Summary: H.R.3402 — 101st Congress (1989-1990)All Information (Except Text)

Bill summaries are authored by CRS.

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Conference report filed in House (11/17/1989)

Support for East European Democracy (SEED) Act of 1989 - Requires the United States to implement, beginning in FY 1990, a program to support East European democracy by providing assistance to Eastern European countries which have taken substantive steps toward institutionalizing political democracy and economic pluralism. Designates support for East European democracy activities as SEED.

Title I: Structural Adjustment - Directs the U.S. Government, to the extent that Poland and Hungary continue to evolve toward pluralism and democracy and to develop and implement economic reforms, to: (1) mobilize international financial institutions to provide resources to help Poland and Hungary; (2) support the Government of Poland in attacking hyperinflation and other economic problems and relieve urgent balance of payments requirements in Poland; (3) urge all creditor governments to adopt a generous and early debt rescheduling program for Poland and expedite consultations between Poland and such governments to facilitate such rescheduling; and (4) provide agricultural assistance to Poland.

Requires the Secretary of the Treasury to direct the U.S. executive director of the International Bank for Reconstruction and Development (World Bank) to urge expeditious approval and disbursement by the Bank of a structural adjustment loan to Poland to facilitate major economic reforms scheduled for early 1990.

Declares that the U.S. Government, to the extent that the International Monetary Fund (IMF) review of the Polish economy projects a probable balance of payments shortage for the fourth quarter of 1989, should work closely with the European Community and international financial institutions to determine the extent of emergency assistance required by Poland and consider extending a bridge loan to relieve urgent balance of payments requirements. States that the President should seek to ensure that industrialized democracies undertake an immediate effort to respond to Poland's request for $1,000,000 to support economic stabilization programs. Authorizes the President to furnish assistance to Poland for such programs. Authorizes appropriations.

Requires the U.S. Government to: (1) make available agricultural assistance to Poland to alleviate food shortages and to facilitate the transition to a free market economy; and (2) encourage parallel efforts by the European Community and other agricultural surplus countries.

Sets a minimum level of agricultural assistance for Poland for FY 1990.

Directs the President to take actions to encourage innovative approaches to debt reduction of East European countries which have taken substantive steps toward political democracy and economic pluralism. Authorizes the President to undertake the discounted sale to private purchasers of U.S. Government debt obligations of such countries. Permits such a sale only if it will facilitate a debt-for-equity or debt-for-development swap.

Title II: Private Sector Development - Authorizes the President to designate two private, nonprofit organizations as the Polish-American Enterprise Fund and the Hungarian-American Enterprise Fund to promote development of the Polish and Hungarian private sectors. Authorizes appropriations for the Funds.

Permits grants to be made to the Funds only if the Funds are in compliance with this title. Authorizes Fund monies to be used for: (1) employee stock ownership plans; (2) indigenous credit unions; (3) the modernization of Polish telecommunications; and (4) the economic foundation of NSZZ Solidarnosc.

Sets forth provisions with respect to the administration of the Funds and auditing, recordkeeping, and reporting requirements.

Requires the Secretary of Labor to provide technical assistance to Poland and Hungary for the implementation of labor market reform and to facilitate adjustment during the period of economic transition and reform. Outlines administrative authorities and types of assistance authorized. Authorizes appropriations.

Directs the Agency for International Development (AID) to implement a technical training program for Poland and Hungary to enable such countries to develop market economies. Permits AID to use the Polish-American and Hungarian-American Enterprise Funds and other appropriate Federal and private agencies and programs to carry out such training. Authorizes appropriations for FY 1990 through 1992.

Prohibits funding for the Farmer-to-Farmer program to be made available under the Food Security Act of 1985 or a similar provision of law.

Authorizes appropriations for FY 1990 through 1992 to carry out Peace Corps programs in Poland and Hungary.

Permits the use of local currencies generated by the sale of agricultural commodities made available to Poland to: (1) complement certain assistance made available under this Act; and (2) support the activities of a joint commission established under the American Aid to Poland Act of 1988. States that the use of such currencies should emphasize agricultural development in Poland.

Declares that it is U.S. policy that: (1) U.S. persons, financial institutions, and other persons may provide financial and technical assistance to credit unions in Poland and Hungary; and (2) federally insured depository institutions may provide technical assistance to such credit unions, to the extent that such assistance is prudent and not inconsistent with safe and sound banking practice.

Amends the Federal Credit Union Act to allow Federal credit unions to provide technical assistance to credit unions in Poland and Hungary.

Title III: Trade and Investment - Amends the Trade Act of 1974 to remove Poland from the list of countries ineligible for designations as beneficiary developing countries.

Requires the Overseas Private Investment Corporation (OPIC) to support projects in Poland and Hungary to enhance the nongovernmental sector and reduce state involvement in the economy.

Authorizes the Export-Import Bank to extend financial services to Poland and Hungary.

Amends the Foreign Assistance Act of 1961 to authorize the President to provide guarantees to the Bank for liabilities incurred in connection with guarantees or insurance for financing involving exports of goods and services for the private sector in Poland. Limits such guarantees to short-term guarantees and insurance to be repayable within one year of the date of arrival of such goods and services. Permits economic support fund assistance to be made available to discharge such liabilities. Provides for the crediting of subsequent payments to a reserve fund. Limits the aggregate amount of outstanding guarantees. Requires the AID Administrator and the President of the Bank to report biannually to the Speaker of the House and the chairman of the Senate Foreign Relations Committee on the amount and extension of such guarantees and insurance. Authorizes the Bank to charge fees and premiums in connection with such guarantees or insurance. Terminates the President's authority to make such guarantees after FY 1992.

Authorizes appropriations for FY 1990 through 1992 to carry out the Trade and Development Program in Poland and Hungary.

Urges the President to seek bilateral investment treaties with Poland and Hungary to establish a more stable legal framework for U.S. investment in such countries.

Amends the Tax Reform Act of 1986 to exempt certain Polish bonds from rules relating to below-market loans.

Title IV: Educational, Cultural, and Scientific Activities - Declares that the United States should: (1) expand its participation in educational and cultural exchange activities with Poland and Hungary especially activities that assist the development of free market economies in Poland and Hungary; and (2) take action to establish binational Fulbright commissions with Poland and Hungary.

States that the President should consider the establishment of reciprocal cultural centers in Poland, Hungary, and the United States to facilitate cultural exchanges.

Requires the President to encourage the establishment of "sister institution" programs between American and Polish, and American and Hungarian, organizations.

Authorizes appropriations for FY 1990 through 1992 for such activities.

Authorizes the AID Administrator to establish and administer a scholarship program to enable Polish and Hungarian students to study in the United States. Provides that such program shall emphasize scholarships for the study of business and economics.

Authorizes the Administrator to make grants to States to provide assistance in study areas related to the development needs of Poland and Hungary. Limits the annual Federal share for such grants to 50 percent of the total amount. Requires States to enlist the assistance of the private sector in meeting the non-Federal share of payments and to encourage the private sector to offer internships or other opportunities to scholarship recipients. Makes available economic support fund and development assistance to carry out such program. Authorizes additional appropriations for FY 1990 through 1992.

Authorizes appropriations for FY 1990 through 1992 to implement the 1987 U.S.-Polish science and technology agreement and the 1989 U.S.-Hungarian science and technology agreement.

Title V: Other Assistance Programs - Authorizes appropriations for FY 1990 through 1992 for the support of democratic institutions and activities in Poland and Hungary.

Provides that a high priority be given to pollution control and the restoration of the natural resource base in the implementation of assistance to Poland and Hungary.

Authorizes the Administrator of the Environmental Protection Agency to undertake environmental protection activities in Poland and Hungary.

Requires the Administrator to cooperate with Polish officials and experts to: (1) establish an air quality monitoring network in the Krakow metropolitan area; and (2) improve water quality and the availability of drinking water in such area.

Directs the Administrator to work with U.S. and Hungarian officials and private parties to establish and support a center in Budapest, Hungary, for facilitating cooperative environmental activities between governmental experts and U.S. and Eastern and Western European organizations.

Authorizes appropriations for FY 1990 through 1992.

Directs the Secretary of Energy to cooperate with Polish officials and experts to: (1) retrofit a coal-fired commercial power plant in Krakow, Poland, with advanced clean coal technology; and (2) assess and develop Poland's capability to manufacture or modify industrial equipment to enable industrial facilities to use fossil fuels cleanly. Authorizes apppropriations for FY 1990 through 1992.

Requires the Secretary of Energy to give high priority to assisting Poland and Hungary in improving energy efficiency.

Expresses the sense of the Congress that the executive branch should work with the Hungarian Government to achieve environmentally safe alternative investments in energy efficiency, particularly with regard to projects along the Danube River.

Authorizes additional appropriations under the Foreign Assistance Act of 1961 for FY 1990 through 1992 to be available only for the provision of medical supplies and hospital equipment to Poland and the training of Polish medical personnel.

Title VI: Additional SEED Program Actions - Requires the President to designate a SEED program coordinator within the Department of State.

Directs the President to establish a SEED Information Center System to serve as a clearinghouse for information relating to business needs and opportunities in, and voluntary assistance to, Eastern Europe. Requires such system to encourage economically sound proposals to the Polish-American and Hungarian-American Enterprise Funds and other finance sources for the development of private enterprise in Eastern Europe. Provides that such system shall be based in Washington, D.C., Warsaw, Budapest and, as appropriate, other East European capitals.

Expresses the sense of the Congress that the President should encourage national monetary and food contributions for assistance to Poland and to Romanian refugees in Hungary. Declares that the President should use all available authorities, request additional authorities, as needed, and encourage participation by private voluntary organizations in transporting nonfinancial private contributions to Poland.

Expresses the sense of the Congress that: (1) the U.S. embassies in Budapest and Warsaw should each be assigned one additional economic and commercial officer; and (2) the U.S. Trade Center in Warsaw and the U.S. mission in Krakow should each be assigned an additional economic and commercial officer.

Title VII: Reports to Congress - Requires the President to report to the Congress on: (1) steps taken by the U.S. Government with respect to title I of this Act; and (2) Poland's requirements for additional agricultural assistance during FY 1990 through 1992 and how much assistance is proposed by the President. Provides for revised assessments of Poland's requirements for such assistance to be submitted to the Congress.

Directs the President to report to the Congress on the confidence building measures Poland and Hungary could undertake to facilitate the negotiation of agreements to encourage private sector investments in such countries and with respect to the treatment accorded to such countries under the Export Administration Act of 1979.

Requires the President to report annually to: (1) the Congress on the SEED program; and (2) the appropriate congressional committees on the extent of espionage activities against the United States and NATO member countries by operatives of East European countries receiving assistance under this Act.

Applies reprogramming notification requirements of the Foreign Assistance Act of 1961 to funds made available under such Act to carry out this Act.

Title VIII: Miscellaneous Provisions - Declares that the President should suspend assistance to an East European country pursuant to this Act if the President reports to the Congress that: (1) such country is engaged in international activities that threaten U.S. national security interests; (2) a government official of such country initiates martial law or a state of emergency for reasons other than to respond to a natural disaster or a foreign invasion; or (3) any elected parliament member has been removed from office or arrested through extraconstitutional processes.

Congratulates the Hungarian people on the declaration of a Republic of Hungary and expresses the desire to enhance friendly relations between the Hungarian and American peoples and Governments.

Permits AID to use a specified amount of funds made available under this Act for administrative expenses.

Authorizes the AID Administrator, during FY 1990, to use excess foreign currencies for: (1) purposes for which economic assistance is provided under the Foreign Assistance Act of 1961; and (2) any institution providing education to a significant number of U.S. nationals.