[Senate Report 110-196]
[From the U.S. Government Publishing Office]
Calendar No. 419
110th Congress Report
SENATE
1st Session 110-196
======================================================================
TROPICAL FOREST AND CORAL CONSERVATION REAUTHORIZATION ACT OF 2007
_______
October 15, 2007.--Ordered to be printed
_______
Mr. Biden, from the Committee on Foreign Relations,
submitted the following
R E P O R T
[To accompany S. 2020]
The Committee on Foreign Relations, having had under
consideration the bill (S. 2020) to reauthorize the Tropical
Forest Conservation Act of 1998 through fiscal year 2010, to
rename the Tropical Forest Conservation Act of 1998 as ``The
Tropical Forest and Coral Conservation Act of 2007,'' and for
other purposes, reports favorably thereon without amendment and
with an amendment to the title and recommends that the bill do
pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................1
III. Discussion.......................................................1
IV. Cost Estimate....................................................4
V. Evaluation of Regulatory Impact..................................5
VI. Changes in Existing Law..........................................6
I. PURPOSE
The purpose of S. 2020 is to protect and conserve the
world's tropical forests and coral reefs through debt swap
mechanisms.
II. COMMITTEE ACTION
S. 2020 was introduced by Senators Lugar and Biden on
September 6, 2007. It is cosponsored by Senators Hagel,
Brownback, Leahy, Murray and Inouye. On September 11, 2007, the
committee ordered the bill reported favorably by voice vote.
III. DISCUSSION
The Tropical Forest and Coral Conservation Act (TFCCA) of
2007 reauthorizes and revises the Tropical Forest Conservation
Act of 1998 (P.L. 108-323), legislation to protect the world's
most valuable tropical forests and coral reefs by forgiving
debts owed the United States by developing countries in
exchange for the preservation of significant tropical forests
and coral reefs. This market-oriented conservation program is
based on the Enterprise for the Americas Initiative (P.L. 102-
532), which allowed the President to restructure debt in
exchange for conservation efforts in Latin America.
TFCCA will help secure and protect endangered habitats and
species faced with extinction due to climate change,
deforestation, and other environmental and anthropogenic
pressures. The initiative will directly sustain efforts to
protect tropical forests, which harbor a major share of the
Earth's biological and terrestrial resources and provide
multiple ecological, economic and social benefits, including
food, fuel, shelter, clean water, stable soils, medicines,
livelihood and employment. It will help slow the extinction of
animal and plant species by preserving rare and valuable
tropical forest and coral reef habitats that house an estimated
10-30 million plant and animal species, including species
essential to medicinal research and continued agricultural
productivity in the United States and around the globe. The
initiative is focused on developing countries, where economic
pressure, poverty, food insecurity, energy needs and capital
and investment priorities have contributed to rapid
deforestation and forest degradation.
An additional benefit of the initiative is its role in
mitigating climate change. Tropical forests act as ``carbon
sinks,'' absorbing an estimated 1 billion metric tons of carbon
annually from the atmosphere. Conversely, the harvesting and
burning of tropical forests adds an estimated 1.6 billion
metric tons of carbons to the earth's atmosphere every year.
The legislation makes coral reefs and associated coastal
marine ecosystems, which face extreme vulnerability due to the
effects of climate change, eligible for protection. Coral reefs
provide a wide range of benefits to mankind; they harbor more
species per unit area than any other marine habitat and provide
the basis for developing pharmaceutical products and fostering
a growing marine tourism sector. They are also a major source
of food and jobs for hundreds of millions of coastal residents
and serve as natural storm barriers, protecting vulnerable
shorelines and communities from storm waves and erosion.
Several countries may be well placed to pursue agreements to
protect their coral reefs.
It is important to note that the legislation is meant to
apply strictly to tropical forests, coral reefs and associated
coastal marine ecosystems. Eligible tropical forests should
contain unique biodiversity, or should be representative of a
larger tropical forest on a global, continental or regional
scale. The legislation is not intended to include other non-
tropical forest areas in temperate climates. Associated coastal
marine ecosystems are understood to be those areas which
surround or directly relate to a coral reef and are important
to maintaining the ecological integrity of that coral reef. The
committee does not intend for the legislation to be interpreted
broadly, and TFCCA does not apply to coastal marine ecosystems
that only have a tangential link to a nearby coral reef system.
The legislation achieves its objectives by authorizing the
Secretary of State to negotiate agreements with eligible
countries to redirect portions of their debt owed to the U.S.
Government towards a fund that will provide grants to local
organizations to undertake conservation activities in tropical
forests and coral reefs. Funds generated from debt-for-nature
transactions will be deposited in a tropical forest or coral
reef fund for each country. The fund is overseen by an
administrating body composed of one or more appointees chosen
by the U.S. Government and the government of the beneficiary
country, and individuals who represent a broad range of
environmental, academic, and scientific organizations in the
beneficiary country. Under one version of a debt-for-nature
transaction authorized by this legislation, local currency
payments of interest accrued on restructured loans are
deposited into a tropical forest or coral fund and serve as the
fund's principal. Interest earned from this principal balance
and the principal itself is usually given in the form of grants
to fund conservation projects. Participation of third parties
(e.g., non-governmental organizations) under the debt-swap
option can increase and leverage the amount of funds available
to treat debt. In addition, the legislation is intended to
build grass roots capacity and help promote and instill a
culture of conservation through grants to community and other
local non-governmental organizations.
The legislation includes authority for three types of debt
mechanisms used to conduct debt-for-nature transactions: debt
restructuring and reduction, three-party debt swaps, or debt
buyback by the debtor country. In a three-party swap, a
conservation group purchases a hard currency debt owed to
commercial banks on the secondary market or an official debt
owed to a creditor government at a discounted rate compared to
the face value of the debt. The group then renegotiates the
debt obligation with the debtor country. The debt is generally
sold back to the debtor country for more than the NGO purchase
price, but for less than its secondary market price. The
proceeds generated from the renegotiated debt, to be repaid in
local currency, are typically put into a fund that allocates
grants to local environmental organizations for conservation
projects. In these cases, the conservation organization,
representatives from local environmental groups, and the debtor
government administer the fund. Money to buy the debt initially
may come from the NGO, governments, banks, or other private
organizations.
In a debt-restructuring agreement, the original debt
agreement is cancelled--a percentage of the face value of the
debt is reduced--and a new agreement is created with a
provision for an annual amount of money, in local currency, to
be deposited into an environmental fund. This transaction can
be bilateral or multilateral in nature and is conducted with
official funds directly between one or more creditor countries
and the debtor government. The creditor government(s) determine
the criteria for eligibility, which usually involve the
existence of certain financial and political conditions in the
debtor country.
In a debt buyback agreement, the debt is bought back by the
debtor country for a discounted price. Money for the
environment is generated from a percentage of the buyback
price.
The committee understands that oversight mechanisms
developed to monitor the tropical forest component of this
program will be extended to cover the coral reef component
which is being authorized in this bill. The committee supports
and encourages the use of financial audits to ensure that funds
are appropriately utilized. Current oversight includes the
following:
Funds for this program are subject to periodic formal
evaluations and annual fund evaluations recently
required as part of OMB's Program Assessment Rating
Tool (PART). A TFCA Evaluation Scorecard is completed
each year on each TFCA Fund. The Evaluation Scorecard
was developed to provide for consistent, on-going
evaluation and reporting across local TFCA programs.
Grant recipients sign agreements that establish the
timeline, budget and reporting requirements for each
grant. Grant proposals must meet criteria, including
detailed budgets, established by the local board/
oversight committee.
A local board or oversight committee is required to monitor
performance under each grant agreement to ensure that
time schedules and other performance goals are being
achieved. All grant agreements include provisions
requiring periodic progress reports from the grantee to
the board. These progress reports review all components
of the grant which are essential to the successful
achievement of the activity for which the grant was
awarded. Boards and oversight committees also hold
grantees accountable for both financial and
programmatic aspects of their activities.
Local TFCA activities are managed in-country primarily by
local NGOs and community groups who live and work in
the areas in which they are undertaking the activities.
This enables a relatively continuous presence in the
forest by those who are implementing approved
activities. In addition, the TFCA secretariat
coordinates the TFCA annual management budget Congress
provides. Evaluations undertaken with these funds
include local site visits to determine that activities
are being carried out consistent with the terms of the
TFCA agreement.
IV. COST ESTIMATE
In accordance with Rule XXVI, paragraph 11(a) of the
Standing Rules of the Senate, the committee provides this
estimate of the costs of this legislation prepared by the
Congressional Budget Office.
United States Congress,
Congressional Budget Office,
Washington, DC, September 18, 2007.
Hon. Joseph R. Biden, Jr.,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2020, the Tropical
Forest and Coral Conservative Reauthorization Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sunita
D'Monte.
Sincerely,
Robert A. Sunshine
(For Peter R. Orszag, Director).
------
Congressional Budget Office Cost Estimate
September 18, 2007.
S. 2020 would authorize the appropriation of $20 million in
2008 and $75 million over the 2008-2010 period to restructure
debt owed to the United States in exchange for agreements that
the indebted countries would conserve tropical forests, coral
reefs, and coastal marine ecosystems. CBO estimates that
implementing the bill would cost $2 million in 2008 and $72
million over the 2008-2012 period, assuming that the authorized
amounts are appropriated and that outlays will follow
historical spending patterns for those programs.
Enacting the bill would not affect direct spending or
revenues. S. 2020 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act
and would not affect the budgets of state, local, or tribal
governments.
S. 2020 would reauthorize the Tropical Forest Conservation
Act of 1998 (TFCA) through 2010 and broaden its scope to
include coral reefs and coastal marine ecosystems. Under
current law, the act expires in 2007 and applies only to
tropical forests. TFCA allows the United States to modify
concessional debt held by eligible countries and redirect
payments in local currency to support forest conservation
programs. The debt modifications include authority to reduce
and to restructure debt, to swap debt, or to sell debt back to
an eligible country in ways that will generate income for
conservation efforts. S. 2020 would authorize the appropriation
of $20 million in 2008, $25 million in 2009, and $30 million in
2010 to cover the cost of loan modifications, as defined by the
Federal Credit Reform Act.
The estimated budgetary impact of S. 2020 is shown in the
following table. The costs of this legislation fall within
budget function 150 (international affairs).
The CBO staff contact for this estimate is Sunita D'Monte.
This estimate was approved by Peter H. Fontaine, Assistant
Director for Budget Analysis.
ESTIMATED BUDGETARY IMPACT OF S. 2020
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for Debt Restructuring
Budget Authority*................................. 64 0 0 0 0 0
Estimated Outlays................................. 146 117 64 29 0 0
Proposed Changes
Authorization Level............................... 0 20 25 30 0 0
Estimated Outlays................................. 0 2 12 22 25 11
Spending Under S. 2020 for Debt Restructuring
Authorization Level*.............................. 64 20 25 30 0 0
Estimated Outlays................................. 146 119 76 51 25 11
----------------------------------------------------------------------------------------------------------------
* The 2007 level is the amount appropriated for that year.
V. EVALUATION OF REGULATORY IMPACT
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VI. CHANGES IN EXISTING LAW
In compliance with Rule XXVI, paragraph 12 of the Standing
Rules of the Senate, 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
italic, existing law in which no change is proposed is shown in
roman).
The Foreign Assistance Act of 1961
* * * * * * *
PART IV--ENTERPRISE FOR THE AMERICAS INITIATIVE
* * * * * * *
SEC. 703. ELIGIBILITY FOR BENEFITS.
(a) Requirements.--To be eligible for benefits from the
Facility under this part, a country must be a Latin American or
Caribbean country--
(1) * * *
* * * * * * *
(5) that has in effect, has received approval for,
[or, as appropriate in exceptional circumstances,] or
is making significant progress toward--
(A) an International Monetary Fund standby
arrangement, extended Fund arrangement, or an
arrangement under the structural adjustment
facility or enhanced structural adjustment
facility, [or in exceptional circumstances, a
Fund monitored program or its equivalent,] or a
Fund monitored program, or is implementing
sound macroeconomic policies, unless the
President determines [(after consultation with
the Enterprise for the Americas Board)] that
such an arrangement or program (or its
equivalent) could reasonably be expected to
have significant adverse social or
environmental effects; and
(B) as appropriate, structural or sectoral
adjustment loans from the International Bank
for Reconstruction and Development or the
International Development Association, unless
the President determines (after consultation
with the Enterprise for the Americas Board)
that the resulting adjustment requirements
could reasonably be expected to have
significant adverse social or environmental
effects;
* * * * * * *
PART V--DEBT REDUCTION FOR DEVELOPING COUNTRIES WITH TROPICAL FORESTS
SEC. 801. SHORT TITLE.
This part may be cited as the [``Tropical Forest
Conservation Act of 1998''] ``Tropical Forest and Coral
Conservation Act of 2007''.
SEC. 802. [22 U.S.C. 2431] FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds the following:
(1) It is the established policy of the United States
to support and seek protection of [tropical forests]
tropical forests and coral reefs and associated coastal
marine ecosystems around the world.
(2) Tropical forests provide a wide range of benefits
to humankind by--
(A) harboring a major share of the Earth's
biological and terrestrial [resources, which
are the basis for developing pharmaceutical
products and revitalizing agricultural crops]
resources;
(B) playing a critical role as carbon sinks
in reducing greenhouse gases in the atmosphere,
thus moderating potential global climate
change; and
(C) regulating hydrological cycles on which
[far-flung] agricultural and coastal resources
depend.
(3) International negotiations and assistance
programs to conserve forest resources have proliferated
over the past decade, but the rapid rate of tropical
deforestation continues unabated.
(4) Developing countries with urgent needs for
investment and capital for development have allocated a
significant amount of their forests to logging
concessions.
(5) Poverty and economic pressures on the populations
of developing countries have, over time, resulted in
clearing of vast areas of forest for conversion to
agriculture, which is often unsustainable in the poor
soils underlying tropical forests.
(6) Debt reduction can reduce economic pressures on
developing countries and result in increased protection
for [tropical forests] tropical forests and coral reefs
and associated coastal marine ecosystems.
(7) Finding economic benefits to local communities
from sustainable uses of tropical forests and coral
reefs and associated coastal marine ecosystems is
critical to the protection of [tropical forests]
tropical forests and coral reefs and associated coastal
marine ecosystems.
(b) Purposes.--The purposes of this part are--
(1) to recognize the values received by United States
citizens from protection of [tropical forests] tropical
forests and coral reefs and associated coastal marine
ecosystems;
(2) to facilitate greater protection of [tropical
forests] tropical forests and coral reefs and
associated coastal marine ecosystems (and to give
priority to protecting [tropical forests] areas with
the highest levels of biodiversity and under the most
severe threat) by providing for the alleviation of debt
in countries where [tropical forests] tropical forests
and coral reefs and associated coastal marine
ecosystems are located, thus allowing the use of
additional resources to protect these critical
resources and reduce economic pressures [that have led
to deforestation] on such countries;
(3) to ensure that resources freed from debt in such
countries are targeted to protection of [tropical
forests] tropical forests and coral reefs and
associated coastal marine ecosystems; and
(4) to rechannel existing resources to facilitate the
protection of [tropical forests] tropical forests and
coral reefs and associated coastal marine ecosystems.
SEC. 803. DEFINITIONS.
As used in this part:
(1) Administering body.--The term ``administering
body'' means the entity provided for in section 809(c).
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on International Relations
and the Committee on Appropriations of the
House of Representatives; and
(B) the Committee on Foreign Relations and
the Committee on Appropriations of the Senate.
(3) Beneficiary country.--The term ``beneficiary
country'' means an eligible country with respect to
which the authority of section 806(a)(1), section
807(a)(1), or paragraph (1) or (2) of section 808(a) is
exercised.
[(4) Board.--The term ``Board'' means the board
referred to in section 811.]
[(5)] (4) Developing country with a [tropical forest]
tropical forest or coral reef.--The term ``developing
country with a [tropical forest] tropical forest or
coral reef'' means--
(A)(i) a country that has a per capita income
of $725 or less in 1994 United States dollars
(commonly referred to as ``low-income
country''), as determined and adjusted on an
annual basis by the International Bank for
Reconstruction and Development in its World
Development Report; or
(ii) a country that has a per capita income
of more than $725 but less than $8,956 in 1994
United States dollars (commonly referred to as
``middle-income country''), as determined and
adjusted on an annual basis by the
International Bank for Reconstruction and
Development in its World Development Report;
and
(B) a country that contains at least one
[tropical forest] tropical forest or coral reef
that is globally outstanding in terms of its
biological diversity or represents one of the
larger intact blocks of tropical forests left,
on a regional, continental, or global scale.
[(6)] (5) Eligible country.--The term ``eligible
country'' means a country designated by the President
in accordance with section 805.
[(7)] (6) [Tropical forest agreement] Conservation
agreement.--The term [``Tropical Forest Agreement'']
``Conservation Agreement'' or ``Agreement'' means a
[Tropical Forest Agreement] Conservation Agreement
provided for in section 809.
[(8)] (7) [Tropical forest facility] Conservation
facility.--The term [``Tropical Forest Facility'']
``Conservation Facility'' or ``Facility'' means the
[Tropical Forest Facility] Conservation Facility
established in the Department of the Treasury by
section 804.
[(9)] (8) [Tropical forest fund] Conservation fund.--
The term [``Tropical Forest Fund''] ``Conservation
Fund'' or ``Fund'' means a [Tropical Forest Fund]
Conservation Fund provided for in section 810.
(10) Coral.--The term ``coral'' means species of the
phylum Cnidaria, including--
(A) all species of the orders Antipatharia
(black corals), Scleractinia (stony corals),
Alcyonacea (soft corals), Gorgonacea (horny
corals), Stolonifera (organpipe corals and
others), and Coenothecalia (blue coral), of the
class Anthoza; and
(B) all species of the order Hydrocorallina
(fire corals and hydrocorals) of the class
Hydrozoa.
(11) Coral reef.--The term ``coral reef'' means any
reef or shoal composed primarily of coral.
(12) Associated coastal marine ecosystem.--The term
``associated coastal marine ecosystem'' means any
coastal marine ecosystem surrounding, or directly
related to, a coral reef and important to maintaining
the ecological integrity of that coral reef, such as
seagrasses, mangroves, sandy seabed communities, and
immediately adjacent coastal areas.
SEC. 804. ESTABLISHMENT OF THE FACILITY.
There is established in the Department of the Treasury an
entity to be known as the [``Tropical Forest Facility'']
``Conservation Facility'' for the purpose of providing for the
administration of debt reduction in accordance with this part.
SEC. 805. ELIGIBILITY FOR BENEFITS.
(a) In General.--To be eligible for benefits from the
Facility under this part, a country shall be a developing
country with a [tropical forest] tropical forest or coral
reef--
(1) whose government meets the requirements
applicable to Latin American or Caribbean countries
under paragraphs (1) through (5) and (7) of section
703(a) of this Act; and
(2) that has put in place investment reforms, as
evidenced by the conclusion of a bilateral investment
treaty with the United States, implementation of an
investment sector loan with the Inter-American
Development Bank, World Bank-supported investment
reforms, or other measures, as appropriate.
(b) Eligibility Determinations.--
(1) In general.--Consistent with subsection (a), the
President shall determine whether a country is eligible
to receive benefits under this part.
(2) Congressional notification.--The President shall
notify the appropriate congressional committees of his
intention to designate a country as an eligible country
at least 15 days in advance of any formal
determination.
SEC. 806. REDUCTION OF DEBT OWED TO THE UNITED STATES AS A RESULT OF
CONCESSIONAL LOANS UNDER THE FOREIGN ASSISTANCE ACT
OF 1961.
(a) Authority To Reduce Debt.--
(1) Authority.--The President may reduce the amount
owed to the United States (or any agency of the United
States) that is outstanding as of January 1, 1998, as a
result of concessional loans made to an eligible
country by the United States under part I of this Act,
chapter 4 of part II of this Act, or predecessor
foreign economic assistance legislation.
(2) Authorization of appropriations.--For the cost
(as defined in section 502(5) of the Federal Credit
Reform Act of 1990) for the reduction of any debt
pursuant to this section, there are authorized to be
appropriated to the President--
(A) $25,000,000 for fiscal year 1999;
(B) $75,000,000 for fiscal year 2000; and
(C) $100,000,000 for fiscal year 2001.
(3) Certain prohibitions inapplicable.--
(A) In general.--A reduction of debt pursuant
to this section shall not be considered
assistance for purposes of any provision of law
limiting assistance to a country.
(B) Additional requirement.--The authority of
this section may be exercised notwithstanding
section 620(r) of this Act or section 321 of
the International Development and Food
Assistance Act of 1975.
(b) Implementation of Debt Reduction.--
(1) In general.--Any debt reduction pursuant to
subsection (a) shall be accomplished at the direction
of the Facility by the exchange of a new obligation for
obligations of the type referred to in subsection (a)
outstanding as of the date specified in subsection
(a)(1).
(2) Exchange of obligations.--
(A) In general.--The Facility shall notify
the agency primarily responsible for
administering part I of this Act of an
agreement entered into under paragraph (1) with
an eligible country to exchange a new
obligation for outstanding obligations.
(B) Additional requirement.--At the direction
of the Facility, the old obligations that are
the subject of the agreement shall be canceled
and a new debt obligation for the country shall
be established relating to the agreement, and
the agency primarily responsible for
administering part I of this Act shall make an
adjustment in its accounts to reflect the debt
reduction.
(c) Additional Terms and Conditions.--(1) The following
additional terms and conditions shall apply to the reduction of
debt under subsection (a)(1) in the same manner as such terms
and conditions apply to the reduction of debt under section
704(a)(1) of this Act:
(A) The provisions relating to repayment of principal
under section 705 of this Act.
(B) The provisions relating to interest on new
obligations under section 706 of this Act.
(2) In addition to the application of the provisions
relating to repayment of principal under section 705 of this
Act to the reduction of debt under subsection (a)(1) (in
accordance with paragraph (1)(A) of this subsection), repayment
of principal on a new obligation established under subsection
(b) may be made in the local currency of the beneficiary
country and deposited in the [Tropical Forest Fund]
Conservation Fund of the country in the same manner as the
provisions relating to payment of interest on new obligations
under section 706 of this Act.
(d) Authorization of Appropriations for Fiscal Years After
Fiscal Year 2001.--For the cost (as defined in section 502(5)
of the Federal Credit Reform Act of 1990) for the reduction of
any debt pursuant to this section or section 807, there are
authorized to be appropriated to the President the following:
(1) $50,000,000 for fiscal year 2002.
(2) $75,000,000 for fiscal year 2003.
(3) $100,000,000 for fiscal year 2004.
(4) $20,000,000 for fiscal year 2005.
(5) $25,000,000 for fiscal year 2006.
(6) $30,000,000 for fiscal year 2007.
(7) $20,000,000 for fiscal year 2008.
(8) $25,000,000 for fiscal year 2009.
(9) $30,000,000 for fiscal year 2010.
[(e) Use of Funds To Conduct Program Audits and
Evaluations.--Of the amounts made available to carry out this
part for a fiscal year, $200,000 is authorized to be made
available to carry out audits and evaluations of programs under
this part, including personnel costs associated with such
audits and evaluations.]
(e) Use of Funds To Conduct Program Audits, Evaluations,
Monitoring, and Administration.--Of the amounts made available
to carry out this part for a fiscal year, $300,000 is
authorized to be made available to carry out audits,
evaluations, monitoring, and administration of programs under
this part, including personnel costs associated with such
audits, evaluations, monitoring and administration.'.
SEC. 807. REDUCTION OF DEBT OWED TO THE UNITED STATES AS A RESULT OF
CREDITS EXTENDED UNDER TITLE I OF THE AGRICULTURAL
TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954.
(a) Authority To Reduce Debt.--
(1) Authority.--Notwithstanding any other provision
of law, the President may reduce the amount owed to the
United States (or any agency of the United States) that
is outstanding as of January 1, 1998, as a result of
any credits extended under title I of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C.
1701 et seq.) to a country eligible for benefits from
the Facility.
(2) Authorization of appropriations.--
(A) In general.--For the cost (as defined in
section 502(5) of the Federal Credit Reform Act
of 1990) for the reduction of any debt pursuant
to this section, there are authorized to be
appropriated to the President--
(i) $25,000,000 for fiscal year 1999;
(ii) $50,000,000 for fiscal year
2000; and
(iii) $50,000,000 for fiscal year
2001.
(B) Limitation.--The authority provided by
this section shall be available only to the
extent that appropriations for the cost (as
defined in section 502(5) of the Federal Credit
Reform Act of 1990) of the modification of any
debt pursuant to this section are made in
advance.
(b) Implementation of Debt Reduction.--
(1) In general.--Any debt reduction pursuant to
subsection (a) shall be accomplished at the direction
of the Facility by the exchange of a new obligation for
obligations of the type referred to in subsection (a)
outstanding as of the date specified in subsection
(a)(1).
(2) Exchange of obligations.--
(A) In general.--The Facility shall notify
the Commodity Credit Corporation of an
agreement entered into under paragraph (1) with
an eligible country to exchange a new
obligation for outstanding obligations.
(B) Additional requirement.--At the direction
of the Facility, the old obligations that are
the subject of the agreement shall be canceled
and a new debt obligation shall be established
for the country relating to the agreement, and
the Commodity Credit Corporation shall make an
adjustment in its accounts to reflect the debt
reduction.
(c) Additional Terms and Conditions.--(1) The following
additional terms and conditions shall apply to the reduction of
debt under subsection (a)(1) in the same manner as such terms
and conditions apply to the reduction of debt under section
604(a)(1) of the Agricultural Trade Development and Assistance
Act of 1954 (7 U.S.C. 1738c):
(A) The provisions relating to repayment of principal
under section 605 of such Act.
(B) The provisions relating to interest on new
obligations under section 606 of such Act.
(2) In addition to the application of the provisions
relating to repayment of principal under section 605 of the
Agricultural Trade Development and Assistance Act of 1954 to
the reduction of debt under subsection (a)(1) (in accordance
with paragraph (1)(A) of this subsection), repayment of
principal on a new obligation established under subsection (b)
may be made in the local currency of the beneficiary country
and deposited in the [Tropical Forest Fund] Conservation Fund
of the country in the same manner as the provisions relating to
payment of interest on new obligations under section 606 of
such Act.
SEC. 808. AUTHORITY TO ENGAGE IN DEBT-FOR-NATURE SWAPS AND DEBT
BUYBACKS.
(a) Loans and Credits Eligible for Sale, Reduction, or
Cancellation.--
(1) Debt-for-nature swaps.--
(A) In general.--Notwithstanding any other
provision of law, the President may, in
accordance with this section, sell to any
eligible purchaser described in subparagraph
(B) any concessional loans described in section
806(a)(1) or any credits described in section
807(a)(1), or on receipt of payment from an
eligible purchaser described in subparagraph
(B), reduce or cancel such loans (or credits)
or portion thereof, only for the purpose of
facilitating a debt-for-nature swap to support
eligible activities described in section
809(d).
(B) Eligible purchaser described.--A loan or
credit may be sold, reduced, or canceled under
subparagraph (A) only to a purchaser who
presents plans satisfactory to the President
for using the loan or credit for the purpose of
engaging in debt-for-nature swaps to support
eligible activities described in section
809(d).
(C) Consultation requirement.--Before the
sale under subparagraph (A) to any eligible
purchaser described in subparagraph (B), or any
reduction or cancellation under such
subparagraph (A), of any loan or credit made to
an eligible country, the President shall
consult with the country concerning the amount
of loans or credits to be sold, reduced, or
canceled and their uses for debt-for-nature
swaps to support eligible activities described
in section 809(d).
(D) Authorization of appropriations.--For the
cost (as defined in section 502(5) of the
Federal Credit Reform Act of 1990) for the
reduction of any debt pursuant to subparagraph
(A), amounts authorized to be appropriated
under sections 806(a)(2), 807(a)(2), and 806(d)
shall be made available for such reduction of
debt pursuant to subparagraph (A).
(2) Debt buybacks.--Notwithstanding any other
provision of law, the President may, in accordance with
this section, sell to any eligible country any
concessional loans described in section 806(a)(1) or
any credits described in section 807(a)(1), or on
receipt of payment from an eligible country, reduce or
cancel such loans (or credits) or portion thereof, only
for the purpose of facilitating a debt buyback by an
eligible country of its own qualified debt, only if the
eligible country uses an additional amount of the local
currency of the eligible country, equal to not less
than the lessor of 40 percent of the price paid for
such debt by such eligible country, or the difference
between the price paid for such debt and the face value
of such debt, to support eligible activities described
in section 809(d).
(3) Limitation.--The authority provided by paragraphs
(1) and (2) shall be available only to the extent that
appropriations for the cost (as defined in section
502(5) of the Federal Credit Reform Act of 1990) of the
modification of any debt pursuant to such paragraphs
are made in advance.
(4) Terms and conditions.--Notwithstanding any other
provision of law, the President shall, in accordance
with this section, establish the terms and conditions
under which loans and credits may be sold, reduced, or
canceled pursuant to this section.
(5) Administration.--
(A) In general.--The Facility shall notify
the administrator of the agency primarily
responsible for administering part I of this
Act or the Commodity Credit Corporation, as the
case may be, of eligible purchasers described
in paragraph (1)(B) that the President has
determined to be eligible under paragraph (1),
and shall direct such agency or Corporation, as
the case may be, to carry out the sale,
reduction, or cancellation of a loan pursuant
to such paragraph.
(B) Additional requirement.--Such agency or
Corporation, as the case may be, shall make an
adjustment in its accounts to reflect the sale,
reduction, or cancellation.
(C) United states government representation
on the administering body.--One or more
individuals appointed by the United States
Government may serve in an official capacity on
the administering body that oversees the
implementation of grants arising from a debt-
for-nature swap or debt buy-back regardless of
whether the United States is a party to any
agreement between the eligible purchaser and
the government of the beneficiary country.
(b) Deposit of Proceeds.--The proceeds from the sale,
reduction, or cancellation of any loan sold, reduced, or
canceled pursuant to this section shall be deposited in the
United States Government account or accounts established for
the repayment of such loan.
SEC. 809. [TROPICAL FOREST AGREEMENT] CONSERVATION AGREEMENT.
[(a) Authority.--
[(1) In general.--The Secretary of State is
authorized, in consultation with other appropriate
officials of the Federal Government, to enter into a
Tropical Forest Agreement with any eligible country
concerning the operation and use of the Fund for that
country.
[(2) Consultation.--In the negotiation of such an
Agreement, the Secretary shall consult with the Board
in accordance with section 811.]
(a)(1) Authority.--The Secretary of State is authorized, in
consultation with other appropriate officials of the Federal
Government, to enter into a Conservation Agreement with any
eligible country concerning the operation and use of the Fund
for that country.
(2) Consultation.--In the negotiation of such an Agreement,
the Secretary shall consult with the Board in accordance with
section 811.
(b) Contents of Agreement.--The requirements contained in
section 708(b) of this Act (relating to contents of an
agreement) shall apply to an Agreement in the same manner as
such requirements apply to an Americas Framework Agreement.
(c) Administering Body.--
(1) In general.--Amounts disbursed from the Fund in
each beneficiary country shall be administered by a
body constituted under the laws of that country.
(2) Composition.--
(A) In general.--The administering body shall
consist of--
(i) one or more individuals appointed
by the United States Government to
serve in an official capacity;
(ii) one or more individuals
appointed by the government of the
beneficiary country; and
(iii) individuals who represent a
broad range of--
(I) environmental
nongovernmental organizations
of, or active in, the
beneficiary country;
(II) local community
development nongovernmental
organizations of the
beneficiary country; and
(III) scientific, academic,
or forestry organizations of
the beneficiary country.
(B) Additional requirement.--A majority of
the members of the administering body shall be
individuals described in subparagraph (A)(iii).
(3) Responsibilities.--The requirements contained in
section 708(c)(3) of this Act (relating to
responsibilities of the administering body) shall apply
to an administering body described in paragraph (1) in
the same manner as such requirements apply to an
administering body described in section 708(c)(1) of
this Act.
(d) Eligible Activities.--Amounts deposited in a Fund shall
be used only to provide grants to conserve, maintain, and
restore the [tropical forests] tropical forests and coral reefs
and associated coastal marine ecosystems related to such coral
reefs in the beneficiary country, through one or more of the
following activities:
(1) Establishment, restoration, protection, and
maintenance of parks, protected areas, and reserves.
(2) Development and implementation of scientifically
sound systems of natural resource management, including
land and ecosystem management practices.
(3) Training programs to increase the scientific,
technical, and managerial capacities of individuals and
organizations involved in conservation efforts.
(4) Restoration, protection, or sustainable use of
diverse animal and plant species.
(5) Research and identification of medicinal uses of
[tropical forest] plant life to treat human diseases,
illnesses, and health related concerns.
(6) Development and support of the livelihoods of
individuals [living in or near a tropical forest in a
manner consistent with protecting such tropical forest]
dependent on a tropical forest or coral reef or an
associated coastal marine ecosystem related to such
coral reef and related resources in a manner consistent
with conserving such resources.
(e) Grant Recipients.--
(1) In general.--Grants made from a Fund shall be
made to--
(A) nongovernmental environmental, forestry,
conservation, and indigenous peoples
organizations of, or active in, the beneficiary
country;
(B) other appropriate local or regional
entities of, or active in, the beneficiary
country; or
(C) [in exceptional circumstances, the
government of the beneficiary country] in
limited circumstances, the government of the
beneficiary country when needed to improve
governance and enhance management of tropical
forests or coral reefs or associated coastal
marine ecosystems, without replacing existing
levels of financial efforts by the government
of the beneficiary country and with priority
given to projects that complement grants made
under subparagraphs (A) and (B).
(2) Priority.--In providing grants under paragraph
(1), priority shall be given to projects that are run
by nongovernmental organizations and other private
entities and that involve local communities in their
planning and execution.
[(f) Review of Larger Grants.--Any grant of more than
$100,000 from a Fund shall be subject to veto by the Government
of the United States or the government of the beneficiary
country.]
(f) Review of Larger Grants.--Any grant of more than
$250,000 from a Fund must be approved by the Government of the
United States and the government of the beneficiary country.
(g) Eligibility Criteria.--In the event that a country
ceases to meet the eligibility requirements set forth in
section 805(a), as determined by the President pursuant to
section 805(b), then grants from the Fund for that country may
only be made to nongovernmental organizations until such time
as the President determines that such country meets the
eligibility requirements set forth in section 805(a).
SEC. 810. [TROPICAL FOREST FUND] CONSERVATION FUND.
(a) Establishment.--Each beneficiary country that enters
into a [Tropical Forest Agreement] Conservation Agreement under
section 809 shall be required to establish a [Tropical Forest
Fund] Conservation Fund to receive payments of interest and
principal on new obligations undertaken by the beneficiary
country under this part.
(b) Requirements Relating to Operation of Fund.--The
following terms and conditions shall apply to the Fund in the
same manner as such terms as conditions apply to an Enterprise
for the Americas Fund under section 707 of this Act:
(1) The provision relating to deposits under
subsection (b) of such section.
(2) The provision relating to investments under
subsection (c) of such section.
(3) The provision relating to disbursements under
subsection (d) of such section.
[SEC. 811. BOARD.
[(a) Enterprise for the Americas Board.--The Enterprise for
the Americas Board established under section 610(a) of the
Agricultural Trade Development and Assistance Act of 1954 (7
U.S.C. 1738i(a)) shall, in addition to carrying out the
responsibilities of the Board under section 610(c) of such Act,
carry out the duties described in subsection (c) of this
section for the purposes of this part.
[(b) Additional Membership.--
[(1) In general.--The Enterprise for the Americas
Board shall be composed of an additional four members
appointed by the President as follows:
[(A) Two representatives from the United
States Government, including a representative
of the International Forestry Division of the
United States Forest Service.
[(B) Two representatives from private
nongovernmental environmental, scientific,
forestry, or academic organizations with
experience and expertise in preservation,
maintenance, sustainable uses, and restoration
of tropical forests.
[(2) Chairperson.--Notwithstanding section 610(b)(2)
of the Agricultural Trade Development and Assistance
Act of 1954 (7 U.S.C. 1738i(b)(2)), the Enterprise for
the Americas Board shall be headed by a chairperson who
shall be appointed by the President and shall be the
representative from the Department of State appointed
under section 610(b)(1)(A) of such Act''.
[(c) Duties.--The duties described in this subsection are
as follows:
[(1) Advise the Secretary of State on the
negotiations of Tropical Forest Agreements.
[(2) Ensure, in consultation with--
[(A) the government of the beneficiary
country;
[(B) nongovernmental organizations of the
beneficiary country;
[(C) nongovernmental organizations of the
region (if appropriate);
[(D) environmental, scientific, forestry, and
academic leaders of the beneficiary country;
and
[(E) environmental, scientific, forestry, and
academic leaders of the region (as
appropriate), that a suitable administering
body is identified for each Fund.
[(3) Review the programs, operations, and fiscal
audits of each administering body.]
SEC. 812. CONSULTATIONS WITH THE CONGRESS.
The President shall consult with the appropriate
congressional committees on a periodic basis to review the
operation of the Facility under this part and the eligibility
of countries for benefits from the Facility under this part.
SEC. 813. ANNUAL REPORTS TO THE CONGRESS.
[(a) In General.--Not later than December 31] Not later
than April 15 of each year, the President shall prepare and
transmit to the Congress an annual report concerning the
operation of the Facility for the prior fiscal year. Such
report shall include--
(1) a description of the activities undertaken by the
Facility during the previous fiscal year;
(2) a description of any Agreement entered into under
this part;
(3) a report on any Funds that have been established
under this part and on the operations of such Funds;
and
(4) a description of any grants that have been
provided by administering bodies pursuant to Agreements
under this part.
[(b) Supplemental Views in Annual Report.--Not later than
December 15 of each year, each member of the Board shall be
entitled to receive a copy of the report required under
subsection (a).
Each member of the Board may prepare and submit supplemental
views to the President on the implementation of this part by
December 31 for inclusion in the annual report when it is
transmitted to Congress pursuant to this section.]