Report text available as:

(PDF provides a complete and accurate display of this text.) Tip?



107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    107-119

======================================================================



 
REAUTHORIZATION OF THE TROPICAL FOREST CONSERVATION ACT OF 1998 THROUGH 
                            FISCAL YEAR 2004

                                _______
                                

 June 28, 2001.--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. 2131]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on International Relations, to whom was 
referred the bill (H.R. 2131) to reauthorize the Tropical 
Forest Conservation Act of 1998 through fiscal year 2004, 
having considered the same, reports favorably thereon with 
amendments and recommends that the bill as amended do pass.

                           TABLE OF CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Committee Consideration..........................................     3
Committee Oversight Findings.....................................     3
New Budget Authority and Tax Expenditures........................     3
Congressional Budget Office Cost Estimate........................     3
Performance Goals and Objectives.................................     5
Constitutional Authority Statement...............................     5
Section-by-Section Analysis......................................     5
Agency Views.....................................................     6
New Advisory Committees..........................................     6
Congressional Accountability Act.................................     6
Federal Mandates.................................................     6
Changes in Existing Law Made by the Bill, as Reported............     6

                             The Amendments

    The amendments are as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. ELIGIBILITY FOR BENEFITS.

    Section 805(a)(2) of the Tropical Forest Conservation Act of 1998 
(22 U.S.C. 2431c(a)(2)) is amended by striking ``major''.

SEC. 2. AUTHORIZATION OF APPROPRIATIONS TO SUPPORT REDUCTION OF DEBT 
                    UNDER THE FOREIGN ASSISTANCE ACT OF 1961 AND TITLE 
                    I OF THE AGRICULTURAL TRADE DEVELOPMENT AND 
                    ASSISTANCE ACT OF 1954.

    (a) Reauthorization.--Section 806 of the Tropical Forest 
Conservation Act of 1998 (22 U.S.C. 2431d) is amended by adding at the 
end the following new subsection:
    ``(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.''.
    (b) Conforming Amendment.--Section 808(a)(1)(D) of the Tropical 
Forest Conservation Act of 1998 (22 U.S.C. 2431f(a)(1)(D)) is amended 
by striking ``to appropriated under sections 806(a)(2) and 807(a)(2)'' 
and inserting ``to be appropriated under sections 806(a)(2), 807(a)(2), 
and 806(d)''.

SEC. 3. CHAIRPERSON OF THE ENTERPRISE FOR THE AMERICAS BOARD.

    Section 811(b)(2) of the Tropical Forest Conservation Act of 1998 
(22 U.S.C. 2431i(b)(2)) is amended by striking ``from among the 
representatives appointed under section 610(b)(1)(A) of such Act or 
paragraph (1)(A) of this subsection'' and inserting ``and shall be the 
representative from the Department of State appointed under section 
610(b)(1)(A) of such Act''.

    Amend the title so as to read:

      A bill to reauthorize the Tropical Forest Conservation 
Act of 1998 through fiscal year 2004, and for other purposes.

                          Purpose and Summary

    To Reauthorize the Tropical Forest Conservation Act of 1998 
through fiscal year 2004. This bill authorizes appropriations 
for debt reduction for eligible countries of $50 million for 
FY2002, $75 million for FY2003, and $100 million for FY2004.

                Background and Need for the Legislation

    The bill reauthorizes the Tropical Forest Conservation Act 
(TFCA) to protect the world's most valuable tropical forests 
through ``debt for nature'' mechanisms. At present there are 11 
nations on three continents that are interested in negotiating 
debt reduction agreements under the TFCA. This market-oriented 
conservation program is based on the previous Bush 
Administration's Enterprise for the Americas Initiative 
allowing the President to restructure debt in exchange for 
conservation efforts in Latin America. TFCA expands this 
initiative to tropical forests on a sustained basis worldwide. 
Tropical forests act as ``carbon sinks'' absorbing massive 
quantities of carbon dioxide from the atmosphere, thereby 
reducing greenhouse gases.

                        Committee Consideration

    On June 20, 2001, the Committee met in open session and 
ordered favorably reported the bill H.R. 2131, as amended, by 
voice vote, a quorum being present.

                      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. 2131, 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 21, 2001.
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. 2131, a bill to 
reauthorize the Tropical Forest Conservation Act of 1998 
through fiscal year 2004.
    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,
                                  Dan L. Crippen, Director.

Enclosure

cc:
        Honorable Tom Lantos
        Ranking Democratic Member
H.R. 2131--A bill to reauthorize the Tropical Forest Conservation Act 
        of 1998 through fiscal year 2004, and for other purposes.

                                SUMMARY

    H.R. 2131 would extend the Tropical Forest Conservation Act 
for three years through 2004 and authorize the appropriation of 
$225 million for the cost of implementing the act over that 
period. The bill would expand the act to include additional 
countries and it would require that the State Department chair 
the interagency board that oversees the tropical forest program 
and a companion Enterprise-for-the-Americas program. Assuming 
the appropriation of the authorized amounts, CBO estimates that 
implementing the bill would cost $221 million over the 2002-
2006 period. Because H.R. 2131 would not affect direct spending 
or receipts, pay-as-you-go procedures would not apply.
    The Tropical Forest Conservation Act authorizes the 
Secretary of State to negotiate agreements with eligible 
countries to create local funds administered by local boards 
with the authority to make grants to preserve, maintain, and 
restore tropical forests. The local funds receive a stream of 
payments generated by modifying the terms of outstanding 
development assistance or food-aid debt owed to the United 
States. The debt modifications include authority to reduce and 
to restructure debt, to swap the debt, or to sell the debt back 
to an eligible country in ways that will generate income for 
the local funds. The amounts authorized by H.R. 2131 would be 
used to cover the cost, as defined by the Federal Credit Reform 
Act, of modifying the debt.
    H.R. 2131 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 2131 is shown in the 
following table. The costs of this legislation fall within 
budget function 150 (international affairs).

                                     By fiscal year, in millions of dollars
----------------------------------------------------------------------------------------------------------------
                                                              2001     2002     2003     2004     2005     2006
----------------------------------------------------------------------------------------------------------------

SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for Debt Reduction of
 Developing Countries with Tropical Forests
  Budget Authority \1\                                           13        0        0        0        0        0
  Estimated Outlays                                               6       13        0        0        0        0

Proposed Changes
  Authorization Level                                             0       50       75      100        0        0
  Estimated Outlays                                               0       13       36       69       64       39

Spending Under H.R. 2131 for Debt Reduction of Developing
 Countries with Tropical Forests
  Authorization Level \1\                                        13       50       75      100        0        0
  Estimated Outlays                                               6       26       36       69       64       39
----------------------------------------------------------------------------------------------------------------
\1\ The 2001 level is the amount appropriated for that year for the cost of implementing the Tropical Forest
  Conservation Act of 1998.

                           BASIS OF ESTIMATE

    CBO assumes that the authorized amounts would be 
appropriated by the start of each fiscal year and that outlays 
would follow historical spending patterns.

                     PAY-AS-YOU-GO CONSIDERATIONS:

    None

              INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    H.R. 2131 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would not affect the budgets of 
state, local, or tribal governments.

                         ESTIMATE PREPARED BY:

Federal Costs: Joseph C. Whitehill (226-2840)
Impact on State, Local, and Tribal Governments: Elyse Goldman 
        (225-3220)
Impact on the Private Sector: Lauren Marks (226-2940)

                         ESTIMATE APPROVED BY:

Robert A. Sunshine
Assistant Director for Budget Analysis

                    Performance Goals and Objectives

    The goal of this legislation is to reauthorize the TFCA 
(P.L. 105-214), protecting the world's valuable tropical 
forests by restructuring debt in exchange for conservation 
efforts.

                   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 1, section 8, clause 18 of the 
Constitution.

               Section-by-Section Analysis and Discussion

    To reauthorize the Tropical Forest Conservation Act of 1998 
through fiscal year 2004.
Section 1--Eligibility for Benefits.
    Section 1 allows more countries to be eligible for 
benefits. In section 805(a)(2) of the Tropical Forest 
Conservation Act of 1998 (P.L. 105-214), the threshold for 
investment reforms for a country to become eligible for 
assistance has been changed by dropping ``major'' before 
``investment reforms.'' The Committee is concerned that the 
Treasury Department is insisting on comprehensive foreign 
investment protection regimes, including extraneous trade-
related issues, in order for countries to participate in this 
Act. However, the Committee believes that countries such as the 
Philippines and Costa Rica made significant progress in 
improving the climate for foreign investment, and should be 
made eligible to participate in the provisions of this Act in 
light of this progress as well as the critical importance of 
protecting the tropical forests in these countries.
    The Committee wishes to clarify that the geographical 
limits defining eligibility under the Tropical Forest 
Conservation Act should be extended to any country or area that 
is between 30 degrees north and 30 degrees south of the 
Equator. The reason the Committee encourages this extension is 
due to U.S. Agency for International Development's 
interpretation that only countries lying between 23.5 degrees 
north or south of the equator are eligible for benefits under 
this Act. This interpretation excludes certain tropical-type 
forests such as the forests of the Terai region in Southern 
Nepal and Northern India as well as large parts of the Atlantic 
forest in Brazil, Argentina, and Paraguay. The Committee 
believes that these valuable regions should be eligible under 
this Act in order to encourage their conservation.
Section 2--Authorization of Appropriations to Support Reduction of Debt 
        under the Foreign Assistance Act of 1961 and Title I of the 
        Agricultural Trade Development and Assistance Act of 1954.
    Section 2 authorizes appropriations of $50,000,000 for 
fiscal year 2002, $75,000,000 for fiscal year 2003, 
$100,000,000 fiscal year 2004.
Section 3--Chairpersons of the Enterprise for the Americas Board.
    Section 3 specifies that the chairperson of the Enterprise 
for the Americas Board shall be a representative from the 
Department of State.

                              Agency Views

    The Administration supports the bill.

                        New Advisory Committees

    H.R. 2131 does not establish or authorize any new advisory 
committees.

                    Congressional Accountability Act

    H.R. 2131 does not apply to the legislative branch.

                            Federal Mandages

    H.R. 2131 provides 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):

                TROPICAL FOREST CONSERVATION ACT OF 1998



           *       *       *       *       *       *       *
PART V--DEBT REDUCTION FOR DEVELOPING COUNTRIES WITH TROPICAL FORESTS

           *       *       *       *       *       *       *


SEC. 805. ELIGIBILITY FOR BENEFITS.

    (a) In General.--To be eligible for benefits from the 
Facility under this part, a country shall be a developing 
country with a tropical forest--
            (1) whose government meets the requirements 
        applicable to Latin American or Caribbean countries 
        under paragraphs (1) through (5) and (7) of section 
        703(a) of this Act; and
            (2) that has put in place [major] investment 
        reforms, as evidenced by the conclusion of a bilateral 
        investment treaty with the United States, 
        implementation of an investment sector loan with the 
        Inter-American Development Bank, World 
        Bank-supported investment reforms, or other measures, 
        as appropriate.

           *       *       *       *       *       *       *


SEC. 806. REDUCTION OF DEBT OWED TO THE UNITED STATES AS A RESULT OF 
                    CONCESSIONAL LOANS UNDER THE 
                    FOREIGN ASSISTANCE ACT OF 1961.

    (a) * * *

           *       *       *       *       *       *       *

    (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.

           *       *       *       *       *       *       *


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) * * *

           *       *       *       *       *       *       *

                    (D) Authorization of appropriations.--For 
                the cost (as defined in section 502(5) of the 
                Federal Credit Reform Act of 1990) for the 
                reduction of any debt pursuant to subparagraph 
                (A), amounts authorized [to appropriated under 
                sections 806(a)(2) and 807(a)(2)] 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).

           *       *       *       *       *       *       *


SEC. 811. BOARD.

    (a) * * *
    (b) Additional Membership.--
            (1) * * *
            (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 [from among the 
        representatives appointed under section 610(b)(1)(A) of 
        such Act or paragraph (1)(A) of this subsection] and 
        shall be the representative from the Department of 
        State appointed under section 610(b)(1)(A) of such Act.

           *       *       *       *       *       *       *