To approve the Agreement providing terms for a continuation of the free association between the United States and Palau, and for other purposes.

Summary: Continued Free Association with Palau Act of 2012 - Approves, with specified exceptions, the agreement and appendices signed by the United States and the Republic of Palau on September 3, 2010, in connection with the Compact of Free Association between the United States and Palau.

Extends funding for: (1) infrastructure maintenance and projects, (2) the Fiscal Consolidation Fund (at a reduced level for FY2012), and (3) specified federal entities.

Assents to specified amendments to the Compact subsidiary agreements.

Authorizes appropriations to the Department of the Interior for postal services related to Palau, the Federated States of Micronesia, and the Marshall Islands.

States that Congress finds that Palau is eligible for certain U.S. domestic programs.

Prohibits specified funds from being used for: (1) assistance to China or Argentina, (2) the development innovation ventures program, and (3) contributions to the United Nations Educational, Scientific and Cultural Organization (UNESCO).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Continued Free Association with 
Palau Act of 2012''.

SEC. 2. APPROVAL OF AGREEMENT.

    Title I of Public Law 99-658 (48 U.S.C. 1931 et seq.) is amended by 
adding at the end the following:

``SEC. 105. COMPACT 15TH ANNIVERSARY SECTION 432 REVIEW AGREEMENT.

    ``(a) In General.--The Agreement and appendices signed by the 
United States and the Republic of Palau on September 3, 2010 (in this 
section referred to as the `Agreement'), in connection with section 432 
of the Compact of Free Association between the Government of the United 
States of America and the Government of Palau (48 U.S.C. 1931 note; 
Public Law 99-658) (in this section referred to as the `Compact of Free 
Association'), are approved--
            ``(1) except for the extension of Article X of the 
        Agreement Regarding Federal Programs and Services, and 
        Concluded Pursuant to Article II of Title Two and section 232 
        of the Compact of Free Association; and
            ``(2) subject to the provisions of this section.
    ``(b) Funding Provisions.--
            ``(1) Infrastructure maintenance.--The amounts to be 
        provided by the United States and Palau in fiscal year 2011 
        under section 2(a) of the Agreement shall be provided in fiscal 
        year 2013, in addition to the amounts otherwise to be provided 
        under that section in that fiscal year.
            ``(2) Fiscal consolidation fund.--The amounts to be 
        provided by the United States under section 3 of the Agreement 
        in fiscal years 2011 and 2012 shall be provided in fiscal years 
        2012 and 2013, respectively, and the amount so provided by the 
        United States under that section in fiscal year 2012 shall be 
        reduced by $411,000.
            ``(3) Infrastructure projects.--The amounts to be provided 
        by the United States under section 5 of the Agreement in fiscal 
        years 2011 through 2016 shall be provided in fiscal years 2012 
        through 2017, respectively.
    ``(c) Approval of Amendments to Compact Subsidiary Agreements.--
Congress consents to the amendments to the Compact subsidiary 
agreements referred to in sections 7 and 8 of the Agreement .
    ``(d) Application of Related Law.--Section 105(f)(1)(B)(ix) of the 
Compact of Free Association Amendments Act of 2003 (48 U.S.C. 
1921d(f)(1)(B)(ix) shall be applied by substituting `2024' for `2009'.
    ``(e) Authorization of Appropriations.--
            ``(1) Postal services.--There are authorized to be 
        appropriated to the Department of the Interior $1,500,000 for 
        each of fiscal years 2012 through 2024 for postal services 
        related to Palau, the Federated States of Micronesia, and the 
        Marshall Islands, to remain available until expended. The 
        Department of the Interior may transfer funds made available 
        pursuant to this paragraph to the United States Postal Service 
        so long as domestic postage may be used for mail to Palau, the 
        Federated States of Micronesia, and the Marshall Islands.
            ``(2) Continuation of other appropriations.--Appropriations 
        to the Federal entities referred to in paragraphs (1), (3), and 
        (4) of section 221(a) of the Compact of Free Association, and 
        the successors to such Federal entities, to which 
        appropriations have been made available in fiscal year 2011, 
        may be made through fiscal year 2024 to carry out the purposes 
        of those paragraphs, and shall remain available until expended.
            ``(3) Full faith and credit.--Section 236 of the Compact 
        applies to the commitments of the United States under sections 
        1, 2(a), 3, 4(a), and 5 of the Compact Review Agreement, and to 
        the amounts necessary to conduct the audits required by 
        Appendix D to the Compact Review Agreement, to the same extent 
        as such section 236 applies to the Compact. Section 215 of the 
        Compact shall be applied to such commitments and amounts by 
        substituting `2011' for `1981'.
    ``(f) Oversight and Report to Appropriate Congressional 
Committees.--
            ``(1) Finding.--The Congress finds that the Government of 
        Palau is eligible for certain United States domestic programs.
            ``(2) Annual report.--
                    ``(A) Report.--The Secretary of the Interior, 
                because of the Secretary's jurisdiction with respect to 
                the administration of financial assistance under the 
                Compact, shall, not later than March 1 of each year, 
                submit to the Committee on Energy and Natural Resources 
                of the Senate and to the Committee on Foreign Affairs 
                and the Committee on Natural Resources of the House of 
                Representatives, a report on the use and effectiveness 
                of financial, technical, and other assistance provided 
                to Palau under any United States domestic program 
                described in paragraph (1).
                    ``(B) Consultation.--In preparing each report 
                required by subparagraph (A) with respect to a domestic 
                program, the Secretary of the Interior shall consult 
                with the Federal agency or agencies with jurisdiction 
                over that domestic program.''.

SEC. 3. OFFSETS.

    (a) Repeal of Prior Authorization for Civil Administration of Trust 
Territory of the Pacific Islands.--Section 3 of the Act of June 30, 
1954 (68 Stat. 330, 82 Stat. 1213, chapter 423) is repealed.
    (b) Global Health Programs.--Chapter 1 of part I of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2151 et seq.) is amended by adding at 
the end the following:

``SEC. 136. LIMITATION ON USE OF FUNDS.

    ``(a) Limitation.--None of the funds made available to carry out 
this chapter or chapter 10 for global health activities for fiscal year 
2012 and each fiscal year thereafter through fiscal year 2024 may be 
used to provide assistance to the People's Republic of China for such 
activities.
    ``(b) Amount of Reduction.--The total amount that may be obligated 
for global health activities for a fiscal year in subsection (a) is 
$2,000,000 less than the total amount made available for such 
activities for such fiscal year.
    ``(c) Applicability.--This section applies notwithstanding any 
other provision of law enacted after the enactment of this section.''.
    (c) Climate Change Funds.--Chapter 4 of part II of the Foreign 
Assistance Act of 1961 (relating to the economic support fund) (22 
U.S.C. 2346 et seq.) is amended by adding at the end the following:

``SEC. 535. LIMITATION ON USE OF FUNDS.

    ``(a) Limitation.--None of the funds made available to carry out 
this chapter for climate change activities for fiscal year 2012 and 
each fiscal year thereafter through fiscal year 2024 may be used to 
provide assistance to the People's Republic of China for such 
activities.
    ``(b) Amount of Reduction.--The total amount that may be obligated 
for climate change activities for a fiscal year in subsection (a) is 
$4,500,000 less than the total amount made available for such 
activities for such fiscal year.
    ``(c) Applicability.--This section applies notwithstanding any 
other provision of law enacted after the enactment of this section.''.
    (d) Prohibition on Funding for Development Innovation Ventures 
(DIV) Program.--Section 667 of the Foreign Assistance Act of 1961 (22 
U.S.C. 2427) is amended by adding at the end the following:
    ``(c)(1) None of the funds made available for fiscal years 2012 and 
2013 to the United States Agency for International Development may be 
used for the Development Innovation Ventures (DIV) program or any 
successor program.
    ``(2) The total amount that may be obligated by the United States 
Agency for International Development for a fiscal year in subsection 
(a) is $28,200,000 less than the total amount made available for such 
Agency for such fiscal year.
    ``(3) This subsection applies notwithstanding any other provision 
of law enacted after the enactment of this subsection.''.
    (e) IMET.--Section 542 of the Foreign Assistance Act of 1961 (22 
U.S.C. 2347a) is amended--
            (1) by striking ``There are authorized'' and inserting the 
        following:
    ``(a) In General.--There are authorized''; and
            (2) by adding at the end the following:
    ``(b) Limitation on Use of Funds.--
            ``(1) Limitation.--None of the funds made available to 
        carry out this chapter for fiscal year 2012 and each fiscal 
        year thereafter through fiscal year 2024 may be used to provide 
        assistance to Argentina.
            ``(2) Amount of reduction.--The total amount that may be 
        obligated under this chapter for a fiscal year in subsection 
        (a) is $4,500,000 less than the total amount made available for 
        such activities for such fiscal year.
            ``(3) Applicability.--This subsection applies 
        notwithstanding any other provision of law enacted after the 
        enactment of this subsection.''.
    (f) UNESCO.--Chapter 3 of part I of the Foreign Assistance Act of 
1961 (22 U.S.C. 301 et seq.) is amended by adding at the end the 
following:

``SEC. 308. LIMITATION ON USE OF FUNDS.

    ``(a) Limitation.--None of the funds made available for fiscal year 
2012 and each fiscal year thereafter through fiscal year 2024 for 
United States assessed contributions to the United Nations may be used 
for such contributions to the United Nations Educational, Scientific 
and Cultural Organization.
    ``(b) Amount of Reduction.--The total amount that may be obligated 
for a fiscal year in subsection (a) for United States assessed 
contributions to the United Nations is $4,500,000 less than the total 
amount made available for such contributions for such fiscal year.
    ``(c) Applicability.--This section applies notwithstanding any 
other provision of law enacted after the enactment of this section.''.
    (g) United States Institute of Peace.--Section 1710 of the United 
States Institute of Peace (22 U.S.C. 4609) is amended by adding at the 
end the following:
    ``(e) Limitation on Obligation of Funds.--
            ``(1) Limitation.--The total amount that may be obligated 
        to carry out this title for fiscal year 2012 and each fiscal 
        year thereafter through fiscal year 2024 is $6,811,000 less 
        than the total amount made available for such purpose for such 
        fiscal year.
            ``(2) Applicability.--This subsection applies 
        notwithstanding any other provision of law enacted after the 
        enactment of this subsection.''.