IIA
105TH CONGRESS
2D SESSION
H. R. 2870
IN THE SENATE OF THE UNITED STATES
MARCH 19, 1998
Received; read twice and referred to the Committee on Foreign Relations
AN ACT
To amend the Foreign Assistance Act of 1961 to facilitate
protection of tropical forests through debt reduction with
developing countries with tropical forests.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. DEBT REDUCTION FOR DEVELOPING COUN-
TRIES WITH TROPICAL FORESTS.
The Foreign Assistance Act of 1961 (22 U.S.C. 2151
et seq.) is amended by adding at the end the following:
‘‘PART V—DEBT REDUCTION FOR DEVELOPING
COUNTRIES WITH TROPICAL FORESTS
‘‘SEC. 801. SHORT TITLE.
‘‘This part may be cited as the ‘Tropical Forest Con-
servation Act of 1998’.
‘‘SEC. 802. FINDINGS AND PURPOSES.
‘‘(a) FINDINGS.—The Congress finds the following:
‘‘(1) It is the established policy of the United
States to support and seek protection of tropical for-
ests around the world.
‘‘(2) Tropical forests provide a wide range of
benefits to humankind by—
‘‘(A) harboring a major share of the
Earth’s biological and terrestrial resources,
which are the basis for developing pharma-
ceutical products and revitalizing agricultural
crops;
‘‘(B) playing a critical role as carbon sinks
in reducing greenhouse gases in the atmos-
phere, thus moderating potential global climate
change; and
‘‘(C) regulating hydrological cycles on
which far-flung agricultural and coastal re-
sources depend.
‘‘(3) International negotiations and assistance
programs to conserve forest resources have pro-
liferated over the past decade, but the rapid rate of
tropical deforestation continues unabated.
‘‘(4) Developing countries with urgent needs for
investment and capital for development have allo-
cated a significant amount of their forests to logging
concessions.
‘‘(5) Poverty and economic pressures on the
populations of developing countries have, over time,
resulted in clearing of vast areas of forest for con-
version to agriculture, which is often unsustainable
in the poor soils underlying tropical forests.
‘‘(6) Debt reduction can reduce economic pres-
sures on developing countries and result in increased
protection for tropical forests.
‘‘(b) PURPOSES.—The purposes of this part are—
‘‘(1) to recognize the values received by United
States citizens from protection of tropical forests;
‘‘(2) to facilitate greater protection of tropical
forests (and to give priority to protecting tropical
forests with the highest levels of biodiversity and
under the most severe threat) by providing for the
alleviation of debt in countries where tropical forests
are located, thus allowing the use of additional re-
sources to protect these critical resources and reduce
economic pressures that have led to deforestation;
‘‘(3) to ensure that resources freed from debt in
such countries are targeted to protection of tropical
forests and their associated values; and
‘‘(4) to rechannel existing resources to facilitate
the protection of tropical forests.
‘‘SEC. 803. DEFINITIONS.
‘‘As used in this part:
‘‘(1) ADMINISTERING BODY.—The term ‘admin-
istering body’ means the entity provided for in sec-
tion 809(c).
‘‘(2) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘appropriate congressional com-
mittees’ means—
‘‘(A) the Committee on International Rela-
tions and the Committee on Appropriations of
the House of Representatives; and
‘‘(B) the Committee on Foreign Relations
and the Committee on Appropriations of the
Senate.
‘‘(3) BENEFICIARY COUNTRY.—The term ‘bene-
ficiary country’ means an eligible country with re-
spect to which the authority of section 806(a)(1),
section 807(a)(1), or paragraph (1) or (2) of section
808(a) is exercised.
‘‘(4) BOARD.—The term ‘Board’ means the
board referred to in section 811.
‘‘(5) DEVELOPING COUNTRY WITH A TROPICAL
FOREST.—The term ‘developing country with a trop-
ical forest’ means—
‘‘(A)(i) a country that has a per capita in-
come of $725 or less in 1994 United States dol-
lars (commonly referred to as ‘low-income coun-
try’), as determined and adjusted on an annual
basis by the International Bank for Reconstruc-
tion and Development in its World Development
Report; or
‘‘(ii) a country that has a per capita in-
come of more than $725 but less than $8,956
in 1994 United States dollars (commonly re-
ferred to as ‘middle-income country’), as deter-
mined and adjusted on an annual basis by the
International Bank for Reconstruction and De-
velopment in its World Development Report;
and
‘‘(B) a country that contains at least one
tropical forest that is globally outstanding in
terms of its biological diversity or represents
one of the larger intact blocks of tropical for-
ests left, on a regional, continental, or global
scale.
‘‘(6) ELIGIBLE COUNTRY.—The term ‘eligible
country’ means a country designated by the Presi-
dent in accordance with section 805.
‘‘(7) TROPICAL
FOREST
AGREEMENT.—The
term ‘Tropical Forest Agreement’ or ‘Agreement’
means a Tropical Forest Agreement provided for in
section 809.
‘‘(8) TROPICAL FOREST FACILITY.—The term
‘Tropical Forest Facility’ or ‘Facility’ means the
Tropical Forest Facility established in the Depart-
ment of the Treasury by section 804.
‘‘(9) TROPICAL
FOREST
FUND.—The term
‘Tropical Forest Fund’ or ‘Fund’ means a Tropical
Forest Fund provided for in section 810.
‘‘SEC. 804. ESTABLISHMENT OF THE FACILITY.
‘‘There is established in the Department of the
Treasury an entity to be known as the ‘Tropical Forest
Facility’ for the purpose of providing for the administra-
tion of debt reduction in accordance with this part.
‘‘SEC. 805. ELIGIBILITY FOR BENEFITS.
‘‘(a) IN GENERAL.—To be eligible for benefits from
the Facility under this part, a country shall be a develop-
ing country with a tropical forest—
‘‘(1) whose government meets the requirements
applicable to Latin American or Caribbean countries
under paragraphs (1) through (5) and (7) of section
703(a) of this Act;
‘‘(2) that has put in place major investment re-
forms, as evidenced by the conclusion of a bilateral
investment treaty with the United States, implemen-
tation of an investment sector loan with the Inter-
American Development Bank, World Bank-sup-
ported investment reforms, or other measures, as
appropriate; and
‘‘(3) whose government meets other require-
ments related to its environmental policies and prac-
tices, as determined by the President.
‘‘(b) ELIGIBILITY DETERMINATIONS.—
‘‘(1) IN GENERAL.—Consistent with subsection
(a), the President shall determine whether a country
is eligible to receive benefits under this part.
‘‘(2) 
CONGRESSIONAL
NOTIFICATION.—The
President shall notify the appropriate congressional
committees of his intention to designate a country as
an eligible country at least 15 days in advance of
any formal determination.
‘‘SEC. 806. REDUCTION OF DEBT OWED TO THE UNITED
STATES AS A RESULT OF CONCESSIONAL
LOANS UNDER THE FOREIGN ASSISTANCE
ACT OF 1961.
‘‘(a) AUTHORITY TO REDUCE DEBT.—
‘‘(1) AUTHORITY.—The President may reduce
the amount owed to the United States (or any agen-
cy of the United States) that is outstanding as of
January 1, 1997, as a result of concessional loans
made to an eligible country by the United States
under part I of this Act, chapter 4 of part II of this
Act, or predecessor foreign economic assistance leg-
islation.
‘‘(2) AUTHORIZATION
OF
APPROPRIATIONS.—
For the cost (as defined in section 502(5) of the
Federal Credit Reform Act of 1990) for the reduc-
tion of any debt pursuant to this section, there are
authorized to be appropriated to the President—
‘‘(A) $25,000,000 for fiscal year 1999;
‘‘(B) $75,000,000 for fiscal year 2000; and
‘‘(C) $100,000,000 for fiscal year 2001.
‘‘(3) CERTAIN PROHIBITIONS INAPPLICABLE.—
‘‘(A) IN GENERAL.—A reduction of debt
pursuant to this section shall not be considered
assistance for purposes of any provision of law
limiting assistance to a country.
‘‘(B) ADDITIONAL
REQUIREMENT.—The
authority of this section may be exercised not-
withstanding section 620(r) of this Act or sec-
tion 321 of the International Development and
Food Assistance Act of 1975.
‘‘(b) IMPLEMENTATION OF DEBT REDUCTION.—
‘‘(1) IN GENERAL.—Any debt reduction pursu-
ant to subsection (a) shall be accomplished at the di-
rection of the Facility by the exchange of a new obli-
gation for obligations of the type referred to in sub-
section (a) outstanding as of the date specified in
subsection (a)(1).
‘‘(2) EXCHANGE OF OBLIGATIONS.—
‘‘(A) IN GENERAL.—The Facility shall no-
tify the agency primarily responsible for admin-
istering part I of this Act of an agreement en-
tered into under paragraph (1) with an eligible
country to exchange a new obligation for out-
standing obligations.
‘‘(B) ADDITIONAL REQUIREMENT.—At the
direction of the Facility, the old obligations that
are the subject of the agreement shall be can-
celed and a new debt obligation for the country
shall be established relating to the agreement,
and the agency primarily responsible for admin-
istering part I of this Act shall make an adjust-
ment in its accounts to reflect the debt reduc-
tion.
‘‘(c) NOTIFICATION REQUIREMENT.—The President
shall notify the congressional committees specified in sec-
tion 634A of this Act at least 15 days in advance of each
reduction of debt pursuant to this section in accordance
with the procedures applicable to reprogramming notifica-
tions under such section 634A.
‘‘(d) ADDITIONAL TERMS AND CONDITIONS.—The
following additional terms and conditions shall apply to
the reduction of debt under subsection (a)(1) in the same
manner as such terms and conditions apply to the reduc-
tion of debt under section 704(a)(1) of this Act:
‘‘(1) The provisions relating to repayment of
principal under section 705 of this Act.
‘‘(2) The provisions relating to interest on new
obligations under section 706 of this Act.
‘‘SEC. 807. REDUCTION OF DEBT OWED TO THE UNITED
STATES AS A RESULT OF CREDITS EXTENDED
UNDER TITLE I OF THE AGRICULTURAL
TRADE DEVELOPMENT AND ASSISTANCE ACT
OF 1954.
‘‘(a) AUTHORITY TO REDUCE DEBT.—
‘‘(1) AUTHORITY.—Notwithstanding any other
provision of law, the President may reduce the
amount owed to the United States (or any agency of
the United States) that is outstanding as of January
1, 1997, as a result of any credits extended under
title I of the Agricultural Trade Development and
Assistance Act of 1954 (7 U.S.C. 1701 et seq.) to
a country eligible for benefits from the Facility.
‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(A) IN GENERAL.—For the cost (as de-
fined in section 502(5) of the Federal Credit
Reform Act of 1990) for the reduction of any
debt pursuant to this section, there are author-
ized to be appropriated to the President—
‘‘(i) $25,000,000 for fiscal year 1999;
‘‘(ii) $50,000,000 for fiscal year 2000;
and
‘‘(iii) $50,000,000 for fiscal year
2001.
‘‘(B) LIMITATION.—The authority pro-
vided by this section shall be available only to
the extent that appropriations for the cost (as
defined in section 502(5) of the Federal Credit
Reform Act of 1990) of the modification of any
debt pursuant to this section are made in ad-
vance.
‘‘(b) IMPLEMENTATION OF DEBT REDUCTION.—
‘‘(1) IN GENERAL.—Any debt reduction pursu-
ant to subsection (a) shall be accomplished at the di-
rection of the Facility by the exchange of a new obli-
gation for obligations of the type referred to in sub-
section (a) outstanding as of the date specified in
subsection (a)(1).
‘‘(2) EXCHANGE OF OBLIGATIONS.—
‘‘(A) IN GENERAL.—The Facility shall no-
tify the Commodity Credit Corporation of an
agreement entered into under paragraph (1)
with an eligible country to exchange a new obli-
gation for outstanding obligations.
‘‘(B) ADDITIONAL REQUIREMENT.—At the
direction of the Facility, the old obligations that
are the subject of the agreement shall be can-
celed and a new debt obligation shall be estab-
lished for the country relating to the agreement,
and the Commodity Credit Corporation shall
make an adjustment in its accounts to reflect
the debt reduction.
‘‘(c) NOTIFICATION REQUIREMENT.—The President
shall notify the congressional committees specified in sec-
tion 634A of this Act at least 15 days in advance of each
reduction of debt pursuant to this section in accordance
with the procedures applicable to reprogramming notifica-
tions under such section 634A.
‘‘(d) ADDITIONAL TERMS AND CONDITIONS.—The
following additional terms and conditions shall apply to
the reduction of debt under subsection (a)(1) in the same
manner as such terms and conditions apply to the reduc-
tion of debt under section 604(a)(1) of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C.
1738c):
‘‘(1) The provisions relating to repayment of
principal under section 605 of such Act.
‘‘(2) The provisions relating to interest on new
obligations under section 606 of such Act.
‘‘SEC. 808. AUTHORITY TO ENGAGE IN DEBT-FOR-NATURE
SWAPS AND DEBT BUYBACKS.
‘‘(a) LOANS AND CREDITS ELIGIBLE FOR SALE, RE-
DUCTION, OR CANCELLATION.—
‘‘(1) DEBT-FOR-NATURE SWAPS.—
to an eligible country, the President shall con-
sult with the country concerning the amount of
loans or credits to be sold, reduced, or canceled
and their uses for debt-for-nature swaps to sup-
port eligible activities described in section
809(d).
‘‘(D) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—For the cost (as defined in section
502(5) of the Federal Credit Reform Act of
1990) for the reduction of any debt pursuant to
subparagraph (A), amounts authorized to be
appropriated under sections 806(a)(2) and
807(a)(2) shall be made available for such re-
duction of debt pursuant to subparagraph (A).
‘‘(2) DEBT
BUYBACKS.—Notwithstanding any
other provision of law, the President may, in accord-
ance with this section, sell to any eligible country
any concessional loans described in section 806(a)(1)
or any credits described in section 807(a)(1), or on
receipt of payment from an eligible country, reduce
or cancel such loans (or credits) or portion thereof,
only for the purpose of facilitating a debt buyback
by an eligible country of its own qualified debt, only
if the eligible country uses an additional amount of
the local currency of the eligible country, equal to
not less than the lesser of 40 percent of the price
paid for such debt by such eligible country, or the
difference between the price paid for such debt and
the face value of such debt, to support eligible activi-
ties described in section 809(d).
‘‘(3) LIMITATION.—The authority provided by
paragraphs (1) and (2) shall be available only to the
extent that appropriations for the cost (as defined in
section 502(5) of the Federal Credit Reform Act of
1990) of the modification of any debt pursuant such
paragraphs are made in advance.
‘‘(4) TERMS AND CONDITIONS.—Notwithstand-
ing any other provision of law, the President shall,
in accordance with this section, establish the terms
and conditions under which loans and credits may be
sold, reduced, or canceled pursuant to this section.
‘‘(5) ADMINISTRATION.—
‘‘(A) IN GENERAL.—The Facility shall no-
tify the administrator of the agency primarily
responsible for administering part I of this Act
or the Commodity Credit Corporation, as the
case may be, of eligible purchasers described in
paragraph (1)(B) that the President has deter-
mined to be eligible under paragraph (1), and
shall direct such agency or Corporation, as the
case may be, to carry out the sale, reduction, or
cancellation of a loan pursuant to such para-
graph.
‘‘(B) ADDITIONAL
REQUIREMENT.—Such
agency or Corporation, as the case may be,
shall make an adjustment in its accounts to re-
flect the sale, reduction, or cancellation.
‘‘(b) NOTIFICATION REQUIREMENT.—The President
shall notify the congressional committees specified in sec-
tion 634A of this Act at least 15 days in advance of each
sale, reduction, or cancellation of loans or credits pursuant
to this section in accordance with the procedures applica-
ble to reprogramming notifications under such section
634A.
‘‘(c) DEPOSIT OF PROCEEDS.—The proceeds from
the sale, reduction, or cancellation of any loan sold, re-
duced, or canceled pursuant to this section shall be depos-
ited in the United States Government account or accounts
established for the repayment of such loan.
‘‘SEC. 809. TROPICAL FOREST AGREEMENT.
‘‘(a) AUTHORITY.—
‘‘(1) IN GENERAL.—The Secretary of State is
authorized, in consultation with other appropriate
officials of the Federal Government, to enter into a
Tropical Forest Agreement with any eligible country
concerning the operation and use of the Fund for
that country.
‘‘(2) CONSULTATION.—In the negotiation of
such an Agreement, the Secretary shall consult with
the Board in accordance with section 811.
‘‘(b) CONTENTS OF AGREEMENT.—The requirements
contained in section 708(b) of this Act (relating to con-
tents of an agreement) shall apply to a Agreement in the
same manner as such requirements apply to an Americas
Framework Agreement.
‘‘(c) ADMINISTERING BODY.—
‘‘(1) IN
GENERAL.—Amounts disbursed from
the Fund in each beneficiary country shall be admin-
istered by a body constituted under the laws of that
country.
‘‘(2) COMPOSITION.—
‘‘(A) IN
GENERAL.—The administering
body shall consist of—
‘‘(i) one or more individuals appointed
by the United States Government;
‘‘(ii) one or more individuals ap-
pointed by the government of the bene-
ficiary country; and
‘‘(iii) individuals who represent a
broad range of—
‘‘(I) environmental nongovern-
mental organizations of, or active in,
the beneficiary country;
‘‘(II) local community develop-
ment nongovernmental organizations
of the beneficiary country; and
‘‘(III) scientific or academic or-
ganizations or institutions of the ben-
eficiary country.
‘‘(B) ADDITIONAL REQUIREMENT.—A ma-
jority of the members of the administering body
shall be individuals described in subparagraph
(A)(iii).
‘‘(3) 
RESPONSIBILITIES.—The 
requirements
contained in section 708(c)(3) of this Act (relating
to responsibilities of the administering body) shall
apply to an administering body described in para-
graph (1) in the same manner as such requirements
apply to an administering body described in section
708(c)(1) of this Act.
‘‘(d) ELIGIBLE ACTIVITIES.—Amounts deposited in a
Fund shall be used to provide grants to preserve, main-
tain, and restore the tropical forests in the beneficiary
country, including one or more of the following activities:
‘‘(1) Establishment, restoration, protection, and
maintenance of parks, protected areas, and reserves.
‘‘(2) Development and implementation of sci-
entifically sound systems of natural resource man-
agement, including land and ecosystem management
practices.
‘‘(3) Training programs to strengthen conserva-
tion institutions and increase scientific, technical,
and managerial capacities of individuals and organi-
zations involved in conservation efforts.
‘‘(4) Restoration, protection, or sustainable use
of diverse animal and plant species.
‘‘(5) Research and identification of medicinal
uses of tropical forest plant life to treat human dis-
eases and illnesses and other health-related con-
cerns.
‘‘(6) Mitigation of greenhouse gases in the at-
mosphere.
‘‘(7) Development and support of the livelihoods
of individuals living in or near a tropical forest, in-
cluding the cultures of such individuals, in a manner
consistent with protecting such tropical forest.
‘‘(e) GRANT RECIPIENTS.—
‘‘(1) IN GENERAL.—Grants made from a Fund
shall be made to—
‘‘(A) nongovernmental environmental, con-
servation, and indigenous people organizations
of, or active in, the beneficiary country;
‘‘(B) other appropriate local or regional
entities of, or active in, the beneficiary country;
and
‘‘(C) in exceptional circumstances, the gov-
ernment of the beneficiary country.
‘‘(2) PRIORITY.—In providing grants under
paragraph (1), priority shall be given to projects
that are run by nongovernmental organizations and
other private entities and that involve local commu-
nities in their planning and execution.
‘‘(f) REVIEW OF LARGER GRANTS.—Any grant of
more than $100,000 from a Fund shall be subject to veto
by the Government of the United States or the govern-
ment of the beneficiary country.
‘‘(g) ELIGIBILITY CRITERIA.—In the event that a
country ceases to meet the eligibility requirements set
forth in section 805(a), as determined by the President
pursuant to section 805(b), then grants from the Fund
for that country may only be made to nongovernmental
organizations until such time as the President determines
that such country meets the eligibility requirements set
forth in section 805(a).
‘‘SEC. 810. TROPICAL FOREST FUND.
‘‘(a) ESTABLISHMENT.—Each beneficiary country
that enters into a Tropical Forest Agreement under sec-
tion 809 shall be required to establish a Tropical Forest
Fund to receive payments of interest on new obligations
undertaken by the beneficiary country under this part.
‘‘(b) REQUIREMENTS RELATING TO OPERATION OF
FUND.—The following terms and conditions shall apply
to the Fund in the same manner as such terms and condi-
tions apply to an Enterprise for the Americas Fund under
section 707 of this Act:
‘‘(1) The provision relating to deposits under
subsection (b) of such section.
‘‘(2) The provision relating to investments
under subsection (c) of such section.
‘‘(3) The provision relating to disbursements
under subsection (d) of such section.
‘‘SEC. 811. BOARD.
‘‘(a) ENTERPRISE FOR THE AMERICAS BOARD.—The
Enterprise for the Americas Board established under sec-
tion 610(a) of the Agricultural Trade Development and
Assistance Act of 1954 (7 U.S.C. 1738i(a)) shall, in addi-
tion to carrying out the responsibilities of the Board under
section 610(c) of such Act, carry out the duties described
in subsection (c) of this section for the purposes of this
part.
‘‘(b) ADDITIONAL MEMBERSHIP.—
‘‘(1) IN
GENERAL.—The Enterprise for the
Americas Board shall be composed of an additional
four members appointed by the President as follows:
‘‘(A) Two representatives from the United
States Government.
‘‘(B) Two representatives from private
nongovernmental environmental, scientific, and
academic organizations with experience and ex-
pertise in preservation, maintenance, and res-
toration of tropical forests.
‘‘(2) CHAIRPERSON.—Notwithstanding section
610(b)(2) of the Agricultural Trade Development
and Assistance Act of 1954 (7 U.S.C. 1738i(b)(2)),
the Enterprise for the Americas Board shall be
headed by a chairperson who shall be appointed by
the President from among the representatives ap-
pointed under section 610(b)(1)(A) of such Act or
paragraph (1)(A) of this subsection.
‘‘(c) DUTIES.—The duties described in this sub-
section are as follows:
‘‘(1) Advise the Secretary of State on the nego-
tiations of Tropical Forest Agreements.
‘‘(2) Ensure, in consultation with—
‘‘(A) the government of the beneficiary
country;
‘‘(B) nongovernmental organizations of the
beneficiary country;
‘‘(C) nongovernmental organizations of the
region (if appropriate);
‘‘(D) environmental, scientific, indigenous,
and academic leaders of the beneficiary country;
and
‘‘(E) environmental, scientific, indigenous,
and academic leaders of the region (as appro-
priate),
that a suitable administering body is identified for
each Fund.
‘‘(3) Review the programs, operations, and fis-
cal audits of each administering body.
‘‘SEC. 812. CONSULTATIONS WITH THE CONGRESS.
‘‘The President shall consult with the appropriate
congressional committees on a periodic basis to review the
operation of the Facility under this part and the eligibility
of countries for benefits from the Facility under this part.
‘‘SEC. 813. ANNUAL REPORTS TO THE CONGRESS.
‘‘(a) IN GENERAL.—Not later than December 31 of
each fiscal year, the President shall prepare and transmit
to the Congress an annual report concerning the operation
of the Facility for the prior fiscal year. Such report shall
include—
‘‘(1) a description of the activities undertaken
by the Facility during the previous fiscal year;
‘‘(2) a description of any Agreement entered
into under this part;
‘‘(3) a report on any Funds that have been es-
tablished under this part and on the operations of
such Funds; and
‘‘(4) a description of any grants that have been
provided by administering bodies pursuant to Agree-
ments under this part.
‘‘(b) SUPPLEMENTAL VIEWS IN ANNUAL REPORT.—
Not later than December 15 of each fiscal year, each mem-
ber of the Board shall be entitled to receive a copy of the
report required under subsection (a). Each member of the
Board may prepare and submit supplemental views to the
President on the implementation of this part by December
31 for inclusion in the annual report when it is transmit-
ted to Congress pursuant to this section.’’.
Passed the House of Representatives March 19,
1998.
Attest:
Robin H. Carle,
Clerk.