Union Calendar No. 251
105TH CONGRESS
2D SESSION
H. R. 2870
[Report No. 105–443]
A BILL
To amend the Foreign Assistance Act of 1961 to
facilitate protection of tropical forests through
debt reduction with developing countries with
tropical forests.
MARCH 13, 1998
Reported with an amendment, committed to the Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed
IB
Union Calendar No. 251
105TH CONGRESS
2D SESSION
H. R. 2870
[Report No. 105–443]
To amend the Foreign Assistance Act of 1961 to facilitate protection of
tropical forests through debt reduction with developing countries with
tropical forests.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 7, 1997
Mr. PORTMAN (for himself, Mr. KASICH, and Mr. HAMILTON) introduced the
following bill; which was referred to the Committee on International Relations
MARCH 13, 1998
Additional sponsors: Ms. FURSE, Mr. EWING, Mr. HASTERT, Mrs. MALONEY
of New York, Mr. KLUG, Ms. PRYCE of Ohio, Mr. LATOURETTE, Mr.
CHABOT, Mr. BROWN of Ohio, Mr. STOKES, Mr. SAWYER, Mr. PASTOR,
Mr. CAMP, Mr. LATHAM, Mr. FALEOMAVAEGA, Mr. LIPINSKI, Mr.
WEXLER, Mr. KOLBE, Mr. DOOLEY of California, Mr. SHERMAN, Mr.
GALLEGLY, Mr. ACKERMAN, Mr. LUTHER, Mr. BILBRAY, Mrs. KELLY,
Mr. HOBSON, Mr. LEACH, Mr. SHAYS, Mr. MCHUGH, Ms. WOOLSEY, Mr.
GUTIERREZ, Mr. LANTOS, Mr. BALLENGER, Mr. CAMPBELL, Mr. SMITH
of New Jersey, Mr. SKAGGS, Mr. FRANK of Massachusetts, Mr. ENGLISH
of Pennsylvania, Mr. BEREUTER, Mr. MANZULLO, Ms. KAPTUR, and Mr.
PORTER
MARCH 13, 1998
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on November 7, 1997]
A BILL
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 pharmaceutical products
and revitalizing agricultural crops;
‘‘(B) playing a critical role as carbon sinks
in reducing greenhouse gases in the atmosphere,
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 proliferated
over the past decade, but the rapid rate of tropical de-
forestation continues unabated.
‘‘(4) Developing countries with urgent needs for
investment and capital for development have allocated
a significant amount of their forests to logging conces-
sions.
‘‘(5) Poverty and economic pressures on the pop-
ulations of developing countries have, over time, re-
sulted in clearing of vast areas of forest for conversion
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 for-
ests with the highest levels of biodiversity and under
the most severe threat) by providing for the allevi-
ation of debt in countries where tropical forests are
located, thus allowing the use of additional resources
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 section
809(c).
‘‘(2) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘appropriate congressional commit-
tees’ 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), sec-
tion 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 tropi-
cal 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 referred
to as ‘middle-income country’), as determined
and adjusted on an annual basis by the Inter-
national Bank for Reconstruction and Develop-
ment 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 forests left,
on a regional, continental, or global scale.
‘‘(6) ELIGIBLE
COUNTRY.—The term ‘eligible
country’ means a country designated by the President
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 ‘Tropi-
cal 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 Treas-
ury an entity to be known as the ‘Tropical Forest Facility’
for the purpose of providing for the administration 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 developing
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-supported
investment reforms, or other measures, as appro-
priate; and
‘‘(3) whose government meets other requirements
related to its environmental policies and practices, 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 Presi-
dent shall notify the appropriate congressional com-
mittees 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 agency 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 prede-
cessor foreign economic assistance legislation.
‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—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 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 au-
thority of this section may be exercised notwith-
standing section 620(r) of this Act or section 321
of the International Development and Food As-
sistance Act of 1975.
‘‘(b) IMPLEMENTATION OF DEBT REDUCTION.—
‘‘(1) IN GENERAL.—Any debt reduction pursuant
to subsection (a) shall be accomplished at the direc-
tion of the Facility by the exchange of a new obliga-
tion for obligations of the type referred to in sub-
section (a) outstanding as of the date specified in sub-
section (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 canceled
and a new debt obligation for the country shall
be established relating to the agreement, and the
agency primarily responsible for administering
part I of this Act shall make an adjustment in
its accounts to reflect the debt reduction.
‘‘(c) ADDITIONAL TERMS AND CONDITIONS.—The fol-
lowing additional terms and conditions shall apply to the
reduction of debt under subsection (a)(1) in the same man-
ner as such terms and conditions apply to the reduction
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 Assist-
ance 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 defined
in section 502(5) of the Federal Credit Reform
Act of 1990) for the reduction of any debt pursu-
ant to this section, there are authorized to be ap-
propriated 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 provided
by this section shall be available only to the ex-
tent 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 pur-
suant to this section are made in advance.
‘‘(b) IMPLEMENTATION OF DEBT REDUCTION.—
‘‘(1) IN GENERAL.—Any debt reduction pursuant
to subsection (a) shall be accomplished at the direc-
tion of the Facility by the exchange of a new obliga-
tion for obligations of the type referred to in sub-
section (a) outstanding as of the date specified in sub-
section (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 canceled
and a new debt obligation shall be established for
the country relating to the agreement, and the
Commodity Credit Corporation shall make an
adjustment in its accounts to reflect the debt re-
duction.
‘‘(c) ADDITIONAL TERMS AND CONDITIONS.—The fol-
lowing additional terms and conditions shall apply to the
reduction of debt under subsection (a)(1) in the same man-
ner as such terms and conditions apply to the reduction
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.—
‘‘(A) IN
GENERAL.—Notwithstanding any
other provision of law, the President may, in ac-
cordance with this section, sell to any eligible
purchaser described in subparagraph (B) 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 purchaser
described in subparagraph (B), reduce or cancel
such loans (or credits) or portion thereof, only
for the purpose of facilitating a debt-for-nature
‘‘(4) TERMS AND CONDITIONS.—Notwithstanding
any other provision of law, the President shall, in ac-
cordance 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 reflect the
sale, reduction, or cancellation.
‘‘(b) DEPOSIT OF PROCEEDS.—The proceeds from the
sale, reduction, or cancellation of any loan sold, reduced,
or canceled pursuant to this section shall be deposited in
the United States Government account or accounts estab-
lished for the repayment of such loan.
‘‘SEC. 809. TROPICAL FOREST AGREEMENT.
‘‘(a) AUTHORITY.—
‘‘(1) IN GENERAL.—The Secretary of State is au-
thorized, in consultation with other appropriate offi-
cials of the Federal Government, to enter into a Trop-
ical Forest Agreement with any eligible country con-
cerning 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 contents
of an agreement) shall apply to a Agreement in the same
manner as such requirements apply to an Americas Frame-
work Agreement.
‘‘(c) ADMINISTERING BODY.—
‘‘(1) IN GENERAL.—Amounts disbursed from the
Fund in each beneficiary country shall be adminis-
tered 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 beneficiary
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 orga-
nizations or institutions of the bene-
ficiary 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 con-
tained in section 708(c)(3) of this Act (relating to re-
sponsibilities of the administering body) shall apply
to an administering body described in paragraph (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, maintain,
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 manage-
ment, 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) Mitigation of greenhouse gases in the atmos-
phere.
‘‘(6) 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 en-
tities 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 communities 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 government 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 coun-
try may only be made to nongovernmental organizations
until such time as the President determines that such coun-
try 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 section 809
shall be required to establish a Tropical Forest Fund to re-
ceive 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 conditions
apply to an Enterprise for the Americas Fund under sec-
tion 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 section
610(a) of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1738i(a)) shall, in addition to
carrying out the responsibilities of the Board under section
610(c) of such Act, carry out the duties described in sub-
section (c) of this section for the purposes of this part.
‘‘(b) ADDITIONAL MEMBERSHIP.—
‘‘(1) IN GENERAL.—The Enterprise for the Amer-
icas 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 non-
governmental environmental, scientific, and aca-
demic organizations with experience and exper-
tise in preservation, maintenance, and restora-
tion 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 appointed under sec-
tion 610(b)(1)(A) of such Act or paragraph (1)(A) of
this subsection.
‘‘(c) DUTIES.—The duties described in this subsection
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, and aca-
demic leaders of the beneficiary country, and
‘‘(E) environmental, scientific, and aca-
demic leaders of the region (as appropriate),
that a suitable administering body is identified for
each Fund.
‘‘(3) Review the programs, operations, and fiscal
audits of each administering body.
‘‘SEC. 812. CONSULTATIONS WITH THE CONGRESS.
‘‘The President shall consult with the appropriate con-
gressional committees on a periodic basis to review the oper-
ation 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 estab-
lished 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 member
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 Presi-
dent on the implementation of this part by December 31
for inclusion in the annual report when it is transmitted
to Congress pursuant to this section.’’.