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the Administrator shall prepare and submit to the Committee on Foreign Affairs and Committee on Agriculture of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report containing the rea

sons for the waiver. (b) USE OF VALUE-ADDED COMMODITIES.

(1) MINIMUM LEVELS.—Except as provided in paragraph (2), in making agricultural commodities available under this title, the Administrator shall ensure that not less than 75 percent of the quantity of such commodities required to be distributed during each fiscal year under subsection (aX2) be in the form of processed, fortified, or bagged commodities.

(2) WAIVER OF MINIMUM.—The Administrator may waive the requirement of paragraph (1) for any fiscal year in which the Administrator determines that the requirements of the programs established under this title will not be best served by

the enforcement of such requirement under such paragraph. SEC. 205.15 FOOD AID CONSULTATIVE GROUP.

(a) ESTABLISHMENT.-There is established a Food Aid Consultative Group (hereinafter referred to in this section as the “Group”) that shall meet regularly to review and address issues concerning the effectiveness of the regulations and procedures that govern food assistance programs established and implemented under this title, and the implementation of other provisions of this title that may involve private voluntary organizations, cooperatives and indigenous non-governmental organizations. (b) MEMBERSHIP.—The Group shall be composed of,

(1) the Administrator;

(2) the Under Secretary for International Affairs and Commodity Programs;

(3) the Inspector General of the Agency for International Development;

(4) a representative of each private voluntary organization and cooperative participating in a program under this title, or receiving planning assistance funds from the Agency to establish programs under this title; and

(5) representatives from African, Asian and Latin American indigenous non-governmental organizations determined appro

priate by the Administrator. (c) CHAIRPERSON.-The Administrator shall be the chairperson of the Group.

(d) CONSULTATIONS.-In preparing regulations, handbooks, or guidelines implementing this title, or significant revisions thereto, the Administrator shall provide such proposals to the Group for review and comment. The Administrator shall consult and, when appropriate, meet with the Group regarding such proposed regulations, handbooks, guidelines, or revisions thereto prior to the issuance of such.

(e) ADVISORY COMMITTEE ACT.-The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Group.

18 7 U.S.C. 1725.

(f) TERMINATION.—The Group shall terminate on December 31, 1995. SEC. 206.16 MAXIMUM LEVEL OF EXPENDITURES.

(a) MAXIMUM EXPENDITURES.-Except as provided in subsection (b), programs of assistance shall not be undertaken under this title during any fiscal year if such programs necessitate an appropriation of more than $1,000,000,000 to reimburse the Commodity Credit Corporation for all costs incurred in connection with such programs (including the Corporation's investment in commodities made available).

(b) WAIVER BY PRESIDENT.—The President may waive the limitation contained in subsection (a) if the President determines that such waiver is necessary to undertake programs of assistance to meet urgent humanitarian or emergency needs. SEC. 207.17 ADMINISTRATION. (a) PROPOSALS.

(1) TIME FOR DECISION.—Not later than 45 days after the receipt by the Administrator of a proposal submitted

(A) by a private voluntary organization or cooperative, with the concurrence of the appropriate United States field mission, for commodities; or

(B) by a United States field mission to make commodities available to a private voluntary organization or coop

erative; Inder this title, the Administrator shall make a decision concerning such proposal.

(2) DENIAL.-If a proposal under paragraph (1) is denied, the response shall specify the reasons for denial and the conditions

that must be met for the approval of such proposal. (b) NOTICE AND COMMENT.—Not later than 30 days prior to the issuance of a final guideline to carry out this title, the Administrator shall—

(1) provide notice of the existence of a proposed guideline, and that such guideline is available for review and comment, to private voluntary organizations and cooperatives that participate in programs under this title, and to other interested persons;

(2) make the proposed guideline available, on request, to the organizations, cooperatives, and other persons referred to in paragraph (1); and

(3) take any comments received into consideration prior to the issuance of the final guideline. (c) REGULATIONS.

(1) IN GENERAL.—The Administrator shall promptly issue all necessary regulations and make revisions to agency guidelines with respect to changes in the operation or implementation of the program established under this title.

(2) REQUIREMENTS.—The Administrator shall develop regulations with the intent of

16 7 U.S.C. 1726. 17 7 U.S.C. 1726a.

(A) simplifying procedures for participation in the programs established under this title;

(B) reducing paperwork requirements under such programs;

(C) establishing reasonable and realistic accountability standards to be applied to eligible organizations participating in the programs established under this title, taking into consideration the problems associated with carrying out programs in developing countries; and

(D) providing flexibility for carrying out programs under this title. (3) HANDBOOKS.—Handbooks developed by the Administrator to assist in carrying out the program under this title shall be designed to foster the development of programs under this title

by eligible organizations. (d) DEADLINE FOR SUBMISSION OF COMMODITY ORDERS.-Not later than 15 days after receipt from a United States field mission of a call forward for agricultural commodities for programs that meet the requirements of this title, the order for the purchase or the supply, from inventory, of such commodities or products shall be transmitted to the Commodity Credit Corporation.

TITLE II—FOOD FOR DEVELOPMENT SEC. 301.18 BILATERAL GRANT PROGRAM.

(a) IN GENERAL.—The President shall establish a program under which agricultural commodities are donated in accordance with this title to least developed countries. The revenue generated by the sale of such commodities in the recipient country may be utilized for economic development activities. Such program shall be implemented by the Administrator.

(b) GENERAL AUTHORITY.—To carry out the policies and accomplish the objectives described in section 2, the Administrator may negotiate and execute agreements with least developed countries to provide commodities to such countries on a grant basis. SEC. 302.19 ELIGIBLE COUNTRIES.

(a) LEAST DEVELOPED COUNTRIES.-A country shall be considered to be a least developed country and eligible for the donation of ag. ricultural commodities under this title if

(1) such country meets the poverty criteria established by the International Bank for Reconstruction and Development for Civil Works Preference for providing financial assistance; or

(2) such country is a food deficit country and is characterized by high levels of malnutrition among significant numbers of its population, as determined by the Administrator under subsec

tion (b). (b) INDICATORS OF FOOD DEFICIT COUNTRIES.—To make a finding under subsection (aX2) that a country is a food deficit country and is characterized by high levels of malnutrition, the Administrator must determine that the country meets all of the following indicators of national food deficit and malnutrition:

18 7 U.S.C. 1727. 19 7 U.S.C. 1727a.

(1) CALORIE CONSUMPTION.—That the daily per capita calorie consumption of the country is less than 2300 calories.

(2) FOOD SECURITY REQUIREMENTS.—That the country cannot meet its food security requirements through domestic production or imports due to a shortage of foreign exchange earnings.

(3) CHILD MORTALITY RATE.—That the mortality rate of children under 5 years of age in the country is in excess of 100 per

1000 births. (c) PRIORITY.-In determining whether and to what extent agricultural commodities shall be made available to least developed countries under this title, the Administrator shall give priority to countries that

(1) demonstrate the greatest need for food;

(2) demonstrate the capacity to use food assistance effectively;

(3) have demonstrated a commitment to policies to promote food security, including policies to reduce measurably hunger and malnutrition through efforts such as establishing and institutionalizing supplemental nutrition programs targeted to reach those who are nutritionally at risk; and

(4) have a long-term plan for broad-based, equitable, and sus

tainable development. SEC. 303.20 GRANT PROGRAMS.

To carry out the policies and accomplish the objectives described in section 2, the Administrator may negotiate and execute agreements with least developed countries to provide commodities to such countries on a grant basis either through the Commodity Credit Corporation or through private trade channels. SEC. 304.21 DIRECT USES OR SALES OF COMMODITIES.

Agricultural commodities provided to a least developed country under this section

(1) may be used in such country for

(A) direct feeding programs, including programs that include activities that deal directly with the special health needs of children and mothers consistent with section 104(c2) of the Foreign Assistance Act of 1961 (22 U.S.C. 2151b(c)2)), relating to the Child Survival Fund; or

(B) the development of emergency food reserves; or (2) may be sold in such country by the government of the country or the Administrator (or their designees) as provided in the agreement, and the proceeds of such sale used in accord

ance with this title. SEC. 305.22 LOCAL CURRENCY ACCOUNTS.

(a) RETENTION OF PROCEEDS.—To the extent determined to be appropriate by the Administrator, revenues generated from the sale, under section 304(2), of agricultural commodities provided under this title shall be deposited into a separate account (that may be interest bearing) in the recipient country to be disbursed for the benefit of such country in accordance with local currency agreements entered into between the recipient country and the Administrator. The Administrator may determine not to deposit such reve nues in a separate account if

20 7 U.S.C. 1727b. 21 7 U.S.C. 1727c. 22 7 U.S.C. 1727d.

(1) local currencies are to be programmed for specific economic development purposes listed in section 306(a); and

(2) the recipient country programs an equivalent amount of money for such purposes as specified in an agreement entered

into by the Administrator and the recipient country. (b) OWNERSHIP AND PROGRAMMING OF ACCOUNTS.—The proceeds of sales pursuant to section 304(2) shall be the property of the recipient country or the United States, as specified in the applicable agreement. Such proceeds shall be utilized for the benefit of the recipient country, shall be jointly programmed by the Administrator and the government of the recipient country, and shall be disbursed for the benefit of such country in accordance with local currency agreements between the Administrator and that government.

(c) OVERALL DEVELOPMENT STRATEGY.—The Administrator shall consider the local currency proceeds as an integral part of the overall development strategy of the Agency for International Development and the recipient country. SEC. 306.23 USE OF LOCAL CURRENCY PROCEEDS.

(a) IN GENERAL.—The local currency proceeds of sales pursuant to section 304(2) shall be used in the recipient country for specific economic development purposes, including

(1) the promotion of specific policy reforms to improve food security and agricultural development within the country and to promote broad-based, equitable, and sustainable development;

(2) the establishment of development programs, projects, and activities that promote food security, alleviate hunger, improve nutrition, and promote family planning, maternal and child health care, oral rehydration therapy, and other child survival objectives consistent with section 104cX2) of the Foreign Assistance Act of 1961 (22 U.S.C. 2151(c)(2)), relating to the Child Survival Fund;

(3) the promotion of increased access to food supplies through the encouragement of specific policies and programs designed to increase employment and incomes within the country;

(4) the promotion of free and open markets through specific policies and programs;

(5) support for United States private voluntary organizations and cooperatives and encouragement of the development and utilization of indigenous nongovernmental organizations;

(6) the purchase of agricultural commodities (including transportation and processing costs) produced in the country

(A) to meet urgent or extraordinary relief requirements in the country or in neighboring countries; or

(B) to develop emergency food reserves;

23 7 U.S.C. 1727e.

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