I 
108TH CONGRESS 
2D SESSION 
H. R. 4560
To provide multilateral and bilateral debt relief for developing countries, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 14, 2004
Mr. HYDE introduced the following bill; which was referred to the Committee 
on Financial Services, and in addition to the Committees on International 
Relations and Agriculture, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To provide multilateral and bilateral debt relief for 
developing countries, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as ‘‘Foreign Credit Reform Act 
of 2004’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Unsustainable debt in the world’s poorest 
countries constitutes a serious impediment to the de-
velopment of stable democratic political structures, 
broad-based economic growth, poverty eradication, 
and food security. 
(2) Financing should be appropriate for the 
purposes for which it is used and should, to the 
maximum extent possible, generate a return suffi-
cient to pay the principal and interest due. As such, 
long-term lending for perishable goods, such as food 
commodities, may be construed as inappropriate to 
the extent that it places a long-term debt burden on 
the recipient country without generating sufficient 
revenues with which to service the debt. 
(3) Since 1955, the United States has extended 
more than $27,800,000,000 in loans for food under 
title I of the Agricultural Trade Development and 
Assistance Act of 1954 (commonly referred to as 
‘‘PL 480’’), $10,632,858,000 of which remained 
outstanding at the end of 2002. 
(4) As of December 31, 2002, arrears on prin-
cipal and interest payments under title I of PL 480 
totaled $1,241,472,000. 
(5) Since 1992 the United States provided the 
independent states of the former Soviet Union with 
$1,601,500,000 in loans for food under title I of PL 
480, for which these countries are estimated to have
paid $112,748,000 in principal and interest in 2003. 
Russia alone has received $1,035,000,000 in credits, 
paying an estimated $79,695,000 in principal and 
interest in 2003. 
(6) Rising debt stocks and debt-to-export ratios 
may undermine a country’s credit worthiness and 
jeopardize its ability to borrow from commercial 
lenders. 
(7) Debt reduction contributes marginally to a 
country’s development prospects if new debt is al-
lowed to create the next generation of heavy indebt-
edness. 
Therefore, 
President 
Bush’s 
initiative, 
adopted by Group of Seven (G–7) leaders at the 
June 2002 summit, to increase World Bank grant 
assistance to the most heavily indebted poor coun-
tries is a crucial step toward alleviating poverty, 
curbing future unsustainable debt, and providing for 
urgent human needs in countries in which people live 
on less than one dollar a day. Replacing loans with 
targeted grants will eliminate the need for govern-
ments to repay long-term investments in people, es-
pecially for education, health, nutrition, water sup-
ply, and sanitation purposes. 
(8) The G–7 agreement at the June 2002 sum-
mit to fully fund the remaining costs of the en-
hanced Heavily Indebted Poor Country (HIPC) ini-
tiative is essential to ensuring that eligible debt-dis-
tressed nations receive full benefits under the HIPC 
debt relief measure. 
(9) The United States has been a leading voice 
for more than a decade in international debt reduc-
tion initiatives for poor countries, including a 1991 
initiative to cancel $689,000,000 in food loans under 
title I of PL 480 owed by 15 sub-Saharan African 
countries. 
(10) The United States must continue its lead-
ership role to encourage full participation by all 
Paris Club creditors in multilateral debt negotia-
tions. 
(11) Several poor countries that are not eligible 
for enhanced HIPC debt reduction terms face a se-
vere debt overhang that undermines increased re-
source allocation for development and discourages 
productive investment. 
(12) The World Bank, which has provided over 
$1,700,000,000 since 1986 to fight the spread of 
HIV/AIDS, should continue to place the highest pri-
ority on programs to combat infectious diseases, in-
cluding HIV/AIDS, malaria, and tuberculosis.
(13) Debt reduction is an important, but only 
partial solution to long-term development. Promoting 
an environment that will stimulate internal economic 
growth, promote trade and external investment, and 
encourage responsible governance are the most im-
portant ingredients for sustainable growth. 
TITLE I—MULTILATERAL DEBT 
RELIEF 
SEC. 101. SUPPORT FOR THE HIPC TRUST FUND. 
Section 801(b)(1) of H.R. 5526 of the 106th Con-
gress, as introduced on October 24, 2000, and enacted 
into law by section 101(a) of Public Law 106–429 (and 
contained in the appendix thereto) is amended by striking 
‘‘2003, $435,000,000’’ and inserting ‘‘2006, such sums as 
may be necessary’’. 
SEC. 102. DEBT SERVICE REINVESTED INTO THE GLOBAL 
FUND. 
The Bretton Woods Agreements Act (22 U.S.C. 286–
286oo) is further amended by adding at the end the fol-
lowing: 
‘‘SEC. 64. DEBT SERVICE REINVESTED INTO THE GLOBAL 
FUND. 
‘‘(a) NEGOTIATION OF AGREEMENT.—The Secretary 
of the Treasury shall seek to negotiate an agreement 
among the member countries of the Bank and the Fund,
under which, on approval by the Global Fund of a grant 
proposal originating from an eligible country, the Bank 
and the Fund shall make a contribution to the Global 
Fund in an amount equal to the amount of the grant 
award for the year, except that the total amount of the 
contributions so made with respect to the country during 
a year shall not exceed the total amount of debt service 
payments made by the country to the Bank and the Fund 
during the year. 
‘‘(b) DEFINITIONS.—In this section: 
‘‘(1) GLOBAL FUND.—The term ‘Global Fund’ 
means the public-private partnership known as the 
Global Fund to Fight AIDS, Tuberculosis and Ma-
laria that was established upon the call of the 
United Nations Secretary General in April 2001. 
‘‘(2) ELIGIBLE COUNTRY.—The term ‘eligible 
country’ means a country—
‘‘(A) which has received debt relief under 
the Enhanced HIPC Initiative; and 
‘‘(B) in which the prevalence of HIV/AIDS 
among individuals who have attained 15 years 
of age but have not attained 49 years of age is 
not less than 5 percent. 
‘‘(3) ENHANCED HIPC INITIATIVE.—The term 
‘Enhanced HIPC Initiative’ means the multilateral
debt initiative for heavily indebted poor countries 
presented in the Report of G–7 Finance Ministers 
on the Cologne Debt Initiative to the Cologne Eco-
nomic Summit, Cologne, June 18–20, 1999. 
‘‘(4) 
HIV/AIDS.—The 
term 
‘HIV/AIDS’ 
means, with respect to an individual, an individual 
who is infected with HIV or living with AIDS. 
‘‘(5) HIV.—The term ‘HIV’ means the human 
immunodeficiency virus, the pathogen that causes 
AIDS. 
‘‘(6) AIDS.—The term ‘AIDS’ means the ac-
quired immune deficiency syndrome.’’. 
TITLE II—BILATERAL DEBT 
RELIEF 
SEC. 201. ACTIONS TO PROVIDE BILATERAL DEBT RELIEF. 
Section 501(i) of H.R. 3425 of the 106th Congress, 
as introduced on November 17, 1999, and enacted into 
law by section 1000(a)(5) of Public Law 106–113 (and 
contained in Appendix E thereto), is amended by striking 
‘‘2004’’ and inserting ‘‘2005’’. 
SEC. 202. DEBT FORGIVENESS UNDER TITLE I OF PUBLIC 
LAW 480. 
(a) DEBT FORGIVENESS.—For each of the fiscal 
years 2005 and 2006, the President is authorized and en-
couraged to use the authority of section 411 of the Agri-
cultural Trade Development and Assistance Act of 1954 
(7 U.S.C. 1736e) to waive payments of principal and in-
terest that a country described in subsection (b) would 
otherwise be required to make to the Commodity Credit 
Corporation under dollar sales agreements under title I 
of such Act (7 U.S.C. 1701 et seq.). 
(b) COUNTRY DESCRIBED.—A country referred to in 
subsection (a) is a country—
(1) which has outstanding public and publicly 
guaranteed debt, the net present value of which on 
December 31, 2003, was at least 150 percent of the 
value of exports of the country in 2003; or 
(2) whose debt service payments on public and 
publicly guaranteed debt exceeded 8 percent of the 
value of its exports in 2003. 
(c) APPLICABLE PROVISIONS.—Except to the extent 
inconsistent with the provisions of this section, section 411 
of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1736e) (except subsection (e) of such 
section) shall apply with respect to the authority to waive 
payments of principal and interest under this section to 
the same extent and in the same manner as such section 
applies to the authority to waive payments of principal and 
interest under section 411 of such Act.
(d) AUTHORIZATION OF APPROPRIATIONS.—For the 
cost (as defined in section 502 of the Federal Credit Re-
form Act of 1990) for the reduction or cancellation of any 
debt pursuant to this section, there are authorized to be 
appropriated to the President for each of the fiscal years 
2005 and 2006 such sums as may be necessary. 
SEC. 203. MISCELLANEOUS AMENDMENTS. 
(a) FINANCING ASSISTANCE UNDER TITLE I OF 
PUBLIC LAW 480.—Section 101(b) of the Agricultural 
Trade Development and Assistance Act of 1954 (7 U.S.C. 
1701(b)) is amended—
(1) by striking ‘‘To carry out the policies’’ and 
inserting the following: 
‘‘(1) IN GENERAL.—To carry out the policies’’; 
(2) by striking ‘‘developing countries’’ and in-
serting ‘‘developing countries described in paragraph 
(2)’’; and 
(3) by adding at the end the following: 
‘‘(2) DEVELOPING
COUNTRY
DESCRIBED.—A 
developing country referred to in paragraph (1) is a 
developing country that meets the following require-
ments: 
‘‘(A) The country is not prohibited from 
receiving assistance under the Foreign Assist-
ance Act of 1961 by reason of the application
of section 620(q) of such Act and irrespective 
of whether or not the President has determined 
that assistance to the country is in the national 
interest of the United States. 
‘‘(B) The country is not in default, during 
a period in excess of six calendar months, in 
payment to the United States of principal or in-
terest on any loan made to such country under 
this title or under any other provision of law. 
‘‘(C) The country is not a low-income 
country or lower-middle income country, as de-
fined by the International Bank for Reconstruc-
tion and Development in its World Development 
Indicators Report (issued in April 2004 and up-
dated annually). 
‘‘(D) The country is not a severely-in-
debted country or moderately-indebted country 
as defined by the International Bank for Recon-
struction and Development in its World Devel-
opment Indicators Report (issued in April 2004 
and updated annually).’’. 
(b) ECONOMIC ASSISTANCE UNDER THE FOREIGN 
ASSISTANCE ACT OF 1961.—Section 620(q) of the For-
eign Assistance Act of 1961 (22 U.S.C. 2370(q)) is 
amended—
(1) by inserting after ‘‘under this Act’’ the sec-
ond place it appears the following: ‘‘or under title I 
of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1701 et seq.)’’; and 
(2) by adding at the end the following: ‘‘A de-
termination by the President under the preceding 
sentence that assistance to a country is in the na-
tional interest of the United States shall be effective 
for a period not to exceed one calendar year.’’.
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