H. R. 2870
One Hundred Fifth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-eight
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 Representatives of
the United States of America in Congress assembled,
SECTION 1. DEBT REDUCTION FOR DEVELOPING COUNTRIES 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 Conservation
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 forests 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 resources depend.
‘‘(3) International negotiations and assistance programs to
conserve forest resources have proliferated 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 allocated 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 conversion to agriculture, which
is often unsustainable in the poor soils underlying tropical
forests.
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‘‘(6) Debt reduction can reduce economic pressures on devel-
oping countries and result in increased protection for tropical
forests.
‘‘(7) Finding economic benefits to local communities from
sustainable uses of tropical forests is critical to the protection
of 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 resources
to protect these critical resources and reduce economic pres-
sures that have led to deforestation;
‘‘(3) to ensure that resources freed from debt in such coun-
tries are targeted to protection of tropical forests and their
associated values; and
‘‘(4) to rechannel existing resources to facilitate the protec-
tion of tropical forests.
‘‘SEC. 803. DEFINITIONS.
‘‘As used in this part:
‘‘(1) ADMINISTERING BODY.—The term ‘administering body’
means the entity provided for in section 809(c).
‘‘(2) APPROPRIATE CONGRESSIONAL COMMITTEES.—The term
‘appropriate congressional committees’ means—
‘‘(A) the Committee on International Relations and the
Committee on Appropriations of the House of Representa-
tives; and
‘‘(B) the Committee on Foreign Relations and the
Committee on Appropriations of the Senate.
‘‘(3) BENEFICIARY COUNTRY.—The term ‘beneficiary country’
means an eligible country with respect 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 tropical forest’ means—
‘‘(A)(i) a country that has a per capita income of $725
or less in 1994 United States dollars (commonly referred
to as ‘low-income country’), as determined and adjusted
on an annual basis by the International Bank for
Reconstruction and Development in its World Development
Report; or
‘‘(ii) a country that has a per capita income 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
International Bank for Reconstruction and Development
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 diver-
sity or represents one of the larger intact blocks of tropical
forests left, on a regional, continental, or global scale.
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‘‘(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 estab-
lished in the Department 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 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; and
‘‘(2) that has put in place major investment reforms, as
evidenced by the conclusion of a bilateral investment treaty
with the United States, implementation of an investment sector
loan with the Inter-American Development Bank, World
Bank-supported investment reforms, or other measures, as
appropriate.
‘‘(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 agency of the United States)
that is outstanding as of January 1, 1998, 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 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.
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‘‘(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 notwithstanding section 620(r)
of this Act or section 321 of the International Development
and Food Assistance Act of 1975.
‘‘(b) IMPLEMENTATION OF DEBT REDUCTION.—
‘‘(1) IN GENERAL.—Any debt reduction pursuant to sub-
section (a) shall be accomplished at the direction of the Facility
by the exchange of a new obligation for obligations of the
type referred to in subsection (a) outstanding as of the date
specified in subsection (a)(1).
‘‘(2) EXCHANGE OF OBLIGATIONS.—
‘‘(A) IN GENERAL.—The Facility shall notify the agency
primarily responsible for administering part I of this Act
of an agreement entered into under paragraph (1) with
an eligible country to exchange a new obligation 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
for the country shall be established relating to the agree-
ment, and the agency primarily responsible for administer-
ing part I of this Act shall make an adjustment in its
accounts to reflect the debt reduction.
‘‘(c) 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 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 ASSIST-
ANCE 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, 1998, 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 pursuant to this section, there are
authorized 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.
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‘‘(B) LIMITATION.—The authority provided by this
section shall be available only to the extent that appropria-
tions 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 advance.
‘‘(b) IMPLEMENTATION OF DEBT REDUCTION.—
‘‘(1) IN GENERAL.—Any debt reduction pursuant to sub-
section (a) shall be accomplished at the direction of the Facility
by the exchange of a new obligation for obligations of the
type referred to in subsection (a) outstanding as of the date
specified in subsection (a)(1).
‘‘(2) EXCHANGE OF OBLIGATIONS.—
‘‘(A) IN
GENERAL.—The Facility shall notify the
Commodity Credit Corporation of an agreement entered
into under paragraph (1) with an eligible country to
exchange a new obligation 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 agree-
ment, and the Commodity Credit Corporation shall make
an adjustment in its accounts to reflect the debt reduction.
‘‘(c) 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 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, REDUCTION, OR
CANCELLATION.—
‘‘(1) DEBT-FOR-NATURE SWAPS.—
‘‘(A) IN GENERAL.—Notwithstanding any other provi-
sion of law, the President may, in accordance with this
section, sell to any eligible purchaser described in subpara-
graph (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 swap to support eligible activities described
in section 809(d).
‘‘(B) ELIGIBLE PURCHASER DESCRIBED.—A loan or credit
may be sold, reduced, or canceled under subparagraph
(A) only to a purchaser who presents plans satisfactory
to the President for using the loan or credit for the purpose
of engaging in debt-for-nature swaps to support eligible
activities described in section 809(d).
‘‘(C) CONSULTATION
REQUIREMENT.—Before the sale
under subparagraph (A) to any eligible purchaser described
in subparagraph (B), or any reduction or cancellation under
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such subparagraph (A), of any loan or credit made to an
eligible country, the President shall consult with the coun-
try concerning the amount of loans or credits to be sold,
reduced, or canceled and their uses for debt-for-nature
swaps to support eligible activities described in section
809(d).
‘‘(D) 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
subparagraph (A), amounts authorized to appropriated
under sections 806(a)(2) and 807(a)(2) shall be made avail-
able for such reduction of debt pursuant to subparagraph
(A).
‘‘(2) DEBT BUYBACKS.—Notwithstanding any other provision
of law, the President may, in accordance 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 coun-
try, equal to not less than the lessor of 40 percent of the
price paid for such debt by such eligible country, or the dif-
ference between the price paid for such debt and the face
value of such debt, to support eligible activities described in
section 809(d).
‘‘(3) LIMITATION.—The authority provided by paragraphs
(1) and (2) shall be available only to the extent that appropria-
tions 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 such paragraphs are made in advance.
‘‘(4) TERMS AND CONDITIONS.—Notwithstanding 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 notify 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 paragraph.
‘‘(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, reduc-
tion, or cancellation of any loan sold, reduced, or canceled pursuant
to this section shall be deposited in the United States Government
account or accounts established for the repayment of such loan.
‘‘SEC. 809. TROPICAL FOREST AGREEMENT.
‘‘(a) AUTHORITY.—
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‘‘(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 Agree-
ment, 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 an Agreement in the same manner as such require-
ments apply to an Americas Framework Agreement.
‘‘(c) ADMINISTERING BODY.—
‘‘(1) IN GENERAL.—Amounts disbursed from the Fund in
each beneficiary country shall be administered 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 appointed by the
government of the beneficiary country; and
‘‘(iii) individuals who represent a broad range of—
‘‘(I) environmental nongovernmental organiza-
tions of, or active in, the beneficiary country;
‘‘(II) local community development nongovern-
mental organizations of the beneficiary country;
and
‘‘(III) scientific, academic, or forestry organiza-
tions of the beneficiary country.
‘‘(B) ADDITIONAL
REQUIREMENT.—A majority 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 paragraph (1) in the same manner as such require-
ments 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 only to provide grants to conserve, maintain, and restore
the tropical forests in the beneficiary country, through one or more
of the following activities:
‘‘(1) Establishment, restoration, protection, and mainte-
nance of parks, protected areas, and reserves.
‘‘(2) Development and implementation of scientifically
sound systems of natural resource management, including land
and ecosystem management practices.
‘‘(3) Training programs to increase the scientific, technical,
and managerial capacities of individuals and organizations
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 diseases, illnesses, and health
related concerns.