SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Debt Relief Enhancement Act of 
2002''.

SEC. 2. MODIFICATION OF THE ENHANCED HIPC INITIATIVE.

    Title XVI of the International Financial Institutions Act (22 
U.S.C. 262p--262p-5) is amended by adding at the end the following new 
section:

``SEC. 1625. MODIFICATION OF THE ENHANCED HIPC INITIATIVE.

    ``(a) Authority.--
            ``(1) In general.--The Secretary of the Treasury shall 
        immediately commence efforts within the Paris Club of Official 
        Creditors, the International Bank for Reconstruction and 
        Development, the International Monetary Fund, and other 
        appropriate multilateral development institutions to modify the 
        Enhanced HIPC Initiative so that the amount of debt stock 
        reduction approved for a country eligible for debt relief under 
        the Enhanced HIPC Initiative shall be sufficient to reduce, for 
        each of the first 3 years after the date of enactment of this 
        Act or the Decision Point, whichever is later--
                    ``(A) the net present value of the outstanding 
                public and publicly guaranteed debt of the country to 
                not more than 150 percent of the annual value of 
                exports of the country for the year preceding the 
                Decision Point; and
                    ``(B) the annual payments due on such public and 
                publicly guaranteed debt to not more than 10 percent 
                or, in the case of a country suffering a public health 
                crisis (as defined in subsection (e)), not more than 5 
                percent, of the amount of the annual current revenues 
                received by the country from internal resources.
            ``(2) Limitation.--In financing the objectives of the 
        Enhanced HIPC Initiative, an international financial 
        institution shall give priority to using its own resources.
    ``(b) Relation to Poverty and the Environment.--Debt cancellation 
under the modifications to the Enhanced HIPC Initiative described in 
subsection (a) shall not be conditioned on any agreement by an 
impoverished country to implement or comply with policies that deepen 
poverty or degrade the environment, including any policy that--
            ``(1) implements or extends user fees on primary education 
        or primary health care, including prevention and treatment 
        efforts for HIV/AIDS, tuberculosis, malaria, and infant, child, 
        and maternal well-being;
            ``(2) provides for increased cost recovery from poor people 
        to finance basic public services such as education, health 
        care, clean water, or sanitation;
            ``(3) reduces the country's minimum wage to a level of less 
        than $2 per day or undermines workers' ability to exercise 
        effectively their internationally recognized worker rights, as 
        defined under section 526(e) of the Foreign Operations, Export 
        Financing and Related Programs Appropriations Act, 1995 (22 
        U.S.C. 262p-4p); or
            ``(4) promotes unsustainable extraction of resources or 
        results in reduced budget support for environmental programs.
    ``(c) Conditions.--A country shall not be eligible for cancellation 
of debt under modifications to the Enhanced HIPC Initiative described 
in subsection (a) if the government of the country--
            ``(1) has an excessive level of military expenditures;
            ``(2) has repeatedly provided support for acts of 
        international terrorism, as determined by the Secretary of 
        State under section 6(j)(1) of the Export Administration Act of 
        1979 (50 U.S.C. App. 2405(j)(1)) or section 620A(a) of the 
        Foreign Assistance Act of 1961 (22 U.S.C. 2371(a));
            ``(3) is failing to cooperate on international narcotics 
        control matters; or
            ``(4) engages in a consistent pattern of gross violations 
        of internationally recognized human rights (including its 
        military or other security forces).
    ``(d) Programs To Combat HIV/AIDS and Poverty.--A country that is 
otherwise eligible to receive cancellation of debt under the 
modifications to the Enhanced HIPC Initiative described in subsection 
(a) may receive such cancellation only if the country has agreed--
            ``(1) to ensure that the financial benefits of debt 
        cancellation are applied to programs to combat HIV/AIDS and 
        poverty, in particular through concrete measures to improve 
        basic services in health, education, nutrition, and other 
        development priorities, and to redress environmental 
        degradation;
            ``(2) to ensure that the financial benefits of debt 
        cancellation are in addition to the government's total spending 
        on poverty reduction for the previous year or the average total 
        of such expenditures for the previous 3 years, whichever is 
        greater;
            ``(3) to implement transparent and participatory 
        policymaking and budget procedures, good governance, and 
        effective anticorruption measures; and
            ``(4) to broaden public participation and popular 
        understanding of the principles and goals of poverty reduction.
    ``(e) Definitions.--In this section:
            ``(1) Country suffering a public health crisis.--The term 
        `country suffering a public health crisis' means a country in 
        which the HIV/AIDS infection rate, as reported in the most 
        recent epidemiological data for that country compiled by the 
        Joint United Nations Program on HIV/AIDS, is at least 5 percent 
        among women attending prenatal clinics or more than 20 percent 
        among individuals in groups with high-risk behavior.
            ``(2) Decision point.--The term `Decision Point' means the 
        date on which the executive boards of the International Bank 
        for Reconstruction and Development and the International 
        Monetary Fund review the debt sustainability analysis for a 
        country and determine that the country is eligible for debt 
        relief under the Enhanced HIPC Initiative.
            ``(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 
        Economic Summit, Cologne, June 18-20, 1999.''.

SEC. 3. REPORT ON EXPANSION OF DEBT RELIEF TO NON-HIPC COUNTRIES.

    (a) In General.--Not later than 90 days after the date of enactment 
of this Act, the Secretary of the Treasury shall submit to Congress a 
report on--
            (1) the options and costs associated with the expansion of 
        debt relief provided by the Enhanced HIPC Initiative to include 
        poor countries that were not eligible for inclusion in the 
        Enhanced HIPC Initiative;
            (2) options for burden-sharing among donor countries and 
        multilateral institutions of costs associated with the 
        expansion of debt relief; and
            (3) options, in addition to debt relief, to ensure debt 
        sustainability in poor countries, particularly in cases when 
        the poor country has suffered an external economic shock or a 
        natural disaster.
    (b) Specific Options To Be Considered.--Among the options for the 
expansion of debt relief provided by the Enhanced HIPC Initiative, 
consideration should be given to making eligible for that relief poor 
countries for which outstanding public and publicly guaranteed debt 
requires annual payments in excess of 10 percent or, in the case of a 
country suffering a public health crisis (as defined in section 1625(e) 
of the Financial Institutions Act, as added by section 2 of this Act), 
not more than 5 percent, of the amount of the annual current revenues 
received by the country from internal resources.
    (c) Enhanced HIPC Initiative Defined.--In this section, 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 Economic 
Summit, Cologne, June 18-20, 1999.''.

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated to the 
President such sums as may be necessary for the fiscal year 2003 and 
each fiscal year thereafter to carry out section 1625 of the 
International Financial Institutions Act, as added by section 2 of this 
Act.
    (b) Availability of Funds.--Amounts appropriated pursuant to 
subsection (a) are authorized to remain available until expended.
Output: Debt Relief Enhancement Act of 2002 - Amends the International Financial Institutions Act to direct the Secretary of the Treasury to commence efforts immediately within the Paris Club of Official Creditors, the International Bank for Reconstruction and Development (IBRD), the International Monetary Fund (IMF), and other appropriate multilateral development institutions to modify the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative so that the amount of debt stock reduction approved for a country eligible for debt relief shall be sufficient to reduce, by a specified deadline, the net present value of the outstanding public and publicly guaranteed debt of the country, and the annual payments due, to levels determined according to certain formulae.Prohibits conditioning any such debt cancellation on an agreement by an impoverished country to implement or comply with policies that deepen poverty or degrade the environment.Prescribes other specified conditions and prohibitions with respect to country eligibility.Requires any country otherwise eligible to receive debt cancellation under the modifications to the Initiative made by this Act to agree to: (1) ensure that the financial benefits of debt cancellation are applied to programs to combat HIV/AIDS and poverty; and (2) implement transparent and participatory policymaking and budget procedures, good governance, and effective anticorruption measures.Requires the Secretary to report to Congress on the options and costs associated with expanding debt relief under the Initiative to poor countries not eligible for inclusion in it.