A bill to provide economic assistance to the Central American democracies, and for other purposes.

(Reported to Senate from the Committee on Foreign Relations with amendment, S. Rept. 100-12)

Declares that it is U.S. policy to support the building of democracy, the restoration of peace, and the improvement of living conditions in Central America.

Authorizes appropriations for FY 1987 for economic assistance for Costa Rica, El Salvador, Guatemala, and Honduras.

Prohibits obligating or spending any money on behalf of the Nicaraguan democratic resistance on or after enactment of this Act except for funds for: (1) relocation of members of the resistance away from areas of Honduras or Costa Rica bordering on Nicaragua; (2) support for the Contadora peace negotiations; or (3) support for civilian democratic forces in Nicaragua.

Prohibits the export to the Nicaraguan democratic resistance of any defense article or other goods or technology subject to U.S. jurisdiction and prohibits the export to the resistance of any such article, goods, or technology by any person subject to U.S. jurisdiction.

Prohibits any foreign country which provides assistance to the resistance on or after enactment of this Act from being eligible to receive assistance under the Foreign Assistance Act of 1961 or the Arms Export Control Act.

Expresses the sense of the Congress on a U.S. policy with respect to Nicaragua that would promote U.S. national security and foreign policy interests in Central America. Declares that such policy supports negotiations leading to an agreement that: (1) prohibits the establishment of foreign military bases; (2) bars the introduction of sophisticated or destabilizing weapons; (3) provides for the removal of all foreign military advisers and security personnel; (4) limits the size and structure of the armed forces; (5) precludes assistance to guerilla forces or paramilitary groups; and (6) establishes adequate means of verification to ensure compliance. Declares that such policy supports negotiations leading to an agreement that facilitates the establishment and growth of democratic institutions in Nicaragua by, among other things: (1) providing for adherence to constitutional practices and procedures; (2) guaranteeing freedom of speech, the press, religion, and assembly; and (3) safeguarding property rights and providing for economic self-determination. Declares that the United States shall assist Costa Rica, Guatemala, El Salvador, Honduras, and Nicaragua, if the above goals are achieved, in creating a regional economic development and recovery program. Declares that the United States shall urge other democracies to join in an extensive aid program for Central America.