearings 
related to the content of H.R. 3445, such as:
          September 13, 2017, subcommittee hearing, ``The 
        Future of Democracy and Governance in Liberia'' (The 
        Honorable Donald Yamamoto, Acting Assistant Secretary, 
        Bureau of African Affairs, U.S. Department of State; 
        Ms. Cheryl Anderson, Acting Assistant Administrator, 
        Bureau for Africa, U.S. Agency for International 
        Development; Mr. Dave Peterson, Senior Director for 
        Africa Programs, National Endowment for Democracy; Ms. 
        Aurelia Curtis, Founder and Executive Director, Weeks 
        Educational and Social Advocacy Project; Mr. Rushdi 
        Nackerdien, Regional Director for Africa International 
        Foundation for Electoral Systems; Christopher Fomunyoh, 
        Ph.D., Senior Associate and Regional Director for 
        Central and West Africa, National Democratic 
        Institute);
          September 7, 20176, subcommittee hearing, 
        ``Maintaining U.S. Influence in South Asia: The FY 2018 
        Budget'' (The Honorable Alice G. Wells, Acting 
        Assistant Secretary, Bureau of South and Central Asian 
        Affairs, U.S. Department of State; Ms. Gloria Steele, 
        Acting Assistant Administrator, Bureau for Asia, U.S. 
        Agency for International Development);
          July 13, 2017, subcommittee hearing, ``America's 
        Interests in the Middle East and North Africa: The 
        President's FY 2018 Budget Request'' (The Honorable 
        Stuart Jones, Acting Assistant Secretary, Bureau of 
        Near Eastern Affairs, U.S. Department of State; Ms. 
        Maria Longi, Acting Assistant Administrator, Bureau for 
        the Middle East, U.S. Agency for International 
        Development);
          July 12, 2017, full committee hearing, ``Beyond 
        Microfinance: Empowering Women in the Developing 
        World'' (Ms. Mary Ellen Iskenderian, President and 
        Chief Executive Officer, Women's World Banking; Tavneet 
        Suri, Ph.D, Associate Professor of Applied Economics, 
        Sloan School of Management, Massachusetts Institute of 
        Technology; the Honorable Melanne Verveer, Executive 
        Director, Georgetown Institute for Women, Peace and 
        Security, Georgetown University);
          June 14, 2017, full committee hearing, ``The FY 2018 
        Foreign Affairs Budget'' (The Honorable Rex W. 
        Tillerson, Secretary of State, U.S. Department of 
        State);
          May 18, 2017, full committee hearing, ``U.S. 
        Interests in Africa'' (General William E. Ward, USA, 
        Retired, President and Chief Operating Officer, SENTEL 
        Corporation, (Former Commander, U.S. Africa Command); 
        Mr. Bryan Christy, Explorer and Investigative Reporter, 
        National Geographic Society; Mr. Anthony Carroll, 
        Adjunct Professor, School of Advanced International 
        Studies, Johns Hopkins University; the Honorable Reuben 
        E. Brigety II, Dean, Elliott School of International 
        Affairs, The George Washington University, (Former U.S. 
        Representative to the African Union, U.S. Department of 
        State));
          March 28, 2017, full committee hearing, ``The Budget, 
        Diplomacy, and Development'' (Stephen D. Krasner, 
        Ph.D., Senior Fellow, Hoover Institution; Ms. Danielle 
        Pletka, Senior Vice President, Foreign and Defense 
        Policy Studies, American Enterprise Institute; the 
        Honorable R. Nicholas Burns, Roy and Barbara Goodman 
        Family Professor of Diplomacy and International 
        Relations, Belfer Center for Science and International 
        Affairs, John F. Kennedy School of Government, Harvard 
        University);
          June 23, 2016, subcommittee hearing, ``U.S. Policy in 
        the Pacific: The Struggle to Maintain Influence'' (Mr. 
        Matthew J. Matthews, Deputy Assistant Secretary for 
        Australia, New Zealand, and the Pacific Islands and 
        Senior Official for APEC, Bureau of East Asian and 
        Pacific Affairs, U.S. Department of State; Ms. Gloria 
        Steele Senior Deputy Assistant Administrator, Bureau 
        for Asia, U.S. Agency for International Development);
          March 15, 2016, full committee hearing, ``Review of 
        the FY 2017 Foreign Assistance Budget: Aligning 
        Interests, Ensuring Effectiveness and Transparency'' 
        (The Honorable Gayle Smith, Administrator, U.S. Agency 
        for International Development; the Honorable Dana J. 
        Hyde, Chief Executive Officer, Millennium Challenge 
        Corporation);
          March 17, 2015, full committee hearing, ``The FY 2016 
        Budget Request: Assessing U.S. Foreign Assistance 
        Effectiveness'' (The Honorable Alfonso E. Lenhardt, 
        Acting Administrator, U.S. Agency for International 
        Development; the Honorable Dana J. Hyde, Chief 
        Executive Officer, Millennium Challenge Corporation);
          March 4, 2015, subcommittee hearing, ``The Trans-
        Pacific Partnership: Prospects for Greater U.S. Trade'' 
        (Mr. Claude Barfield, Ph.D., Resident Scholar, American 
        Enterprise Institute; Ms. Tami Overby, Senior Vice 
        President for Asia, U.S. Chamber of Commerce; Mr. Scott 
        Miller, Senior Adviser and William M. Scholl Chair in 
        International Business, Center for Strategic and 
        International Studies; Ms. Celeste Drake, Trade and 
        Globalization Policy Specialist, The American 
        Federation of Labor and Congress of Industrial 
        Organizations);
          February 25, 2015, full committee hearing, 
        ``Advancing U.S. Interests in a Troubled World: The FY 
        2016 Foreign Affairs Budget'' (The Honorable John F. 
        Kerry, Secretary of State, U.S. Department of State);

                        Committee Consideration

    On September 28, 2017, the Committee on Foreign Affairs 
marked up H.R. 3445 in open session, pursuant to notice. The 
bill was considered as introduced, and was agreed to by voice 
vote.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of rules of 
the House of Representatives, the committee reports that 
findings and recommendations of the committee, based on 
oversight activities under clause 2(b)(1) of House Rule X, are 
incorporated in the descriptive portions of this report, 
particularly in the ``Background and Purpose of Legislation'' 
and ``Section-by-Section Analysis'' sections.

      New Budget Authority, Tax Expenditures, and Federal Mandates

    In compliance with clause 3(c)(2) of House Rule XIII and 
the Unfunded Mandates Reform Act (P.L. 104-4), the committee 
adopts as its own the estimate of new budget authority, 
entitlement authority, tax expenditure or revenues, and Federal 
mandates contained in the cost estimate prepared by the 
Director of the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974.

               Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 11, 2017.

Hon. Edward R. Royce, Chairman,
Committee on Foreign Affairs,
House of Representatives, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3445, the AGOA and 
MCA Modernization Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sunita 
D'Monte, who can be reached at 226-2840.
            Sincerely,
                                                Keith Hall.
Enclosure

cc:
        Honorable Eliot L. Engel
        Ranking Member
H.R. 3445--AGOA and MCA Modernization Act.
    As ordered reported by the House Committee on Foreign 
Affairs on September 28, 2017.

    H.R. 3445 would direct the President to increase public 
awareness of the African Growth and Opportunity Act (AGOA) and 
would authorize several federal programs to encourage trade and 
economic cooperation with and between AGOA countries. It also 
would make changes to the operations of the Millennium 
Challenge Corporation (MCC). In total, CBO estimates that 
implementing the bill would cost less than $500,000 over the 
2018-2022 period, subject to the availability of appropriated 
funds.
    In particular, the bill would:

         LRequire the President to establish and update 
        a public website for information on AGOA;

         LAuthorize the President to encourage trade 
        with and economic cooperation between countries in sub-
        Saharan Africa;

         LAuthorize MCC to enter into a concurrent 
        compact with a country to increase regional economic 
        integration, trade, or other economic collaborations;

         LAllow countries that experience changes in 
        their per capita income to remain candidates for MCC 
        compacts in the year they were selected and the two 
        subsequent years; and

         LRequire MCC to report to the Congress on the 
        risks associated with concurrent compacts and on the 
        feasibility of partnering with entities within a 
        country such as state or local governments.

    On the basis of information from agencies engaged in 
implementing AGOA, CBO expects that most of the bill's 
requirements pertaining to AGOA will be implemented under 
current and ongoing initiatives. MCC indicated that allowing it 
to enter into concurrent compacts would not require additional 
appropriations nor would it significantly affect MCC's planned 
obligations. In recent years, appropriations acts have provided 
MCC the flexibility to stabilize its pool of candidate 
countries despite changes in their per capita income, and CBO 
estimates that making that flexibility permanent would not 
affect spending by MCC. Finally, on the basis of information 
from MCC, CBO estimates that implementing the reporting 
requirements would have insignificant costs.
    Enacting H.R. 3445 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting H.R. 3445 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2028.
    H.R. 3445 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Sunita D'Monte. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                          Directed Rule Making

    Pursuant to clause 3(c) of House Rule XIII, as modified by 
section 3(i) of H. Res. 5 during the 115th Congress, the 
committee notes that H.R. 3445 contains no directed rule-making 
provisions.

                  Non-Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of House Rule XIII, the 
committee states that no provision of this bill establishes or 
reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                    Performance Goals and Objectives

    The objective of this legislation is to enhance the 
transparency, accountability, and impact of two critical tools 
for promoting market-based economic growth and trade, 
particularly in sub-Saharan Africa: AGOA and MCC. The 
overarching goal is to help poor but relatively well-governed 
countries to grow their own way out of poverty and accelerate 
the transition from U.S. foreign aid recipients to U.S. trade 
partners, while also creating opportunities for increased U.S. 
investment and trade. Performance goals associated with these 
objectives include, but are not limited to, the following:
    For AGOA: Measurably increasing utilization of AGOA at both 
the country and sector level; measurably increasing the volume 
and diversity of U.S. investments and trade in sub-Saharan 
Africa; successfully deploying a single, publicly-available 
website that provides timely and accurate information about 
AGOA; ensuring all U.S. Embassies and Consulates in eligible 
countries that link to the AGOA website; and measurably 
improving the quality and quantity of public engagement by U.S. 
Embassies and Consulates about AGOA benefits across sub-Saharan 
Africa.
    For MCC: Effectively managing and mitigating the impact of 
abrupt movements between the LIC and LMIC country candidate 
pools; preventing operational disruptions attributable to 
extended vacancies on the Board of Directors; measurably 
increasing regional economic collaboration, integration, and 
trade among eligible countries through the deployment of 
concurrent Compacts; improving the quality and timeliness of 
reports and notifications, including by reducing the time 
between the close of a financial quarter and delivery of 
associated quarterly status report to 90 days or less; 
standardizing the incorporation of economic justifications and 
risk management plans into Compact proposals and notifications; 
and completing and delivering a feasibility study on 
subnational compacts.

                    Congressional Accountability Act

    H.R. 3445 does not apply to terms and conditions of 
employment or to access to public services or accommodations 
within the legislative branch.

                        New Advisory Committees

    H.R. 3445 does not establish or authorize any new advisory 
committees.

                         Earmark Identification

    H.R. 3445 contains no congressional earmarks, limited tax 
benefits, or limited tariff benefits as described in clauses 
9(e), 9(f), and 9(g) of House Rule XXI.

                      Section-by-Section Analysis

    Section 1. Short Title and Table of Contents. States that 
the bill may be cited as the ``African Growth and Opportunity 
Act and Millennium Challenge Act Modernization Act'' or ``AGOA 
and MCA Modernization Act'' and divides the bill into two 
corresponding titles.

    TITLE I: ENHANCEMENT OF THE AFRICAN GROWTH AND OPPORTUNITY ACT.

    Section 101. Statement of Policy. Establishes that it shall 
be the policy of the United States to support efforts to: (1) 
improve rule of law, promote free and fair elections, 
strengthen and expand the private sector, and fight corruption 
in sub-Saharan Africa; and (2) promote the role of women in 
social, political, and economic development in sub-Saharan 
Africa.
    Section 102. Activities in Support of Transparency. 
Requires the President to establish a publicly available 
Internet website for the collection and sharing of information 
regarding AGOA, to include information about AGOA benefits in 
eligible countries, technical assistance available through 
regional trade hubs, and outcomes of meetings of the United 
States-Sub-Saharan Africa Trade and Economic Cooperation Forum. 
U.S. embassies in eligible countries should link to the AGOA 
website and promote utilization of AGOA benefits.
    Section 103. Activities in Support of Trade Capacity 
Building. Calls upon the President to develop and implement 
policies to encourage cross-boundary cooperation among eligible 
sub-Saharan African countries in order to facilitate trade and 
economic growth. Encourages the President to provide technical 
assistance and training: (1) for businesses and government 
officials in eligible countries on how to access benefits under 
AGOA and other trade preference programs; (2) for African 
entrepreneurs and trade associations on production strategies, 
quality standards, formation of cooperatives, market research, 
and market development; (3) to promote diversification of 
African products and value-added processing; and (4) to help 
African businesses and institutions comply with United States 
counter-terrorism initiatives and policies.
    Section 104. Eligible Sub-Saharan Country. Defines the term 
``eligible sub-Saharan country''.

    TITLE II: MODERNIZATION OF THE MILLENNIUM CHALLENGE CORPORATION.

    Section 201. Candidacy Status. Amends the Millennium 
Challenge Act of 2003 (hereinafter cited as the ``MCA'') (22 
U.S.C. 7705(a)) to redefine and stabilize movement between the 
``low income'' and ``lower middle income'' candidate country 
pools, consistent with authorizing language that has been 
carried in annual appropriations bills since FY2012.
    Section 202. Carryover Authority for Private Sector Members 
of the Board of Directors. Amends the MCA (22 U.S.C. 
7703(c)(4)(B)) to clarify that public sector board members may 
be appointed for a single three-year term and reappointed for a 
single two-year term, but may extend either of those terms by 
up to one year if a successor has not yet been appointed and 
confirmed by the U.S. Senate.
    Section 203. Additional Reporting to the Board on the 
Treatment of Civil Society in an Eligible Country. Amends the 
MCA (22 U.S.C. 7706) to require MCC to submit to the Board 
information relating to a potential candidate country's 
treatment of civil society prior to selecting such country to 
develop a Compact.
    Section 204. Concurrent Compacts under the Millennium 
Challenge Act of 2003. Amends the MCA (22 U.S.C. 7708) to grant 
the Millennium Challenge Corporation with the authority to 
enter into and have in effect up to two Compacts with an 
eligible country at the same time (i.e. ``Concurrent 
Compacts''), provided that at least one of the Compacts is 
focused on promoting regional economic integration, increasing 
regional trade, or facilitating cross-border collaboration. 
Approval of a Concurrent Compact will be subject to a Board 
determination that the eligible country is making demonstrable 
progress in implementing its existing Compact.
    Section 205. Public Notification of Entering Into a 
Compact. Amends the MCA (22 U.S.C. 7709) to consolidate and 
streamline existing notification and consultation requirements, 
including those carried in annual appropriations bills. Adds an 
additional requirement for MCC to provide Congress with a 
``risk management plan'' at least 60 days prior to entering 
into a Concurrent Compact with an eligible country. Reduces 
administrative costs by allowing MCC to publish a Compact 
summary, rather than the entire Compact, in the Federal 
Register.
    Section 206. Disclosure. Amends the MCA (22 U.S.C. 7711(a)) 
to require more timely, public disclosure of quarterly status 
reports.
    Section 207. Restriction on the Use of Assistance Under 
Section 616. Amends the MCA (22 U.S.C. 7715(d)) to extend a 10 
percent limitation on funding for ``threshold'' programs (i.e. 
assistance provided to a candidate country to help them become 
eligible for a full Compact) that was imposed in FY2004. 
Further amends the MCA to prohibit the provision of assistance 
to a country in a fiscal year for which that country does not 
qualify as a candidate country, consistent with a restriction 
that has been carried in annual appropriations bills since 
FY2014.
    Section 208. Study on Subnational Compacts. Requires the 
Board, acting through the CEO, to submit to Congress a one-time 
study that assesses the feasibility of developing compacts at 
the sub-national level within candidate countries within 180 
days of enactment.

         Changes in Existing Law Made by the Bill, as Reported

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

                    MILLENNIUM CHALLENGE ACT OF 2003

           *       *       *       *       *       *       *
TITLE VI--MILLENNIUM CHALLENGE ACT OF 2003

           *       *       *       *       *       *       *

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

  (a) Establishment.--There is established in the executive 
branch a corporation to be known as the ``Millennium Challenge 
Corporation'' that shall be responsible for carrying out this 
title. The Corporation shall be a government corporation, as 
defined in section 103 of title 5, United States Code.
  (b) Chief Executive Officer.--
          (1) In general.--There shall be in the Corporation a 
        Chief Executive Officer who shall be responsible for 
        the management of the Corporation.
          (2) Appointment.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the Chief Executive Officer 
                shall be appointed by the President, by and 
                with the advice and consent of the Senate.
                  (B) Interim ceo.--The members of the Board of 
                Directors described in subsection (c)(3)(A) may 
                designate by unanimous consent in writing an 
                individual who is an officer within any Federal 
                department or agency (and who has been 
                appointed to such position by the President, by 
                and with the advice and consent of the Senate) 
                to carry out the duties described in this 
                subsection until the Chief Executive Officer is 
                appointed pursuant to subparagraph (A).
          (3) Relationship to board.--The Chief Executive 
        Officer shall report to and be under the direct 
        authority of the Board.
          (4) Compensation and rank.--
                  (A) In general.--The Chief Executive Officer 
                shall be compensated at the rate provided for 
                level II of the Executive Schedule under 
                section 5313 of title 5, United States Code, 
                and shall have the equivalent rank of Deputy 
                Secretary.
                  (B) Amendment.--Section 5313 of title 5, 
                United States Code, is amended by adding at the 
                end the following:
          ``Chief Executive Officer, Millennium Challenge 
        Corporation.''.
          (5) Authorities and duties.--The Chief Executive 
        Officer shall be responsible for the management of the 
        Corporation and shall exercise the powers and discharge 
        the duties of the Corporation.
          (6) Authority to appoint officers.--In consultation 
        and with approval of the Board, the Chief Executive 
        Officer shall appoint all officers of the Corporation.
  (c) Board of Directors.--
          (1) Establishment.--There shall be in the Corporation 
        a Board of Directors.
          (2) Duties.--The Board shall perform the functions 
        specified to be carried out by the Board in this title 
        and may prescribe, amend, and repeal bylaws, rules, 
        regulations, and procedures governing the manner in 
        which the business of the Corporation may be conducted 
        and in which the powers granted to it by law may be 
        exercised.
          (3) Membership.--The Board shall consist of--
                  (A) the Secretary of State, the Secretary of 
                the Treasury, the Administrator of the United 
                States Agency for International Development, 
                the Chief Executive Officer of the Corporation, 
                and the United States Trade Representative; and
                  (B) four other individuals with relevant 
                international experience who shall be appointed 
                by the President, by and with the advice and 
                consent of the Senate, of which--
                          (i) one individual should be 
                        appointed from among a list of 
                        individuals submitted by the majority 
                        leader of the House of Representatives;
                          (ii) one individual should be 
                        appointed from among a list of 
                        individuals submitted by the minority 
                        leader of the House of Representatives;
                          (iii) one individual should be 
                        appointed from among a list of 
                        individuals submitted by the majority 
                        leader of the Senate; and
                          (iv) one individual should be 
                        appointed from among a list of 
                        individuals submitted by the minority 
                        leader of the Senate.
          (4) Terms.--
                  (A) Officers of the federal government.--Each 
                member of the Board described in paragraph 
                (3)(A) shall serve for a term that is 
                concurrent with the term of service of the 
                individual's position as an officer within the 
                other Federal department or agency.
                  [(B) Other members.--Each member of the Board 
                described in paragraph (3)(B) shall be 
                appointed for a term of 3 years and may be 
                reappointed for a term of an additional 2 
                years.]
                  (B) Other members.--Each member of the Board 
                described in paragraph (3)(B)--
                          (i) shall be appointed for a term of 
                        3 years;
                          (ii) may be reappointed for a term of 
                        an additional 2 years; and
                          (iii) may continue to serve in each 
                        such appointment until the earlier of--
                                  (I) the date on which his or 
                                her successor is appointed; or
                                  (II) the date that is one 
                                year after the expiration of 
                                his or her appointment or 
                                reappointment, as the case may 
                                be.
                  (C) Vacancies.--A vacancy in the Board shall 
                be filled in the manner in which the original 
                appointment was made.
          (5) Chairperson.--There shall be a Chairperson of the 
        Board. The Secretary of State shall serve as the 
        Chairperson.
          (6) Quorum.--A majority of the members of the Board 
        shall constitute a quorum, which, except with respect 
        to a meeting of the Board during the 135-day period 
        beginning on the date of the enactment of this Act, 
        shall include at least one member of the Board 
        described in paragraph (3)(B).
          (7) Meetings.--The Board shall meet at the call of 
        the Chairperson.
          (8) Compensation.--
                  (A) Officers of the federal government.--
                          (i) In general.--A member of the 
                        Board described in paragraph (3)(A) may 
                        not receive additional pay, allowances, 
                        or benefits by reason of the member's 
                        service on the Board.
                          (ii) Travel expenses.--Each such 
                        member of the Board shall receive 
                        travel expenses, including per diem in 
                        lieu of subsistence, in accordance with 
                        applicable provisions under subchapter 
                        I of chapter 57 of title 5, United 
                        States Code.
                  (B) Other members.--
                          (i) In general.--Except as provided 
                        in clause (ii), a member of the Board 
                        described in paragraph (3)(B)--
                                  (I) shall be paid 
                                compensation out of funds made 
                                available for the purposes of 
                                this title at the daily 
                                equivalent of the highest rate 
                                payable under section 5332 of 
                                title 5, United States Code, 
                                for each day (including travel 
                                time) during which the member 
                                is engaged in the actual 
                                performance of duties as a 
                                member of the Board; and
                                  (II) while away from the 
                                member's home or regular place 
                                of business on necessary travel 
                                in the actual performance of 
                                duties as a member of the 
                                Board, shall be paid per diem, 
                                travel, and transportation 
                                expenses in the same manner as 
                                is provided under subchapter I 
                                of chapter 57 of title 5, 
                                United States Code.
                          (ii) Limitation.--A member of the 
                        Board may not be paid compensation 
                        under clause (i)(II) for more than 90 
                        days in any calendar year.

           *       *       *       *       *       *       *

SEC. 606. CANDIDATE COUNTRIES.

  (a) Low Income Countries.--
          (1) Fiscal year 2004.--A country shall be a candidate 
        country for purposes of eligibility for assistance for 
        fiscal year 2004 if--
                  (A) the country is eligible for assistance 
                from the International Development Association, 
                and the per capita income of the country is 
                equal to or less than the historical ceiling of 
                the International Development Association for 
                that year, as defined by the International Bank 
                for Reconstruction and Development; and
                  (B) subject to paragraph [(3)] (4), the 
                country is not ineligible to receive United 
                States economic assistance under part I of the 
                Foreign Assistance Act of 1961 by reason of the 
                application of any provision of the Foreign 
                Assistance Act of 1961 or any other provision 
                of law.
          (2)  [Fiscal year 2005 and subsequent fiscal years.--
        ] Fiscal years 2005 through 2012._A country shall be a 
        candidate country for purposes of eligibility for 
        assistance for [fiscal year 2005 or a subsequent fiscal 
        year] each of fiscal years 2005 through 2012 if--
                  (A) the per capita income of the country is 
                equal to or less than the historical ceiling of 
                the International Development Association for 
                the fiscal year involved, as defined by the 
                International Bank for Reconstruction and 
                Development; and
                  (B) the country meets the requirements of 
                paragraph (1)(B).
          (3) Fiscal year 2013 and subsequent fiscal years.--A 
        country shall be a candidate country for purposes of 
        eligibility for assistance for fiscal year 2013 or a 
        subsequent fiscal year if the country--
                  (A) has a per capita income not greater than 
                the lower middle income country threshold 
                established by the International Bank for 
                Reconstruction and Development for such fiscal 
                year;
                  (B) is among the 75 countries identified by 
                the International Bank for Reconstruction and 
                Development as having the lowest per capita 
                income; and
                  (C) meets the requirements under paragraph 
                (1)(B).
          [(3)] (4) Rule of construction.--For the purposes of 
        determining whether a country is eligible for receiving 
        assistance under section 605 pursuant to paragraph 
        (1)(B), the exercise by the President, the Secretary of 
        State, or any other officer or employee of the United 
        States of any waiver or suspension of any provision of 
        law referred to in such paragraph, and notification to 
        the appropriate congressional committees in accordance 
        with such provision of law, shall be construed as 
        satisfying the requirement of such paragraph.
  (b) Lower Middle Income Countries.--
          (1)  [In general.--] Fiscal years 2006 through 2012._
        In addition to countries described in subsection (a), a 
        country shall be a candidate country for purposes of 
        eligibility for assistance for [fiscal year 2006 or a 
        subsequent fiscal year] fiscal years 2006 through 2012 
        if the country--
                  (A) is classified as a lower middle income 
                country in the then most recent edition of the 
                World Development Report for Reconstruction and 
                Development published by the International Bank 
                for Reconstruction and Development and has an 
                income greater than the historical ceiling for 
                International Development Association 
                eligibility for the fiscal year involved; and
                  (B) meets the requirements of subsection 
                (a)(1)(B).
          (2) Fiscal year 2013 and subsequent fiscal years.--In 
        addition to the countries described in subsection (a), 
        a country shall be a candidate country for purposes of 
        eligibility for assistance for fiscal year 2013 or a 
        subsequent fiscal year if the country--
                  (A) has a per capita income not greater than 
                the lower middle income country threshold 
                established by the International Bank for 
                Reconstruction and Development for the fiscal 
                year;
                  (B) is not among the 75 countries identified 
                by the International Bank for Reconstruction 
                and Development as having the lowest per capita 
                income; and
                  (C) meets the requirements under subsection 
                (a)(1)(B).
          [(2)] (3) Limitation.--The total amount of assistance 
        provided to countries described in paragraph (1) for 
        fiscal year 2006 or any subsequent fiscal year may not 
        exceed 25 percent of the total amount of assistance 
        provided to all countries under section 605 for fiscal 
        year 2006 or the subsequent fiscal year, as the case 
        may be.
  (c) Treatment of Countries With Per Capita Income Changes.--A 
country qualifying for candidate status under this section with 
a per capita income that changes during the fiscal year such 
that the country would be reclassified from a low income 
country to a lower middle income country or from a lower middle 
income country to a low income country shall retain its 
candidacy status in its former income classification for such 
fiscal year and the two subsequent fiscal years.
  [(c)] (d) Identification by the Board.--The Board shall 
identify whether a country is a candidate country for purposes 
of this section.

SEC. 607. ELIGIBLE COUNTRIES.

  (a) Determination by the Board.--The Board shall determine 
whether a candidate country is an eligible country for purposes 
of this section. Such determination shall be based, to the 
maximum extent possible, upon objective and quantifiable 
indicators of a country's demonstrated commitment to the 
criteria in subsection (b), and shall, where appropriate, take 
into account and assess the role of women and girls.
  (b) Criteria.--A candidate country should be considered to be 
an eligible country for purposes of this section if the Board 
determines that the country has demonstrated a commitment to--
          (1) just and democratic governance, including a 
        demonstrated commitment to--
                  (A) promote political pluralism, equality, 
                and the rule of law;
                  (B) respect human and civil rights, including 
                the rights of people with disabilities;
                  (C) protect private property rights;
                  (D) encourage transparency and accountability 
                of government; [and]
                  (E) combat corruption; and
                  (F) the quality of the civil society enabling 
                environment;
          (2) economic freedom, including a demonstrated 
        commitment to economic policies that--
                  (A) encourage citizens and firms to 
                participate in global trade and international 
                capital markets;
                  (B) promote private sector growth;
                  (C) strengthen market forces in the economy; 
                and
                  (D) respect worker rights, including the 
                right to form labor unions; and
          (3) investments in the people of such country, 
        particularly women and children, including programs 
        that--
                  (A) promote broad-based primary education;
                  (B) strengthen and build capacity to provide 
                quality public health and reduce child 
                mortality; and
                  (C) promote the protection of biodiversity 
                and the transparent and sustainable management 
                and use of natural resources.
  (c) Selection by the Board.--
          (1) In general.--At the time the Board determines 
        eligible countries under this section for a fiscal 
        year, the Board shall select those eligible countries 
        with respect to which the United States will initially 
        seek to enter into a Millennium Challenge Compact 
        pursuant to section 609.
          (2) Factors.--In selecting eligible countries under 
        paragraph (1), the Board shall consider the following 
        factors:
                  (A) The extent to which the country clearly 
                meets or exceeds the eligibility criteria.
                  (B) The opportunity to reduce poverty and 
                generate economic growth in the country.
                  (C) The availability of amounts to carry out 
                this title.
  (d) Reporting on Treatment of Civil Society.--Before the 
Board selects an eligible country for a Compact under 
subsection (c), the Corporation shall provide information to 
the Board regarding the country's treatment of civil society, 
including classified information, as appropriate. The 
information shall include an assessment and analysis of factors 
including--
          (1) any relevant laws governing the formation or 
        establishment of a civil society organization, 
        particularly laws intended to curb the activities of 
        foreign civil society organizations;
          (2) any relevant laws governing the operations of a 
        civil society organization, particularly those laws 
        seeking to define or otherwise regulate the actions of 
        foreign civil society organizations;
          (3) laws relating to the legal status of civil 
        society organizations, including laws which effectively 
        discriminate against foreign civil society 
        organizations as compared to similarly situated 
        domestic organizations;
          (4) laws regulating the freedom of expression and 
        peaceful assembly; and
          (5) laws regulating the usage of the Internet, 
        particularly by foreign civil society organizations.
  [(d)] (e) Establishment of Criteria and Methodology.--The 
criteria and methodology submitted by the Board to Congress and 
published in the Federal Register under section 608(b)(2) with 
respect to a fiscal year shall remain fixed for purposes of 
eligibility determinations for such year.
  [(e)] (f) Annual Modification of Criteria and Methodology.--
As appropriate, the Board, acting through the Chief Executive 
Officer, shall review the eligibility criteria and methodology 
and modify such criteria and methodology in subsequent years 
consistent with section 608(b).

           *       *       *       *       *       *       *

SEC. 609. MILLENNIUM CHALLENGE COMPACT.

  (a) Compact.--The Board, acting through the Chief Executive 
Officer of the Corporation, may provide assistance for an 
eligible country only if the country enters into an agreement 
with the United States, to be known as a ``Millennium Challenge 
Compact'', that establishes a multi-year plan for achieving 
shared development objectives in furtherance of the purposes of 
this title.
  (b) Elements.--
          (1) In general.--The Compact should take into account 
        the national development strategy of the eligible 
        country and shall contain--
                  (A) the specific objectives that the country 
                and the United States expect to achieve during 
                the term of the Compact;
                  (B) the responsibilities of the country and 
                the United States in the achievement of such 
                objectives;
                  (C) regular benchmarks to measure, where 
                appropriate, progress toward achieving such 
                objectives;
                  (D) an identification of the intended 
                beneficiaries, disaggregated by income level, 
                gender, and age, to the maximum extent 
                practicable;
                  (E) a multi-year financial plan, including 
                the estimated amount of contributions by the 
                Corporation and the country and proposed 
                mechanisms to implement the plan and provide 
                oversight, that describes how the requirements 
                of subparagraphs (A) through (D) will be met, 
                including identifying the role of civil society 
                in the achievement of such requirements;
                  (F) where appropriate, a description of the 
                current and potential participation of other 
                donors in the achievement of such objectives;
                  (G) a plan to ensure appropriate fiscal 
                accountability for the use of assistance 
                provided under section 605;
                  (H) where appropriate, a process or processes 
                for consideration of solicited proposals under 
                the Compact as well as a process for 
                consideration of unsolicited proposals by the 
                Corporation and national, regional, or local 
                units of government;
                  (I) a requirement that open, fair, and 
                competitive procedures are used in a 
                transparent manner in the administration of 
                grants or cooperative agreements or the 
                procurement of goods and services for the 
                accomplishment of objectives under the Compact;
                  (J) the strategy of the eligible country to 
                sustain progress made toward achieving such 
                objectives after expiration of the Compact; and
                  (K) a description of the role of the United 
                States Agency for International Development in 
                any design, implementation, and monitoring of 
                programs and activities funded under the 
                Compact.
          (2) Lower middle income countries.--In addition to 
        the elements described in subparagraphs (A) through (K) 
        of paragraph (1), with respect to a lower middle income 
        country described in section 606(b), the Compact shall 
        identify a contribution, as appropriate, from the 
        country relative to its national budget, taking into 
        account the prevailing economic conditions, toward 
        meeting the objectives of the Compact. Any such 
        contribution should be in addition to government 
        spending allocated for such purposes in the country's 
        budget for the year immediately preceding the 
        establishment of the Compact and should continue for 
        the duration of the Compact.
          (3) Definition.--In this subsection, the term 
        ``national development strategy'' means any strategy to 
        achieve market-driven economic growth and eliminate 
        extreme poverty that has been developed by the 
        government of the country in consultation with a wide 
        variety of civic participation, including 
        nongovernmental organizations, private and voluntary 
        organizations, academia, women's and student 
        organizations, local trade and labor unions, and the 
        business community.
  (c) Additional Provision Relating to Prohibition on 
Taxation.--In addition to the elements described in subsection 
(c), each Compact shall contain a provision that states that 
assistance provided by the United States under the Compact 
shall be exempt from taxation by the government of the eligible 
country.
  (d) Local Input.--In entering into a Compact, the United 
States shall seek to ensure that the government of an eligible 
country--
          (1) takes into account the local-level perspectives 
        of the rural and urban poor, including women, in the 
        eligible country; and
          (2) consults with private and voluntary 
        organizations, the business community, and other donors 
        in the eligible country.
  (e) Consultation.--During any discussions with a country for 
the purpose of entering into a Compact with the country, 
officials of the Corporation participating in such discussions 
shall, at a minimum, consult with appropriate officials of the 
United States Agency for International Development, 
particularly with those officials responsible for the 
appropriate region or country on development issues related to 
the Compact.
  (f) Coordination With Other Donors.--To the maximum extent 
feasible, activities undertaken to achieve the objectives of 
the Compact shall be undertaken in coordination with the 
assistance activities of other donors.
  (g) Assistance for Development of Compact.--Notwithstanding 
subsection (a), the Chief Executive Officer may enter into 
contracts or make grants for any eligible country for the 
purpose of facilitating the development and implementation of 
the Compact between the United States and the country.
  (h) Requirement for Approval by the Board.--Each Compact 
shall be approved by the Board before the United States enters 
into the Compact.
  (i) Increase or Extension of Assistance Under a Compact.--Not 
later than 15 days after making a determination to increase or 
extend assistance under a Compact with an eligible country, the 
Board, acting through the Chief Executive Officer--
          (1) shall prepare and transmit to the appropriate 
        congressional committees a written report and 
        justification that contains a detailed summary of the 
        proposed increase in or extension of assistance under 
        the Compact and a copy of the full text of the 
        amendment to the Compact; and
          (2) shall publish a detailed summary, full text, and 
        justification of the proposed increase in or extension 
        of assistance under the Compact in the Federal Register 
        and on the Internet website of the Corporation.
  (j) Duration of Compact.--The duration of a Compact shall not 
exceed 5 years.
  (k) Concurrent Compacts.--An eligible country that has 
entered into and has in effect a Compact under this section may 
enter into and have in effect at the same time not more than 
one additional Compact in accordance with the requirements of 
this title if--
          (1) one or both of the Compacts are or will be for 
        purposes of regional economic integration, increased 
        regional trade, or cross-border collaborations; and
          (2) the Board determines that the country is making 
        considerable and demonstrable progress in implementing 
        the terms of the existing Compact and supplementary 
        agreements thereto.
  [(k)] (l) Subsequent Compacts.--[An eligible country and the 
United States may enter into and have in effect only one 
Compact at any given time under this section.] An eligible 
country and the United States may enter into one or more 
subsequent Compacts in accordance with the requirements of this 
title after the expiration of the existing Compact.

[SEC. 610. CONGRESSIONAL AND PUBLIC NOTIFICATION OF COMPACT.

  [(a) Congressional Consultation Prior to Compact 
Negotiations.--Not later than 15 days prior to the start of 
negotiations of a Compact with an eligible country, the Board, 
acting through the Chief Executive Officer--
          [(1) shall consult with the appropriate congressional 
        committees with respect to the proposed Compact 
        negotiation; and
          [(2) shall identify the objectives and mechanisms to 
        be used for the negotiation of the Compact.
  [(b) Congressional and Public Notification After Entering 
Into a Compact.--Not later than 10 days after entering into a 
Compact with an eligible country, the Board, acting through the 
Chief Executive Officer--
          [(1) shall provide notification of the Compact to the 
        appropriate congressional committees, including a 
        detailed summary of the Compact and a copy of the text 
        of the Compact; and
          [(2) shall publish such detailed summary and the text 
        of the Compact in the Federal Register and on the 
        Internet website of the Corporation.]

SEC. 610. CONGRESSIONAL AND PUBLIC NOTIFICATION.

  (a) Congressional Consultations and Notifications.--
          (1) In general.--The Board, acting through the Chief 
        Executive Officer, shall consult with and notify the 
        appropriate congressional committees not later than 15 
        days before taking any of the actions described in 
        paragraph (2).
          (2) Actions described.--The actions described in this 
        paragraph are--
                  (A) providing assistance for an eligible 
                country under section 609(g);
                  (B) commencing negotiations with an eligible 
                country to provide assistance for--
                          (i) a Compact under section 605; or
                          (ii) an agreement under section 616;
                  (C) signing such a Compact or agreement; and
                  (D) terminating assistance under such a 
                Compact or agreement.
          (3) Economic justification.--Any notification 
        relating to the intent to negotiate or sign a Compact 
        shall include a report describing the projected 
        economic justification for the Compact, including, as 
        applicable--
                  (A) the expected economic rate of return of 
                the Compact;
                  (B) a cost-benefit analysis of the Compact;
                  (C) a description of the impact on 
                beneficiary populations;
                  (D) the likelihood that the investment will 
                catalyze private sector investments; and
                  (E) any other applicable economic factors 
                that justify each project to be funded under 
                such a Compact to the extent practicable and 
                appropriate.
          (4) Risk management plan.--Not later than 60 days 
        before signing each concurrent Compact, as authorized 
        under section 609, the Board, acting through the Chief 
        Executive Officer, shall consult with and provide to 
        the appropriate congressional committees--
                  (A) an assessment and, as appropriate, the 
                identification of potential measures to 
                mitigate risks, of--
                          (i) the countries' commitment to 
                        regional integration and cross-border 
                        cooperation and capacity to carry out 
                        commitments;
                          (ii) political and policy risks, 
                        including risks that could affect 
                        country eligibility;
                          (iii) risks associated with realizing 
                        economic returns;
                          (iv) time and completion risks; and
                          (v) cost and financial risks; and
                  (B) an assessment of measures to be taken to 
                mitigate any identified risks, including--
                          (i) securing other potential donors 
                        to finance projects or parts of 
                        projects as needed; and
                          (ii) partnering with regional 
                        organizations to support and oversee 
                        effective cross-border cooperation.
  (b) Congressional and Public Notification After Entering Into 
a Compact.--Not later than 10 days after entering into a 
Compact with an eligible country, the Board, acting through the 
Chief Executive Officer, shall--
          (1) publish the text of the Compact on the internet 
        website of the Corporation;
          (2) provide the appropriate congressional committees 
        with a detailed summary of the Compact and, upon 
        request, the text of the Compact; and
          (3) publish in the Federal Register a detailed 
        summary of the Compact and a notice of availability of 
        the text of the Compact on the internet website of the 
        Corporation.

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SEC. 612. DISCLOSURE.

  (a) Requirement for Timely Disclosure.--[The Corporation] Not 
later than 90 days after the last day of each fiscal quarter, 
the Corporation shall make available to the public [on at least 
a quarterly basis,] the following information:
          (1) For assistance provided under section 605--
                  (A) the name of each entity to which 
                assistance is provided;
                  (B) the amount of assistance provided to the 
                entity; and
                  (C) a description of the program or project, 
                including--
                          (i) a description of whether the 
                        program or project was solicited or 
                        unsolicited; and
                          (ii) a detailed description of the 
                        objectives and measures for results of 
                        the program or project.
          (2) For funds allocated or transferred under section 
        619(b)--
                  (A) the name of each United States Government 
                agency to which such funds are transferred or 
                allocated;
                  (B) the amount of funds transferred or 
                allocated to such agency; and
                  (C) a description of the program or project 
                to be carried out by such agency with such 
                funds.
  [(b) Dissemination.--The information required to be disclosed 
under subsection (a) shall be made available to the public by 
means of publication in the Federal Register and on the 
Internet website of the Corporation, as well as by any other 
methods that the Board determines appropriate.]
  (b) Dissemination.--The Board, acting through the Chief 
Executive Officer, shall make the information required to be 
disclosed under subsection (a) available to the public--
          (1) by publishing it on the internet website of the 
        Corporation;
          (2) by providing notice of the availability of such 
        information in the Federal Register; and
          (3) by any other methods that the Board determines to 
        be appropriate.

SEC. 613. ANNUAL REPORT.

  (a) Report.--Not later than March 31, 2005, and each March 31 
thereafter, the President shall submit to Congress a report on 
the assistance provided under section 605 during the prior 
fiscal year.
  (b) Contents.--The report shall include the following:
          (1) The amount of obligations and expenditures for 
        assistance provided to each eligible country during the 
        prior fiscal year.
          (2) For each eligible country, an assessment of--
                  (A) the progress made during each year by the 
                country toward achieving the objectives set out 
                in [the] any Compact entered into by the 
                country; and
                  (B) the extent to which assistance provided 
                under section 605 has been effective in helping 
                the country to achieve such objectives.
          (3) A description of the coordination of assistance 
        provided under section 605 with other United States 
        foreign assistance and related trade policies.
          (4) A description of the coordination of assistance 
        provided under section 605 with assistance provided by 
        other donor countries.
          (5) Any other information the President considers 
        relevant with respect to assistance provided under 
        section 605.

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SEC. 616. ASSISTANCE TO CERTAIN CANDIDATE COUNTRIES.

  (a) Authorization.--The Board, acting through the Chief 
Executive Officer, is authorized to provide assistance to a 
candidate country described in subsection (b) for the purpose 
of assisting such country to become an eligible country.
  (b) Candidate Country Described.--A candidate country 
referred to in subsection (a) is a candidate country that--
          (1) satisfies the requirements contained in 
        subsection (a) or (b) of section 606; and
          (2) demonstrates a significant commitment to meet the 
        requirements of section 607(b) but fails to meet such 
        requirements (including by reason of the absence or 
        unreliability of data).
  (c) Administration.--Assistance under this section may be 
provided through the United States Agency for International 
Development.
  [(d) Funding.--Not more than 10 percent of the amount 
appropriated pursuant to the authorization of appropriations 
under section 619(a) for fiscal year 2004 is authorized to be 
made available to carry out this section.]
  (d) Funding.--
          (1) Limitation.--Not more than 10 percent of the 
        amounts made available to carry out this Act for a 
        fiscal year may be made available to carry out this 
        section.
          (2) Restriction relating to assistance.--None of the 
        funds authorized to carry out the purposes of this Act 
        shall be available for assistance under this section to 
        a country that does not qualify as a candidate country 
        under section 606 for the fiscal year during which such 
        assistance is provided.

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