[House Report 108-205]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-205
======================================================================
MILLENNIUM CHALLENGE ACCOUNT AUTHORIZATION AND PEACE CORPS EXPANSION
ACT OF 2003
_______
July 14, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hyde, from the Committee on International Relations, submitted the
following
R E P O R T
[To accompany H.R. 2441]
[Including cost estimate of the Congressional Budget Office]
The Committee on International Relations, to whom was
referred the bill (H.R. 2441) to establish the Millennium
Challenge Account to provide increased support for developing
countries that have fostered democracy and the rule of law,
invested in their citizens, and promoted economic freedom; to
assess the impact and effectiveness of United States economic
assistance; to authorize the expansion of the Peace Corps, and
for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
TABLE OF CONTENTS
Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 23
Background and Need for the Legislation.......................... 24
Hearings......................................................... 32
Committee Consideration.......................................... 32
Summary of Amendments............................................ 32
Votes of the Committee........................................... 33
Committee Oversight Findings..................................... 34
New Budget Authority and Tax Expenditures........................ 34
Congressional Budget Office Cost Estimate........................ 34
Performance Goals and Objectives................................. 37
Constitutional Authority Statement............................... 37
Section-by-Section Analysis...................................... 37
New Advisory Committees.......................................... 55
Congressional Accountability Act................................. 56
Federal Mandates................................................. 56
Changes in Existing Law Made by the Bill, as Reported............ 56
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Millennium
Challenge Account Authorization and Peace Corps Expansion Act of
2003''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
DIVISION A--MILLENNIUM CHALLENGE ACCOUNT
TITLE I--GENERAL PROVISIONS
Sec. 101. Definitions.
Sec. 102. Sunset.
TITLE II--MILLENNIUM CHALLENGE ASSISTANCE
Sec. 201. Findings; statement of policy.
Sec. 202. Authorization of assistance.
Sec. 203. Eligibility and related requirements.
Sec. 204. Millennium Challenge Compact.
Sec. 205. Suspension and termination of assistance.
Sec. 206. Annual report.
Sec. 207. Participation of certain United States businesses.
Sec. 208. Authorization of appropriations; related authorities.
TITLE III--MILLENNIUM CHALLENGE CORPORATION
Sec. 301. Millennium Challenge Corporation.
Sec. 302. Chief Executive Officer.
Sec. 303. Board of Directors.
Sec. 304. Interagency coordination.
Sec. 305. Powers of the Corporation; related provisions.
Sec. 306. Transparency and accountability of the Corporation.
Sec. 307. Detail of personnel to the Corporation; other authorities and
limitations.
Sec. 308. Millennium Challenge Advisory Council.
Sec. 309. Millennium Challenge seed grants.
TITLE IV--PROVISIONS RELATING TO UNITED STATES ECONOMIC ASSISTANCE
Sec. 401. Definition.
Sec. 402. Framework for assistance.
Sec. 403. Report relating to impact and effectiveness of assistance.
DIVISION B--REAUTHORIZATION AND EXPANSION OF THE PEACE CORPS
TITLE X--GENERAL PROVISIONS
Sec. 1001. Definitions.
Sec. 1002. Findings.
TITLE XI--AMENDMENTS TO PEACE CORPS ACT; RELATED PROVISIONS
Sec. 1101. Advancing the goals of the Peace Corps.
Sec. 1102. Reports and consultations.
Sec. 1103. Special volunteer recruitment and placement for certain
countries.
Sec. 1104. Global Infectious Diseases Initiative; coordination of HIV/
AIDS activities.
Sec. 1105. Peace Corps National Advisory Council.
Sec. 1106. Readjustment allowances.
Sec. 1107. Programs and projects of returned Peace Corps volunteers and
former staff.
Sec. 1108. Declaration of policy.
Sec. 1109. Peace Corps in Sierra Leone.
Sec. 1110. Authorization of appropriations.
DIVISION A--MILLENNIUM CHALLENGE ACCOUNT
TITLE I--GENERAL PROVISIONS
SEC. 101. DEFINITIONS.
In this division:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on International Relations 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.
(2) Board.--The term ``Board'' means the Board of Directors
of the Corporation established pursuant to section 303 of this
Act.
(3) Compact.--The term ``Compact'' means the Millennium
Challenge Compact described in section 204 of this Act.
(4) Corporation.--The term ``Corporation'' means the
Millennium Challenge Corporation established under section 301
of this Act.
(5) Council.--The term ``Council'' means the Millennium
Challenge Advisory Council established under section 308 of
this Act.
(6) Millennium development goals.--The term ``Millennium
Development Goals'' means the key objectives described in the
United Nations Millennium Declaration, as contained in United
Nations General Assembly Resolution 55/2 (September 2000),
which aim to eradicate extreme poverty and hunger, achieve
universal primary education, promote gender equality and
empower women, reduce child mortality, improve maternal health,
combat HIV/AIDS, malaria, and other infectious diseases, ensure
environmental sustainability, and develop a global partnership
for development.
SEC. 102. SUNSET.
All authorities under this division (other than title IV) shall
terminate on October 1, 2007.
TITLE II--MILLENNIUM CHALLENGE ASSISTANCE
SEC. 201. FINDINGS; STATEMENT OF POLICY.
(a) Findings.--Congress finds the following:
(1) A principal objective of United States foreign
assistance programs, as stated in section 101 of the Foreign
Assistance Act of 1961, is the ``encouragement and sustained
support of the people of developing countries in their efforts
to acquire the knowledge and resources essential to development
and to build the economic, political, and social institutions
which will improve the quality of their lives''.
(2) The expanding acceptance of free trade and open markets
and the spread of democracy and the rule of law have brought a
better way of life to an increasing number of people in the
world.
(3) Inequalities between men and women undermine
development and poverty-reduction efforts in fundamental ways.
A woman's limited access to resources and restrictions on the
exercise of her rights, including the right to participate in
social and political processes, disables her from maximizing
her contribution to her family's health, education, and general
well-being.
(4) On March 14, 2002, the President noted the successes of
development assistance programs: ``The advances of free markets
and trade and democracy and rule of law have brought prosperity
to an ever-widening circle of people in this world. During our
lifetime, per capita income in the poorest countries has nearly
doubled. Illiteracy has been cut by one-third, giving more
children a chance to learn. Infant mortality has been almost
halved, giving more children a chance to live.''.
(5) Development is neither an easy process nor a linear
one. There are successes and there are failures. Today, too
many people are still living in poverty, disease has eroded
many of the economic and social gains of previous decades, and
many countries have not adopted policies, for a variety of
reasons, that would enable them to compete in an open and
equitable international economic system.
(6) More countries and more people will be able to
participate in and benefit from the opportunities afforded by
the global economy if the following conditions for sound and
sustainable economic development are met:
(A) Security.--Security is necessary for economic
development. Persistent poverty and oppression can lead
to hopelessness, despair, and to failed states that
become havens for terrorists.
(B) Policies that support broad-based economic
growth.--Successful long-term development can only
occur through broad-based economic growth that enables
the poor to increase their incomes and have access to
productive resources and services so that they can lead
lives of decency, dignity, and hope.
(C) Democracy and the rule of law.--Democratic
development, political pluralism, and respect for
internationally recognized human rights are
intrinsically linked to economic and social progress.
The ability of people to participate in the economic
and political processes affecting their lives is
essential to sustained growth. The rule of law and a
commitment to fight corruption is also critical to the
development of a prosperous society.
(D) Investments in people.--Economic growth and
democracy can be sustained only if both men and women
have the basic tools and capabilities that foster the
opportunity for participation in the economic, social,
and political life of their countries. Successful
development of countries requires citizens who are
literate, healthy, and prepared and able to work.
(7) Economic assistance programs authorized under part I of
the Foreign Assistance Act of 1961, as administered by the
United States Agency for International Development and other
Federal agencies, are of critical importance in assisting
countries to be in a position to maximize the effectiveness of
assistance authorized by this title.
(8) It is in the national interest of the United States to
help those countries that are implementing the economic and
political reforms necessary for development to occur.
(9) On March 14, 2002, the President stated that the
``growing divide between wealth and poverty, between
opportunity and misery, is both a challenge to our compassion
and a source of instability . . . [w]e must confront it . . .
[w]e must include every African, every Asian, every Latin
American, every Muslim, in an expanding circle of
development.''.
(10) The President has pledged that funds requested for the
Millennium Challenge Account shall be in addition to, and not a
substitute for, existing development and humanitarian programs.
(11) Development assistance alone is not sufficient to
stimulate economic growth and development. Assistance has been
shown to have a positive impact on growth and development in
developing countries with sound policies and institutions. If
countries have poor policies and institutions, however, it is
highly unlikely that assistance will have a net positive
effect.
(12) Economic development, and the achievement of the
Millennium Development Goals, must be a shared responsibility
between donor and recipient countries.
(b) Statement of Policy Regarding a New Compact for Global
Development.--It is, therefore, the policy of the United States to
support a new compact for global development that--
(1) increases support by donor countries to those
developing countries that are fostering democracy and the rule
of law, investing in their people, and promoting economic
freedom for all their people;
(2) recognizes, however, that it is the developing
countries themselves that are primarily responsible for the
achievement of those goals;
(3) seeks to coordinate the disparate development
assistance policies of donor countries, and to harmonize the
trade and finance policies of donor countries with their
respective development assistance programs; and
(4) aims to reduce poverty by significantly increasing the
economic growth trajectory of beneficiary countries through
investing in the productive potential of the people of such
countries.
SEC. 202. AUTHORIZATION OF ASSISTANCE.
(a) Assistance.--The President, acting through the Chief Executive
Officer of the Millennium Challenge Corporation, is authorized to
provide assistance to eligible countries to support policies and
programs that advance the progress of such countries in achieving
lasting economic growth and poverty reduction and are in furtherance of
the purposes of this title.
(b) Principal Objectives.--Assistance provided under subsection (a)
should advance a country's progress toward promoting the following
principal objectives:
(1) Fostering democratic societies, human rights, and the
rule of law.--The assistance should promote--
(A) political, social, and economic pluralism;
(B) respect for the rule of law;
(C) anti-corruption initiatives and law
enforcement;
(D) development of institutions of democratic
governance, including electoral and legislative
processes;
(E) transparent and accountable public
administration at all levels of government;
(F) a fair, competent, and independent judiciary;
and
(G) a free and independent media.
(2) Fostering investment in education and health
infrastructure and systems.--The assistance should foster
improved educational opportunities and health conditions,
particularly for women and children, including through--
(A) support for programs and personnel that promote
broad-based primary education, including through the
development of academic curricula, by making available
textbooks and other educational materials, and through
appropriate use of technology;
(B) support for programs to strengthen and build
institutions, including primary health care systems,
infrastructure, facilities, and personnel that provide
quality health care;
(C) support for improved systems for the delivery
of healthy water and sanitation services; and
(D) support for programs that reduce child
mortality (including those programs that combat HIV/
AIDS, malaria, tuberculosis, and other infectious
diseases, consistent with sections 104(c), 104A, 104B,
and 104C of the Foreign Assistance Act of 1961).
(3) Promoting economic freedom, broad-based economic
growth, and fostering free market systems.--The assistance
should foster the institutions and conditions needed to promote
free market systems, trade, and investment, including--
(A) the reform and restructuring of banking and
financial systems, including by allowing foreign
competition in the banking and financial sectors, where
appropriate;
(B) the development of transparent and efficient
commercial codes and reduction in the regulatory burden
on business;
(C) the protection of property rights, including
private property and intellectual property rights,
including through the adoption and effective
enforcement of intellectual property treaties or
international agreements;
(D) support for market-based policies that support
increased agricultural production;
(E) a strong commitment to sound monetary and
budgetary policies;
(F) the development of small businesses, private
cooperatives, credit unions, and trade and labor
unions;
(G) the protection of internationally recognized
workers' rights; and
(H) the capacity of eligible countries to
ameliorate damage to the environment and respect other
environmental standards.
SEC. 203. ELIGIBILITY AND RELATED REQUIREMENTS.
(a) Assistance for Low Income Countries.--
(1) Fiscal year 2004.--A country shall be eligible to
receive assistance under section 202 for fiscal year 2004 if--
(A) the country is eligible for assistance from the
International Development Association, and the per
capita income of the country is equal to or less than
the historical ceiling of the International Development
Association for that year, as defined by the
International Bank for Reconstruction and Development;
(B) subject to paragraph (3), the country is not
ineligible to receive United States economic assistance
by reason of the application of section 116, 490, or
620A of the Foreign Assistance Act of 1961, or by
reason of the application of any other provision of
law; and
(C) the Chief Executive Officer of the Corporation
determines that the country has demonstrated a
commitment to--
(i) bolster democracy, human rights, good
governance and the rule of law;
(ii) invest in the health and education of
its citizens; and
(iii) promote sound economic policies that
promote economic freedom and opportunity.
(2) Fiscal years 2005 and 2006.--A country shall be
eligible to receive assistance under section 202 for fiscal
years 2005 and 2006 if--
(A) the per capita income of the country is equal
to or less than the historical ceiling of the
International Development Association for the fiscal
year involved, as defined by the International Bank for
Reconstruction and Development;
(B) the country meets the requirements of paragraph
(1)(B); and
(C) the country meets the requirements of clauses
(i) through (iii) of paragraph (1)(C), as determined by
the Chief Executive Officer.
(3) Rule of construction.--For the purposes of determining
whether a country is eligible for receiving assistance under
section 202 pursuant to paragraph (1)(B), the exercise by the
President, the Secretary of State, or any other officer or
employee of the United States of any waiver or suspension of
any provision of law referred to in such paragraph shall not be
construed as satisfying the requirement of such paragraph.
(b) Assistance for Lower Middle Income Countries.--
(1) In general.--In addition to countries described in
subsection (a), a country shall be eligible to receive
assistance under section 202 for fiscal year 2006 if the
country--
(A) is classified as a lower middle income country
in the then most recent edition of the World
Development Report for Reconstruction and Development
published by the International Bank for Reconstruction
and Development;
(B) meets the requirements of subsection (a)(1)(B);
and
(C) meets the requirements of clauses (i) through
(iii) of subsection (a)(1)(C), as determined by the
Chief Executive Officer.
(2) Limitation.--The total amount of assistance provided to
countries under this subsection for fiscal year 2006 may not
exceed 20 percent of the total amount of assistance provided to
all countries under section 202 for fiscal year 2006.
(c) Assistance for Selected Low Income Countries.--
(1) In general.--A country shall be eligible to receive
assistance for any of fiscal years 2004 through 2006 solely for
the purpose of becoming eligible to receive assistance under
subsection (a) if the country--
(A) meets the requirements of paragraphs (1)(B) and
(2)(A) of subsection (a);
(B) demonstrates a commitment to meeting the
requirements of clauses (i) through (iii) of subsection
(a)(1)(C), as determined by the Chief Executive
Officer; but
(C) fails to meet the eligibility criteria
necessary to receive assistance under section 202, as
established under subsection (e).
(2) Administration.--Assistance for countries eligible by
reason of the application of this subsection shall be provided
through the United States Agency for International Development.
(3) Allocation of funds.--Of the amount authorized to be
appropriated under section 208(a) for a fiscal year, not more
than 15 percent of such amount is authorized to be appropriated
to the President, acting through the Chief Executive Officer,
for the fiscal year to carry out this subsection.
(d) General Authority To Determine Eligibility.--
(1) General authority.--The Chief Executive Officer shall
determine whether or not a country is eligible to receive
assistance under section 202.
(2) Congressional notification.--Not later than 7 days
after making a determination of eligibility for a country under
paragraph (1), the Chief Executive Officer shall provide notice
thereof to the appropriate congressional committees. Such
notice shall include a certification of the determination of
the Chief Executive Officer that the country meets the
requirements of clauses (i) through (iii) of subsection
(a)(1)(C) in accordance with such subsection, subsection
(a)(2)(C), subsection (b)(1)(C), or subsection (c)(1)(B), as
the case may be.
(e) Eligibility Criteria.--
(1) Initial criteria and methodology.--At soon as
practicable after the date of the enactment of this Act, but
not later than 30 days prior to making any determination of
eligibility for a country under this section, the Chief
Executive Officer--
(A) shall consult in-person with the appropriate
congressional committees with respect to the
establishment of eligibility criteria and methodology
that the Chief Executive Officer proposes to use for
purposes of determining eligibility under this section;
(B) shall establish such eligibility criteria and
methodology; and
(C) shall prepare and transmit to such committees a
written report that contains such eligibility criteria
and methodology.
(2) Revisions to criteria and methodology.--If the Chief
Executive Officer proposes to use revised or different criteria
from the criteria described in paragraph (1) in making a
determination of eligibility for a country under this section,
then, not later than 15 days prior to making such
determination, the Chief Executive Officer shall consult in-
person with the appropriate congressional committees with
respect to such revised or different criteria and methodology
in accordance with paragraph (1)(A) and shall prepare and
transmit a written report in accordance with paragraph (1)(C).
(f) Form of Assistance; Recipients.--
(1) Form of assistance.--Assistance provided under section
202 for a country shall be provided to one or more of the
entities described in paragraph (2) on a nonrepayable basis and
in accordance with a fair, open, and competitive selection
process that results in the awarding of such assistance on a
merit basis using selection criteria that are made public by
the Corporation in advance and are otherwise in accordance with
standard and customary best practices for the provision of
similar types of assistance.
(2) Recipients.--The entities referred to in paragraph (1)
are the following:
(A) The national government of the country.
(B) Regional or local governmental units of the
country.
(C) Nongovernmental organizations, including for-
profit, not-for-profit, and voluntary organizations.
(D) International organizations and trust funds.
(g) Congressional Notification.--The Chief Executive Officer may
not make any grant or enter into any contract for assistance for a
country under section 202 that exceeds $5,000,000 until 15 days after
the date on which the Chief Executive Officer provides notification of
the proposed grant or contract to the appropriate congressional
committees in accordance with the procedures applicable to
reprogramming notifications under section 634A of the Foreign
Assistance Act of 1961.
SEC. 204. MILLENNIUM CHALLENGE COMPACT.
(a) Compact.--The President, acting through the Chief Executive
Officer of the Corporation, may provide assistance to an eligible
country under section 202 only if the country enters into a contract
with the United States, to be known as a ``Millennium Challenge
Compact'', that establishes a multi-year plan for achieving shared
development objectives in furtherance of the purposes of this title,
and only if the President, acting through the Chief Executive Officer,
provides to Congress notice regarding such Compact pursuant to
subsection (h).
(b) Elements.--
(1) In general.--The Compact shall take into account the
national development strategy of the eligible country and shall
contain--
(A) the specific objectives that the country and
the United States expect to achieve;
(B) the responsibilities of the country and the
United States in the achievement of such objectives;
(C) regular benchmarks to measure, where
appropriate, progress toward achieving such objectives;
(D) an identification of the intended
beneficiaries, disaggregated by income level, gender,
and age, to the maximum extent practicable;
(E) a multi-year financial plan, including the
estimated amount of contributions by the Corporation
and the country and proposed mechanisms to implement
the plan and provide oversight, that describes how the
requirements of subparagraphs (A) through (D) will be
met, including identifying the role of civil society in
the achievement of such requirements;
(F) where appropriate, a description of the
responsibility of other donors in the achievement of
such objectives; and
(G) a plan to ensure appropriate fiscal
accountability for the use of assistance provided under
section 202.
(2) Lower middle income countries.--In addition to the elements
described in subparagraphs (A) through (G) of paragraph (1), with
respect to a lower middle income country described in section 203(b),
the Compact shall identify an appropriate contribution from the country
relative to its national budget, taking into account the prevailing
economic conditions, toward meeting the objectives of the Compact. Such
contribution shall be in addition to government spending allocated for
such purposes in the country's budget for the year immediately
preceding the establishment of the Compact and shall continue for the
duration of the Compact.
(c) Definition.--In subsection (b), the term ``national development
strategy'' means any strategy to achieve market-driven economic growth
that has been developed by the government of the country in
consultation with a wide variety of civic participation, including
nongovernmental organizations, private and voluntary organizations,
academia, women and student organizations, local trade and labor
unions, and the business community.
(d) Additional Provision Relating to Prohibition on Taxation.--In
addition to the elements described in subsection (b), each Compact
shall contain a provision that states that assistance provided by the
United States under the Compact shall be exempt from taxation by the
government of the eligible country.
(e) Local Input.--In entering into a Compact, the United States and
the eligible country--
(1) shall take into account the local-level perspectives of
the rural and urban poor in the eligible country; and
(2) should consult with private and voluntary
organizations, the business community, and other donors, in the
eligible country.
(f) Consultation.--During any discussions with a country for the
purpose of entering into a Compact with the country, officials of the
Corporation participating in such discussions shall, at a minimum,
consult with appropriate officials of the United States Agency for
International Development, particularly with those officials
responsible for the appropriate region or country on development issues
related to the Compact.
(g) Coordination with Other Donors.--To the maximum extent
feasible, activities undertaken to achieve the objectives of the
Compact shall be undertaken in coordination with the assistance
activities of other donors.
(h) Congressional and Public Notification.--Not later than 15 days
prior to entering into a Compact with an eligible country, the
President, acting through the Chief Executive Officer--
(1) shall consult in-person with the appropriate
congressional committees with respect to the proposed Compact;
(2) shall provide notification of the proposed Compact to
the appropriate congressional committees in accordance with the
procedures applicable to reprogramming notifications under
section 634A of the Foreign Assistance Act of 1961;
(3) shall prepare and transmit to such committees a written
report that contains a detailed summary of the proposed Compact
and a copy of the full text of the Compact; and
(4) shall publish such detailed summary and full text of
the proposed Compact in the Federal Register and on the
Internet website of the Corporation.
(i) Assistance for Development of Compact.--Notwithstanding
subsection (a), the Chief Executive Officer may enter into contracts or
make grants for any eligible country for the purpose of facilitating
the development of the Compact between the United States and the
country.
SEC. 205. SUSPENSION AND TERMINATION OF ASSISTANCE.
(a) Suspension of Assistance.--
(1) In general.--The President shall suspend assistance in
whole or in part for a country under this title if the
President determines that--
(A) the country is engaged in activities which are
contrary to the national security interests of the
United States;
(B) the elected head of state of the country or any
member of the country's highest judicial tribunal has
been removed from that office or forcibly detained
through extra-constitutional processes; or
(C) the country has failed to adhere to its
responsibilities under the Compact.
(2) Reinstatement.--The President may reinstate assistance
for a country under this title only if the President determines
that the country has demonstrated a commitment to correcting
each condition for which assistance was suspended under
paragraph (1).
(3) Congressional notification.--A suspension of assistance
under paragraph (1), or a reinstatement of assistance under
paragraph (2), shall be effective beginning 15 days after the
date on which the President transmits to the appropriate
congressional committees a report that contains the
determination of the President under paragraph (1) or paragraph
(2), as the case may be.
(b) Termination of Assistance.--
(1) In general.--The President, acting through the Chief
Executive Officer of the Corporation, shall terminate all
assistance for a country under this title if the President
determines that the country has consistently failed to adhere
to its responsibilities under the Compact or has significantly
failed to meet the requirements of this title.
(2) Congressional notification.--A termination of
assistance under paragraph (1) shall be effective beginning 15
days after the date on which the President, acting through the
Chief Executive Officer, provides notification of the proposed
termination of assistance to the congressional committees
specified in section 634A(a) of the Foreign Assistance Act of
1961 in accordance with the procedures applicable to
reprogramming notifications under that section.
SEC. 206. ANNUAL REPORT.
(a) Report.--Not later than April 1, 2005, and not later than April
1 of each year thereafter, the Chief Executive Officer of the
Corporation shall prepare and transmit to the appropriate congressional
committees a report on the implementation of this title for the
preceding year.
(b) Contents.--The report shall include the following:
(1) A description and assessment of the eligibility
criteria and methodology utilized by the Chief Executive
Officer to determine eligibility for each country under section
203.
(2) A description of the agreed upon measures of progress
contained in each Compact.
(3)(A) An analysis, on a country-by-country, project-by-
project basis, of the impact of assistance provided under this
title on the economic development of each country.
(B) For each country, the analysis shall--
(i) to the maximum extent possible, be done on a
sector-by-sector basis, gender basis, and per capita
income basis, and identify trends within each of these
bases;
(ii) identify economic policy reforms conducive to
economic development that are supported by assistance
provided under this title;
(iii) describe, in quantified terms to the extent
practicable, the progress made in achieving assistance
objectives for the country;
(iv) describe the amount and nature of economic
assistance provided by other major donors which further
the purposes of this title; and
(v) discuss the commitment and contribution of the
country to achieving the assistance objectives
contained in its Compact.
SEC. 207. PARTICIPATION OF CERTAIN UNITED STATES BUSINESSES.
(a) Participation.--To the maximum extent practicable, the
President, acting through the Chief Executive Officer, shall ensure
that United States small, minority-owned, and disadvantaged business
enterprises fully participate in the provision of goods and services
that are financed with funds made available under this title.
(b) Report.--The Chief Executive Officer shall prepare and submit
to the appropriate congressional committees an annual report that
contains a description of the extent to which the requirement of
subsection (a) has been met for the preceding year.
SEC. 208. AUTHORIZATION OF APPROPRIATIONS; RELATED AUTHORITIES.
(a) Authorization of Appropriations.--There are authorized to be
appropriated to the President, acting through the Chief Executive
Officer of the Corporation, to carry out this division (other than
title IV) $1,300,000,000 for fiscal year 2004, $3,000,000,000 for
fiscal year 2005, and $5,000,000,000 for fiscal year 2006.
(b) Additional Authorities.--Amounts appropriated pursuant to the
authorization of appropriations under subsection (a)--
(1) may be referred to as the ``Millennium Challenge
Account'';
(2) are authorized to remain available until expended; and
(3) are in addition to amounts otherwise available for such
purposes.
TITLE III--MILLENNIUM CHALLENGE CORPORATION
SEC. 301. MILLENNIUM CHALLENGE CORPORATION.
(a) Establishment.--There is hereby established in the executive
branch a corporation to be known as the ``Millennium Challenge
Corporation'' that shall be responsible for carrying out title II.
(b) Government Corporation.--The Corporation shall be a Government
corporation, as defined in section 103 of title 5, United States Code.
SEC. 302. CHIEF EXECUTIVE OFFICER.
(a) Appointment.--The Corporation shall be headed by an individual
who shall serve as Chief Executive Officer of the Corporation, who
shall be appointed by the President, by and with the advice and consent
of the Senate.
(b) Compensation and Rank.--
(1) In general.--The Chief Executive Officer shall be
compensated at the rate provided for level II of the Executive
Schedule under section 5313 of title 5, United States Code, and
shall have the equivalent rank of Deputy Secretary.
(2) Amendment.--Section 5313 of title 5, United States
Code, is amended by adding at the end the following:
``Chief Executive Officer, Millennium Challenge
Corporation.''.
(c) Authorities and Duties.--The Chief Executive Officer shall
exercise the powers and discharge the duties of the Corporation and any
other duties, as conferred on the Chief Executive Officer by the
President.
(d) Authority To Appoint Officers.--The Chief Executive Officer
shall appoint all officers of the Corporation.
SEC. 303. BOARD OF DIRECTORS.
(a) In General.--There shall be in the Corporation a Board of
Directors.
(b) Duties.--The Board may prescribe, amend, and repeal bylaws,
rules, regulations, and procedures governing the manner in which the
business of the Corporation may be conducted and in which the powers
granted to it by law may be exercised.
(c) Membership.--
(1) In general.--The Board shall consist of--
(A) the Secretary of State, the Secretary of
Treasury, the Administrator of the United States Agency
for International Development, the Chief Executive
Officer of the Corporation, and the United States Trade
Representative; and
(B) four other individuals who shall be appointed
by the President, by and with the advice and consent of
the Senate, of which--
(i) one individual shall be appointed from
among a list of individuals submitted by the
majority leader of the House of
Representatives;
(ii) one individual shall be appointed from
among a list of individuals submitted by the
minority leader of the House of
Representatives;
(iii) one individual shall be appointed
from among a list of individuals submitted by
the majority leader of the Senate; and
(iv) one individual shall be appointed from
among a list of individuals submitted by the
minority leader of the Senate.
(2) Ex-officio members.--In addition to members of the
Board described in paragraph (1), the Director of the Office of
Management and Budget, the President and Chief Executive
Officer of the Overseas Private Investment Corporation, the
Director of the Trade and Development Agency, and the Director
of the Peace Corps shall be non-voting members, ex officio, of
the Board.
(d) Terms.--
(1) Officers of federal government.--Each member of the
Board described in paragraphs (1)(A) and (2) of subsection (c)
shall serve for a term that is concurrent with the term of
service of the individual's position as an officer within the
other Federal department or agency.
(2) Other members.--Each member of the Board described in
subsection (c)(1)(B) shall be appointed for a term of 3 years
and may be reappointed for a term of an additional 2 years, in
the same manner in which the original appointment was made.
(3) Vacancies.--A vacancy in the Board shall be filled in
the manner in which the original appointment was made.
(e) Chairperson.--The Secretary of State shall serve as the
Chairperson of the Board.
(f) Quorum.--A majority of the members of the Board shall
constitute a quorum, which shall include at least one member of the
Board described in subsection (c)(1)(B).
(g) Meetings.--The Board shall meet at the call of the Chairperson.
(h) Compensation.--
(1) Officers of federal government.--
(A) In general.--A member of the Board described in
paragraphs (1)(A) and (2) of subsection (c) may not
receive additional pay, allowances, or benefits by
reason of their service on the Board.
(B) Travel expenses.--Each such member of the Board
shall receive travel expenses, including per diem in
lieu of subsistence, in accordance with applicable
provisions under subchapter I of chapter 57 of title 5,
United States Code.
(2) Other members.--
(A) In general.--Except as provided in paragraph
(2), a member of the Board described in subsection
(c)(1)(B)--
(i) shall be paid compensation out of funds
made available for the purposes of this title
at the daily equivalent of the highest rate
payable under section 5332 of title 5, United
States Code, for each day (including travel
time) during which the member is engaged in the
actual performance of duties as a member of the
Board; and
(ii) while away from the member's home or
regular place of business on necessary travel,
as determined by the Chief Executive Officer,
in the actual performance of duties as a member
of the Board, shall be paid per diem, travel,
and transportation expenses in the same manner
as is provided under subchapter I of chapter 57
of title 5, United States Code.
(B) Limitation.--A member of the Council may not be
paid compensation under subparagraph (A)(i) for more
than thirty days in any calendar year.
SEC. 304. INTERAGENCY COORDINATION.
In carrying out the functions described in this title, and
consistent with section 101 of the National Security Act of 1947 (50
U.S.C. 402), the President shall ensure coordination of assistance
authorized under title II with foreign economic assistance programs and
activities carried out by other Federal departments and agencies.
SEC. 305. POWERS OF THE CORPORATION; RELATED PROVISIONS.
(a) Powers.--The Corporation--
(1) may adopt, alter, and use a corporate seal, which shall
be judicially noticed;
(2) may prescribe, amend, and repeal such rules,
regulations, and procedures as are necessary for carrying out
the functions of the Corporation and all Compacts;
(3) may make and perform such contracts, grants, and other
agreements with any individual, corporation, or other private
or public entity, however designated and wherever situated, as
may be necessary for carrying out the functions of the
Corporation;
(4) may determine and prescribe the manner in which its
obligations shall be incurred and its expenses allowed and
paid, including expenses for representation not exceeding
$95,000 in any fiscal year;
(5) may lease, purchase, or otherwise acquire, own, hold,
improve, use or otherwise deal in and with such property (real,
personal, or mixed) or any interest therein, wherever situated,
as may be necessary for carrying out the functions of the
Corporation;
(6) may accept gifts or donations of services or of
property (real, personal, or mixed), tangible or intangible, in
furtherance of the purposes of this division;
(7) may hire or obtain passenger motor vehicles;
(8) may use the United States mails in the same manner and
on the same conditions as the Executive departments (as defined
in section 101 of title 5, United States Code);
(9) may, with the consent of any Executive agency (as
defined in section 105 of title 5, United States Code), use the
information, services, facilities, and personnel of that agency
on a full or partial reimbursement in carrying out the purposes
of this division; and
(10) may sue and be sued, complain, and defend, in its
corporate name in any court of competent jurisdiction.
(b) Offices.--
(1) Principal office.--The Corporation shall maintain its
principal office in the metropolitan area of Washington,
District of Columbia.
(2) Other offices.--The Corporation may establish other
offices in any place or places outside the United States in
which the Corporation may carry out any or all of its
operations and business.
(c) Cooperation With Other Federal Departments and Agencies.--In
order to avoid unnecessary expense and duplication of functions,
efforts, and activities between the Corporation and other Federal
departments and agencies the Chief Executive Officer, or the Chief
Executive Officer's designee--
(1)(A) shall consult, to the maximum extent practicable,
with the Administrator of the United States Agency for
International Development, or the Administrator's designee, in
order to coordinate the activities of the Corporation and the
Agency for International Development; and
(B) shall consult with the heads of other departments and
agencies to ensure similar coordination of activities;
(2)(A) shall ensure proper coordination of activities of
the Corporation with the provision of development assistance of
relevant international financial institutions, including the
International Bank for Reconstruction and Development, the
International Monetary Fund, and the regional multilateral
development banks; and
(B) shall provide to each United States Executive Director
(or other United States representative) to the relevant
international financial institutions a copy of each proposed
Compact between the United States and an eligible country and a
copy of each such final Compact.
(d) Positions with Foreign Governments.--When approved by the
Corporation, in furtherance of its purposes, employees of the
Corporation (including individuals detailed to the Corporation) may
accept and hold offices or positions to which no compensation is
attached with governments or governmental agencies of foreign countries
or with international organizations.
SEC. 306. TRANSPARENCY AND ACCOUNTABILITY OF THE CORPORATION.
The Corporation and its officers and employees shall be subject to
the provisions of section 552 of title 5, United States Code (relating
to freedom of information).
SEC. 307. DETAIL OF PERSONNEL TO THE CORPORATION; OTHER AUTHORITIES AND
LIMITATIONS.
(a) Detail of Personnel.--Upon request of the Chief Executive
Officer of the Corporation, the head of an agency may detail any
employee of such agency to the Corporation on a fully or partially
reimbursable basis. Any employee so detailed remains, for the purpose
of preserving such employee's allowances, privileges, rights,
seniority, and other benefits, an employee of the agency from which
detailed.
(b) Limitation on Total Service.--
(1) In general.--Except as provided in paragraph (2), no
individual may serve in or under the Corporation (whether as an
employee of the Corporation, a detailee to the Corporation, or
a combination thereof) for a total period exceeding 5 years.
(2) Exceptions.--
(A) Extension authority.--The Chief Executive
Officer may extend the 5-year period under paragraph
(1) for up to an additional 3 years, in the case of any
particular individual, if the Chief Executive Officer
determines that such extension is essential to the
achievement of the purposes of this division.
(B) Officers.--Nothing in this subsection shall
limit the period for which an individual may serve as
an officer of the Corporation appointed pursuant to
section 302(d) nor shall any period of service as such
an officer be taken into account for purposes of
applying this subsection.
(c) Reemployment Rights.--
(1) In general.--An employee of an agency who is serving
under a career or career conditional appointment (or the
equivalent), and who, with the consent of the head of such
agency, transfers to the Corporation, is entitled to be
reemployed in such employee's former position or a position of
like seniority, status, and pay in such agency, if such
employee--
(A) is separated from the Corporation--
(i) by reason of the application of
subsection (b); or
(ii) for any other reason, other than
misconduct, neglect of duty, or malfeasance;
and
(B) applies for reemployment not later than 90 days
after the date of separation from the Corporation.
(2) Specific rights.--An employee who satisfies paragraph
(1) is entitled to be reemployed (in accordance with such
paragraph) within 30 days after applying for reemployment and,
on reemployment, is entitled to at least the rate of basic pay
to which such employee would have been entitled had such
employee never transferred.
(d) Basic Pay.--The Chief Executive Officer may fix the rate of
basic pay of employees of the Corporation without regard to the
provisions of--
(1) chapter 51 of title 5, United States Code (relating to
the classification of positions), and
(2) subchapter III of chapter 53 of such title (relating to
General Schedule pay rates),
except that no employee of the Corporation may receive a rate of basic
pay that exceeds the rate for level II of the Executive Schedule under
section 5313 of such title.
(e) Assignment to United States Embassies.--An employee of the
Corporation, including an individual detailed to or contracted by the
Corporation, may be assigned to a United States diplomatic mission or
consular post, or United States Agency for International Development
field mission.
(f) Privileges and Immunities.--The Secretary of State shall seek
to ensure that an employee of the Corporation, including an individual
detailed to or contracted by the Corporation, and the members of the
family of such employee, while the employee is performing duties in any
country or place outside the United States, enjoy the privileges and
immunities that are enjoyed by a member of the Foreign Service, or the
family of a member of the Foreign Service, as appropriate, of
comparable rank and salary of such employee, if such employee or a
member of the family of such employee is not a national of or
permanently resident in such country or place.
(g) Responsibility of Chief of Mission.--An employee of the
Corporation, including an individual detailed to or contracted by the
Corporation, and a member of the family of such employee, shall be
subject to section 207 of the Foreign Service Act of 1980 (22 U.S.C.
3927) in the same manner as United States Government employees while
the employee is performing duties in any country or place outside the
United States if such employee or member of the family of such employee
is not a national of or permanently resident in such country or place.
(h) Allocation of Funds.--
(1) In general.--The Corporation may allocate or transfer
to the United States Agency for International Development or
any other agency any part of any funds available for carrying
out the purposes of this division. Such funds shall be
available for obligation and expenditure for the purposes for
which authorized, in accordance with authority granted in this
title or under authority governing the activities of the
agencies of the United States Government to which such funds
are allocated or transferred.
(2) Congressional notification.--The Chief Executive
Officer shall notify the appropriate congressional committees
not later than 15 days prior to a transfer of funds under
paragraph (1) that exceeds $5,000,000.
(3) Use of services.--For carrying out the purposes of this
division, the Corporation may utilize the services and
facilities of, or procure commodities from, any agency under
such terms and conditions as may be agreed to by the head of
the agency and the Corporation.
(i) Funding Limitation.--Of the funds allocated under subsection
(h) in any fiscal year, not more than 7 percent of such funds may be
used for administrative expenses.
(j) Other Authorities.--Except to the extent inconsistent with the
provisions of this division, the administrative authorities under
chapters 1 and 2 of part III of the Foreign Assistance Act of 1961
shall apply to the provision of assistance under this division to the
same extent and in the same manner as such authorities apply to the
provision of economic assistance under part I of such Act.
(k) Applicability of Government Corporation Control Act.--
(1) In general.--The Corporation shall be subject to the
provisions of chapter 91 of subtitle VI of title 31, United
States Code, except that the Corporation shall not be
authorized to issue obligations or offer obligations to the
public.
(2) Conforming amendment.--Section 9101(3) of title 31,
United States Code, is amended by adding at the end the
following:
``(Q) the Millennium Challenge Corporation.''
(l) Inspector General.--
(1) In general.--The Inspector General of the United States
Agency for International Development shall serve as Inspector
General of the Corporation, and, in acting in such capacity,
may conduct reviews, investigations, and inspections of all
aspects of the operations and activities of the Corporation.
(2) Authority of the board.--In carrying out its
responsibilities under this subsection, the Inspector General
shall report to the Board of Directors.
(3) Reimbursement.--The Corporation shall reimburse the
United States Agency for International Development for all
expenses incurred by the Inspector General in connection with
the Inspector General's responsibilities under this subsection.
(m) Comptroller General.--
(1) In general.--The Comptroller General shall conduct
audits, evaluations, and investigations of the Corporation.
(2) Scope.--The activities and financial transactions of
the Corporation for any fiscal year during which Federal funds
are available to finance any portion of its operations may be
evaluated, investigated, or audited by the Comptroller General
in accordance with such rules and regulations as may be
prescribed by the Comptroller General.
(3) Access and records.--Any evaluation, investigation, or
audit shall be conducted at the place or places where pertinent
information of the Corporation is normally kept. The
representatives of the General Accounting Office shall have
access to all books, accounts, financial records, reports,
files, and other papers or property belonging to or in use by
the Corporation and necessary to facilitate the evaluation,
investigation, or audit; and full facilities for verifying
transactions with the balances and securities held by
depositories, fiscal agents, and custodians shall be afforded
to such representatives. All such books, accounts, financial
records, reports, files, and other papers or property of the
Corporation shall remain in the possession and custody of the
Corporation throughout the period beginning on the date such
possession or custody commences and ending three years after
such date, but the General Accounting Office may require the
retention of such books, accounts, financial records, reports,
files, papers, or property for a longer period under section
3523(c) of title 31, United States Code.
(4) Report.--A report of such audit, evaluation, or
investigation shall be made by the Comptroller General to the
appropriate congressional committees and to the President,
together with such recommendations with respect thereto as the
Comptroller General shall deem advisable.
(n) Definitions.--For purposes of this section--
(1) the term ``agency'' means an Executive agency, as
defined by section 105 of title 5, United States Code; and
(2) the term ``detail'' means the assignment or loan of an
employee, without a change of position, from the agency by
which such employee is employed to the Corporation.
SEC. 308. MILLENNIUM CHALLENGE ADVISORY COUNCIL.
(a) Establishment.--There is hereby established in the executive
branch an advisory council to the Corporation to be known as the
Millennium Challenge Advisory Council.
(b) Functions.--
(1) General functions.--The Council shall advise and
consult with the Chief Executive Officer of the Corporation and
the Board of Directors with respect to policies and programs
designed to further the purposes of this division and shall
periodically report to the Congress with respect to the
activities of the Corporation. In addition, the Council shall
review on an annual basis the criteria and methodology used to
determine eligibility of countries for assistance under title
II and make recommendations to the Chief Executive Officer and
the Board to improve the effectiveness of such criteria and
methodology in order to achieve the purposes of this division.
(2) Additional functions.--Members of the Council shall
(subject to subsection (d)(1)) conduct on-site inspections, and
make examinations, of the activities of the Corporation in the
United States and in other countries in order to--
(A) evaluate the accomplishments of the
Corporation;
(B) assess the potential capabilities and the
future role of the Corporation;
(C) make recommendations to the Chief Executive
Officer, the Board of Directors, and Congress, for the
purpose of guiding the future direction of the
Corporation and of helping to ensure that the purposes
and programs of the Corporation are carried out in ways
that are economical, efficient, responsive to changing
needs in developing countries and to changing
relationships among people, and in accordance with law;
and
(D) make such other evaluations, assessments, and
recommendations as the Council considers appropriate.
(3) Public participation.--The Council may provide for
public participation in its activities, consistent with section
552b of title 5, United States Code.
(c) Membership.--
(1) In general.--The Council shall consist of seven
individuals, who shall be appointed by the Chief Executive
Officer, and who shall be broadly representative of
nongovernmental entities with expertise and interest in
international trade and economic development, including
business and business associations, trade and labor unions,
private and voluntary organizations, foundations, public policy
organizations, academia, and other entities as the Chief
Executive Officer determines appropriate.
(2) Additional requirement.--No member appointed under
paragraph (1) may be an officer or employee of the United
States Government.
(d) Compensation.--
(1) In general.--Except as provided in paragraph (2), a
member of the Council--
(A) shall be paid compensation out of funds made
available for the purposes of this title at the daily
equivalent of the highest rate payable under section
5332 of title 5, United States Code, for each day
(including travel time) during which the member is
engaged in the actual performance of duties as a member
of the Council; and
(B) while away from the member's home or regular
place of business on necessary travel, as determined by
the Chief Executive Officer, in the actual performance
of duties as a member of the Council, shall be paid per
diem, travel, and transportation expenses in the same
manner as is provided under subchapter I of chapter 57
of title 5, United States Code.
(2) Limitation.--A member of the Council may not be paid
compensation under paragraph (1)(A) for more than thirty days
in any calendar year.
(e) Quorum.--A majority of the members of the Council shall
constitute a quorum for the purposes of transacting any business.
(f) Financial Interests of Members.--A member of the Council shall
disclose to the Chairperson of the Council and the Chief Executive
Officer of the existence of any direct or indirect financial interest
of that member in any particular matter before the Council and may not
vote or otherwise participate as a Council member with respect to that
particular matter.
(g) Chairperson.--The Chief Executive Officer shall designate one
of the members of the Council as Chairperson, who shall serve in that
capacity for a term of two years. The Chief Executive Officer may renew
the term of the member appointed as Chairperson under the preceding
sentence.
(h) Meetings, Bylaws, and Regulations.--
(1) Meetings.--The Council shall hold a regular meeting
during each calendar quarter and shall meet at the call of the
President, the Chief Executive Officer, the Chairperson of the
Board, the Chairperson of the Council, or two members of the
Council.
(2) Bylaws and regulations.--The Council shall prescribe
such bylaws and regulations as it considers necessary to carry
out its functions. Such bylaws and regulations shall include
procedures for fixing the time and place of meetings, giving or
waiving of notice of meetings, and keeping of minutes of
meetings.
(i) Report to the President, Chief Executive Officer, and Board.--
(1) Report.--Not later than January 1, 2005, and not later
than January 1 of each year thereafter that the Corporation is
in existence, the Council shall submit to the President, the
Chief Executive Officer, and the Board a report on its views on
the programs and activities of the Corporation.
(2) Contents.--Each report shall contain a summary of the
advice and recommendations provided by the Council to the Chief
Executive Officer and the Board during the period covered by
the report and such recommendations (including recommendations
for administrative or legislative action) as the Council
considers appropriate to make to the Congress.
(3) Additional requirement.--Not later than 90 days after
receiving each such report, the Chief Executive Officer shall
transmit to Congress a copy of the report, together with any
comments concerning the report that the Chief Executive Officer
considers appropriate.
(j) Administrative assistance.--The Chief Executive Officer shall
make available to the Council such personnel, administrative support
services, and technical assistance as are necessary to carry out its
functions effectively.
(k) Termination.--Section 14(a)(2)(B) of the Federal Advisory
Committee Act (5 U.S.C. App.; relating to the termination of advisory
committees) shall not apply to the Council. Notwithstanding section 102
of this Act, the authorities of the Council shall terminate on December
31, 2007.
SEC. 309. MILLENNIUM CHALLENGE SEED GRANTS.
(a) Findings.--Congress finds the following:
(1) Many countries in the developing world lack the
academic and public policy advocacy base essential to attaining
the principal objectives of the Millennium Challenge Account.
(2) Because of widespread government repression of free
speech and poverty, the countries of Africa in particular
suffer an acute shortage of nongovernmental organizations which
effectively study and promote the principal objectives of the
Millennium Challenge Account.
(3) The Millennium Challenge Account will struggle to reach
its goals unless countries in the developing world possess a
home grown intellectual commitment and culture of advocacy
aimed at promoting its principal objectives.
(b) Assistance.--The Chief Executive Officer of the Corporation is
authorized to provide assistance in support of nongovernmental
organizations, (including universities and independent foundations and
other organizations) in low income and lower middle income countries,
which are undertaking research, education, and advocacy efforts aimed
at promoting democratic societies, human rights, the rule of law,
improved educational opportunities and health conditions, particularly
for women and children, and economic freedom.
(c) Limitation.--Not more than $10,000,000 of the amount made
available to carry out this division for a fiscal year may be made
available to carry out this section.
TITLE IV--PROVISIONS RELATING TO UNITED STATES ECONOMIC ASSISTANCE
SEC. 401. DEFINITION.
In this title, the term ``United States economic assistance'' means
any bilateral economic assistance, from any budget functional category,
that is provided by any department or agency of the United States to a
foreign country, including such assistance that is intended--
(1) to assist the development and economic advancement of
friendly foreign countries and peoples, including assistance
provided under title II (relating to the Millennium Challenge
Account);
(2) to promote the freedom, aspirations, or sustenance of
friendly peoples under oppressive rule by unfriendly
governments;
(3) to promote international trade and foreign direct
investment as a means of aiding economic growth;
(4) to save lives and alleviate suffering of foreign
peoples during or following war, natural disaster, or complex
crisis;
(5) to assist in recovery and rehabilitation of countries
or peoples following disaster or war;
(6) to protect refugees and promote durable solutions to
aid refugees;
(7) to promote sound environmental practices;
(8) to assist in development of democratic institutions and
good governance by the people of foreign countries;
(9) to promote peace and reconciliation or prevention of
conflict;
(10) to improve the technical capacities of governments to
reduce production of and demand for illicit narcotics; and
(11) to otherwise promote through bilateral foreign
economic assistance the national objectives of the United
States.
SEC. 402. FRAMEWORK FOR ASSISTANCE.
(a) Sense of Congress.--It is the sense of Congress that a coherent
framework for United States economic assistance should be established
in accordance with this section.
(b) Elements.--The framework described in subsection (a) includes
the following elements:
(1) The United States Agency for International Development,
under the direction and foreign policy guidance of the
Secretary of State, should be responsible for--
(A) providing assistance to countries that face
natural and man-made disasters in order to provide
humanitarian relief to the peoples of such countries,
in coordination with refugee programs administered by
the Department of State;
(B) providing assistance to countries that are
suffering from conflicts or are in post-conflict
situations in order to provide humanitarian relief,
transition assistance, and reconstruction assistance;
(C) providing assistance to help moderate-to-poorly
performing countries achieve development progress in
the areas described in part I of the Foreign Assistance
Act of 1961, including progress toward becoming
eligible for assistance under this title, and to
promote international health worldwide, as well as
assisting in the development of country and regional
development strategies;
(D) addressing transnational problems, such as
environmental degradation, food insecurity, and health
problems; and
(E) assisting other Federal departments and
agencies, including the Corporation established under
title III, to carry out assistance activities abroad,
including providing technical assistance and advice to
such departments and agencies, coordinating its
assistance programs with such departments and agencies,
and using its field offices to help implement such
assistance.
(2) The Corporation established under title III should
provide assistance to countries that have demonstrated a
commitment to bolstering democracy, good governance, and the
rule of law, to investing in the health and educations of their
people, and to promoting sound economic policies that foster
economic opportunity for their people.
(3) The Department of State should be responsible for
allocating security assistance to support key foreign policy
objectives of the United States and shall administer assistance
in such areas as non-proliferation, anti-terrorism, counter-
narcotics, and relief for refugees.
(4) Other Federal departments and agencies with expertise
in international development-related activities, such as the
Overseas Private Investment Corporation, the Trade and
Development Agency, the Department of Agriculture, the
Department of Health and Human Services, and the Centers for
Disease Control and Prevention, to the extent such departments
and agencies have the authority to carry out development-
related programs, and in coordination with the Department of
State and the United States Agency for International
Development, should provide expertise in specific technical
areas and shall provide assistance, including assistance
provided with funds made available from the Corporation to
assist United States Government international development
activities.
SEC. 403. REPORT RELATING TO IMPACT AND EFFECTIVENESS OF ASSISTANCE.
(a) Report.--Not later than December 31, 2004, and December 31 of
each third year thereafter, the President shall transmit to Congress a
report which analyzes, on a country-by-country basis, the impact and
effectiveness of United States economic assistance furnished under the
framework established in section 402 to each country during the
preceding three fiscal years. The report shall include the following
for each recipient country:
(1) An analysis of the impact of United States economic
assistance during the preceding three fiscal years on economic
development in that country, with a discussion of the United
States interests that were served by the assistance. This
analysis shall be done on a sector-by-sector basis to the
extent possible and shall identify any economic policy reforms
which were promoted by the assistance. This analysis shall--
(A) include a description, quantified to the extent
practicable, of the specific objectives the United
States sought to achieve in providing economic
assistance for that country, and
(B) specify the extent to which those objectives
were not achieved, with an explanation of why they were
not achieved.
(2) A description of the amount and nature of economic
assistance provided by other donors during the preceding three
fiscal years, set forth by development sector to the extent
possible.
(3) A discussion of the commitment of the host government
to addressing the country's needs in each development sector,
including a description of the resources devoted by that
government to each development sector during the preceding
three fiscal years.
(4) A description of the trends, both favorable and
unfavorable, in each development sector.
(5) Statistical and other information necessary to evaluate
the impact and effectiveness of United States economic
assistance on development in the country.
(6) A comparison of the analysis provided in the report
with relevant analyses by international financial institutions,
other international organizations, other donor countries, or
nongovernmental organizations.
(b) Listing of Most and Least Successful Assistance Programs.--The
report required by this section shall identify--
(1) each country in which United States economic assistance
has been most successful, as indicated by the extent to which
the specific objectives the United States sought to achieve in
providing the assistance for the country, as referred to in
subsection (a)(1)(A), were achieved; and
(2) each country in which United States economic assistance
has been least successful, as indicated by the extent to which
the specific objectives the United States sought to achieve in
providing the assistance for the country, as referred to in
subsection (a)(1)(A), were not achieved.
For each country listed pursuant to paragraph (2), the report shall
explain why the assistance was not more successful and shall specify
what the United States has done as a result.
(c) De Minimus Exception.--Information under subsections (a) and
(b) for a fiscal year shall not be required with respect to a country
for which United States economic assistance for the country for the
fiscal year is less than $5,000,000.
DIVISION B--REAUTHORIZATION AND EXPANSION OF THE PEACE CORPS
TITLE X--GENERAL PROVISIONS
SEC. 1001. DEFINITIONS.
In this division:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the Committee on
International Relations of the House of Representatives and the
Committee on Foreign Relations of the Senate.
(2) Director.--The term ``Director'' means the Director of
the Peace Corps.
(3) Host country.--The term ``host country'' means a
country whose government has invited the Peace Corps to
establish a Peace Corps program within the territory of the
country.
(4) Peace corps volunteer.--The term ``Peace Corps
volunteer'' means a volunteer or a volunteer leader under the
Peace Corps Act.
(5) Returned peace corps volunteer.--The term ``returned
Peace Corps volunteer'' means a person who has been certified
by the Director as having served satisfactorily as a Peace
Corps volunteer.
SEC. 1002. FINDINGS.
Congress makes the following findings:
(1) The Peace Corps was established in 1961 to promote
world peace and friendship through the service abroad of
volunteers who are United States citizens. The spirit of
service and commitment to helping others is a fundamental
component of democracy.
(2) Since its establishment, more than 168,000 volunteers
have served in the Peace Corps in 136 countries throughout the
world.
(3) The three goals codified in the Peace Corps Act which
have guided the Peace Corps and its volunteers over the years,
can work in concert to promote global acceptance of the
principles of international peace and nonviolent coexistence
among peoples of diverse cultures and systems of government.
(4) The Peace Corps has sought to fulfill three goals--to
help people in developing countries meet basic needs, promote
understanding abroad of the values and ideals of the United
States, and promote an understanding of other peoples by the
people of the United States.
(5) After more than 40 years of operation, the Peace Corps
remains the world's premier international service organization
dedicated to promoting grassroots development by working with
families and communities to improve health care for children,
expand agricultural production, teach in schools, fight
infectious diseases, protect the environment, and initiate
small business opportunities.
(6) The Peace Corps remains committed to sending well
trained and well supported Peace Corps volunteers overseas to
promote international peace, cross-cultural awareness, and
mutual understanding between the United States and other
countries.
(7) The Peace Corps is an independent agency, and,
therefore, no Peace Corps personnel or volunteers should be
used to accomplish any goal other than the goals established by
the Peace Corps Act.
(8) The Crisis Corps has been an effective tool in
harnessing the skills and talents of returned Peace Corps
volunteers and should be expanded, to the maximum extent
practicable, to utilize the talent of returned Peace Corps
volunteers.
(9) In fiscal year 2003, the Peace Corps is operating with
an annual budget of $295,000,000 in 70 countries, with more
than 7,000 Peace Corps volunteers.
(10) There is deep misunderstanding and misinformation in
many parts of the world, particularly in countries with
substantial Muslim populations, with respect to United States
values and ideals. A new or expanded Peace Corps presence in
such places could foster better understanding between the
people of the United States and such countries.
(11) Congress has declared, and the Peace Corps Act
provides, that the Peace Corps shall maintain, to the maximum
extent practicable and appropriate, a volunteer corps of at
least 10,000 individuals.
(12) President George W. Bush has called for the doubling
of the number of Peace Corps volunteers in service.
(13) Any expansion of the Peace Corps should not jeopardize
the quality of the Peace Corps volunteer experience and,
therefore, necessitates, among other things, an appropriate
increase in field and headquarters support staff.
(14) In order to ensure that the proposed expansion of the
Peace Corps preserves the integrity of the program and the
security of volunteers, the integrated Planning and Budget
System supported by the Office of Planning and Policy Analysis
should continue its focus on strategic planning.
(15) A streamlined, bipartisan Peace Corps National
Advisory Council composed of distinguished returned Peace Corps
volunteers, former Peace Corps staff, and other individuals
with diverse backgrounds and expertise can be a source of ideas
and suggestions that may be useful to the Director of the Peace
Corps as the Director discharges the duties and
responsibilities as head of the agency.
TITLE XI--AMENDMENTS TO PEACE CORPS ACT; RELATED PROVISIONS
SEC. 1101. ADVANCING THE GOALS OF THE PEACE CORPS.
(a) Recruitment of Volunteers.--Section 2A of the Peace Corps Act
(22 U.S.C. 2501-1) is amended by adding at the end the following new
sentence: ``As an independent agency, the Peace Corps shall be
responsible for recruiting all of its volunteers.''.
(b) Details and Assignments.--Section 5(g) of the Peace Corps Act
(22 U.S.C. 2504(g)) is amended by striking ``Provided, That'' and
inserting ``Provided, That such detail or assignment furthers the
fulfillment of Peace Corps' development and public diplomacy goals as
described in section 2: Provided further, That''.
SEC. 1102. REPORTS AND CONSULTATIONS.
(a) Annual Reports; Consultations on New Initiatives.--Section 11
of the Peace Corps Act (22 U.S.C. 2510) is amended to read as follows:
``SEC. 11. ANNUAL REPORTS; CONSULTATIONS ON NEW INITIATIVES.
``(a) Annual Reports.--The Director shall transmit to Congress, at
least once in each fiscal year, a report on operations under this Act.
Each report shall contain information--
``(1) describing efforts undertaken to improve coordination
of activities of the Peace Corps with activities of
international voluntary service organizations, such as the
United Nations volunteer program, and of host country voluntary
service organizations, including--
``(A) a description of the purpose and scope of any
development project which the Peace Corps undertook
during the preceding fiscal year as a joint venture
with any such international or host country voluntary
service organizations; and
``(B) recommendations for improving coordination of
development projects between the Peace Corps and any
such international or host country voluntary service
organizations;
``(2) describing--
``(A) any major new initiatives that the Peace
Corps has under review for the upcoming fiscal year,
and any major initiatives that were undertaken in the
previous fiscal year that were not included in prior
reports to the Congress;
``(B) the rationale for undertaking such new
initiatives;
``(C) an estimate of the cost of such initiatives;
and
``(D) the impact on the safety of volunteers;
``(3) describing in detail the Peace Corps plans, including
budgetary plans, to have 14,000 volunteers in service by 2007
while maintaining the quality of the volunteer experience,
ensuring the safety and security of all volunteers, and
providing for appropriate administrative and other support; and
``(4) describing standard security procedures for any
country in which the Peace Corps operates programs or is
considering doing so, as well as any special security
procedures contemplated because of changed circumstances in
specific countries, and assessing whether security conditions
would be enhanced--
``(A) by co-locating volunteers with international
or local nongovernmental organizations; or
``(B) with the placement of multiple volunteers in
one location.
``(b) Consultations on New Initiatives.--The Director of the Peace
Corps shall consult with the appropriate congressional committees with
respect to any major new initiatives not previously discussed in the
latest annual report submitted to Congress under subsection (a) or in
budget presentations. Whenever possible, such consultations should take
place prior to the initiation of such initiatives, or as soon as
practicable thereafter.''.
(b) One-Time Report on Student Loan Forgiveness Programs.--Not
later than 30 days after the date of enactment of this Act, the
Director shall submit to the appropriate congressional committees a
report--
(1) describing the student loan forgiveness programs
currently available to Peace Corps volunteers upon completion
of their service;
(2) comparing such programs with other Government-sponsored
student loan forgiveness programs; and
(3) recommending any additional student loan forgiveness
programs which could attract more applications from low- and
middle-income individuals who are carrying considerable
student-loan debt burdens.
(c) Annual Report to Congress on the Federal Equal Opportunity
Recruitment Program (FEORP).--Not later than 90 days after the date of
enactment of this Act and annually thereafter, the Director shall
report on the progress of the Peace Corps in recruiting historically
underrepresented groups. The Director shall prepare this report in
accordance with section 7201 of title 5, United States Code, and
subpart B of part 720 of title 5, Code of Federal Regulations.
(d) Report on Maintaining the Integrity of the Medical Screening
and Medical Placement Coordination Processes.--Not later than 120 days
after the date of enactment of this Act, the Director shall prepare and
submit to the appropriate congressional committees a report that--
(1) describes the medical screening procedures and
standards of the Office of Medical Services/Screening Unit of
the Peace Corps to determine whether an applicant for Peace
Corps service has worldwide clearance, limited clearance, a
deferral period, or is not medically, including
psychologically, qualified to serve in the Peace Corps as a
volunteer;
(2) describes the procedures and criteria for matching
applicants for Peace Corps service with a host country to
ensure that the applicant, reasonable accommodations
notwithstanding, can complete at least two years of volunteer
service without interruption to host country national projects
due to foreseeable medical conditions; and
(3) with respect to each of fiscal years 2000 through 2002
and the first six months of fiscal year 2003, states the number
of--
(A) medical screenings conducted;
(B) applicants who have received worldwide
clearance, limited clearance, deferral periods, and
medical disqualifications to serve;
(C) Peace Corps volunteers who the agency has had
to separate from service due to the discovery of
undisclosed medical information; and
(D) Peace Corps volunteers who have terminated
their service early due to medical, including
psychological, reasons.
SEC. 1103. SPECIAL VOLUNTEER RECRUITMENT AND PLACEMENT FOR CERTAIN
COUNTRIES.
(a) Report.--Not later than 60 days after the date of enactment of
this Act, the Director shall submit to the appropriate congressional
committees a report that--
(1) describes the recruitment strategies to be employed by
the Peace Corps to recruit and train volunteers with the
appropriate language skills and interest in serving in host
countries; and
(2) lists the countries that the Director has determined
should be priorities for special recruitment and placement of
Peace Corps volunteers.
(b) Use of Returned Peace Corps Volunteers and Former Staff.--The
Director is authorized and strongly urged to utilize the services of
returned Peace Corps volunteers and former Peace Corps staff who have
relevant language and cultural experience and may have served
previously in countries with substantial Muslim populations, in order
to open or reopen Peace Corps programs in such countries.
SEC. 1104. GLOBAL INFECTIOUS DISEASES INITIATIVE; COORDINATION OF HIV/
AIDS ACTIVITIES.
(a) Initiative.--
(1) In general.--The Director, in cooperation with
international public health experts, such as the Centers for
Disease Control and Prevention, the National Institutes of
Health, the World Health Organization, the Pan American Health
Organization, and local public health officials, shall expand
the Peace Corps' program of training for Peace Corps volunteers
in the areas of education, prevention, and treatment of
infectious diseases which are prevalent in host countries in
order to ensure that the Peace Corps increases its contribution
to the global campaign against such diseases.
(2) Additional requirement.--Activities for the education,
prevention, and treatment of infectious diseases in host
countries by the Peace Corps shall be undertaken in a manner
that is consistent with activities authorized under sections
104(c), 104A, 104B, and 104C of the Foreign Assistance Act of
1961.
(b) Coordination of HIV/AIDS Activities.--
(1) In general.--The Director should designate an officer
or employee of the Peace Corps who is located in the United
States to coordinate all HIV/AIDS activities within the Peace
Corps. Such individual may be an individual who is an officer
or employee of the Peace Corps on the date of the enactment of
this Act.
(2) Field coordination.--In addition to the position
established under paragraph (1), the Director should designate
an individual within each country in sub-Saharan Africa, the
Western Hemisphere, and Asia in which Peace Corps volunteers
carry out HIV/AIDS activities to coordinate all such activities
of the Peace Corps in such countries.
(c) Definitions.--In this section:
(1) AIDS.--The term ``AIDS'' means the acquired immune
deficiency syndrome.
(2) HIV.--The term ``HIV'' means the human immunodeficiency
virus, the pathogen that causes AIDS.
(3) HIV/AIDS.--The term ``HIV/AIDS'' means, with respect to
an individual, an individual who is infected with HIV or living
with AIDS.
(4) Infectious diseases.--The term ``infectious diseases''
means HIV/AIDS, tuberculosis, and malaria.
SEC. 1105. PEACE CORPS NATIONAL ADVISORY COUNCIL.
Section 12 of the Peace Corps Act (22 U.S.C. 2511; relating to the
Peace Corps National Advisory Council) is amended--
(1) in subsection (b)(2)--
(A) in subparagraph (C), by striking ``and'' after
the semicolon;
(B) by redesignating subparagraph (D) as
subparagraph (E); and
(C) by inserting after subparagraph (C) the
following:
``(D) make recommendations for utilizing the expertise of
returned Peace Corps volunteers and former Peace Corps staff in
fulfilling the goals of the Peace Corps; and'';
(2) in subsection (c)(2)--
(A) in subparagraph (A)--
(i) in the first sentence--
(I) by striking ``fifteen'' and
inserting ``eleven''; and
(II) by striking ``President, by
and with the advice and consent of the
Senate'' and inserting ``Director of
the Peace Corps''; and
(ii) by striking the second sentence and
inserting the following: ``Six of the members
shall be former Peace Corps volunteers, at
least one of whom shall have been a former
staff member abroad or in the Washington
headquarters, and not more than six shall be
members of the same political party.'';
(B) by striking subparagraph (B);
(C) by amending subparagraph (D) to read as
follows:
``(D) The members of the Council shall be appointed to 2-year
terms.'';
(D) in subparagraph (H), by striking ``nine'' and
inserting ``seven'';
(E) in subparagraph (I), by striking ``President
shall nominate'' and inserting ``Director shall
appoint''; and
(F) by redesignating subparagraphs (C), (D), (E),
(F), (G), (H), and (I) as subparagraphs (B), (C), (D),
(E), (F), (G), and (H), respectively; and
(3) by amending subsection (g) to read as follows:
``(g) Chair.--The Director shall designate one of the voting
members of the Council as Chair, who shall serve in that capacity for a
term of two years. The Director may renew the term of a voting member
appointed as Chair under the preceding sentence.''.
SEC. 1106. READJUSTMENT ALLOWANCES.
The Peace Corps Act is amended--
(1) in section 5(c) (22 U.S.C. 2504(c)), by striking ``$125
for each month of satisfactory service'' and inserting ``$275
for each month of satisfactory service during fiscal year 2004
and $300 for each month of satisfactory service thereafter'';
and
(2) in section 6(1) (22 U.S.C. 2505(1)), by striking ``$125
for each month of satisfactory service'' and inserting ``$275
for each month of satisfactory service during fiscal year 2004
and $300 for each month of satisfactory service thereafter''.
SEC. 1107. PROGRAMS AND PROJECTS OF RETURNED PEACE CORPS VOLUNTEERS AND
FORMER STAFF.
(a) Purpose.--The purpose of this section is to provide support for
returned Peace Corps volunteers to develop and carry out programs and
projects to promote the objectives of the Peace Corps Act, as set forth
in section 2(a) of that Act (22 U.S.C. 2501(a)).
(b) Grants to Certain Nonprofit Corporations.--
(1) Grant authority.--
(A) In general.--To carry out the purpose of this
section, and subject to the availability of
appropriations, the Director may award grants on a
competitive basis to private nonprofit corporations for
the purpose of enabling returned Peace Corps volunteers
to use their knowledge and expertise to develop and
carry out the programs and projects described in
paragraph (2).
(B) Delegation of authority and transfer of
funds.--The Director may delegate the authority to
award grants under subparagraph (A) and may transfer
funds authorized under this section subject to the
notification procedures of section 634A of the Foreign
Assistance Act of 1961 to the Chief Executive Officer
of the Corporation for National and Community Service
(referred to in this section as the ``Corporation'').
(2) Programs and projects.--Such programs and projects may
include--
(A) educational programs designed to enrich the
knowledge and interest of elementary school and
secondary school students in the geography and cultures
of other countries where the volunteers have served;
(B) projects that involve partnerships with local
libraries to enhance community knowledge about other
peoples and countries; and
(C) audio-visual projects that utilize materials
collected by the volunteers during their service that
would be of educational value to communities.
(3) Eligibility for grants.--To be eligible to compete for
grants under this section, a nonprofit corporation shall have a
board of directors composed of returned Peace Corps volunteers
and former Peace Corps staff with a background in community
service, education, or health. If the grants are made by the
Corporation, the nonprofit corporation shall meet all
appropriate Corporation management requirements, as determined
by the Corporation.
(c) Grant Requirements.--Such grants shall be made pursuant to a
grant agreement between the Peace Corps or the Corporation and the
nonprofit corporation that requires that--
(1) the grant funds will only be used to support programs
and projects described in subsection (a) pursuant to proposals
submitted by returned Peace Corps volunteers (either
individually or cooperatively with other returned volunteers);
(2) the nonprofit corporation will give consideration to
funding individual programs or projects by returned Peace Corps
volunteers, in amounts of not more than $50,000, under this
section;
(3) not more than 20 percent of the grant funds made
available to the nonprofit corporation will be used for the
salaries, overhead, or other administrative expenses of the
nonprofit corporation;
(4) the nonprofit corporation will not receive grant funds
for programs or projects under this section for a third or
subsequent year unless the nonprofit corporation makes
available, to carry out the programs or projects during that
year, non-Federal contributions--
(A) in an amount not less than $2 for every $3 of
Federal funds provided through the grant; and
(B) provided directly or through donations from
private entities, in cash or in kind, fairly evaluated,
including plant, equipment, or services; and
(5) the nonprofit corporation shall manage, monitor, and
submit reports to the Peace Corps or the Corporation, as the
case may be, on each program or project for which the nonprofit
corporation receives a grant under this section.
(d) Status of the Fund.--Nothing in this section shall be construed
to make any nonprofit corporation supported under this section an
agency or establishment of the Federal Government or to make the
members of the board of directors or any officer or employee of such
nonprofit corporation an officer or employee of the United States.
(e) Factors in Awarding Grants.--In determining the number of
nonprofit corporations to receive grants under this section for any
fiscal year, the Peace Corps or the Corporation--
(1) shall take into consideration the need to minimize
overhead costs that direct resources from the funding of
programs and projects; and
(2) shall seek to ensure a broad geographical distribution
of grants for programs and projects under this section.
(f) Congressional Oversight.--Grant recipients under this section
shall be subject to the appropriate oversight procedures of Congress.
(g) Funding.--
(1) In general.--There is authorized to be appropriated to
carry out this section up to $10,000,000. Such sum shall be in
addition to funds made available to the Peace Corps under this
division.
(2) Availability.--Amounts appropriated pursuant to
paragraph (1) are authorized to remain available until
expended.
(h) Crisis Corps.--
(1) Statement of policy.--Congress states that the Crisis
Corps has been an effective tool in harnessing the skills and
talents of returned Peace Corps volunteers.
(2) Increase in number of crisis corps assignments.--The
Director, in consultation with the governments of host
countries and appropriate nongovernmental organizations, shall
increase the number of available Crisis Corps assignments for
returned Peace Corps volunteers to at least 120 assignments in
fiscal year 2004, 140 assignments in fiscal year 2005, 160
assignments in fiscal year 2006, and 165 assignments in fiscal
year 2007.
SEC. 1108. DECLARATION OF POLICY.
Congress declares its support for the goal announced by President
Bush of doubling the number of Peace Corps volunteers to 14,000 by 2007
and supports the funding levels necessary to accomplish this growth.
SEC. 1109. PEACE CORPS IN SIERRA LEONE.
(a) Findings.--Congress makes the following findings:
(1) Peace Corps service to Sierra Leone was suspended in
1994 due to a brutal civil war between the government and the
Revolutionary United Front (RUF).
(2) Backed by British military intervention and a United
Nations peacekeeping operation, government authority has been
reestablished throughout the country and ``free and fair''
national elections took place in May 2002.
(3) Sierra Leone is a majority Muslim country.
(4) The Peace Corps has given the safety and security of
its volunteers high priority.
(b) Sense of Congress.--It is the sense of Congress that the Peace
Corps should return its program to Sierra Leone as soon as security
conditions are consistent with the safety and security of its
volunteers.
SEC. 1110. AUTHORIZATION OF APPROPRIATIONS.
Section 3(b)(1) of the Peace Corps Act (22 U.S.C. 2502(b)(1)) is
amended by striking ``and $365,000,000 for fiscal year 2003'' and
inserting ``$365,000,000 for fiscal year 2003, $366,868,000 for fiscal
year 2004, $411,800,000 for fiscal year 2005, $455,930,000 for fiscal
year 2006, and $499,400,000 for fiscal year 2007''.
Purpose and Summary
The purpose of ``The Millennium Challenge Account
Authorization and Peace Corps Expansion Act of 2003'' (H.R.
2441) is twofold: to authorize the establishment of a new
program of foreign assistance for countries that meet and
maintain certain eligibility criteria; and to reauthorize and
expand the Peace Corps, supporting the President's proposal to
double the number of volunteers from 7,000 in FY2003 to 14,000
in FY2007.
``The Millennium Challenge Account Authorization and Peace
Corps Expansion Act of 2003'' is divided into two parts.
Division A consists of the Millennium Challenge Account
Authorization Act, and is subdivided into four titles: title I
(``General Provisions''); title II (``Millennium Challenge
Assistance''); title III (``Millennium Challenge
Corporation''); and title IV (``Provisions Relating to United
States Economic Assistance''). The Millennium Challenge Account
Authorization Act authorizes a new program of assistance of
$1.3 billion in FY2004, $3 billion in FY2005 and $5 billion in
FY2006 for eligible countries for programs that help such
countries achieve lasting economic growth and poverty
reduction. The assistance will be administered by the
Millennium Challenge Corporation, a new government-owned
corporation that is created in title III of the act.
Division B of H.R. 2441 is the Peace Corps Expansion Act of
2003, and is subdivided into two titles: title X (``General
Provisions'') and title XI (``Amendments to Peace Corps Act;
Related Provisions''). The Peace Corps Expansion Act contains a
Congressional Declaration of Policy in support of the goal
announced by the President of doubling the number of Peace
Corps volunteers to 14,000 volunteers by 2007. The bill also
makes necessary amendments to the Peace Corps Act and
authorizes a gradual expansion of the budget of the Peace
Corps, from $366.8 million in FY2004 to $411.8 million in
FY2005, to $455.9 million in FY2006, and to $499.4 million in
FY2007.
Background and Need for the Legislation
In its 108th Congress, the United States of America has
entered a period of unmatched and unprecedented relative power
and influence in the world. Key leaders in the House of
Representatives, both Republican and Democratic, agree that
with such power and influence comes the responsibility and
obligation to assist those less fortunate in the developing
world. The assistance furnished by the Millennium Challenge
Account and an expanded Peace Corps will support this vision.
H.R. 2441 is the latest in a series of legislative initiatives
important to the national security of the United States to
originate in the Committee on International Relations.
During the first 3 years of the 21st century, the Congress
of the United States has met new challenges with decisiveness
and resolve, providing unwavering support to the President and
the American people in the fight against terrorism at home and
abroad. The Congress has acted with alacrity, by authorizing
the new Department of Homeland Security to protect the homeland
and to face squarely the transnational threats of this era. The
Committee on International Relations has authorized the use of
force against the terrorists who perpetrated the September 11,
2001 attacks and in Iraq; has initiated and crafted a new
program of assistance to fight the global AIDS pandemic; and
has originated legislation that will assist the people of
Afghanistan and Iraq emerge from decades of tyranny, war, and
oppression.
While the Committee can be responsive to world events, it
does more than prepare for and respond to imminent threats and
crises. In January 2002, President Bush proposed that the
United States double the size of the Peace Corps, an
institution that since its inception has created opportunities
for nearly 170,000 Americans to learn about the world and
represent their Nation in service to peoples in friendly
countries around the globe who seek advancement, education,
equality, and development.
In March, 2002, President Bush boldly proposed the further
expansion of United States foreign assistance, through the
establishment of the ``Millennium Challenge Account,'' now
known widely as the ``MCA.'' He did so in a revolutionary
manner--by proposing a new and additional assistance program
only for those countries that meet certain standards of
respecting human rights, investing in the future of their
peoples, and promoting economic opportunity and freedom. In
both announcements, the President issued a challenge to help
those less fortunate, to promote universal human rights and
values around the world, and to be part of the spread of
democracy and freedom to the far corners of the globe.
On June 12, 2003, after extensive consultation with the
White House, the Committee on International Relations reported
favorably ``The Millennium Challenge Account Authorization and
Peace Corps Expansion Act of 2003,'' answering the President's
call to authorize these two initiatives, but also acting on
behalf of the American people who from their beginnings have
sought to assist those less fortunate and to spread the light
of democracy, accountability, and progress.
Goals of the Millennium Challenge Account
Introduced by Chairman Hyde and Ranking Member Lantos,
``The Millennium Challenge Account Authorization Act of 2003''
is a legislative initiative that authorizes the expansion of
United States economic assistance to a limited number of high-
performing countries in the developing world. This new form of
assistance will require a proven track record of accomplishment
by potential recipients in the areas of economic freedom,
democracy, and investments in a country's people, principally
in the health and education sectors.
The Millennium Challenge Account is an initiative based on
the idea that countries must be accountable for their actions,
be responsible for developing and advancing their own plans of
progress, and must be able to show results in order to receive
economic assistance from the American taxpayer. The program,
the President announced, would be above and beyond existing aid
programs--for which the President pledged ongoing support--and
will distribute U.S. economic aid to developing countries that
have demonstrated a commitment to govern justly, invest in
their people and encourage economic freedom. Not only is the
program designed to accelerate economic development and reduce
poverty in countries that are performing well across a spectrum
of criteria, but it also provides assistance, and thus an
incentive, to countries that are not doing as well, but,
nevertheless, demonstrate a commitment to the same performance
criteria.
In March 2003, the Committee on International Relations
held a hearing on the Administration's MCA proposal, and heard
from three administration witnesses on the proposed structure
and organization of the Millennium Challenge Corporation, the
new organization proposed to manage MCA assistance. Members
also heard testimony and had the opportunity to question
witnesses from the respected charities Save the Children and
Bread for the World, as well as experts from the Heritage
Foundation and the Center for Global Development on eligibility
criteria for the MCA.
At that hearing, witnesses did not dispute that many U.S.
assistance programs have not achieved fully desired results
over the years. Some assistance has allowed corrupt leaders to
amass personal fortunes and remain in power beyond the will of
the citizenry. Other aid has allowed leaders and governments to
abdicate responsibility for effective governance and pursue
detrimental, self-destructive, or personally self-enriching
policies, with little results to show in the end. The
politicization of assistance programs during the Cold War and
the continued need for economic assistance for strategically
important countries in the War on Terrorism have clouded the
development effectiveness of U.S. assistance programs. While
there is a clear national security interest in maintaining
assistance to advance such political and security imperatives,
it is also clear that a new and separate performance-based
assistance program is needed to advance economic growth and
development, separate from strategic considerations that have
characterized other forms of assistance.
At the March hearing, Members of the Committee expressed
that that the mixed results of the past should not lead us to
turn our backs on the developing world, but rather just the
opposite. Members of the Committee agreed then, and again on
June 12, that now is the time for United States leadership and
for the United States to recognize and help those countries
that respect the rights of citizens, promote democracy, and
encourage economic freedom and prosperity. In this process, the
Committee intends to reward those governments and leaders who
choose the right path of reform. Many people in the developing
world live under governments that do not meet such standards,
and the President has made clear his intention that the MCA
will not replace existing development assistance programs or
subtract from their budgets. The Committee supports this view,
and the act specifically endorses it.
Development and humanitarian assistance, as administered by
the Agency for International Development, is one of the pillars
of our foreign policy and diplomacy, as noted in the
President's National Security Strategy. Such assistance
programs implemented by USAID are responsible for addressing
critical humanitarian emergencies, preventing conflict and
promoting stability as well as promoting development at the
national, regional and community levels. Furthermore, the MCA
is a reward and incentive for countries that meet a higher
standard of performance. The traditional assistance programs
are needed to help countries that do not qualify. It is
imperative that the President continue to request adequate sums
to promote American interests through development aid and
disaster relief, and it is equally essential that the Congress
appropriate such sums that may be necessary for this purpose.
To fund the MCA, the President has proposed an additional $5
billion to the current development assistance budget phased in
over a 3-year period. The President's FY 2004 budget requests
$1.3 billion for the first year of the initiative, and our
proposal calls for MCA funding to increase to $3 billion in FY
2005 and $5 billion in FY 2006. The Committee supports this
plan.
The Committee believes that its overriding principle should
be to ensure success of the Millennium Challenge Account
initiative from the start, demand results from its endeavors,
and receive value for taxpayer dollars. As proposed by the
President and contained in H.R. 2441, MCA assistance will
reward only those recipients that willingly adopt good policies
and institutions. Of the approximately 70 countries currently
eligible for development assistance, it is possible that not
many countries will meet such strict criteria stipulated by the
President and contained in the bill that accompanies this
report. At the funding levels proposed, this will enable the
United States to provide a very high level of assistance for
MCA-eligible countries. The assistance will be implemented in a
manner to give greater ownership and responsibility to the
recipient countries than is the case with traditional bilateral
development programs. The Committee believes that this will
create a competition among ``cusp'' countries to qualify for
the assistance which may accelerate reforms and the adoption of
good policies.
Development assistance alone is not sufficient to stimulate
economic growth and development. The Committee agrees with the
President that the MCA will allow the United States to be more
selective in aid distribution and potentially more effective in
development. MCA assistance must reward only those recipients
that willingly adopt good policies and institutions. If the
President's proposal is implemented, traditional bilateral
assistance programs would continue for countries who do not
meet the criteria. The Administration believes that this will
create a competition among ``cusp'' countries which may
accelerate reforms and the adoption of good policies.
The Legislation
Consistent with the White House proposal, H.R. 2441 places
responsibility for administration of MCA assistance with a new
entity to be known as the Millennium Challenge Corporation.
This corporation will not be bound by the same policies and
procedures that govern other forms of U.S. foreign aid. It will
have flexible authorities and a clear mandate--to negotiate
``Compacts'' with foreign governments that will require such
governments to demonstrate continued progress in certain areas.
The Millennium Challenge Account is a bold experiment that
will reward those that are on the right path of economic
development and freedom. At the Inter-American Development Bank
on March 14, 2002, President Bush called for ``a new compact
for global development, defined by new accountability for both
rich and poor nations alike. Greater contributions from
developed nations must be linked to greater responsibility from
developing nations.''
The President pledged that the United States would lead by
example and increase its core development assistance by 50
percent over the next 3 years, resulting in an annual increase
of $5 billion by FY 2006. Because sound policies are an
essential condition of development, the President proposed the
creation of ``the Millennium Challenge Account'' that would be
``devoted to projects in nations that govern justly, invest in
their people and encourage economic freedom.''
The Millennium Challenge Corporation will be headed by a
Chief Executive Officer, nominated by the President and
confirmed by the Senate, and its programs will be reviewed and
approved by a Board of Directors chaired by the Secretary of
State.
H.R. 2441 calls for the Board of Directors to consist of 9
voting members: four individuals who are not officials of the
government, and five individuals who shall sit on the board by
virtue of their position as officers in the government. The
four members from outside the government shall be nominated by
the President from four separate lists, one each submitted by
the majority and minority leaders of the House of
Representatives and the Senate, respectively. The five members
from within the government shall be the Secretary of State, the
Administrator of the United States Agency for International
Development, the Secretary of the Treasury, the United States
Trade Representative, and the Chief Executive Officer of the
Corporation. In addition to the voting members, H.R. 2441 calls
for an additional five nonvoting members, by virtue of their
position as officials of the government: the Director of the
Office of Management and Budget, the President and Chief
Executive Officer of the Overseas Private Investment
Corporation, the Director of the Trade and Development Agency,
and the Director of the Peace Corps.
In his March 14 speech, President Bush proposed that the
MCA, as a separate and distinct development assistance program,
will be available only to countries which meet three criteria:
they must display good governance, invest in the health and
education of their people, and enact sound policies which
promote economic freedom.
President Bush proposed that eligible countries be
identified based on ``a set of clear and concrete and objective
criteria'' that would be applied ``rigorously and fairly.'' In
receiving this new assistance, the President stated that the
Millennium Challenge Account will ``reward nations that root
out corruption, respect human rights, and adhere to the rule of
law . . . invest in better health care, better schools and
broader immunization . . . [and] have more open markets and
sustainable budget policies, nations where people can start and
operate a small business without running the gauntlets of
bureaucracy and bribery.''
Eligibility Criteria and Methodology
On February 5, 2003, the President transmitted the text of
his proposed legislation to Congress. In the following
communication accompanied the proposed legislation:
``The Millennium Challenge Account (MCA) represents a new
approach to providing and delivering development assistance.
This new compact for development breaks with the past by tying
increased assistance to performance and creating new
accountability for all nations. This proposal implements my
commitment to increase current levels of core development
assistance by 50 percent over the next 3 years, thus providing
an annual increase of $5 billion by fiscal year 2006. To be
eligible for this new assistance, countries must demonstrate
commitment to three standards--ruling justly, investing in
their people, and encouraging economic freedom. Given this
commitment, and the link between financial accountability and
development success, special attention will be given to
fighting corruption. The goal of the Millennium Challenge
Account initiative is to reduce poverty by significantly
increasing economic growth in recipient countries through a
variety of targeted investments. The MCA will be administered
by a new, small Government corporation, called the Millennium
Challenge Corporation, designed to support innovative
strategies and to ensure accountability for measurable results.
The Corporation will be supervised by a Board of Directors
chaired by the Secretary of State and composed of other
Cabinet-level officials. The Corporation will be led by a Chief
Executive Officer appointed by the President, by and with the
advice and consent of the Senate. This proposal provides the
Corporation with flexible authorities to optimize program
implementation, contracting, and personnel selection while
pursuing innovative strategies. The Millennium Challenge
Account initiative recognizes the need for country ownership,
financial oversight, and accountability for results to ensure
effective assistance. We cannot accept permanent poverty in a
world of progress. The MCA will provide people in developing
nations the tools they need to seize the opportunities of the
global economy. I urge the prompt and favorable consideration
of this legislation.''
In materials accompanying the draft legislation, the
Administration has proposed important principles to guide the
creation of a system to determine country eligibility, based on
a transparent process and indicators for which data is publicly
available, objective, and comprehensive. The Committee is aware
and generally supportive of the indicators and methodology
proposed by the Administration for identifying better-
performing countries.
The Millennium Challenge Account Authorization Act of 2003
does not include the 16 specific indicators proposed by the
White House. Instead, the bill provides greater flexibility to
the President and the Corporation in developing and determining
which indicators should be employed in the selection process,
in close consultation with the Committee.
While generally accepted, the Committee notes that the
quality and coverage of the data supporting the 16 indicators
is somewhat inconsistent, and that most of the criteria measure
accomplishments of the past rather than current commitment.
Other data is subjective. In meetings with the Committee,
Administration officials have acknowledged these shortcomings,
and have indicated that criteria will be adjusted to reflect
practical experience and improvements in data.
The eligibility criteria proposed by the Administration
include six criteria in each of the two categories of
``Governing Justly'' and ``Promoting Economic Freedom,'' but
only four in the category of ``Investing in People.'' This
imbalance in the number of criteria in this last category
likely skews the outcome: In dry runs of the data by
researchers outside of government, most countries that just
miss qualifying fail in the category of ``Investing in
People.'' Furthermore, to the extent that the criteria are an
important signal as to what is important and in which areas
countries should concentrate in order to qualify for MCA
assistance, the bias is against these important social
indicators. Resource strapped countries may find it difficult
to reach targets in the area of spending on health and
education, so it is important to add other criteria that can
capture government commitment and efforts to reach poor people.
Also, none of the criteria measure the difference in status
between men and women, although such differences could be
expected in each category, with women typically faring worse
than men. Given the steadily mounting evidence of the benefits
to the development process as a whole through improving the
status of women and girls, this is a serious shortcoming in the
proposed criteria. Inclusion of criteria that can provide a
measure of a country's commitment in this regard is likely to
improve the overall effectiveness of the initiative.
Under the eligibility system as outlined by the
Administration, countries would qualify for consideration for
MCA assistance if they rank ``above the median'' on the
corruption index and on half the criteria in each of the three
categories. Setting the bar above the median has several
shortcomings. First, several of the criteria use a ranking
scale (1-5 or 1-7), and, because of the narrowness of the
scale, there is a grouping of countries at the median. These
countries are automatically eliminated under the proposed
system even if they are likely to be just as qualified as a
country slightly above the median. Second, some of the criteria
are based on subjective discretion (such as the corruption
index) and because some country data coverage is incomplete,
certain countries unnecessarily miss eligibility. The degree of
arbitrariness would be reduced by setting the hurdle for
eligibility ``at the median,'' which would bring in an
additional set of countries as candidates. An additional but
related problem with the median approach is that over time,
median scores would change as qualified countries make progress
and the data is updated. So, a country that just misses
qualification in one year may not qualify again the next year,
despite efforts to improve policies because other countries'
achievements (including progress which is fostered by MCA
assistance) and new data have raised the median scores. For the
MCA to be an incentive for countries to improve policies, it is
necessary for countries to be assured that if they reach
certain targets, they will qualify. To the extent that the
median approach is adopted as the methodology for applying the
criteria, the committee recommends that the MCA adopt stable
standards for each indicator after the first year.
The Committee also believes that in determining
eligibility, the President, acting through the Chief Executive
Officer of the Corporation, should compare indicators among
countries that have the lowest per capita income, as one group,
and among countries that have higher per capita income but
still fall below the threshold described in section 203 for
lower income countries, as another. The Committee is concerned
that the countries with the lowest per capita income would
otherwise have to compete for MCA assistance with countries
that have substantially higher economic activity and government
services. These countries will undoubtedly have better scores
on eligibility indicators than the countries with the lowest
per capita incomes. A mechanistic approach to application of
the Administration's proposed eligibility criteria and
methodology could result in excluding or providing relatively
little MCA assistance to the countries with the lowest per
capita income in favor of low income countries with higher per
capita incomes. In order to avoid this ``crowding out,'' the
Committee believes that, particularly as the program starts up,
comparison among countries with like per capita income levels
would be wise.
Lastly, the Committee understands the need for flexibility
and discretion in determining final country selection in light
of the imperfect nature of the data. However, in order to
preserve the transparency and integrity of the selection
process, the Committee includes a requirement for the
Administration to notify all relevant congressional committees
in writing (prior to notification of recipient countries) of
the countries selected and the basis for their selection. To
the extent that selection deviates from the indicators and
criteria put forth by the Administration, an explanation of the
need to deviate from such indicators should be included.
Establishment of Corporation
The Committee is very concerned about the rapid
establishment of the Corporation once the legislation is
enacted. Because of the delays in submitting legislation to
Congress and because of the difficulties in arriving at the
consensus described in division A of this act, the Committee is
concerned that the Administration will not have the time that
it needs to implement division A of this act at the beginning
of fiscal year 2004. The Committee expects that upon enactment,
the President will move rapidly to nominate a Chief Executive
Officer of the Corporation. However, the nomination, advice and
consent process itself may take some time. Any such delays
would be significant, since the Corporation cannot function
without its Chief Executive Officer. The Chief Executive
Officer, for example, appoints all executive officers of the
Corporation and is responsible for consulting with Congress on
the eligibility criteria.
In order to minimize the impact of any such delay, the
Committee encourages the Administration to establish an office
to begin planning for the establishment of the Corporation, the
administrative arrangements for details and hiring, the
operation of the Board, and the bylaws, regulations, and
operating procedures of the Corporation, so that once the Chief
Executive Officer has been confirmed, the Chief Executive
Officer can immediately start implementing the provisions of
division A of this act after an appropriate review of the work
done prior to that appointment. In order for the MCA program to
build credibility, it must act decisively, and the Committee
believes that timely hard work prior to the appointment of the
Chief Executive Officer is needed to accomplish this purpose.
Moreover, the Committee believes that the Millennium
Challenge Corporation will face a variety of management issues
as it begins to administer the Millennium Challenge Account. It
is critical that the Corporation have access to the best advice
available to help frame its initial organizational structure
and guide its subsequent operations, especially in developing
and fine tuning policies, procedures and processes. Obtaining
the best advice in early stages should be a high priority for
the Corporation. The Committee encourages the Corporation to
seek advice from organizations with managerial expertise, such
as the National Academy of Public Administration (NAPA), in
designing and launching the Millennium Challenge Corporation.
Authorization of the Peace Corps
Division B of H.R. 2441 reauthorizes the Peace Corps
through fiscal year 2007, and in particular, authorizes the
President's proposal to double the number of Peace Corps
volunteers. In addition to reauthorizing the Peace Corps, the
legislation makes several amendments to the Peace Corps Act.
The Peace Corps was established during the administration
of President Kennedy to promote world peace and friendship
through the service of American volunteers in the developing
world. The original Peace Corps Act established three goals for
the Peace Corps: to help people in developing countries meet
basic needs, to promote understanding aboad of the values and
ideals of the United States, and to promote an understanding of
other peoples by the people of the United States.
Since its establishment in 1961, more than 168,000
volunteers have served in 136 different countries throughout
the world. As of the date of this report, there are
approximately 7,000 volunteers in 70 different countries. The
President, in his State of the Union address in January 2002,
announced his goal of doubling the size of the Peace Corps by
2007. The Committee wholeheartedly endorses this bold vision
and supports the continued work of the Peace Corps.
As our Nation fights global terrorism, extremism, and
forces inimical to our way of life, the American people can and
must fight on many fronts to protect our interests, promote our
values, and to provide hope to captive, destitute and
vulnerable people across the globe. The President's proposal
for a Millennium Challenge Account and for an expanded Peace
Corps deserves the support of the Congress. The Committee
embraces the idea of increasing U.S. economic assistance for
those countries that demonstrate a commitment to human rights,
democratic ideals and practices, and investment in people.
Hearings
The Committee held a hearing on the Millennium Challenge
Account on March 6, 2003 at 10:00 a.m. The hearing consisted of
two panels; a panel representing the Administration and a panel
representing the non-governmental community. The first panel
included three witnesses: Andrew S. Natsios, Administrator of
the U.S. Agency for International Development; Alan Larson,
Under Secretary for Economic Affairs, Department of State; and
John B. Taylor, Under Secretary for International Affairs,
Department of the Treasury. The second panel consisted of four
witnesses: David Beckmann, President, Bread for the World;
Charles MacCormack, President and CEO, Save the Children;
Steven Radelet, Senior Fellow, Center for Global Development;
and Brett Schaefer, Senior Fellow, The Heritage Foundation. The
Committee did not hold a hearing on the Peace Corps during the
108th Congress prior to consideration of H.R. 2441.
Committee Consideration
The President's proposed legislation was transmitted to the
Congress on February 5, 2003. The text of the President's
proposed legislation was introduced by Chairman Hyde by request
on May 6, 2003 as H.R. 1966, and was referred to the Committee
on International Relations. A second bill, H.R. 2441, was
introduced on June 12, 2003, by Chairman Hyde and
Representatives Lantos, Green of Wisconsin, Harris, Lee,
Crowley, LaHood, and Janklow. On June 12, 2003, the Committee
met in open session, pursuant to notice, to consider the bill.
A motion offered by Chairman Hyde to favorably report H.R. 2441
to the House of Representatives, as amended, was agreed to by a
record vote of 31 ayes to 4 noes, a quorum being present.
Summary of Amendments
The Committee adopted four amendments and defeated one.
Rep. Royce (R-CA) offered an amendment (#1) to encourage
the return the Peace Corps to Sierra Leone. The Royce amendment
includes a Sense of Congress that the Peace Corps should return
its program to Sierra Leone as soon as security conditions
permit. Four findings in the Royce amendment recount the
history of Peace Corps service in Sierra Leone, and recent
progress in that country since the deployment of peacekeeping
forces and conduct of elections in 2002. The Royce amendment
was agreed to by voice vote.
Rep. Lee (D-CA) offered an amendment (#2) to ensure the
participation of small, minority-owned, and disadvantaged U.S.
businesses in the contracting of the Millennium Challenge
Corporation. The Lee amendment requires that, ``to the maximum
extent practicable, the President, acting through the Chief
Executive Officer, shall ensure that United States small,
minority-owned, and disadvantaged business enterprises fully
participate in the provision of goods and services that are
financed with funds made available under this subtitle.'' The
Lee amendment also requires the Chief Executive Officer to
prepare and submit to the appropriate congressional committees
an annual report that contains a description of the extent to
which this requirement has been met for the preceding year. The
Lee amendment was agreed to by voice vote.
Rep. Royce offered amendment (#3), to shift $10 million
allocated for data collection in the introduced version of H.R.
2441 and instead allocate it for seed grants for indigenous
organizations. The Royce amendment strikes Section 309 from the
introduced version of H.R. 2441 and inserts a new Section 309,
``Millennium Challenge Seed Grants.'' This amendment authorizes
the Chief Executive Officer to provide assistance not to exceed
$10 million ``in support of nongovernmental organizations in
low-income and lower middle income countries which are
undertaking research, education, and advocacy efforts aimed at
promoting democratic societies, human rights, the rule of law,
improved educational opportunities and health conditions,
particularly for women and children, and economic freedom. The
second Royce amendment was agreed to by voice vote.
Rep. Payne (D-NJ) offered amendment (#4) regarding the
Millennium Challenge Compact. The Payne amendment changes
Section 204, ``Millennium Challenge Compact,'' by requiring,
with respect to lower middle income countries, that the
Compacts of such countries ``identify an appropriate
contribution from the country relative to its national budget,
taking into account the prevailing economic conditions, toward
meeting the objectives of the Compact,'' and that the
contribution ``shall be in addition to government spending
allocated for such purposes in the country's budget for the
year immediately preceding the establishment of the Compact.''
The Payne amendment was agreed to by voice vote.
Rep. Menendez (D-NJ) offered an amendment (#5) which would
have extended eligibility of lower middle income countries to
the fiscal years 2004 and 2005. The introduced version of H.R.
2441 limits eligibility of lower middle income countries to the
fiscal year 2005, and at that, to not greater than 20 percent
of the total amounts appropriated pursuant to the authorization
of appropriations in that fiscal year. The Committee defeated,
by a record vote of 26 ayes to 10 noes [Record Vote #1], the
Menendez amendment.
The Committee favorably reported to the House H.R. 2441, as
amended.by a record vote of 31 ayes to 4 noes [Record Vote #2].
Votes of the Committee
There were two record votes.
The first was on the Menendez amendment to allow lower
middle income countries to be eligible for assistance in each
of the three fiscal years 2004, 2005 and 2006. This amendment
was defeated by a vote of 26-10.
Voting yes: Menendez, Wexler, Engel, Delahunt, Crowley,
Hoeffel, Berkley, Napolitano, Schiff and Bell.
Voting no: Leach, Bereuter, Ballenger, Rohrabacher, Royce,
Chabot, Houghton, Tancredo, Paul, Smith (MI), Davis, Green,
Weller, Pence, McCotter, Janklow, Lantos, Berman, Faleomavaega,
Payne, Lee, Blumenauer, McCollum, and Hyde.
Present: Harris.
The second record vote was on the Motion to report H.R.
2441 favorably, as amended. This motion was agreed to by a vote
of 31-4.
Voting yes: Leach, Bereuter, Ros-Lehtinen, Ballenger,
Rohrabacher, Royce, Houghton, Green, Weller, Pence, McCotter,
Janklow, Harris, Lantos, Faleomavaega, Payne, Menendez, Brown,
Wexler, Engel, Delahunt, Lee, Crowley, Hoeffel, Blumenauer,
Berkley, Napolitano, Schiff, McCollum, Bell and Hyde.
Voting no: Chabot, Paul, Smith (MI) and Davis.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of House Rule XIII is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R.1298, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 17, 2003.
Hon. Henry J. Hyde, Chairman,
Committee on International Relations,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2441, the
Millennium Challenge Account Authorization and Peace Corps
Expansion Act of 2003.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Joseph C.
Whitehill, who can be reached at 226-2840.
Sincerely,
Douglas Holtz-Eakin.
Enclosure
cc:
Honorable Tom Lantos
Ranking Member
H.R. 2441--Millennium Challenge Account Authorization and Peace Corps
Expansion Act of 2003.
SUMMARY
H.R. 2441 would create a new foreign assistance agency, the
Millennium Challenge Corporation, to provide economic
assistance to developing countries that have demonstrated a
commitment to a just and democratic government, economic
freedom, and improved educational opportunities and health care
for its citizens. The bill would authorize the appropriation of
$1.3 billion in 2004 and $9.3 billion over the 2004-2006 period
for the new corporation. The bill also would authorize
appropriations totaling $1.7 billion for the Peace Corps over
the 2004-2007 period. In addition, the bill would authorize the
appropriation of $10 million to the Corporation for National
and Community Service. CBO estimates that implementing the bill
would cost $9.1 billion over the 2004-2008 period, assuming the
appropriation of the authorized amounts. The bill would not
affect direct spending or receipts.
H.R. 2441 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 2441 is shown in the
following table. The costs of this legislation fall within
budget functions 150 (international affairs) and 500
(education, training, employment, and social services).
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2003 2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for the Peace Corps 295 0 0 0 0 0
Budget Authority\1\
Estimated Outlays 288 59 7 1 0 0
Proposed Changes 0 1,677 3,412 5,456 499 0
Authorization Level
Estimated Outlays 0 418 1,211 2,439 3,335 1,691
Spending Under H.R. 2441 for the Peace Corps 295 1,677 3,412 5,456 499 0
and the Millennium Challenge Corporation
Authorization Level\1\
Estimated Outlays 288 477 1,218 2,440 3,335 1,691
----------------------------------------------------------------------------------------------------------------
\1\ The 2003 level is the amount appropriated for that year for the Peace Corps.
BASIS OF ESTIMATE
The estimate assumes H.R. 2441 will be enacted late in
fiscal year 2003; that the amounts authorized for 2004, 2005,
2006, and 2007 will be appropriated near the start of each
fiscal year; and for existing programs, that spending will
follow historical patterns.
Millennium Challenge Corporation. Division A of the bill
would establish a new Millennium Challenge Corporation to
provide assistance to developing countries. The bill would
authorize the appropriation of $1.3 billion in 2004, $3 billion
in 2005, and $5 billion in 2006 to fund the corporation.
CBO estimates that outlays from the Millennium Challenge
Corporation will be low during the first few years because of
the normal delays in starting a new agency and the multiyear
character of the program as authorized. CBO estimates that it
would take three to six months to select a Chief Executive
Officer to manage the Millennium Challenge Corporation, hire
staff, write the necessary rules and regulations to administer
the program, and establish interagency coordination. Only then
would eligible countries be invited to submit a multiyear plan
detailing how they would use the funds provided by the new
program. CBO expects that the effort to develop such plans
would require considerable time since each country's plan must
specify the objectives it would achieve with Millennium
Challenge funds, describe the actions it would undertake to
achieve those objectives, provide a time schedule for achieving
those objectives, and identify benchmarks for assessing whether
the country has achieved its objectives.
In addition, the bill also would require eligible countries
to involve private-sector and voluntary organizations in
preparing their plans. Thus, CBO estimates that few grants
would be extended before the last quarter of fiscal year 2004.
Moreover, because the bill would require periodic evaluations
to determine whether the country is meeting its commitments,
CBO believes that this multiyear program would probably have a
spending pattern similar to existing development assistance
programs.
Peace Corps. Division B of the bill would authorize the
appropriation of $367 million in 2004 and $1.7 billion over the
2004-2007 period for the Peace Corps. It also would require the
Director of the Peace Corps to develop a plan to increase the
number of volunteers in service to 14,000 by 2007 and would
increase the readjustment allowance authorized to returning
volunteers from $125 for each month of service to $275 for each
month of service in 2004 and $300 a month for service
thereafter. CBO estimates implementing these provisions would
cost $280 million in 2004 and $1.6 billion over the 2004-2008
period, assuming the appropriation of the authorized amounts.
Corporation for National and Community Service. Section
1107 would authorize the appropriation of $10 million to the
Corporation for National and Community Service for grants to
organizations that use returning Peace Corps volunteers for
educational programs in local schools and libraries. CBO
assumes, for this estimate, that these funds will be
appropriated for fiscal year 2004.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
H.R. 2441 contains no intergovernmental or private-sector
mandates as defined in UMRA and would impose no costs on state,
local, or tribal governments.
PREVIOUS CBO ESTIMATES
On May 28, 2003, CBO transmitted a cost estimate for the
Millennium Challenge Act of 2003, as ordered reported by the
Senate Committee on Foreign Relations on May 21, 2003. On April
24, 2003, CBO transmitted a cost estimate for the Foreign
Relations Authorization Act, Fiscal Year 2004, as ordered
reported by the Senate Committee on Foreign Relations on April
9, 2003. Title IX of that bill would authorize appropriations
for the Peace Corps over the 2004-2007 period. The differences
between our estimate for H.R. 2441 and the estimate for the two
Senate bills reflect the higher amounts authorized for
appropriation in H.R. 2441, and other changes.
Performance Goals and Objectives
The goals and objectives of this legislation are to promote
economic growth, support policy reform, alleviate poverty, and
provide for the national security of the United States and
other nations by increasing assistance to certain worthy
countries which meet specified performance standards.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8, clause 18 of the
Constitution (relating to making all laws necessary and proper
for carrying into execution powers vested by the Constitution
in the Government of the United States).
Section-by-Section Analysis and Discussion
Section 1. Short Title; Table of Contents. Section 1
contains a short title and table of contents.
Division A--The Millennium Challenge Account
Title I--General Provisions
Section 101. Definitions. Section 101 includes several
definitions of terms used in division A.
Section 101(6). ``Millennium Development Goals'' by its
terms is limited to the ``key development objectives'' of the
United Nations Millennium Declaration, as contained in United
Nations General Assembly Resolution 55/2 and does not include
non-development objectives, such as the support for the
International Olympic Committee.
Section 102. Sunset. Section 102 provides that all
authorities under this title shall terminate on October 1,
2007. The Millennium Challenge Account is a new initiative
which seeks to provide assistance to countries that meet
certain eligibility criteria. The Administration has proposed
and the Committee has provided broad authority and flexibility
to implement this new initiative including the creation of a
new government corporation to administer this initiative.
However, in keeping with the oversight role of Congress, the
Committee has included a sunset or termination of the authority
which would require reauthorization of the legislation prior to
October 1, 2007 for the program to continue. The Committee
intends that should Congress fail to reauthorize the program
before that time, any funds already obligated shall remain
available to be expended, however, no new obligations may be
made subsequent to the termination of the authority.
Title II--Millennium Challenge Assistance
Section 201. Findings; Statement of Policy. Section 201
includes findings on international economic development and a
statement that it is the policy of the United States to support
a new compact for global development which increases support by
developed countries to those developing countries that are
fostering democracy and the rule of law, investing in their
people, and promoting economic freedom for all their people.
The Committee believes that the primary responsibility for
economic development lies with developing countries themselves.
The new compact for global development, as supported by the
Millennium Challenge Account Authorization Act of 2003, should
seek to bring coordination and coherence to disparate trade and
finance policies of donor countries. The Committee recognizes
that economic growth is essential for poverty reduction.
However, the experience of recent years suggests that economic
growth, while necessary, is not sufficient to reduce poverty.
For long-term, sustainable and equitable economic growth and
poverty reduction, developing countries should invest in
sectors that improve the lives and productivity of the broadest
segment of society, particularly the poor. Critical sectors
include basic health, education, access to clean water and
sanitation, and rural development and smallholder farming.
Section 202. Authorization of Assistance. Section 202
authorizes the President, acting through the Chief Executive
Officer of the Millennium Challenge Corporation (established in
title III) to provide assistance to eligible countries for
programs that help such countries to achieve lasting economic
growth and poverty reduction. The assistance should advance a
country's progress toward fostering democratic societies by
promoting political, social, and economic pluralism; respect
for the rule of law; anti-corruption initiatives and law
enforcement; the development of institutions of democratic
governance; a fair, competent, and independent judiciary; and a
free and independent media. Such assistance should also foster
improved health conditions and educational opportunities. Such
assistance should foster the institutions and conditions needed
to promote market-based systems, trade, and investment, while
protecting workers' rights and environmental standards, and
should foster employment and increased production for all
segments of society, including agricultural production. In this
regard, ``regulatory burden'' in section 202(b)(3)(B) refers to
undue or unnecessary regulatory burdens.
The Committee intends that the provision of assistance
under division A of this act to achieve lasting economic growth
and poverty reduction in recipient countries is part of the
contribution of the United States to advance the goals of the
United Nations Millennium Declaration. To this end, the
Committee believes that the provision of assistance under
division A of this act as well as under Part I of the Foreign
Assistance Act of 1961 shall be utilized to achieve the
Millennium Development Goals, established by the United Nations
General Assembly in September 2000, which aim to eradicate
extreme poverty and hunger, achieve universal primary
education, promote gender equality and empower women, reduce
child mortality, improve maternal health, combat HIV/AIDS,
malaria, and other infectious diseases, ensure environmental
sustainability, and develop a global partnership for
development.
The Committee intends that the term ``Millennium
Development Goals'' shall refer to the ``key objectives
described in the United Nations Millennium Declaration, as
contained in United Nations General Assembly Resolution 55/2,''
and does not include, for example, any of the resolved sections
in Resolution 55/2.
The Committee also intends that assistance to develop small
businesses, private cooperatives, and credit unions includes
assistance to establish and strengthen microfinance
institutions which support this objective in recipient
countries. Over the last 2 decades, the field of microfinance
has demonstrated that it is possible to provide financial
services on commercial terms to even the poorest members of
developing societies. Millions of microfinance clients are able
today to make business investments to increase their household
incomes, build assets, improve the health of their families,
keep their children in school and reduce their economic
vulnerability to crises such as civil conflict and HIV/AIDS.
Microfinance allows poor people to protect, diversify and
increase their income sources, and thus access a path out of
poverty and hunger. Microentrepreneurs also often employ
several employees and make a significant contribution to
developing trade in their local economies. Trading between
villages, secondary towns and cities, is fundamental to
developing a consumer market in a developing country and
building a foundation for trade with the international markets.
The World Bank estimates that less than 1 percent of the 4
billion people living on less than $3 a day has access to
financial services. The Millennium Challenge Account can make
an important contribution to closing the gap by helping to spur
innovations in financial service technologies and developing
institutional prototypes for reaching this vast under-served
market. Thus far, USAID has championed a best practices agenda
that focuses on building strong retail financial service
providers that can reach tens of thousands of poor clients in a
sustainable way. The Millennium Challenge Account can build
upon the work of USAID.
Section 203. Eligibility and Related Requirements. Section
203(a) establishes eligibility requirements for countries that
may benefit from the assistance authorized in section 202. A
country shall be eligible to receive assistance under section
202 for a fiscal year only if the country falls within certain
income levels as defined by the World Bank; is not ineligible
to receive United States economic assistance by reason of any
provision of law; and if the Chief Executive Officer of the
Corporation determines that the country has demonstrated a
commitment to bolster democracy, human rights, good governance
and the rule of law; invest in the health and education of its
citizens; and promote sound economic policies that promote
economic opportunity.
This section makes clear that any country which is
ineligible to receive assistance under United States law, but
has such statutory restriction waived by the President, the
Secretary of State, or any other U.S. official, through a
waiver authority internal to such statutory provision or
pursuant to a special waiver authority, shall continue to be
ineligible to receive assistance under division A of this act.
As part of the three-part rubric, the Committee intends that
the Chief Executive Officer of the Millennium Challenge
Corporation pay particular attention during the selection of
eligible countries to the performance of each country with
respect to promoting democracy and human rights, women, the
rural poor, and trade and labor unions.
Section 203(a) authorizes assistance for ``low income
countries'': for fiscal year 2004, such countries are those
which are eligible to receive assistance from the International
Development Association (IDA) and whose per capita income is
equal to or less than the historical ceiling of the IDA for
that year, as defined by the World Bank. For fiscal years 2005
and 2006, such assistance is authorized for those low-income
countries whose per capita income is equal to or less than the
historical ceiling of the IDA for the fiscal year involved, as
defined by the World Bank.
The determination provision in section 203(a)(1)(C)(i)
should be interpreted to require that a country's human rights
record is not deemed ``poor'' in the most recent State
Department Country Report on Human Rights Practices, and the
government of the country has not committed serious human
rights abuses such as torture, extrajudicial killings,
arbitrary and unlawful detention or deprivation of life,
arbitrary arrest, detention, failing to allow access to
political prisoners by humanitarian organizations such as the
International Committee of the Red Cross, persecuting religious
groups, imprisoning religious leaders, or failing to take
minimum steps to combat human trafficking.
The determination provision in section 203(a)(1)(C)(i)
should also be interpreted to require that a country has not
been reported on in the State Department's report on the United
States strategy in promoting human rights and democracy as
called for in section 655 of Public Law 107-228.
In addition to the low-income countries made eligible in
section 203(a), section 203(b) establishes additional
eligibility for ``lower middle income'' countries; such
countries which are classified as such in the then most recent
edition of the World Bank's ``World Development Report.''
Section 203(b) requires that the total amount of assistance
provided to lower middle income countries for fiscal year 2006
may not exceed 20 percent of the total amount of Millennium
Challenge Assistance provided to all eligible countries for
fiscal year 2006. The Committee intends that Section
203(b)(1)(A) be interpreted to include those countries that
have an income greater than the historical ceiling for IDA
eligibility for that fiscal year.
Section 203(c) establishes additional eligibility for
``selected low income countries'' to receive assistance solely
for the purpose of becoming eligible to receive assistance
under section 203(a). Selected low income countries are those
countries, for fiscal years 2004 through 2006, which are not
ineligible to receive U.S. economic assistance (the basic
eligibility criteria established in section 203(a)(1)(B); which
have a per capita income which is equal to or less than the
historical ceiling of the IDA, as defined by the World Bank
(the income eligibility criteria established in section
203(a)(2)(A); and which ``demonstrate a commitment to meeting
the requirements'' of clauses (i) through (iii) of section
203(a)(1)(C), but fail to meet the eligibility criteria
necessary to receive assistance under section 202, as
established under section 203(e). Section 203(c) requires that
assistance for countries made eligible under that section
203(c) be provided through USAID. Section 203(c) allocates for
this purpose not more than 15 percent of the amounts
appropriated pursuant to the authorization of funds in Section
208(a) in each of the fiscal years 2004 through 2006.
Although the Committee agrees with the Administration that
the Chief Executive Officer of the new Millennium Challenge
Corporation needs a certain amount of flexibility in
determining eligibility for ``near miss'' countries, the
Committee believes that the Chief Executive Officer should
ensure that a country which is being considered for eligibility
under section 203(c), at a minimum, meet standards of
performance in promoting democracy, human rights, and the rule
of law in that country. A country should not be eligible under
section 203(c) if the country does not meet these standards of
performance.
For the Millennium Challenge Account to be successful as an
incentive for future reform as well as a reward for past
reform, it must offer opportunities for those low-income
countries whose institutions do not yet meet all the
eligibility criteria but who are demonstrating partial success
in meeting the eligibility criteria. Section 203(c) was created
for this purpose, and should have the flexibility to assist
``near miss'' countries that fail to qualify for the MCA by
only a relatively small margin, or in criteria that involve
subjective discretion such as the corruption index, or in
criteria that are particularly resource-intensive, such as
education.
There are a number of reasons why countries might fail the
Administration's proposed criteria and methodology, but, in the
Committee's view, should still receive MCA assistance. For
example, a country may have emerged from a period of marked
instability, such as a civil war, or a series of natural
disasters, which have led to a complete disruption in the
educational and health care systems of that country. While such
a country may now meet a large number of the Administration's
proposed criteria, and may be demonstrating a commitment to
investing in people by making progress from a very low base, it
may fail to meet all criteria necessary for full assistance.
Similarly, a country may not be eligible for full assistance
because there is not sufficient data to demonstrate that it has
met the proposed criteria. While the Administration may be able
to fill in such data from its own sources and determine that a
particular country is nevertheless eligible for full MCA
assistance, in other cases the Administration may lack
supplemental databases. In the Committee's view, such a country
should be able to receive some assistance, particularly in
those areas which contributed to the country's failure to
demonstrate a commitment to the criteria of section 202, but
also for carrying out the other purposes of division A of this
act.
The Committee concurs with the Administration's proposal
that USAID should be responsible for assisting countries to
qualify for the MCA. However, the Committee feels that the
existing resources of USAID, particularly Development
Assistance resources, are insufficient at current levels to
accommodate this new objective without undermining existing
programs funded out of these resources. It is for this purpose
that the Committee authorizes up to 15 percent of MCA resources
in any given year to be available for section 203(c)), to be
transferred to USAID for that purpose.
Section 203(d) provides authority to the Chief Executive
Officer to determine whether or not a country is eligible to
receive assistance under section 202, and requires a
notification to Congress on such determination within 7 days.
Section 203(e) requires that not later than 30 days after
the date of enactment of this act and prior to making any
determination of eligibility for a country under this section,
the Chief Executive Officer shall prepare and transmit to the
appropriate congressional committees a report that contains the
eligibility criteria that the Chief Executive Officer proposes
to use for purposes of determining eligibility under this
section. This section further requires the Chief Executive
Officer to prepare and transmit to the appropriate
congressional committees a report that contains a description
of any changes to the eligibility criteria prior to making a
determination of eligibility for a country under this section.
Section 203(f) requires that assistance provided under
section 202 for a country shall be provided on a nonrepayable
basis to one or more of the following: the national government
of the country; regional or local governmental units of the
country; nongovernmental organizations, for-profit corporations
or private and voluntary organizations; international
organizations and trust funds; and regional and international
financial institutions. Section 203(f) requires that the
assistance furnished under section 202 shall be provided in
accordance with a fair, open, and competitive selection process
that results in the awarding of such assistance on a merit
basis, using selection criteria that are made public by the
Corporation in advance and are otherwise in accordance with
standard and customary best practices for the provision of
similar types of assistance, including such assistance made
available through grants or contracts or other such fiduciary
agreements with implementing partners as described in section
203(e)(2).
The Committee intends that section 203(f) not preclude the
provision of small or micro-lending assistance through
microfinance or microenterprise institutions. In section 203,
the Committee intends that ``nonrepayable assistance'' refers
to the terms in which it is furnished from the United States
Government without repayment to the United States, not through
the implementing partners as described in section 203(e)(2).
Furthermore, the Committee believes that credit unions are
one of the unique features of the democracy and economy of the
United States, and have provided a safe place to save and
borrow at affordable rates for more than 80 million people in
this country. Credit unions, in more than 90 countries in both
rural and urban areas, help families build assets and are a
necessary compliment to education, health care, and agriculture
development programs. The Committee encourages the Millennium
Challenge Corporation to incorporate the expertise of
organizations, such as the World Council of Credit Unions, to
build and strengthen democratically controlled credit unions
and international remittance networks in recipient countries.
Also, the Committee believes that ownership by the poor of
a plot of land, at least sufficient to erect basic shelter and
have a garden producing food and income, is of fundamental
importance for empowerment, livelihood, social stability, and
the creation of wealth. Financing for acquisition of plots to
be used for such purposes could be on either a repayable or
nonrepayable basis.
In order to ensure a fair, competitive process that
generates innovative, high-quality proposals with strong civil
society participation, the Corporation must have the
flexibility to consider and utilize different approaches to
delivering funds. The Committee supports section 203(f) and
establishes that the Corporation will consider proposals for
the administration of Millennium Challenge Account assistance
from the nongovernmental entities listed in this subsection.
Congress has long supported the role of U.S. private and
voluntary organizations and cooperatives in increasing the
participation of rural and urban poor people in their
countries' development. Such organizations and cooperatives,
embodying the American spirit of self-help and assistance to
others to improve their lives and incomes, constitute an
important means of mobilizing private financial and human
resources to benefit poor people in developing countries.
The Committee believes that in order for Millennium
Challenge assistance to reduce poverty by promoting economic
growth, the assistance should target the low-income countries.
The Committee supports the President's proposal to restrict
eligibility in the first part of the program to those countries
eligible to borrow from the World Bank's soft loan window, the
International Development Association (IDA).
IDA-eligible countries are among the poorest in the world.
The average annual gross domestic product among the IDA-
eligible countries is $460 per capita, versus $1965 per capita
in lower middle-income countries. This is reflected in the lack
of adequate progress in the social sector--particularly in
health and education. On average, adult illiteracy is 33
percent in IDA-eligible countries, versus 14 percent in the
lower middle income countries; and the infant mortality rate is
at 69 per 1000 live births in IDA-eligible countries, versus 27
per 1000 live births in lower middle income countries. The poor
economic conditions in IDA eligible countries prevent them from
being able to raise the necessary financing for economic
development and poverty reduction through private capital, at
commercial, non-concessional terms and from domestic sources.
Lower-middle income countries have better access to other
financial resources. Low-income countries receive less private
capital (8.7 versus 10.3 percent of GDP); have much less
capacity to raise tax revenue (12.6 versus 21.8 percent of
GDP); and are able to save only half as much as lower-middle
income countries (8.4 versus 16.2 percent of GDP).
Section 204. Millennium Challenge Compact. Section 204(a)
provides that the President, acting through the Chief Executive
Officer of the Corporation, may provide assistance to an
eligible country under section 202 only if the country enters
into a Millennium Challenge Contract with the United States
that establishes a multi-year plan for achieving shared
development objectives in furtherance of the purposes of this
title.
Section 204(b) requires that the Contract shall take into
account the national development strategy of the country and
shall contain the specific objectives that the eligible country
and the United States expect to achieve; the responsibilities
of the eligible country and the United States in the
achievement of such objectives; regular benchmarks to measure,
where appropriate, progress toward achieving such objectives; a
plan and timeframe that describes how those objectives will be
met, and mechanisms to implement the plan and provide
oversight, including identifying the role of civil society in
the achievement of such objectives; where appropriate, a
description of the responsibility of other donors in the
achievement of such objectives; and a plan to ensure
appropriate fiscal accountability for the use of assistance
provided under section 202. The Committee urges that, where
there are quantified objectives, the Compact should call for
oversight mechanisms including formal, random-sample surveys
which measure the progress being achieved toward such
objectives. This section further requires that for lower middle
income countries, the Compact shall identify an appropriate
contribution from the country, relative to its national budget,
toward meeting the objectives of the Compact. The Committee
intends that the contributions identified in the Compacts of
lower middle income countries be in addition to government
spending of the countries for the budget year immediately
preceding establishment of the Compact. In general, however, a
Compact shall ensure that the recipient country does not
decrease its budgetary contributions to the areas which are
receiving MCA assistance. Overall, MCA assistance in lower
middle income countries should be used to leverage additional
resources from the recipient country for the purpose of
achieving the goals of the Compact. In no instance, should MCA
assistance relieve the recipient lower middle income country
from its fiscal responsibility to meet development objectives.
The Committee believes that for the MCA to achieve its
stated goal of reducing poverty by significantly increasing the
economic growth trajectory of beneficiary countries through
investing in the productive potential of the people of such
countries, the account must be designed to ensure that the
benefits of development reach the poor. Women and girls, who
constitute the vast majority of the poor, face unique barriers
that prohibit their participation in the development process
and prevent them from experiencing the benefits of economic
growth. Excluding women from the process is particularly
detrimental to development effectiveness as research shows
consistently that women's participation magnifies the impact of
development assistance by empowering women to follow through on
decisions that benefit their families, communities, and
countries.
To this end, the Committee expects the Chief Executive
Officer of the Millennium Challenge Corporation to encourage
actively eligible countries to design national development
strategies that specifically focus on the energy, talents, and
potential of women and that encourage all project proposals
which are submitted pursuant to the Compact take into account
the different roles played by and opportunities available to
women and men. The identification of beneficiaries required in
section 204(b)(4) provides the Chief Executive Officer with a
tool for assessing the extent to which proposed projects
integrate and impact women and men as well different income and
age groups.
The Committee understands that the required identification
of beneficiaries to be the final step in an iterative process
through which the recipient country and the Millennium
Challenge Corporation will assess how accessible the benefits
of proposed projects are to different groups of people and
improve proposed projects to ensure that they affect poverty
reduction as effectively as possible. This analysis will
include an organized approach to considering the relationships
between men and women, their access to resources, their
activities, and the constraints they face relative to each
other in the entire process of development planning,
implementation, and evaluation. The Committee expects this
process to yield projects that integrate the efforts and build
on the potential of women and other people living in poverty.
In order for the Millennium Challenge Corporation to do this
effectively, the Committee expects the Chief Executive
Officer's senior staff to include professionals with
demonstrable experience in this type of analysis and strongly
recommends that their analysis be formally included in all
decisions relating to the selection of proposals, the
establishment of evaluative benchmarks and mid-course
adjustments to improve eligible countries' performance in
achieving project objectives.
Section 204(c) provides a definition of ``national
development strategy'' which, in addition to the general
definition provided in the section, also includes a Poverty
Reduction Strategy Paper or other such nationally owned
poverty-reduction strategy that has been subject to wide public
comment and is designed to achieve progress toward the
Millennium Development Goals.
Section 204(d) requires that each Contract contain a
provision that states that assistance provided by the United
States under the Contract shall be exempt from taxation from
any governmental entity of the recipient country.
Section 204(e) requires that in entering into a Contract,
the United States and the eligible country shall take into
account the local-level perspectives of the rural and urban
poor in the eligible country, and should consult with private
and voluntary organizations, the business community, and other
donors, in the eligible country.
Section 204(f) requires that during any discussions with a
country for the purpose of entering into a Contract with the
country, officials of the Corporation participating in such
discussions shall, at a minimum, consult with appropriate
officials of the United States Agency for International
Development, particularly with those officials responsible for
the appropriate region or country on development issues related
to the Contract.
Section 204(g) requires that, to the maximum extent
feasible, activities undertaken to achieve the objectives of
the Contract shall be undertaken in coordination with the
assistance activities of other donors.
Section 204(h) requires that not later than 15 days prior
to entering into a Contract with an eligible country, the
President, acting through the Chief Executive Officer, shall
consult in-person with the appropriate congressional committees
with respect to the proposed Compact; shall provide
notification of the proposed Compact to the appropriate
congressional committees in accordance with section 634A of the
Foreign Assistance Act of 1961; shall prepare and transmit to
such committees a written report that contains a detailed
summary of the proposed Compact and a copy of the full text of
the Compact; and shall publish the detailed summary and full
text of the proposed Compact in the Federal Register and on the
Internet website of the Corporation. The Committee recognizes
the President's foreign policy role in entering into agreements
with other countries. However, as provided in subsection (a),
should the President fail to follow the requirements of this
subsection with respect to a particular Compact, the country
for which the requirements of subsection (a) were not followed
is ineligible to receive assistance under division A of this
act.
Section 204(i) authorizes the Chief Executive Officer,
notwithstanding the requirements of section 204(a), to enter
into contracts or make grants for any eligible country for the
purpose of facilitating the development of the Compact between
the United States and the country.
Section 205. Suspension and Termination of Assistance.
Section 205 requires the President to suspend Millennium
Challenge Assistance in whole or in part for a country if the
President determines that the country is engaged in activities
which are contrary to the national security interests of the
United States; or the elected head of state, head of government
or any member of the highest judicial tribunal of the country
has been removed from that office or forcibly detained through
extra-constitutional processes. This section authorizes the
President to reinstate assistance for a country only if the
President determines that the country has demonstrated a
commitment to correcting each condition for which assistance
was suspended. This section also requires the President, acting
through the Chief Executive Officer, to terminate all
Millennium Challenge Assistance for a country if the President
determines that the country has consistently failed to adhere
to its responsibilities under the Contract; or has
significantly failed to adhere to its responsibilities under
the Compact or has significantly failed to meet the
requirements of title II.
The Committee intends that assistance under division A of
this act be suspended under section 205(a) to countries which
fail to assist and cooperate with the United States, to the
extent such assistance and cooperation is explicitly requested
by the United States, in the war on terrorism. Failures to
assist and cooperate may include failure to extradite or
prosecute individuals in connection with acts of international
terrorism, failure to arrest individuals believed to be
responsible for furthering acts of international terrorism,
failure to disrupt terrorist activity on the territory of the
country, and failure to share or act on intelligence
information regarding terrorist activity. Such lack of
cooperation and assistance may also be evidenced by a failure
to adhere to multilateral and bilateral agreements which deal
with anti-terrorism issues, failure to adhere to relevant
international law, and failure to take steps to address the use
of a recipient country's banking and financial services system
by terrorists to finance their operations. While current law
already prohibits U.S. foreign assistance to countries which
are designated as state sponsors of terrorism, the Committee
believes that section 205(a) should be applied to suspend
assistance to those countries which, while they do not provide
state support to terrorists, nevertheless have demonstrated an
unwillingness to cooperate with the United States in combating
international terrorism, as determined by the Secretary of
State.
The Committee also strongly encourages the President not to
terminate assistance under this section until the President,
acting through the Chief Executive Officer, has first attempted
other remedial action other than termination, and has
determined that despite these efforts, the recipient country
meets the standard for termination in this section.
Section 206. Annual Report. Section 206 requires that not
later than April 1, 2005, and not later than April 1 of each
year thereafter, the Chief Executive Officer shall prepare and
transmit to the appropriate congressional committees a report
on the implementation of title II. This section requires the
report to include a description of the agreed upon measures of
progress contained in each Contract, and an analysis, on a
country-by-country, project-by-project basis (with an analysis
of each country receiving assistance under this subtitle being
included in the report at least once every 2 years), of the
impact on economic development in each country provided
assistance under title II. This section requires that for each
country, the analysis shall to the maximum extent possible be
done on a sector-by-sector basis, gender basis, and per capita
income basis, and identify trends within each of these bases;
identify economic policy reforms conducive to economic
development that are supported by assistance provided under
this subtitle; describe, in quantified terms to the extent
practicable, the progress made in achieving assistance
objectives for the country; describe the amount and nature of
economic assistance provided by other major donors in
furtherance of the purposes of title II; and discuss the
commitment and contribution of the country to achieving the
assistance objectives contained in its Contract with the United
States.
Section 207. Participation of Certain United States
Businesses. Section 207 requires that to the extend
practicable, the President, acting through the Chief Executive
Officer, shall ensure that small, minority-owned, and
disadvantaged businesses fully participate in the provision of
goods and services that are financed with funds from the
Millennium Challenge Corporation, and that the Chief Executive
Officer prepare and submit an annual report that describes the
extent to which this requirement has been met for the preceding
year.
Section 208. Authorization of appropriations; related
authorities. Section 207 authorizes to be appropriated to the
President to carry out the division $1,300,000,000 for fiscal
year 2004, $3,000,000,000 for fiscal year 2005, and
$5,000,000,000 for fiscal year 2006. This section authorizes
that amounts appropriated pursuant to the authorization of
appropriations under this section may be referred to as the
``Millennium Challenge Account''; are authorized to remain
available until expended; and are in addition to amounts
otherwise available for such purposes.
Title III--Millennium Challenge Corporation
Section 301. Millennium Challenge Corporation. Section 301
establishes in the executive branch a corporation to be known
as the Millennium Challenge Corporation that shall administer
the programs authorized under title II, and that the
Corporation shall be a Government corporation, as defined in
section 103 of title 5, United States Code.
Section 302. Chief Executive Officer. Section 302 describes
the duties and authorities of the Chief Executive Officer, who
shall head the Corporation, and includes the authority to
appoint officers, by which the Committee means senior
management officers, as distinguished from other officers or
employees of the Corporation. The Committee strongly encourages
the Chief Executive Officer to cultivate a professional staff
at the Corporation who are dedicated to, and experienced in,
advancing the purposes of division A of this act.
Section 303. Board of Directors. Section 303 establishes
within the Corporation a Board of Directors, which is
authorized to prescribe, amend, and repeal bylaws, rules,
regulations, and procedures governing the manner in which the
business of the Corporation may be conducted and in which the
powers granted to it by law may be exercised. This section
provides the terms of office of each member of the Board, and
other provisions relating to the Board, including that the
Secretary of State shall serve as the Chairperson of the Board.
The Committee intends that each list submitted by a
congressional leader for the appointment of a Board member be
composed of a number of individuals.
This section also provides that vacancies that are created
in the Board in the positions held by non-executive branch
officials shall be filled in the ``same manner'' as the
original appointment. The Committee intends that if an
appointee from the list of, for example, the majority leader of
the House of Representatives resigns, the majority leader would
send another list of names to the President, from which he
would make the necessary appointment, with the advice and
consent of the Senate.
Section 304. Interagency Coordination. Section 304 requires
the President to ensure the coordination of Millennium
Challenge Assistance with foreign economic assistance programs
and activities carried out by other Federal departments and
agencies, consistent with section 101 of the National Security
Act of 1947 (50 U.S.C. 402).
Section 305. Powers of the Corporation; Related Provisions.
Section 305 enumerates the powers of the Corporation;
establishes that the Corporation shall maintain its principal
office in the metropolitan area of Washington, District of
Columbia; and authorizes the Corporation to establish other
offices in any place or places outside the United States in
which the Corporation may carry out any or all of its
operations and business. This section also instructs the Chief
Executive Officer to consult with the Administrator of USAID in
order to coordinate the activities of the Corporation with
those of USAID for the purpose of avoiding unnecessary expense
and duplication of functions, efforts, and activities of the
two entities. The Committee intends that like other government
corporations, the Millennium Challenge Corporation and all its
assets and property should be exempt from taxation now or
hereafter imposed by the United States, or any territory or
possession thereof, or by any State, county, municipality, or
local taxing authority.
In addition to encouraging the Chief Executive Officer and
other officials in the Millennium Challenge Corporation to
coordinate policies and activities under division A of this act
with USAID and other United States government departments and
agencies, the Committee directs the Chief Executive Officer, or
Chief Executive Officer's designee, to coordinate the
activities of the Corporation with relevant regional and
international organizations, including the International Bank
for Reconstruction and Development and the International
Monetary Fund. The Committee also intends that the Corporation
coordinate its activities with relevant agencies of the United
Nations system, such as the United Nations Development Program,
which has a key role in supporting the formulation and
implementation of national development strategies, such as the
Poverty Reduction Strategy Papers, so as to achieve the
Millennium Development Goals.
Section 306. Transparency and Accountability of the
Corporation. Section 306 subjects the Corporation and its
officers and employees to the provisions of section 552 of
title 5, United States Code (relating to freedom of
information).
Section 307. Detail of personnel to the Corporation; other
authorities and limitations. Section 307 includes personnel and
administrative authorities of the Corporation. This section
authorizes the head of any Federal department or agency, upon
the request of the Chief Executive Officer of the Corporation,
to detail to the Corporation any employee of the respective
department or agency on a fully or partially reimbursable
basis, and such detail shall be without interruption or loss of
civil service or Foreign Service status or privilege, or any
other privilege, right, or seniority of the employee. This
section authorizes the Corporation to allocate or transfer to
the United States Agency for International Development or any
other Federal department or agency any part of any funds
available for carrying out the purposes of this title. Such
allocation or transfer may be appropriate for established
poverty- and hunger-reducing programs, such as the George
McGovern-Robert Dole International Food for Education and Child
Nutrition Program. Such funds shall be available for obligation
and expenditure for the purposes for which authorized, in
accordance with authority granted in this subtitle or under
authority governing the activities of the agencies of the
United States Government to which such funds are allocated or
transferred. In addition, this section authorizes not more than
7 percent of such funds to be used for administrative expenses.
This section also subjects the Corporation to the provisions of
chapter 91 of subtitle VI of title 31, United States Code. This
section establishes that the Inspector General of the United
States Agency for International Development shall serve as
Inspector General of the Corporation, and provides that the
Comptroller General shall conduct audits, evaluations, and
investigations of the Corporation.
The Committee believes that the Chief Executive Officer of
the Millennium Challenge Corporation should ensure that
environmental assessments are conducted of proposals for
assistance under division A of this act and that these
assessments are considered by the Millennium Challenge
Corporation and the recipient country prior to the provision of
assistance under section 203(f) of this act. The Chief
Executive Officer also should ensure that, if necessary,
appropriate environmental safeguards are adopted, including
regular benchmarks to monitor and evaluate the impact of the
assistance on the environment generally, and on those
environment impacts that affect the health and well being of
the global population as a whole.
Section 308. Millennium Challenge Advisory Council. Section
308 establishes within the Corporation an advisory board to
provide policy guidance to the Corporation, including providing
on an annual basis a review of the eligibility criteria
established by the Corporation. The advisory board shall
consist of not more than 7 members who shall be representative
of nongovernmental entities with experience and interest in
international trade and development, including private
voluntary organizations, foundations, unions, academia,
business and business associations, public policy
organizations, and other such organizations, who shall be
appointed by the Chief Executive Officer.
Section 309. Millennium Challenge Seed Grants. Section 309
authorizes the Chief Executive Officer to provide assistance in
support of nongovernmental organizations in low income and
lower middle income countries which are undertaking research,
education and advocacy efforts aimed at promoting democratic
societies, human rights, the rule of law, improved educational
opportunities and health conditions, and economic freedom. Such
assistance may not exceed $10,000,000 of the amounts
appropriated pursuant to the authorization of appropriations in
section 208. The Committee intends that research and efforts
under this section include research aimed at improving the
quality and the accuracy of the data related to the eligibility
criteria and methodology described in section 203 with respect
to low income countries (particularly as the criteria relates
to women and children as well as to trade) and monitoring and
evaluating the impact of assistance provided under this act.
The Committee believes that grant proposals under this section
made by nongovernmental organizations in such countries could
include the participation of other eligible organizations
outside such countries with expertise in the relevant area. The
Committee encourages the Chief Executive Officer to consult
with the International Program Center at the U.S. Census
Bureau, which has been in operation for more than 50 years,
conducting demographic, geographic, and socioeconomic studies,
and strengthening statistical development through technical
assistance, training, and software development.
Title IV--Provisions Relating to United States Economic
Assistance
Section 401. Definition. Section 401 defines the term
``United States economic assistance'' as any bilateral economic
assistance, from any budget functional category, that is
provided by any department or agency of the United States to a
foreign country intended to assist the development and economic
advancement of friendly foreign countries and peoples,
including assistance provided under title II (relating to the
Millennium Challenge Account); to promote the freedom,
aspirations, or sustenance of friendly peoples under oppressive
rule by unfriendly governments; to promote international trade
and foreign direct investment as a means of aiding economic
growth; to save lives and alleviate suffering of foreign
peoples during or following war, natural disaster, or complex
crisis; to assist in recovery and rehabilitation of countries
or peoples following disaster or war; to protect refugees and
promote durable solutions to aid refugees; to promote sound
environmental practices; to assist in development of democratic
institutions and good governance by the people of foreign
countries; to promote peace and reconciliation or prevention of
conflict; to improve the technical capacities of governments to
reduce production of and demand for illicit narcotics; and to
otherwise promote through bilateral foreign economic assistance
the national objectives of the United States.
Section 402. Framework for assistance. Section 402 contains
a sense of Congress that a coherent framework for United States
economic assistance should be established and that describes
the various roles of agencies which furnish U.S. foreign
economic assistance, including the United States Agency for
International Development; the Millennium Challenge Corporation
(as established under title III); the Department of State; and
other Federal departments and agencies with expertise in
international development-related activities, such as the
Overseas Private Investment Corporation, the Trade Development
Agency, the Department of Agriculture, the Department of Health
and Human Services, and the Centers for Disease Control and
Prevention, to the extent such departments and agencies have
the authority to carry out development-related programs.
One danger of the MCA and other recent foreign assistance
initiatives is the fragmentation of U.S. foreign assistance. In
addition to USAID, a host of other U.S. agencies are engaged in
the design and delivery of foreign assistance. Coordination
among these agencies often is not as extensive or effective as
it should be. The creation of another agency, whose sole
responsibility is development, may exacerbate the incoherence
in U.S. development activities.
The Committee encourages the President, after extensive
consultations with appropriate congressional committees, to lay
out clearly the missions of the relevant agencies, including
possibly through a new executive order or Presidential
directive. Correspondingly, the Committee strongly believes, as
described in this section, that USAID has a wealth of
experience, unmatched anywhere else in government, in
delivering effective foreign aid for over 40 years. No other
existing Federal agency has the number of field missions, the
depth and breadth of relationships with key partners in
development, or the personnel to implement development
assistance successfully, nor aid the emergent Millennium
Challenge Corporation to fulfill its mission.
Section 403. Report relating to impact and effectiveness of
assistance. Section 403 requires the President to transmit to
Congress on a triennial basis a report which analyzes, on a
country-by-country basis, the impact and effectiveness of the
United States economic assistance provided during the preceding
3 fiscal years. Specifically, the report shall include for each
country receiving U.S. assistance an analysis of the impact of
United States economic assistance during the preceding 3 fiscal
years on economic development in that country, with a
discussion of the United States interests that were served by
the assistance. The analysis must be done on a sector-by-sector
basis and must identify any economic policy reforms which were
promoted by the assistance. The analysis shall include a
description, quantified to the extent practicable, of the
specific objectives the United States sought to achieve in
providing economic assistance for that country, and specify the
extent to which those objectives were not achieved, with an
explanation of why they were not achieved. It must also include
a description of the amount and nature of economic assistance
provided by other donors during the preceding 3 fiscal years,
set forth by development sector to the extent possible; and a
discussion of the commitment of the host government to
addressing the country's needs in each development sector,
including a description of the resources devoted by that
government to each development sector during the preceding 3
fiscal years. The report must identify those countries in which
United States economic assistance has been most successful, and
those countries in which United States economic assistance has
been least successful. For each country listed pursuant to
paragraph (2), the report shall explain why the assistance was
not more successful and shall specify what the United States
has done as a result.
Division B--The Peace Corps Expansion Act of 2003
Title X--General Provisions
Section 1001. Definitions. Section 1001 includes several
definitions of terms used in division B.
Section 1002. Findings. Section 1002 includes numerous
findings on the Peace Corps.
The Committee strongly supports the work of the Peace Corps
and its volunteers who serve in 71 countries around the world.
The Committee recognizes the President's call to volunteer
service for all Americans, his commitment to the Peace Corps,
and his initiative to double the number of volunteers in the
field to 14,000 by Fiscal Year 2007 as outlined in his 2002
State of the Union Address.
The Committee also recognizes American citizens are
interested in humanitarian service, and the interest on the
part of countries requesting a Peace Corps presence is strong.
The Committee notes that at the end of 2002, requests for
applications were up by 30 percent, new applications rose over
15 percent, and the Peace Corps website received over 1.8
million unique visitors. In the most recent months of this
year, April and May, the Peace Corps website had 1.2 million
unique visitors. Since January 2002, over 30 countries have
requested Peace Corps programs, 22 country assessments have
been conducted, and the Peace Corps has entered or re-entered
14 countries.
The Committee recognizes the specific steps the Peace Corps
has taken to increase the safety and security of volunteers and
staff. The Committee notes that specifically, the agency has
created an Office of Safety and Security, which is headed by an
Associate Director and includes a Chief Compliance Officer, a
volunteer overseas safety and security coordinator, a safety
and security specialist, a data analyst, nine overseas
subregional safety and security officers, three regional safety
and security officers, plus each Peace Corps post has been
authorized to hire a safety and security coordinator. In
addition, the Committee notes that the agency has integrated
safety and security into all aspects of volunteers recruitment,
training, and support.
The Committee supports the Peace Corps' ongoing efforts in
the area of HIV/AIDS prevention education and recognizes that
Peace Corps volunteers are making an impact at the grassroots
level. The Committee endorses the Peace Corps' plans to enhance
the President's HIV/AIDS initiative by including 1,000 new
volunteers in HIV/AIDS programs as part of its objective to
reach 14,000 Volunteers by Fiscal Year 2007.
To achieve the objectives laid out by the Administration as
well as the new provisions in H.R. 2441, the Committee fully
supports the Peace Corps receiving its full budget request.
Title XI--Amendments to Peace Corps Act; Related Provisions
Section 1101. Advancing the Goals of the Peace Corps.
Section 1101 amends the Peace Corps Act to state that as an
independent agency, the Peace Corps shall be responsible for
recruiting all of its volunteers. This section also amends the
Peace Corps Act by clarifying that the detail of Peace Corps
personnel to other Federal agencies should further the
fulfillment of Peace Corps goals.
Section 1102. Reports and Consultations. Section 1102
amends the Peace Corps Act by requiring the Director to
transmit to Congress, at least once in each fiscal year, a
report on efforts undertaken to improve coordination of
activities of the Peace Corps with activities of international
voluntary service organizations, such as the United Nations
volunteer program, and of host country voluntary service
organizations, including a description of the purpose and scope
of any development project undertaken by the Peace Corps during
the preceding fiscal year as a joint venture with any such
international or host country voluntary service organizations;
and recommendations for improving coordination of development
projects between the Peace Corps and any such international or
host country voluntary service organizations. The report shall
also describe any major new initiatives that the Peace Corps
has under review for the upcoming fiscal year, and any major
initiatives that were undertaken in the previous fiscal year
that were not included in prior reports to the Congress. The
report should include the rationale for undertaking such new
initiatives; an estimate of the cost of such initiatives; and
the impact on the safety of volunteers. The report shall
describe in detail the plans by which the Peace Corps will
deploy 14,000 volunteers in service by 2007 while maintaining
the quality of the volunteer experience, ensuring the safety
and security of all volunteers, and providing for appropriate
administrative and other support. The report shall describe
standard security procedures for any country in which the Peace
Corps operates programs or is considering doing so, as well as
any special security procedures contemplated because of changed
circumstances in specific countries, and assessing whether
security conditions would be enhanced by co-locating volunteers
with international or local nongovernmental organizations; or
with the placement of multiple volunteers in one location. This
section also requires the Director to consult with the
appropriate congressional committees with respect to any major
new initiatives not previously discussed in the latest annual
report submitted to Congress or in budget presentations. This
section requires a one-time report on student loan forgiveness
programs currently available to Peace Corps volunteers upon
completion of their service, comparing such programs with other
Government-sponsored student loan forgiveness programs; and
recommending any additional student loan forgiveness programs
which could attract more applicants from low- and middle-income
individuals who are carrying considerable student-loan debt
burdens. This section requires that not later than 90 days
after the date of enactment of the act and annually thereafter,
the Director shall report on the progress of the Peace Corps in
recruiting historically underrepresented groups. This section
also requires that not later than 120 days after the date of
enactment of the act, the Director shall prepare and submit to
the appropriate congressional committees a report that
describes the medical screening procedures and standards of the
Office of Medical Services/ Screening Unit of the Peace Corps
to determine whether an applicant for Peace Corps service has
worldwide clearance, limited clearance, a deferral period, or
is not medically, including psychologically, qualified to serve
in the Peace Corps as a volunteer; describes the procedures and
criteria for matching applicants for Peace Corps service with a
host country to ensure that the applicant, reasonable
accommodations notwithstanding, can complete at least 2 years
of volunteer service without interruption to host country
national projects due to foreseeable medical conditions.
Section 1103. Special Volunteer recruitment and placement
for certain countries. Section 1103 requires that not later
than 60 days after the date of enactment of this act, the
Director shall submit to the appropriate congressional
committees a report that describes the recruitment strategies
to be employed by the Peace Corps to recruit and train
volunteers with the appropriate language skills and interest in
serving in host countries; and lists the countries that the
Director has determined should be priorities for special
recruitment and placement of Peace Corps volunteers. The
Director is authorized and strongly urged to utilize the
services of returned Peace Corps volunteers who have relevant
language and cultural experience and may have served previously
in countries with substantial Muslim populations, in order to
open or reopen Peace Corps programs in such countries.
Section 1104. Global Infectious Diseases Initiative;
coordination of HIV/AIDS activities. Section 1104 requires the
Director of the Peace Corps, in cooperation with international
public health experts, such as the Centers for Disease Control
and Prevention, the National Institutes of Health, the World
Health Organization, the Pan American Health Organization, and
local public health officials, to expand the Peace Corps'
program of training for Peace Corps volunteers in the areas of
education, prevention, and treatment of infectious diseases
which are prevalent in host countries in order to ensure that
the Peace Corps increases its contribution to the global
campaign against such diseases.
Section 1105. Peace Corps National Advisory Council.
Section 1105 amends the relevant section of the Peace Corps Act
relating to the structure and composition of the Peace Corps
Advisory Council, notably by reducing the number of Council
members from 15 to 11, by eliminating the requirement that such
members be appointed by the President, by and with the advice
and consent of the Senate, and instead requiring that the
members be appointed by the Director of the Peace Corps. This
section also specifies that six of the members shall be former
Peace Corps volunteers, at least one of whom shall have been a
former staff member abroad or in the Washington headquarters,
and not more than six shall be members of the same political
party.
Section 1106. Readjustment allowances. Section 1106 amends
the Peace Corps Act to increase the monthly allowance from $125
to $275 in FY2004, and $300 per month in FY2005 and beyond.
Current Peace Corps policy provides a $225 per month, but the
original act prior to the amendments of this division
establishes a floor of $125 per month.
Section 1107. Programs and projects of returned Peace Corps
volunteers and former staff. Section 1107 establishes a program
to provide support for returned Peace Corps volunteers to
develop and carry out programs and projects to promote the
objectives of the Peace Corps Act, as set forth in section 2(a)
of that act. Subject to the availability of appropriations,
this section authorizes the Director to award grants on a
competitive basis to private nonprofit corporations for the
purpose of enabling returned Peace Corps volunteers to use
their knowledge and expertise to develop and carry out the
programs such as educational programs designed to enrich the
knowledge and interest of elementary school and secondary
school students in the geography and cultures of other
countries where the volunteers have served; projects that
involve partnerships with local libraries to enhance community
knowledge about other peoples and countries; and audio-visual
projects that utilize materials collected by the volunteers
during their service that would be of educational value to
communities. This section authorizes the Director to delegate
the authority to award grants and may transfer funds to the
Chief Executive Officer of the Corporation for National and
Community Service. This section also includes a Congressional
Statement of Policy that the Crisis Corps has been an effective
tool in harnessing the skills and talents of returned Peace
Corps volunteers. This section requires the Director, in
consultation with the governments of host countries and
appropriate nongovernmental organizations, to increase the
number of available Crisis Corps assignments for returned Peace
Corps volunteers to at least 120 assignments in fiscal year
2004, 140 assignments in fiscal year 2005, 160 assignments in
fiscal year 2006, and 165 assignments in fiscal year 2007.
Section 1108. Declaration of Policy. Section 1108 is a
Congressional Declaration of Policy in support for the goal
announced by the President of doubling the number of Peace
Corps volunteers to 14,000 by 2007.
Section 1109. Peace Corps in Sierra Leone. Section 1109
includes findings that recount the history of the Peace Corps
in Sierra Leone. This section also includes a Sense of Congress
that the Peace Corps should return its program to Sierra Leone
as soon as security conditions permit.
Section 1110. Authorization of Appropriations. Section 1109
amends Section 3(b)(1) of the Peace Corps Act (22 U.S.C.
2502(b)(1)) to extend and increase the authorization of
appropriations to carry out the Peace Corps Act through fiscal
year 2007, to the following levels for each fiscal year:
$366,868,000 for fiscal year 2004, $411,800,000 for fiscal year
2005, $455,930,000 for fiscal year 2006, and $499,400,000 for
fiscal year 2007''.
New Advisory Committees
H.R. 2441 establishes a new advisory committee (the
Millennium Challenge Advisory Council), and amends the
provisions within the Peace Corps Act regarding an existing
advisory committee, the Peace Corps National Advisory Council.
Congressional Accountability Act
H.R. 2441 does not apply to the legislative branch.
Federal Mandates
H.R. 2441 imposes no Federal mandates.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
SECTION 5313 OF TITLE 5, UNITED STATES CODE
Sec. 5313. Positions at level II
Level II of the Executive Schedule applies to the following
positions, for which the annual rate of basic pay shall be the
rate determined with respect to such level under chapter 11 of
title 2, as adjusted by section 5318 of this title:
Deputy Secretary of Defense.
* * * * * * *
Chief Executive Officer, Millennium Challenge
Corporation.
----------
SECTION 9101 OF TITLE 31, UNTED STATES CODE
Sec. 9101. Definitions
In this chapter--
(1) * * *
* * * * * * *
(3) ``wholly owned Government corporation'' means--
(A) * * *
* * * * * * *
(Q) the Millennium Challenge Corporation.
* * * * * * *
----------
PEACE CORPS ACT
* * * * * * *
peace corps as an independent agency
Sec. 2A. Effective on the date of the enactment of the
International Security and Development Cooperation Act of 1981,
the Peace Corps shall be an independent agency within the
executive branch and shall not be an agency within the ACTION
Agency, the successor to the ACTION Agency, or any other
department or agency of the United States. As an independent
agency, the Peace Corps shall be responsible for recruiting all
of its volunteers.
authorization
Sec. 3. (a) * * *
(b)(1) There are authorized to be appropriated to carry out
the purposes of this Act $270,000,000 for fiscal year 2000,
$298,000,000 for fiscal year 2001, $327,000,000 for fiscal year
2002, [and $365,000,000 for fiscal year 2003] $365,000,000 for
fiscal year 2003, $366,868,000 for fiscal year 2004,
$411,800,000 for fiscal year 2005, $455,930,000 for fiscal year
2006, and $499,400,000 for fiscal year 2007.
* * * * * * *
peace corps volunteers
Sec. 5. (a) * * *
* * * * * * *
(c) Volunteers shall be entitled to receive a readjustment
allowance at a rate not less than [$125 for each month of
satisfactory service] $275 for each month of satisfactory
service during fiscal year 2004 and $300 for each month of
satisfactory service thereafter as determined by the President.
The readjustment allowance of each volunteer shall be payable
on his return to the United States: Provided, however, That,
under such circumstances as the President may determine, the
accrued readjustment allowance, or any part thereof, may be
paid to the volunteer, members of his family or others, during
the period of his service, or prior to his return to the United
States. In the event of the volunteer's death during the period
of his service, the amount of any unpaid readjustment allowance
shall be paid in accordance with the provisions of section
5582(b) of title 5, United States Code. For purposes of the
Internal Revenue Code of 1954 (26 U.S.C.), a volunteer shall be
deemed to be paid and to receive each amount of a readjustment
allowance to which he is entitled after December 31, 1964, when
such amount is transferred from funds made available under this
Act to the fund from which such readjustment allowance is
payable.
* * * * * * *
(g) The President may detail or assign volunteers or
otherwise make them available to any entity referred to in
paragraph (1) of section 10(a) on such terms and conditions as
he may determine: [Provided, That] Provided, That such detail
or assignment furthers the fulfillment of Peace Corps'
development and public diplomacy goals as described in section
2: Provided further, That not to exceed two hundred volunteers
may be assigned to carry out secretarial or clerical duties on
the staffs of the Peace Corps representatives abroad: Provided,
however, That any volunteer so detailed or assigned shall
continue to be entitled to the allowances, benefits and
privileges of volunteers authorized under or pursuant to this
Act.
* * * * * * *
peace corps volunteer leaders
Sec. 6. The President may enroll in the Peace Corps
qualified citizens or nationals of the United States whose
services are required for supervisory or other special duties
or responsibilities in connection with programs under this Act
(referred to in this Act as ``volunteer leaders''). The ratio
of the total number of volunteer leaders to the total number of
volunteers in service at any one time shall not exceed one to
twenty-five. Except as otherwise provided in this Act, all of
the provisions of this Act applicable to volunteers shall be
applicable to volunteer leaders, and the term ``volunteers''
shall include ``volunteer leaders'': Provided, however, That--
(1) volunteer leaders shall be entitled to receive
a readjustment allowance at a rate not less than [$125
for each month of satisfactory service] $275 for each
month of satisfactory service during fiscal year 2004
and $300 for each month of satisfactory service
thereafter as determined by the President;
* * * * * * *
[reports
[Sec. 11. The President shall transmit to the Congress, at
least once in each fiscal year, a report on operations under
this Act. Each report shall contain information describing
efforts undertaken to improve coordination of activities of the
Peace Corps with activities of international voluntary service
organizations, such as the United Nations volunteer program,
and of host country voluntary service organizations,
including--
[(1) a description of the purpose and scope of any
development project which the Peace Corps undertook
during the preceding fiscal year as a joint venture
with any such international or host country voluntary
service organizations; and
[(2) recommendations for improving coordination of
development projects between the Peace Corps and any
such international or host country voluntary service
organizations.
The President shall also include in the report a description of
any plans to carry out the policy set forth in section 2(b) of
this Act.]
SEC. 11. ANNUAL REPORTS; CONSULTATIONS ON NEW INITIATIVES.
(a) Annual Reports.--The Director shall transmit to
Congress, at least once in each fiscal year, a report on
operations under this Act. Each report shall contain
information--
(1) describing efforts undertaken to improve
coordination of activities of the Peace Corps with
activities of international voluntary service
organizations, such as the United Nations volunteer
program, and of host country voluntary service
organizations, including--
(A) a description of the purpose and scope
of any development project which the Peace
Corps undertook during the preceding fiscal
year as a joint venture with any such
international or host country voluntary service
organizations; and
(B) recommendations for improving
coordination of development projects between
the Peace Corps and any such international or
host country voluntary service organizations;
(2) describing--
(A) any major new initiatives that the
Peace Corps has under review for the upcoming
fiscal year, and any major initiatives that
were undertaken in the previous fiscal year
that were not included in prior reports to the
Congress;
(B) the rationale for undertaking such new
initiatives;
(C) an estimate of the cost of such
initiatives; and
(D) the impact on the safety of volunteers;
(3) describing in detail the Peace Corps plans,
including budgetary plans, to have 14,000 volunteers in
service by 2007 while maintaining the quality of the
volunteer experience, ensuring the safety and security
of all volunteers, and providing for appropriate
administrative and other support; and
(4) describing standard security procedures for any
country in which the Peace Corps operates programs or
is considering doing so, as well as any special
security procedures contemplated because of changed
circumstances in specific countries, and assessing
whether security conditions would be enhanced--
(A) by co-locating volunteers with
international or local nongovernmental
organizations; or
(B) with the placement of multiple
volunteers in one location.
(b) Consultations on New Initiatives.--The Director of the
Peace Corps shall consult with the appropriate congressional
committees with respect to any major new initiatives not
previously discussed in the latest annual report submitted to
Congress under subsection (a) or in budget presentations.
Whenever possible, such consultations should take place prior
to the initiation of such initiatives, or as soon as
practicable thereafter.
peace corps national advisory council
Sec. 12. (a) * * *
(b) Functions.--(1) * * *
(2) Members of the Council shall (subject to subsection
(d)(1)) conduct on-site inspections, and make examinations, of
the activities of the Peace Corps in the United States and in
other countries in order to--
(A) * * *
* * * * * * *
(C) make recommendations to the President, the
Director of the Peace Corps, and, as the Council
considers appropriate, the Congress, for the purpose of
guiding the future direction of the Peace Corps and of
helping to ensure that the purposes and programs of the
Peace Corps are carried out in ways that are
economical, efficient, responsive to changing needs in
developing countries and to changing relationships
among people, and in accordance with law; [and]
(D) make recommendations for utilizing the
expertise of returned Peace Corps volunteers and former
Peace Corps staff in fulfilling the goals of the Peace
Corps; and
[(D)] (E) make such other evaluations, assessments,
and recommendations as the Council considers
appropriate.
* * * * * * *
(c) Membership.--(1) * * *
(2)(A) The Council shall consist of [fifteen] eleven voting
members who shall be appointed by the [President, by and with
the advice and consent of the Senate. At least seven of such
members shall be former Peace Corps volunteers, and not more
than eight of such members shall be members of the same
political party.] Director of the Peace Corps. Six of the
members shall be former Peace Corps volunteers, at least one of
whom shall have been a former staff member abroad or in the
Washington headquarters, and not more than six shall be members
of the same political party.
[(B) The first appointments of members of the Council under
this paragraph shall be made not more than sixty days after the
date of the enactment of this section and, solely for purposes
of determining the expiration of their terms, shall be deemed
to take effect on the sixtieth day after such date of
enactment.]
[(C)] (B) No member appointed under this paragraph may be
an officer or employee of the United States Government.
[(D) Of the members initially appointed under this
paragraph, eight shall be appointed to 1-year terms and seven
shall be appointed to 2-year terms. Thereafter, all appointed
members shall be appointed to 2-year terms.]
(C) The members of the Council shall be appointed to 2-year
terms.
[(E)] (D) A member of the Council appointed to fill a
vacancy occurring before the expiration of the term for which
the member's predecessor was appointed shall be appointed only
for the remainder of that term.
[(F)] (E) No member of the Council may serve for more than
two consecutive 2-year terms.
[(G)] (F) Members of the Council shall serve at the
pleasure of the President.
[(H)] (G) An appointed member of the Council may be removed
by a vote of [nine] seven members for malfeasance in office,
for persistent neglect of or inability to discharge duties, or
for offenses involving moral turpitude, and for no other cause.
[(I)] (H) Within thirty days after any vacancy occurs in
the office of an appointed member of the Council, the
[President shall nominate] Director shall appoint an individual
to fill the vacancy.
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[(g) Chair and Vice Chair.--At its first meeting and at its
first regular meeting in each calendar year thereafter, the
Council shall elect a Chair and Vice Chair from among its
appointed members who are citizens of the United States. The
Chair and Vice Chair may not both be members of the same
political party.]
(g) Chair.--The Director shall designate one of the voting
members of the Council as Chair, who shall serve in that
capacity for a term of two years. The Director may renew the
term of a voting member appointed as Chair under the preceding
sentence.
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