Sec. 3. Debt reduction for countries vulnerable to effects of extreme weather events and slow-onset disasters
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The Foreign Assistance Act of 1961 ( 22 U.S.C. 2151 et seq. ) is amended by adding at the end the following: The purposes of this section are— to support the ability of countries to adapt to effects of extreme weather events and slow-onset climate disasters; and to ensure that resources freed from debt in such countries are targeted to developing resilience to the effects of climate change. A country is eligible for benefits under this section if the President determines that— the country is— a low income, lower-middle income, or upper-middle income country, as determined by the World Bank; or a small island developing state, as determined by the United Nations; the government of the country is democratically elected; the government of the country (including its military or other security forces) does not engage in a consistent pattern of gross violations of internationally recognized human rights; and the government of the country has developed a plan to use the benefits made available under this section to conduct— climate adaptation activities; or activities to recover from extreme weather events or slow-onset climate disasters.
Not less than 15 days before formally determining under paragraph
(1)that a country is eligible for benefits under this section, the President shall notify the appropriate congressional committees of intention of the President to determine that the country is eligible for such benefits. In providing benefits under this section, preference shall be given to countries with plans described in paragraph (1)(D) that— involve local communities in the planning and execution of activities described in that paragraph; and aim to reduce gender, income, and social inequalities through such activities. The President may reduce the amount owed to the United States (or any agency of the United States) as a result of 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. There are authorized to be appropriated to the President such sums as may be necessary to carry out this subsection. A reduction of debt pursuant to this subsection shall not be considered assistance for purposes of any provision of law limiting assistance to a country. The authority of this subsection may be exercised notwithstanding section 620(r) of this Act or section 321 of the International Development and Food Assistance Act of 1975 ( Public Law 94–161 ; 22 U.S.C. 2220a note). Any debt reduction pursuant to paragraph
(1)shall be accomplished at the direction of the President by the exchange of a new obligation for obligations of the type referred to in that paragraph. The President shall notify the agency primarily responsible for administering part I of this Act ( 22 U.S.C. 2151 et seq. ) of an agreement entered into under subparagraph
(A)with a country to exchange a new obligation for outstanding obligations. At the direction of the President, the old obligations that are the subject of the agreement entered into under subparagraph
(A)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. Notwithstanding any other provision of law, the President may, in accordance with this subsection, sell to any eligible purchaser described in subparagraph
(B)loans described in subsection (c)(1)(A), or on receipt of payment from such a purchaser, reduce or cancel such loans or portion thereof, only for the purpose of facilitating debt-for-climate adaptation swaps. The President may, in accordance with this subsection, purchase privately owned debt of an eligible country, if that debt is purchased for not more than 65 percent of the face value of the debt, for the purpose of facilitating debt-for-climate adaptation swaps. Notwithstanding section 3302 of title 31, United States Code, the proceeds of any purchase under subclause (I)— shall be credited as offsetting collections to the account that finances the activities under this section; shall be available for expenditure only to pay the costs of activities under this section; and shall remain available until expended. A loan may be sold, reduced, or canceled under subparagraph
(A)only to a purchaser that presents plans satisfactory to the President for using the loan for the purpose of engaging in debt-for-climate adaptation swaps. Before the sale under subparagraph (A)(i) to any eligible purchaser described in subparagraph (B), or any reduction or cancellation under subparagraph (A)(i), of any loan made to an eligible country, and before the purchase of privately owned debt under subparagraph (A)(ii), the President shall consult with the country concerning the amount of loans to be sold, reduced, or canceled, or debt to be purchased, as the case may be, and their uses for debt-for-climate adaptation swaps. There are authorized to be appropriated to the President such sums as may be necessary to carry out this subsection. Notwithstanding any other provision of law, the President may, in accordance with this subsection, sell to any eligible country any loans described in subsection (c)(1)(A) or on receipt of payment from an eligible country, reduce or cancel such loans or portion thereof, only for the purpose of facilitating a debt buyback by an eligible country of its own qualified debt in order to support climate adaptation activities. Notwithstanding any other provision of law, the President shall, in accordance with this subsection, establish the terms and conditions under which loans may be sold, reduced, or canceled pursuant to this subsection. The proceeds from the sale, reduction, or cancellation of any loan sold, reduced, or canceled pursuant to this subsection shall be deposited in the United States Government account or accounts established for the repayment of the loan. The President shall consult with the appropriate congressional committees on a periodic basis to review the operation of this section and the eligibility of countries for benefits under this section. Not later than April 15 of each year, the President shall prepare and submit to Congress an annual report concerning the operation of this section during the preceding calendar year. Each report required by paragraph
(1)shall include— a description of the activities undertaken under this section during the preceding calendar year; and a description of any agreement entered into under this section. In this section: The term appropriate congressional committees means— the Committee on Foreign Relations and the Committee on Appropriations of the Senate; and the Committee on Foreign Affairs and the Committee on Appropriations of the House of Representatives. The term climate adaptation activities means activities undertaken to make changes to processes, practices, or structures that moderate potential damage from hazardous events, trends, or disturbances associated with extreme weather events and slow-onset climate disasters. The term debt-for-climate adaptation swap means the reduction of amounts owed to the United States (or any agency of the United States) by an eligible country in exchange for the commitment of that country to conduct climate adaptation activities. The term eligible country means a country determined under subsection
(b)to be eligible for benefits under this section. The term extreme weather event means an occurrence of unusually severe weather or climate conditions that can cause devastating impacts on communities and agricultural and natural ecosystems. The term slow-onset climate disaster means an event that evolves gradually from incremental changes occurring over many years or from an increased frequency or intensity of recurring events, such as sea-level rise, loss of biodiversity, desertification, increasing temperatures, or ocean acidification. .
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- Pub. L. 94-161
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Sec. 3
Debt reduction for countries vulnerable to effects of extreme weather events and slow-onset disasters
Pub. L.Pub. L. 94-161
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