Foreign Credit Reform Act of 2004 - Amends Federal law to extend authorization of appropriations for the U.S. contribution to the Heavily Indebted Poor Country (HIPC) Trust Fund.
Amends the Bretton Woods Agreements Act to direct the Secretary of the Treasury to negotiate an agreement under which the International Bank for Reconstruction and Development and the International Monetary Fund shall contribute to the Global Fund to Fight AIDS, Tuberculosis and Malaria an amount equal to the amount of a country's annual debt service made to the Bank and the Fund.
Authorizes the President to waive certain Agricultural Trade Development and Assistance Act of 1954 principal and interest payments owed to the Commodity Credit Corporation by eligible debt-heavy countries for FY 2005 and 2006. Amends such Act to define "developing country" for purposes of title I assistance.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4560 Introduced in House (IH)]
108th CONGRESS
2d Session
H. R. 4560
To provide multilateral and bilateral debt relief for developing
countries, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 14, 2004
Mr. Hyde introduced the following bill; which was referred to the
Committee on Financial Services, and in addition to the Committees on
International Relations and Agriculture, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To provide multilateral and bilateral debt relief for developing
countries, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as ``Foreign Credit Reform Act of 2004''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Unsustainable debt in the world's poorest countries
constitutes a serious impediment to the development of stable
democratic political structures, broad-based economic growth,
poverty eradication, and food security.
(2) Financing should be appropriate for the purposes for
which it is used and should, to the maximum extent possible,
generate a return sufficient to pay the principal and interest
due. As such, long-term lending for perishable goods, such as
food commodities, may be construed as inappropriate to the
extent that it places a long-term debt burden on the recipient
country without generating sufficient revenues with which to
service the debt.
(3) Since 1955, the United States has extended more than
$27,800,000,000 in loans for food under title I of the
Agricultural Trade Development and Assistance Act of 1954
(commonly referred to as ``PL 480''), $10,632,858,000 of which
remained outstanding at the end of 2002.
(4) As of December 31, 2002, arrears on principal and
interest payments under title I of PL 480 totaled
$1,241,472,000.
(5) Since 1992 the United States provided the independent
states of the former Soviet Union with $1,601,500,000 in loans
for food under title I of PL 480, for which these countries are
estimated to have paid $112,748,000 in principal and interest
in 2003. Russia alone has received $1,035,000,000 in credits,
paying an estimated $79,695,000 in principal and interest in
2003.
(6) Rising debt stocks and debt-to-export ratios may
undermine a country's credit worthiness and jeopardize its
ability to borrow from commercial lenders.
(7) Debt reduction contributes marginally to a country's
development prospects if new debt is allowed to create the next
generation of heavy indebtedness. Therefore, President Bush's
initiative, adopted by Group of Seven (G-7) leaders at the June
2002 summit, to increase World Bank grant assistance to the
most heavily indebted poor countries is a crucial step toward
alleviating poverty, curbing future unsustainable debt, and
providing for urgent human needs in countries in which people
live on less than one dollar a day. Replacing loans with
targeted grants will eliminate the need for governments to
repay long-term investments in people, especially for
education, health, nutrition, water supply, and sanitation
purposes.
(8) The G-7 agreement at the June 2002 summit to fully fund
the remaining costs of the enhanced Heavily Indebted Poor
Country (HIPC) initiative is essential to ensuring that
eligible debt-distressed nations receive full benefits under
the HIPC debt relief measure.
(9) The United States has been a leading voice for more
than a decade in international debt reduction initiatives for
poor countries, including a 1991 initiative to cancel
$689,000,000 in food loans under title I of PL 480 owed by 15
sub-Saharan African countries.
(10) The United States must continue its leadership role to
encourage full participation by all Paris Club creditors in
multilateral debt negotiations.
(11) Several poor countries that are not eligible for
enhanced HIPC debt reduction terms face a severe debt overhang
that undermines increased resource allocation for development
and discourages productive investment.
(12) The World Bank, which has provided over $1,700,000,000
since 1986 to fight the spread of HIV/AIDS, should continue to
place the highest priority on programs to combat infectious
diseases, including HIV/AIDS, malaria, and tuberculosis.
(13) Debt reduction is an important, but only partial
solution to long-term development. Promoting an environment
that will stimulate internal economic growth, promote trade and
external investment, and encourage responsible governance are
the most important ingredients for sustainable growth.
TITLE I--MULTILATERAL DEBT RELIEF
SEC. 101. SUPPORT FOR THE HIPC TRUST FUND.
Section 801(b)(1) of H.R. 5526 of the 106th Congress, as introduced
on October 24, 2000, and enacted into law by section 101(a) of Public
Law 106-429 (and contained in the appendix thereto) is amended by
striking ``2003, $435,000,000'' and inserting ``2006, such sums as may
be necessary''.
SEC. 102. DEBT SERVICE REINVESTED INTO THE GLOBAL FUND.
The Bretton Woods Agreements Act (22 U.S.C. 286-286oo) is further
amended by adding at the end the following:
``SEC. 64. DEBT SERVICE REINVESTED INTO THE GLOBAL FUND.
``(a) Negotiation of Agreement.--The Secretary of the Treasury
shall seek to negotiate an agreement among the member countries of the
Bank and the Fund, under which, on approval by the Global Fund of a
grant proposal originating from an eligible country, the Bank and the
Fund shall make a contribution to the Global Fund in an amount equal to
the amount of the grant award for the year, except that the total
amount of the contributions so made with respect to the country during
a year shall not exceed the total amount of debt service payments made
by the country to the Bank and the Fund during the year.
``(b) Definitions.--In this section:
``(1) Global fund.--The term `Global Fund' means the
public-private partnership known as the Global Fund to Fight
AIDS, Tuberculosis and Malaria that was established upon the
call of the United Nations Secretary General in April 2001.
``(2) Eligible country.--The term `eligible country' means
a country--
``(A) which has received debt relief under the
Enhanced HIPC Initiative; and
``(B) in which the prevalence of HIV/AIDS among
individuals who have attained 15 years of age but have
not attained 49 years of age is not less than 5
percent.
``(3) Enhanced hipc initiative.--The term `Enhanced HIPC
Initiative' means the multilateral debt initiative for heavily
indebted poor countries presented in the Report of G-7 Finance
Ministers on the Cologne Debt Initiative to the Cologne
Economic Summit, Cologne, June 18-20, 1999.
``(4) HIV/AIDS.--The term `HIV/AIDS' means, with respect to
an individual, an individual who is infected with HIV or living
with AIDS.
``(5) HIV.--The term `HIV' means the human immunodeficiency
virus, the pathogen that causes AIDS.
``(6) AIDS.--The term `AIDS' means the acquired immune
deficiency syndrome.''.
TITLE II--BILATERAL DEBT RELIEF
SEC. 201. ACTIONS TO PROVIDE BILATERAL DEBT RELIEF.
Section 501(i) of H.R. 3425 of the 106th Congress, as introduced on
November 17, 1999, and enacted into law by section 1000(a)(5) of Public
Law 106-113 (and contained in Appendix E thereto), is amended by
striking ``2004'' and inserting ``2005''.
SEC. 202. DEBT FORGIVENESS UNDER TITLE I OF PUBLIC LAW 480.
(a) Debt Forgiveness.--For each of the fiscal years 2005 and 2006,
the President is authorized and encouraged to use the authority of
section 411 of the Agricultural Trade Development and Assistance Act of
1954 (7 U.S.C. 1736e) to waive payments of principal and interest that
a country described in subsection (b) would otherwise be required to
make to the Commodity Credit Corporation under dollar sales agreements
under title I of such Act (7 U.S.C. 1701 et seq.).
(b) Country Described.--A country referred to in subsection (a) is
a country--
(1) which has outstanding public and publicly guaranteed
debt, the net present value of which on December 31, 2003, was
at least 150 percent of the value of exports of the country in
2003; or
(2) whose debt service payments on public and publicly
guaranteed debt exceeded 8 percent of the value of its exports
in 2003.
(c) Applicable Provisions.--Except to the extent inconsistent with
the provisions of this section, section 411 of the Agricultural Trade
Development and Assistance Act of 1954 (7 U.S.C. 1736e) (except
subsection (e) of such section) shall apply with respect to the
authority to waive payments of principal and interest under this
section to the same extent and in the same manner as such section
applies to the authority to waive payments of principal and interest
under section 411 of such Act.
(d) Authorization of Appropriations.--For the cost (as defined in
section 502 of the Federal Credit Reform Act of 1990) for the reduction
or cancellation of any debt pursuant to this section, there are
authorized to be appropriated to the President for each of the fiscal
years 2005 and 2006 such sums as may be necessary.
SEC. 203. MISCELLANEOUS AMENDMENTS.
(a) Financing Assistance Under Title I of Public Law 480.--Section
101(b) of the Agricultural Trade Development and Assistance Act of 1954
(7 U.S.C. 1701(b)) is amended--
(1) by striking ``To carry out the policies'' and inserting
the following:
``(1) In general.--To carry out the policies'';
(2) by striking ``developing countries'' and inserting
``developing countries described in paragraph (2)''; and
(3) by adding at the end the following:
``(2) Developing country described.--A developing country
referred to in paragraph (1) is a developing country that meets
the following requirements:
``(A) The country is not prohibited from receiving
assistance under the Foreign Assistance Act of 1961 by
reason of the application of section 620(q) of such Act
and irrespective of whether or not the President has
determined that assistance to the country is in the
national interest of the United States.
``(B) The country is not in default, during a
period in excess of six calendar months, in payment to
the United States of principal or interest on any loan
made to such country under this title or under any
other provision of law.
``(C) The country is not a low-income country or
lower-middle income country, as defined by the
International Bank for Reconstruction and Development
in its World Development Indicators Report (issued in
April 2004 and updated annually).
``(D) The country is not a severely-indebted
country or moderately-indebted country as defined by
the International Bank for Reconstruction and
Development in its World Development Indicators Report
(issued in April 2004 and updated annually).''.
(b) Economic Assistance Under the Foreign Assistance Act of 1961.--
Section 620(q) of the Foreign Assistance Act of 1961 (22 U.S.C.
2370(q)) is amended--
(1) by inserting after ``under this Act'' the second place
it appears the following: ``or under title I of the
Agricultural Trade Development and Assistance Act of 1954 (7
U.S.C. 1701 et seq.)''; and
(2) by adding at the end the following: ``A determination
by the President under the preceding sentence that assistance
to a country is in the national interest of the United States
shall be effective for a period not to exceed one calendar
year.''.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Financial Services, and in addition to the Committees on International Relations, and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committees on International Relations, and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committees on International Relations, and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committees on International Relations, and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Specialty Crops and Foreign Agriculture Programs.
Referred to the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology.
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