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prohibit one, using USDA's export loan programs for foreign policy purposes and two, 

 extending credit to countries unable to service the debt. 



The President is given authority to extend new credits to a state and approve 

 additional sales under credits previously extended to the state, notwithstanding one, 

 the restrictions of the Act and two, a state's arrearage on existing loans. 



Section 206(b) gives the President authority to donate agricultural commodities to a 

 qualifying state that has entered into an agreement to reduce its debt. 



To be eligible for a reduction in debt, additional credits, and commodities donations, 

 the state must enter into an agreement as provided for in section 206(c). 



SECTION 206(c) - AGREEMENTS. 



New Section 206(c) sets out the three types of agreements under which qualifying 

 states may have debt reduced: 



1) To promote the establishment or maintenance of democracy or economic 

 reform and progress toward a market economy, the state agrees to give a US 

 business entity, including an agricultural business entity, an equity interest in 

 a state-owned enterprise. The interest would equal the amount of debt reduced 

 which the business agrees to repay. 



2) The state agrees to dismantle nuclear weapons or other military-related 

 objects and facilities within the state or to convert military-related facilities to 

 non-military purposes. 



3) The state agrees to other terms and conditions the President determines 

 to be in the national interest and consistent with the purposes of the Act. 



SECTION 206(d) - IMPLEMENTATION. 



New section 206(d) provides that to implement an agreement and to protect the 

 interests of the US, the President is authorized to provide technical assistance to a 

 state that is party to a debt reduction agreement to monitor and assist in the 

 implementation of the agreement. 



The President may renegotiate or cancel an agreement if not implemented according 

 to its terms. 



HR 1507. THE DEBT FOR DEMOCRACY ACT-BY MR. GUCKMAN 

 SUMMARY-PAGE 2 OF 2 



