Tropical Forest Conservation Act of 1998

Tropical Forest Conservation Act of 1998 - Amends the Foreign Assistance Act of 1961 to establish a Tropical Forest Facility in the Department of the Treasury to provide for the administration of debt reduction in accordance with this Act.

(Sec. 1) Makes eligible for Facility benefits developing countries with tropical forests that: (1) meet certain requirements applicable to Latin American and Caribbean countries for eligibility for Enterprise for the Americas Facility benefits; and (2) have put in place major investment reforms, as evidenced by the conclusion of a bilateral investment treaty with the United States, implementation of an investment sector loan with the Inter-American Development Bank, World Bank-supported investment reforms, or other appropriate measures.

Authorizes the President to: (1) reduce debt owed to the United States (outstanding as of January 1, 1998) by eligible countries as a result of concessional loans made under the Foreign Assistance Act of 1961 or predecessor foreign economic assistance legislation, or credits (subject to advance appropriations) extended under the Agricultural Trade Development and Assistance Act of 1954; and (2) sell to any eligible purchaser any concessional loans or credits or, on receipt of payment from an eligible purchaser, reduce or cancel such loans or credits (or portion thereof), only for the purpose of facilitating a debt-for-nature swap or debt buy back (by an eligible country of its own qualified debt) to support activities to preserve or restore tropical forests.

Authorizes appropriations.

Authorizes the Secretary of State to enter into a Tropical Forest Agreement with any eligible country concerning the operation and use of the Tropical Forest Fund which any eligible country must establish in order to receive payments of interest on new obligations issued under this Act.

Requires the use of Funds to provide grants to preserve, maintain, and restore tropical forests in beneficiary countries. Provides that grants shall be made to: (1) nongovernmental environmental, conservation, and indigenous peoples organizations in beneficiary countries; (2) other appropriate local or regional entities; or (3) governments of such countries, in exceptional circumstances. Makes grants of more than $100,000 subject to veto by the U.S. Government or the government of the beneficiary country.

Directs the Enterprise for the Americas Board established under the Agricultural Trade Development and Assistance Act of 1954 (in addition to its other required duties) to: (1) advise the Secretary of State on the negotiations of Tropical Forest Agreements; (2) ensure that a suitable administering body is identified for each Fund; and (3) review the programs, operations, and fiscal audits of each administering body.

Requires the President to report annually to the Congress on the Facility.