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[Senate Report 110-17]
[From the U.S. Government Publishing Office]

                                                        Calendar No. 42
110th Congress                                                   Report
                                 SENATE
 1st Session                                                     110-17

======================================================================

 
          COMPACTS OF FREE ASSOCIATION AMENDMENTS ACT OF 2007

                                _______
                                

               February 15, 2007.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 283]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 283) to amend the Compact of Free 
Association Amendments Act of 2003, and for other purposes, 
having considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                         Purpose of the Measure

    The purpose of S. 283 is to approve subsidiary agreements 
to the Compact of Free Association, as amended, between the 
Government of the United States of America and the Government 
of the Federated States of Micronesia, and to the Compact of 
Free Association, as amended, between the Government of the 
United States of America and the Government of the Republic of 
the Marshall Islands, and to make other conforming, clarifying, 
and technical amendments to the Compact of Free Association 
Amendments Act of 2003 (CFAAA), (Public Law 108-188).

                      Summary of Major Provisions

    S. 283 consists of nine sections. Section 1 provides a 
short title. Sections 2 and 3 approves agreements negotiated 
between the United States and the Federated States of 
Micronesia (FSM), and between the United States and the 
Republic of the Marshall Islands (RMI) regarding disaster 
assistance and makes conforming amendments to the CFAAA. 
Section 4 clarifies the eligibility of students from the FSM 
and RMI for certain education programs, and the eligibility of 
the Government, institutions, and people of the Republic of 
Palau for certain programs, under the CFAAA. Section 5 
clarifies that citizens of the FSM and RMI who legally reside 
in the United States are eligible for the programs and services 
of Legal Services Corporation. Section 6 makes numerous 
grammatical and technical edits to the CFAAA. Section 7 
restores the authorization for FSM, Palau and the RMI to 
transmit videotaped programming. Section 8 allows Palau to 
deposit a payment, otherwise due the United States in 
connection with a Compact road project, into a trust fund for 
road maintenance. Section 9 clarifies the tax-free status of 
the trust funds established for the FSM and RMI under their 
respective Compacts.

                          Background and Need

    In 1947, the United States became Administrator of the 
United Nation's Trust Territory of the Pacific Islands, 
composed of the Marshall, Caroline, Palau and Mariana (except 
Guam) islands. All of these islands were captured from Japan in 
World War II and include those that now comprise the FSM and 
the RMI. U.S. obligations under the Trusteeship included 
promoting self-government or independence of the inhabitants. 
In the case of the FSM and RMI, negotiations on political 
status culminated with the signing of the Compact of Free 
Association, which was approved by Congress, under Public Law 
99-239, in 1986. The new relationship of free association 
allowed for termination of the U.N. Trusteeship, international 
recognition of the FSM and RMI as sovereign nations, but also 
for the continuation of the special political, economic, and 
security relationship between the United States and these new 
nations.
    In 2003, Congress enacted the CFAAA, which separated the 
Compact into two separate agreements, and approved amendments 
to extend and restructure the financial and program assistance 
provisions. One area that remained unresolved in the new law, 
however, was how disaster assistance would be handled. The 
Federal Emergency Management Agency (FEMA) objected to 
continuing to provide disaster assistance under the Compacts 
because, in its experience, the FSM and RMI governments lacked 
the capacity to properly meet their administrative and support 
responsibilities. Simply terminating FEMA's role was 
unacceptable to Congress because there would likely be 
disasters in the future, and a program would be needed to fund 
and coordinate disaster assistance to meet the needs of the 
population and to reconstruct essential infrastructure.
    Accordingly, section 105(f)(1)(A) of the CFAAA directed the 
Secretary of State, in consultation with FEMA, to negotiate 
specific disaster assistance agreements with the FSM and RMI 
and report to Congress on the outcome of those negotiations, 
including recommendations on any changes to law.
    On August 19, 2004, the State Department transmitted to 
Congress new agreements and the legislative language needed to 
bring them into effect. Generally, the agreements provide that 
FEMA and the Office of Foreign Disaster Assistance (OFDA) will 
jointly consult on any disaster damage assessments and on 
disaster declaration recommendations. FEMA will provide the 
funding to meet FEMA reconstruction and response requirements 
and other necessary expenses, and OFDA will be responsible for 
administering disaster assistance and coordinating the U.S. 
response to declared disasters.
    Prior to introduction of the legislative language as 
transmitted to the Congress, the sponsors agreed to use the 
bill as a vehicle to make other conforming, clarifying, and 
technical amendments to the CFAAA.

                          Legislative History

    S. 283 was introduced by Senator Bingaman (for himself and 
Senator Domenici) on January 12, 2007.
    During the 109th Congress, the Committee considered similar 
legislation, S. 1830, introduced by Senator Domenici (for 
himself and Senators Bingaman and Akaka), at the request of the 
Administration. The Committee on Energy and Natural Resources 
held a hearing on S. 1830 on October 25, 2005 (S. Hrg. 109-
291), and ordered the bill favorably reported, with amendments, 
on March 15, 2006. S. Rept. 109-237. The Senate passed the bill 
by unanimous consent, with amendments, on September 29, 2006. 
No further action occurred prior to the sine die adjournment of 
the 109th Congress.
    At its business meeting on January 31, 2007, the Committee 
ordered S. 283 to be favorably reported.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in open 
business session on January 31, 2007, by a voice vote of a 
quorum present, recommends that the Senate pass S. 283.

                      Section-by-Section Analysis

    Section 1 provides that this Act may be cited as the 
``Compacts of Free Association Amendments Act of 2007''.
    Section 2 amends section 101 of the Compact of Free 
Association Amendments Act of 2003 (CFAAA) (Public Law 108-188) 
to approve the two disaster assistance agreements negotiated 
pursuant to section 105(f)(1)(A) of that Act and transmitted to 
the Congress on August 19, 2004.
    Section 3 deletes the interim disaster assistance 
provisions and negotiating instructions set forth in section 
105(f)(1)(A) of the CFAAA, which will be rendered moot upon 
approval of the new agreements. The Administration more 
recently sent additional language contained in clause (ii) to 
clarify that funding to implement these agreements will be 
``transferred'' from FEMA to OFDA.
    Section 4 makes three clarifying amendments to section 
105(f)(1)(B) of the CFAAA regarding the availability of certain 
U.S. education programs. The first two paragraphs clarify that 
students from the FSM and the RMI who are attending colleges in 
the United States or its territories--and also in Palau, which 
had been inadvertently omitted--shall continue to be eligible 
to receive benefits through the end of their current course of 
studies, up to four years, for programs that are otherwise 
terminated by the CFAAA.
    The third paragraph clarifies that the ``government, 
institutions, and people'' of Palau shall continue to be 
eligible, until the end of fiscal year 2009, for those 
education programs for which they were eligible in fiscal year 
2003. The existing language had generally stated that the 
``Republic of Palau'' would remain eligible, instead of 
specifying that the ``students, institutions, and government of 
Palau'' would remain eligible.
    Section 5 clarifies that section 105(f)(1)(C) of the CFAAA 
is intended to continue eligibility for the programs and 
services of the Legal Services Corporation for FSM and RMI 
migrants who legally reside in the United States. Legal 
Services Corporation eligibility was extended by the first 
Compact Act in 1986 (Public Law 99-239), but in 1996, without 
any further action by Congress, the Legal Services Corporation, 
by rule, terminated the eligibility of FSM and RMI migrants. 
Section 104(e) of the original Compact Act, and of the CFAAA, 
states that it is ``not the intent of Congress to cause any 
adverse consequences for an affected area,'' which are defined 
as Hawaii, Guam, the CNMI, and American Samoa. The Legal 
Services Corporation is one of those programs which had 
assisted local communities, in both the ``affected areas'' and 
in the mainland United States, in responding to the impacts and 
needs of FSM and RMI citizens who were residing in U.S. 
communities. This section would restore eligibility as it 
existed from 1986 to 1996.
    Section 6 makes technical corrections to the CFAAA.
    Section 7 authorizes the FSM, Palau, and the RMI to 
transmit videotaped programming. In remote and isolated 
communities of the United States, such as isolated communities 
in Alaska, Hawaii, and the Territories, Congress has provided 
an exception from the copyright laws to allow for the 
videotaping of television programming for rebroadcast in 
outlying areas. Section 7 would restore this exception for 
videotaping and rebroadcast of television programming for the 
freely associated states, which enjoyed the privilege during 
the Trust Territory period.
    Section 8 allows the Government of Palau to deposit the 
payment, otherwise payable to the United States under section 
111 of Public Law 101-219, into a trust fund if the earnings of 
the trust fund are expended solely for maintenance of the road 
system constructed pursuant to section 212 of the Palau 
Compact, and if this trust fund is established and operated 
pursuant to an agreement entered into between the United States 
and Palau.
    Section 9 would clarify the tax-free status of the trust 
funds established for the FSM and RMI under their respective 
Compacts. Because these trust funds are to be incorporated in 
the District of Columbia and it is not a State, the intended 
tax-free status could otherwise be questioned.

                   Cost and Budgetary Considerations

    The following estimate of the cost of this measure has been 
provided by the Congressional Budget Office:

S. 283--Compacts of Free Association Amendments Act of 2007

    S. 283 would amend the Compact of Free Association 
Amendments Act of 2003. The bill would make several amendments 
to the compact and would cancel a $3 million payment Palau owes 
to the federal government if Palau deposits $3 million into a 
trust fund controlled by the Republic of Palau. The earnings 
from the trust fund would be used for maintenance of the road 
system in Palau. Based on information from the Department of 
the Interior, CBO estimates that this provision would result in 
a loss of offsetting receipts (a credit against direct 
spending) of $3 million in fiscal year 2007. Enacting the 
legislation would not affect revenues.
    S. 283 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 283. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 283, as ordered reported.

                        Executive Communications

    Because S. 283 is similar to legislation considered by the 
Senate in the 109th Congress, the Committee did not request 
Executive Agency views on S. 283.
    Following is a copy of the August 19, 2004, letter from the 
U.S. Department of State to the Chairman of the Committee 
transmitting the text of legislation that was included as 
section 2 of S. 283, as introduced. Copies of the two 
agreements to be approved by this language are retained in the 
Committee files.

                         United States Department of State,
                                   Washington, DC, August 19, 2004.
Hon. Jeff Bingaman,
Committee on Energy and Natural Resources,
U.S. Senate.
    Dear Senator Bingaman: In accordance with section 
105(f)(1)(A)(iii) of the Compact of Free Association Amendments 
Act of 2003 (P.L. 108-188), the Department of State has 
completed negotiations and signed subsidiary agreements to the 
amended Compacts of Free Association with the Republic of the 
Marshall Islands (RMI) and the Federated States of Micronesia 
(FSM) with regard to future United States provision of disaster 
assistance.
    Specifically, we have reached agreement with the RMI and 
FSM on amendments to the Federal Programs and Services 
Agreements necessary to address the continued extension of 
disaster assistance and response services by the U.S. Agency 
for International Development (USAID), Office of Foreign 
Disaster Assistance (OFDA), and continued support from the 
Department of Homeland Security's Federal Emergency Management 
Agency (FEMA). Accordingly, I am pleased to transmit to the 
Congress for consideration and enactment under section 
105(f)(1)(A)(iii) of P.L. 108-188, the enclosed draft 
legislation to grant the consent of Congress to:

          (1) the Agreement to Amend Article X of the Federal 
        Programs and Services Agreement Between the Government 
        of the United States and the Government of the Republic 
        of the Marshall Islands Concluded Pursuant to Article 
        III of Title One, Article II of Title Two, (including 
        Section 222), and Section 231 of the Compact of Free 
        Association, as Amended; and
          (2) the Agreement to Amend Article X of the Federal 
        Programs and Services Agreement Between the Government 
        of the United States and the Government of the 
        Federated States of Micronesia Concluded Pursuant to 
        Article III of Title One, Article II of Title Two, 
        (including Section 222), and Section 231 of the Compact 
        of Free Association, as Amended.

    The text of the signed Agreements is also enclosed,
    The Department of State appreciates Congress' expeditious 
passage of the Compact of Free Association Amendments Act of 
2003. The amended Compacts have entered into force with both 
nations, and the Department is working with the Department of 
the Interior, other executive branch agencies, and the 
respective governments to ensure their successful 
implementation.
    The Office of Management and Budget advises that there is 
no objection to the submission of this legislation from the 
standpoint of the Administration's program.
            Sincerely,
                                             Paul V. Kelly,
                          Assistant Secretary, Legislative Affairs.
    Enclosures.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 1830, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

            PUBLIC LAW 108-188 [H.J. RES. 63]--DEC. 17, 2003

           COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF 2003

 108 P.L. 188; 117 Stat. 2720; 2003 Enacted H.J. Res. 63; 108 Enacted 
                              H.J. Res. 63

                            JOINT RESOLUTION

    To approve the Compact of Free Association, as amended, 
between the Government of the United States of America and the 
Government of the Federated States of Micronesia, and the 
Compact of Free Association, as amended, between the Government 
of the United States of America and the Government of the 
Republic of the Marshall Islands, and to appropriate funds to 
carry out the amended Compacts.

           *       *       *       *       *       *       *

      TITLE I--APPROVAL OF U.S.-FSM COMPACT AND U.S. RMI COMPACT; 
 INTERPRETATION OF, AND U.S. POLICIES REGARDING, U.S.-FSM COMPACT AND 
               U.S.-RMI COMPACT; SUPPLEMENTAL PROVISIONS

SEC. 101. APPROVAL OF U.S.-FSM COMPACT OF FREE ASSOCIATION AND THE 
                    U.S.-RMI COMPACT OF FREE ASSOCIATION; REFERENCES TO 
                    SUBSIDIARY AGREEMENTS OR SEPARATE AGREEMENTS.

    (a) Federated States of Micronesia.--The Compact of Free 
Association, as amended with respect to the Federated States of 
Micronesia and signed by the United States and the Government 
of the Federated States of Micronesia and set forth in Title II 
(section 201(a)) of this joint resolution, is hereby approved, 
and Congress hereby consents to the subsidiary agreements and 
amended subsidiary agreements listed in section 462 of the 
U.S.-FSM Compact, including Article X of the Federal Programs 
and Services Agreement Between the Government of the United 
States and the Government of the Federated States of 
Micronesia, as amended under the Agreement to Amend Article X 
that was signed by those 2 Governments on June 30, 2004, which 
shall serve as the authority to implement the provisions 
thereof. Subject to the provisions of this joint resolution, 
the President is authorized to agree, in accordance with 
section 411 of the U.S.-FSM Compact, to an effective date for 
and thereafter to implement such U.S.-FSM Compact.
    (b) Republic of the Marshall Islands.--The Compact of Free 
Association, as amended with respect to the Republic of the 
Marshall Islands and signed by the United States and the 
Government of the Republic of the Marshall Islands and set 
forth in Title II (section 201(b)) of this joint resolution, is 
hereby approved, and Congress hereby consents to the subsidiary 
agreements and amended subsidiary agreements listed in section 
462 of the U.S. RMI Compact, including Article X of the Federal 
Programs and Services Agreement Between the Government of the 
United States and the Government of the Republic of the 
Marshall Islands, as amended under the Agreement to Amend 
Article X that was signed by those 2 Governments on June 18, 
2004, which shall serve as the authority to implement the 
provisions thereof. Subject to the provisions of this joint 
resolution, the President is authorized to agree, in accordance 
with section 411 of the U.S.-RMI Compact, to an effective date 
for and thereafter to implement such U.S.-RMI Compact.

           *       *       *       *       *       *       *

SEC. 103. AGREEMENTS WITH AND OTHER PROVISIONS RELATED TO THE REPUBLIC 
                    OF THE MARSHALL ISLANDS.

           *       *       *       *       *       *       *

    (c) Section 177 Agreement.--
          (1) In the joint resolution of January 14, 1986 
        (Public Law 99-239) Congress provided that in 
        furtherance of the purposes of Article I of the 
        Subsidiary Agreement for Implementation of Section 177 
        of the Compact, the payment of the amount specified 
        therein shall be made by the United States under 
        Article I of the Agreement between the Government of 
        the United States and the Government of the Marshall 
        Islands for the Implementation of [section 177] Section 
        177 of the Compact (hereafter in this subsection 
        referred to as the ``Section 177 Agreement'') only 
        after the Government of the Marshall Islands has 
        notified the President of the United States as to which 
        investment management firm has been selected by such 
        Government to act as Fund Manager under Article I of 
        the Section 177 Agreement.

           *       *       *       *       *       *       *

SEC. 104. INTERPRETATION OF AND UNITED STATES POLICY REGARDING U.S.-FSM 
                    COMPACT AND U.S.-RMI COMPACT.

           *       *       *       *       *       *       *

    (b) Immigration and Passport Security.--
          (1) Naturalized citizens.--The rights of a bona fide 
        naturalized citizen of the Federated States of 
        Micronesia or the Republic of the Marshall Islands to 
        enter the United States, to lawfully engage therein in 
        occupations, and to establish residence therein as a 
        nonimmigrant, to the extent such rights are provided 
        under section 141 of the U.S.-FSM Compact and the U.S.-
        RMI Compact, shall not be deemed to extend to any such 
        naturalized citizen with respect to whom circumstances 
        associated with the acquisition of the status of a 
        naturalized citizen are such as to allow a reasonable 
        inference, on the part of appropriate officials of the 
        United States and subject to United States procedural 
        requirements, that such naturalized status was acquired 
        primarily in order to obtain such rights.

           *       *       *       *       *       *       *

    (e) Impact of the U.S.-FSM Compact and the U.S.-RMI Compact 
on the State of Hawaii, Guam, the Commonwealth of the Northern 
Mariana Islands and American Samoa; Related Authorization and 
Continuing Appropriation.
          (1) Statement of congressional intent.--In 
        Reauthorizing the U.S.-FSM Compact and the U.S.-RMI 
        Compact, it is not the intent of Congress to cause any 
        adverse consequences for an affected jurisdiction.

           *       *       *       *       *       *       *

          (8) Reporting requirement.--Not later than one year 
        after the date of enactment of this joint resolution, 
        and at one year intervals thereafter, the Governors of 
        Guam, the State of Hawaii, the Commonwealth of the 
        Northern Mariana Islands, and American Samoa may 
        provide to the Secretary of the Interior by February 1 
        of each year their comments with respect to the impacts 
        of the Compacts on their respective jurisdiction. The 
        Secretary of the Interior, upon receipt of any such 
        comments, shall report to the Congress not later than 
        May 1 of each year [to include] and include the 
        following:
                  (A) The Governor's comments on the impacts of 
                the Compacts as well as the Administration's 
                analysis of such impact.
                  (B) The Administration views on any 
                recommendations for corrective action to 
                eliminate those consequences as proposed by 
                such Governors.
                  (C) With regard to immigration, statistics 
                concerning the number of persons availing 
                themselves of the rights described in section 
                141(a) of the Compact during the year covered 
                by each report.
                  (D) With regard to trade, an analysis of the 
                impact on the economy of American Samoa 
                resulting from imports of canned tuna into the 
                United States from the Federated States of 
                Micronesia and the Republic of the Marshall 
                Islands.
          (9) Reconciliation of unreimbursed impact expenses.--
                  (A) In general.--Notwithstanding any other 
                provision of law, the President, to address 
                previously accrued and unreimbursed impact 
                expenses, may, at the request of the Governor 
                of Guam or the Governor of the Commonwealth of 
                the Northern Mariana Islands, reduce, release, 
                or waive all or part of any amounts owed by the 
                Government of Guam or the Government of the 
                Commonwealth of the Northern Mariana Islands 
                (or either government's autonomous agencies or 
                instrumentalities), respectively, to any 
                department, agency, independent agency, office, 
                or instrumentality of the United States.
                  (B) Terms and conditions.--
                          (i) Substantiation of impact costs.--
                        Not later than 120 days after the date 
                        of the enactment of this resolution, 
                        the Governor of Guam and the Governor 
                        of the Commonwealth of the Northern 
                        Mariana Islands shall each submit to 
                        the Secretary of the Interior a report, 
                        prepared in consultation with an 
                        independent accounting firm, 
                        substantiating unreimbursed impact 
                        expenses claimed for the period from 
                        January 14, 1986, through September 30, 
                        2003. Upon request of the Secretary of 
                        the Interior, the Governor of Guam and 
                        the Governor of the Commonwealth of the 
                        Northern Mariana Islands shall submit 
                        to the Secretary of the Interior copies 
                        of all documents upon which the report 
                        submitted by that Governor under this 
                        clause was based.
                          (ii) Congressional notification.--The 
                        President shall notify Congress of his 
                        intent to exercise the authority 
                        granted in subparagraph (A).
                          (iii) Congressional review and 
                        comment.--Any reduction, release, or 
                        waiver under this Act shall not take 
                        effect until 60 days after the 
                        President notifies Congress of his 
                        intent to approve a request of the 
                        Governor of Guam or the Governor of the 
                        Commonwealth of the Northern Mariana 
                        Islands. In exercising his authority 
                        under this section and in determining 
                        whether to give final approval to a 
                        request, the President shall take into 
                        consideration comments he may receive 
                        after Congressional review.
                          (iv) Expiration.--The authority 
                        granted in subparagraph (A) shall 
                        expire on February 28, 2005.
          (10) Authorization of appropriations for grants.--
        There are hereby authorized to the Secretary of the 
        Interior for each of fiscal years 2004 through 2023 
        such sums as may be necessary for grants to the 
        governments of Guam, the State of Hawaii, the 
        Commonwealth of the Northern Mariana Islands, and 
        American Samoa, as a result of increased demands placed 
        on educational, social, or public safety services or 
        infrastructure [related to service] related to such 
        services due to the presence in Guam, Hawaii, the 
        Commonwealth of the Northern Mariana Islands, and 
        American Samoa of qualified nonimmigrants from the 
        Federated States of Micronesia, the Republic of the 
        Marshall Islands, and the Republic of Palau.
    (j) Inflation Adjustment.--As of Fiscal Year 2015, if the 
United States Gross Domestic Product Implicit Price Deflator 
average for Fiscal Years 2009 through 2013 is greater than 
United States Gross Domestic Product Implicit Price Deflator 
average for Fiscal Years 2004 through 2008 (as reported in the 
Survey of Current Business or subsequent publication and 
compiled by the Department of the Interior), then section 217 
of the U.S.-FSM Compact, paragraph 5 of Article II of the U.S.-
FSM Fiscal Procedures Agreement, section 218 of the U.S.-RMI 
Compact, and paragraph 5 of Article II of the U.S.-RMI Fiscal 
Procedures Agreement shall be construed as if ``the full'' 
appeared in place of ``two-thirds of the'' each place those 
words appear. If an inflation adjustment is made under this 
subsection, the base year for calculating the inflation 
adjustment shall be fiscal year 2014.

           *       *       *       *       *       *       *

SEC. 105. SUPPLEMENTAL PROVISIONS.

    (a) Domestic Program Requirements.--Except as may otherwise 
be provided in this joint resolution, all United States Federal 
programs and services extended to or operated in the Federated 
States of Micronesia or the Republic of the Marshall Islands 
are and shall remain subject to all applicable criteria, 
standards, reporting requirements, auditing procedures, and 
other rules and regulations applicable to such programs when 
operating in the United States (including its territories and 
commonwealths).
    (b) Relations With the Federated States of Micronesia and 
the Republic of the Marshall Islands.--
          (1) Appropriations made pursuant to Article I of 
        Title Two and subsection (a)(2) of section 221 of 
        article II of Title Two of the U.S.-FSM Compact and the 
        U.S.-RMI Compact shall be made to the Secretary of the 
        Interior, who shall have the authority necessary to 
        fulfill his responsibilities for monitoring and 
        managing the funds so appropriated consistent with the 
        U.S.-FSM Compact and the U.S.-RMI Compact, including 
        the agreements referred to in section 462(b)(4) of the 
        U.S.-FSM Compact and U.S.-RMI Compact (relating to 
        Fiscal Procedures) and the agreements referred to in 
        section 462(b)(5) of the U.S.FSM Compact and the U.S.-
        RMI Compact (regarding the [Trust Fund] Trust Funds).

           *       *       *       *       *       *       *

    (f) Continuing Programs and Laws.--
          (1) Federated states of micronesia and republic of 
        the marshall islands.--In addition to the programs and 
        services set forth in section 221 of the Compact, and 
        pursuant to section 222 of the Compact, the programs 
        and services of the following agencies shall be made 
        available to the Federated States of Micronesia and to 
        the Republic of the Marshall Islands:
                  [(A) Continuation of the programs and 
                services of the federal emergency management 
                agency.--Except as provided in clauses (ii) and 
                (iii), the programs and services of the 
                Department of Homeland Security, Federal 
                Emergency Management Agency shall continue to 
                be available to the Federated States of 
                Micronesia and the Republic of the Marshall 
                Islands to the same extent as such programs and 
                services available in fiscal year 2003.
                          [(i) Paragraph (a)(6) of section 221 
                        of the U.S.-FSM Compact and paragraph 
                        (a)(5) of the U.S.-RMI Compact shall 
                        each be construed as though the 
                        paragraph reads as follows: ``the 
                        Department of Homeland Security, United 
                        States Federal Emergency Management 
                        Agency.''.
                          [(ii) Subsection (d) of section 211 
                        of the U.S.-FSM Compact and subsection 
                        (e) of section 211 of the U.S.-RMI 
                        Compact shall each be construed as 
                        though the subsection reads as follows: 
                        ``Not more than $200,000 (as adjusted 
                        for inflation pursuant to section 217 
                        of the U.S.-FSM Compact and section 218 
                        of the U.S.-RMI Compact) shall be made 
                        available by the Secretary of the 
                        Interior to the Department of Homeland 
                        Security, Federal Emergency Management 
                        Agency to facilitate the activities of 
                        the Federal Emergency Management Agency 
                        in accordance with and to the extent 
                        provided in the Federal Programs and 
                        Services Agreement.''.
                          [(iii) The Secretary of State, in 
                        consultation with the Department of 
                        Homeland Security and the Federal 
                        Emergency Management Agency, shall 
                        immediately undertake negotiations with 
                        the Government of the Federated States 
                        of Micronesia and the Government of the 
                        Republic of the Marshall Islands 
                        regarding disaster assistance and shall 
                        report to the appropriate committees of 
                        Congress no later than June 30, 2004, 
                        on the outcome of such negotiations, 
                        including recommendations for changes 
                        to law regarding disaster assistance 
                        under the U.S.-FSM Compact and the 
                        U.S.-RMI Compact, and including 
                        subsidiary agreements as needed to 
                        implement such changes to law. If an 
                        agreement is not concluded, and 
                        legislation enacted which reflects such 
                        agreement, before the date which is 
                        five years after the date of enactment 
                        of this Joint Resolution, the following 
                        provisions shall apply: ``Paragraph 
                        (a)(6) of section 221 of the U.S.-FSM 
                        Compact and paragraph (a)(5) of section 
                        221 of the U.S.-RMI Compact shall each 
                        be construed and applied as if each 
                        provision reads as follows: ``The U.S. 
                        Agency for International Development 
                        shall be responsible for the provision 
                        of emergency and disaster relief 
                        assistance in accordance with its 
                        statutory authorities, regulations and 
                        policies. The Republic of the Marshall 
                        Islands and the Federated States of 
                        Micronesia may additionally request 
                        that the President make an emergency or 
                        major disaster declaration. If the 
                        President declares an emergency or 
                        major disaster, the Department of 
                        Homeland Security (DHS), the Federal 
                        Emergency Management Agency (FEMA) and 
                        the U.S. Agency for International 
                        Development shall jointly (a) assess 
                        the damage caused by the emergency or 
                        disaster and (b) prepare a 
                        reconstruction plan including an 
                        estimate of the total amount of Federal 
                        resources that are needed for 
                        reconstruction. Pursuant to an 
                        interagency agreement, FEMA shall 
                        transfer funds from the Disaster Relief 
                        Fund in the amount of the estimate, 
                        together with an amount to be 
                        determined for administrative expenses, 
                        to the U.S. Agency for International 
                        Development, which shall carry out 
                        reconstruction activities in the 
                        Republic of the Marshall Islands and 
                        the Federated States of Micronesia in 
                        accordance with the reconstruction 
                        plan. For purposes of Disaster Relief 
                        Fund appropriations, the funding of the 
                        activities to be carried out pursuant 
                        to this paragraph shall be deemed to be 
                        necessary expenses in carrying out the 
                        Robert T. Stafford Disaster Relief and 
                        Emergency Assistance Act (42 U.S.C. 
                        5121 et seq.). ``DHS may provide to the 
                        Republic of the Marshall Islands and 
                        the Federated States of Micronesia 
                        preparedness grants to the extent that 
                        such assistance is available to the 
                        States of the United States. Funding 
                        for this assistance may be made 
                        available from appropriations made to 
                        DHS for preparedness activities.''.]
                  (A) Emergency and disaster assistance.--
                          (i) In general.--Subject to clause 
                        (ii), section 221(a)(6) of the U.S.-FSM 
                        Compact and section 221(a)(5) of the 
                        U.S.-RMI Compact shall each be 
                        construed and applied in accordance 
                        with the 2 Agreements to Amend Article 
                        X of the Federal Programs and Service 
                        Agreements signed on June 30, 2004, and 
                        on June 18, 2004, respectively.
                          (ii) Definition of will provide 
                        funding.--In the second sentence of 
                        paragraph 12 of each of the Agreements 
                        described in clause (i), the term 
                        ``will provide funding'' means will 
                        provide funding through a transfer of 
                        funds using Standards Form 1151 or a 
                        similar document or through an 
                        interagency, reimbursable agreement.
                  (B) Treatment of additional programs.--
                          (i) Consultation.--The United States 
                        appointees to the committees 
                        established pursuant to section 213 of 
                        the U.S.-FSM Compact and section 214 of 
                        the U.S.-RMI Compact shall consult with 
                        the Secretary of Education regarding 
                        the objectives, use, and monitoring of 
                        United States financial, program, and 
                        technical assistance made available for 
                        educational purposes.
                          (ii) Continuing programs.--The 
                        Government of the United States--
                                  (I) shall continue to make 
                                available to the Federated 
                                States of Micronesia and the 
                                Republic of the Marshall 
                                Islands for fiscal years 2004 
                                through 2023, the services to 
                                individuals eligible for such 
                                services under the Individuals 
                                with Disabilities Education Act 
                                (20 U.S.C. 1400 et seq.) to the 
                                extent that such services 
                                continue to be available to 
                                individuals in the United 
                                States; and
                                  (II) shall continue to make 
                                available to eligible 
                                institutions in the Federated 
                                States of Micronesia and the 
                                Republic of the Marshall 
                                Islands, and to students 
                                enrolled in such institutions, 
                                and in institutions in the 
                                United States [and its 
                                territories], its territories, 
                                and the Republic of Palau for 
                                fiscal years 2004 through 2023, 
                                grants under subpart 1 of part 
                                A of title IV of the Higher 
                                Education Act of 1965 (20 
                                U.S.C. 1070a et seq.) to the 
                                extent that such grants 
                                continue to be available to 
                                institutions and students in 
                                the United States.
                          (iii) Supplemental education 
                        grants.--In lieu of eligibility for 
                        appropriations under part A of title I 
                        of the Elementary and Secondary 
                        Education Act of 1965 (20 U.S.C. 6311 
                        et seq.), title I of the Workforce 
                        Investment Act of 1998 (29 U.S.C. 2801 
                        et seq.), other than subtitle C of that 
                        Act (29 U.S.C. 2881 et seq.) (Job 
                        Corps), title II of the Workforce 
                        Investment Act of 1998 (20 U.S.C. 9201 
                        et seq.; commonly known as the Adult 
                        Education and Family Literacy Act), 
                        title I of the Carl D. Perkins 
                        Vocational and Technical Education Act 
                        of 1998 (20 U.S.C. 2321 et seq.), the 
                        Head Start Act (42 U.S.C. 9831 et 
                        seq.), and subpart 3 of part A, and 
                        part C, of title IV of the Higher 
                        Education Act of 1965 (20 U.S.C. 1070b 
                        et seq., 42 U.S.C. 2751 et seq.), there 
                        are authorized to be appropriated to 
                        the Secretary of Education to 
                        supplement the education grants under 
                        section 211(a)(1) of the U.S.-FMS 
                        Compact and section 211(a)(1) of the 
                        U.S.-RMI Compact, respectively, the 
                        following amounts:
                                  (I) $12,230,000 for the 
                                Federated States of Micronesia 
                                for fiscal year 2005 and an 
                                equivalent amount, as adjusted 
                                for inflation under section 217 
                                of the U.S.-FSM Compact, for 
                                each of fiscal years 2005 
                                through 2023; and
                                  (II) $6,100,000 for the 
                                Republic of the Marshall 
                                Islands for fiscal year 2005 
                                and an equivalent amount, as 
                                adjusted for inflation under 
                                section 218 of the U.S.-RMI 
                                Compact, for each of fiscal 
                                years 2005 through 2023, except 
                                that citizens of the Federated 
                                States of Micronesia and the 
                                Republic of the Marshall 
                                Islands who attend an 
                                institution of higher education 
                                in the United States or its 
                                territories, the Federated 
                                States of Micronesia, [or the 
                                Republic of the Marshall 
                                Islands] the Republic of the 
                                Marshall Islands, or the 
                                Republic of Palau on the date 
                                of enactment of this joint 
                                resolution may continue to 
                                receive assistance under such 
                                subpart 3 of part A or part C, 
                                for not more than 4 academic 
                                years after such date to enable 
                                such citizens to complete their 
                                program of study.
                          (iv) Fiscal procedures.--
                        Appropriations made pursuant to clause 
                        (iii) shall be used and monitored in 
                        accordance with an agreement between 
                        the Secretary of Education, the 
                        Secretary of Labor, the Secretary of 
                        Health and Human Services, and the 
                        Secretary of the Interior, and in 
                        accordance with the respective Fiscal 
                        Procedures Agreements referred to in 
                        section 462(b)(4) of the U.S.-FSM 
                        Compact and section 462(b)(4) of the 
                        U.S.-RMI Compact. The agreement between 
                        the Secretary of Education, the 
                        Secretary of Labor, the Secretary of 
                        Health and Human Services, and the 
                        Secretary of the Interior shall provide 
                        for the transfer, not later than 60 
                        days after the appropriations made 
                        pursuant to clause (iii) become 
                        available to the Secretary of 
                        Education, the Secretary of Labor, and 
                        the Secretary of Health and Human 
                        Services, from the Secretary of 
                        Education, the Secretary of Labor, and 
                        the Secretary of Health and Human 
                        Services, to the Secretary of the 
                        Interior for disbursement.
                          (v) Formula education grants.--For 
                        fiscal years 2005 through 2023, except 
                        as provided in clause (ii) and the 
                        exception provided under clause (iii), 
                        the Governments of the Federated States 
                        of Micronesia and the Republic of the 
                        Marshall Islands shall not receive any 
                        grant under any formula-grant program 
                        administered by the Secretary of 
                        Education or the Secretary of Labor, 
                        nor any grant provided through the Head 
                        Start Act (42 U.S.C. 9831 et seq.) 
                        administered by the Secretary of Health 
                        and Human Services.
                          (vi) Transition.--For fiscal year 
                        2004, the Governments of the Federated 
                        States of Micronesia and the Republic 
                        of the Marshall Islands shall continue 
                        to be eligible for appropriations and 
                        to receive grants under the provisions 
                        of law specified in clauses (ii) and 
                        (iii).
                          (vii) Technical assistance.--The 
                        Federated States of Micronesia and the 
                        Republic of the Marshall Islands may 
                        request technical assistance from the 
                        Secretary of Education, the Secretary 
                        of Health and Human Services, or the 
                        Secretary of Labor the terms of which, 
                        including reimbursement, shall be 
                        negotiated with the participation of 
                        the appropriate cabinet officer for 
                        inclusion in the Federal Programs and 
                        Services Agreement.
                          (viii) Continued eligibility for 
                        competitive grants.--The Governments of 
                        the Federated States of Micronesia and 
                        the Republic of the Marshall Islands 
                        shall continue to be eligible for 
                        competitive grants administered by the 
                        Secretary of Education, the Secretary 
                        of Health and Human Services, and the 
                        Secretary of Labor to the extent that 
                        such grants continue to be available to 
                        State and local governments in the 
                        United States.
                          (ix) Applicability.--The [Republic] 
                        government, institutions, and people of 
                        Palau shall remain eligible for 
                        appropriations and to receive grants 
                        under the provisions of law specified 
                        in clauses (ii) and (iii) until the end 
                        of fiscal year [2007] 2009, to the 
                        extent the [Republic] government, 
                        institutions, and people of Palau [was] 
                        were so eligible under such provisions 
                        in fiscal year 2003.
                  (C) The Legal Services Corporation, which 
                shall also continue to be available to the 
                citizens of the Federated States of Micronesia, 
                the Republic of Palau, and the Republic of the 
                Marshall Islands who legally reside in the 
                United States (including territories and 
                possessions).

           *       *       *       *       *       *       *

  TITLE II--COMPACTS OF FREE ASSOCIATION WITH THE FEDERATED STATES OF 
          MICRONESIA AND THE REPUBLIC OF THE MARSHALL ISLANDS

SEC. 201. COMPACTS OF FREE ASSOCIATION, AS AMENDED BETWEEN THE 
                    GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE 
                    GOVERNMENT OF THE FEDERATED STATES OF MICRONESIA 
                    AND BETWEEN THE GOVERNMENT OF THE UNITED STATES OF 
                    AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF THE 
                    MARSHALL ISLANDS.

    (a) Compact of Free Association, as Amended, Between the 
Government of the United States of America and the Government 
of the Federated States of Micronesia.--The Compact of Free 
Association, as amended, between the Government of the United 
States of America and the Government of the Federated States of 
Micronesia is as follows:

                                PREAMBLE

 THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF 
THE FEDERATED STATES OF MICRONESIA

           *       *       *       *       *       *       *

Section 174

    Except as otherwise provided in this Compact, as amended, 
and its related agreements:
    (a) The Government of the Federated States of Micronesia, 
and its agencies and officials, shall be immune from the 
jurisdiction of the court of the United States, and the 
Government of the United States, and its agencies and 
officials, shall be immune from the jurisdiction of the 
[courts] court of the Federated States of Micronesia.
    (b) The Government of the United States accepts 
responsibility for and shall pay:
          (1) any unpaid money judgment rendered by the High 
        Court of the Trust Territory of the Pacific Islands 
        against the Government of the United States with regard 
        to any cause of action arising as a result of acts or 
        omissions of the Government of the Trust Territory of 
        the Pacific Islands or the Government of the United 
        States prior to November 3, 1986;
          (2) any claim settled by the claimant and the 
        Government of the Trust Territory of the Pacific 
        Islands but not paid as of [the] November 3, 1986; and

           *       *       *       *       *       *       *

Section 177

    Section 177 of the Compact entered into force with respect 
to the Federated States of Micronesia on November 3, 1986 as 
follows:
    ``(a) The Government of the United States accepts the 
responsibility for compensation owing to citizens of the 
Marshall Islands, or the Federated States of Micronesia[, or 
Palau] (or Palau) for loss or damage to property and person of 
the citizens of the Marshall Islands, or the Federated States 
of Micronesia, resulting from the nuclear testing program which 
the Government of the United States conducted in the Northern 
Marshall Islands between June 30, 1946, and August 18, 1958.

           *       *       *       *       *       *       *

Section 179

    (a) The courts of the Federated States of Micronesia shall 
not exercise criminal jurisdiction over the Government of the 
United States, or its instrumentalities.
    (b) The courts of the Federated States of Micronesia shall 
not exercise criminal jurisdiction over any person if the 
Government of the United States provides notification to the 
Government of the Federated States of Micronesia that such 
person was acting on behalf of the Government of the United 
States, for actions taken in furtherance of section 221 or 224 
of this [amended Compact] Compact, as amended, or any other 
provision of law authorizing financial, program, or service 
assistance to the Federated States of Micronesia.

                     TITLE TWO--ECONOMIC RELATIONS

                               ARTICLE I

                            GRANT ASSISTANCE

Section 211--Sector Grants

    (a) In order to assist the Government of the Federated 
States of Micronesia in its efforts to promote the economic 
advancement, budgetary self-reliance, and economic self-
sufficiency of its people, and in recognition of the special 
relationship that exists between the Federated States of 
Micronesia and the United States, the Government of the United 
States shall provide assistance on a sector grant basis for a 
period of twenty years in the amounts set forth in section 216, 
commencing on the effective date of this Compact, as amended. 
Such grants shall be used for assistance in the sectors of 
education, health care, private sector development, the 
environment, public sector capacity building, and public 
infrastructure, or for other sectors as mutually agreed, with 
priorities in the education and health care sectors. For each 
year such sector grant assistance is made available, the 
proposed division of this amount among these sectors shall be 
certified to the Government of the United States by the 
Government of the Federated States of Micronesia and shall be 
subject to the concurrence of the Government of the United 
States. In such case, the Government of the United States shall 
disburse the agreed upon amounts and monitor the use of such 
sector grants in accordance with the provisions of this Article 
and the Agreement Concerning Procedures for the Implementation 
of United States Economic Assistance Provided in the [Compact, 
as Amended, of Free Association] Compact of Free Association, 
as amended, Between the Government of the United States of 
America and the Government of the Federated States of 
Micronesia (``Fiscal Procedures Agreement'') which shall come 
into effect simultaneously with this Compact, as amended. The 
provision of any United States assistance under the Compact, as 
amended, the Fiscal Procedures Agreement, the [Trust Fund 
Agreement] Agreement Between the Government of the United 
States of America and the Government of the Federated States of 
Micronesia Implementing Section 215 and Section 216 of the 
Compact, as Amended, Regarding a Trust Fund (Trust Fund 
Agreement), or any other subsidiary agreement to the Compact, 
as amended, shall constitute ``a particular distribution . . . 
required by the terms or special nature of the assistance'' for 
purposes of Article XII, section l(b) of the Constitution of 
the Federated States of Micronesia.

           *       *       *       *       *       *       *

    (b) Humanitarian Assistance.--Federated States of 
Micronesia Program. In recognition of the special development 
needs of the Federated States of Micronesia, the Government of 
the United States shall make available to the [Government of 
the] Federated States of Micronesia, on its request and to be 
deducted from the grant amount made available under subsection 
(a) of this section, a Humanitarian Assistance--Federated 
States of Micronesia (``HAFSM'') Program with emphasis on 
health, education, and infrastructure (including 
transportation), projects. The terms and conditions of the 
HAFSM shall be set forth in the Agreement Regarding the 
Military Use and Operating Rights of the Government of the 
United States in the Government of the Federated States of 
Micronesia Concluded Pursuant to [Sections 321 and 323 of the 
Compact of Free Association, as Amended] Sections 211(b), 321, 
and 323 of the Compact of Free Association, as amended which 
shall come into effect simultaneously with the amendments to 
this Compact.
    (c) Development Plan.--The Government of the Federated 
States of Micronesia shall prepare and maintain an official 
overall development plan. The plan shall be strategic in 
nature, shall be continuously reviewed and updated through the 
annual budget process, and shall make projections on a multi-
year rolling basis. Each of the sectors named in subsection (a) 
of this section, or other sectors as mutually agreed, shall be 
accorded specific treatment in the plan. Insofar as grants 
funds are involved, the plan shall be subject to the 
concurrence of the Government of the United States.
    (d) Disaster Assistance Emergency Fund.--An amount of two 
hundred thousand dollars ($200,000) shall be provided annually, 
with an equal contribution from the Government of the Federated 
States of Micronesia, as a contribution to a ``Disaster 
Assistance Emergency Fund (DAEF).'' Any funds from the DAEF may 
be used only for assistance and rehabilitation resulting from 
disasters and emergencies. The funds will be accessed upon 
declaration by the Government of the Federated States of 
Micronesia, with the concurrence of the United States Chief of 
Mission to the Federated States of Micronesia. The 
Administration of the DAEF shall be governed by the Fiscal 
Procedures Agreement and the Federal Programs and Services 
Agreement referred to in section 231.

           *       *       *       *       *       *       *

Section 215--Trust Fund

    (a) The United States shall contribute annually for twenty 
years from the effective date of this Compact, as amended, in 
the amounts set forth in section 216 into a Trust Fund 
established in accordance with the Agreement Between the 
Government of the United States of America and the Government 
of the Federated States of Micronesia Implementing Section 215 
and Section 216 of the Compact, as Amended, Regarding a Trust 
Fund (``Trust Fund Agreement''). Upon termination of the annual 
financial assistance under section 211, the proceeds of the 
fund shall thereafter be used for the purpose described in 
section 211 or as otherwise mutually agreed.
    (b) The United States contribution into the Trust Fund 
described in [subsection (a)] subsection (a) of this section is 
conditioned on the Government of the Federated States of 
Micronesia contributing to the Trust Fund at least $30 million, 
prior to September 30, 2004. Any funds received by the 
Federated States of Micronesia under section 111(d) of Public 
Law 99-239 (January 14, 1986), or successor provisions, would 
be contributed to the Trust Fund as a Federated States of 
Micronesia contribution.

           *       *       *       *       *       *       *

Section 221

    (a) Section.--The Government of the United States shall 
make available to the Federated States of Micronesia, in 
accordance with and to the extent provided in the Federal 
Programs and Services Agreement referred to in section 231, the 
services and related programs of:
          (1) the United States Weather Service;
          (2) the United States Postal Service;
          (3) the United States Federal Aviation 
        Administration;
          (4) the United States Department of Transportation;
          (5) the Federal Deposit Insurance Corporation (for 
        the benefit only of the Bank of the Federated States of 
        Micronesia); and
          (6) the Department of Homeland Security (Federal 
        Emergency Management Agency), and the United States 
        Agency for International Development, Office of Foreign 
        Disaster Assistance.
    Upon the effective date of this Compact, as amended, the 
United States Departments and Agencies named or having 
responsibility to provide these services and related programs 
shall have the authority to implement the relevant provisions 
of the Federal Programs and Services Agreement referred to in 
section 231.
    (b) Programs.--
          (1) With the exception of the services and programs 
        covered by subsection (a) of this section, and unless 
        the Congress of the United States provides otherwise, 
        the Government of the United States shall make 
        available to the Federated States of Micronesia the 
        services and programs that were available to the 
        Federated States of Micronesia on the effective date of 
        this Compact, as amended, to the extent that such 
        services and programs continue to be available to State 
        and local governments of the United States. As set 
        forth in the Fiscal ProceduresAgreement, funds provided 
under subsection (a) of section 211 will be considered to be local 
revenues of the Government of the Federated States of Micronesia when 
used as the local share required to obtain Federal programs and 
services.
          (2) Unless provided otherwise by U.S. law, the 
        services and programs described in paragraph (1) of 
        this subsection shall be extended in accordance with 
        the terms of the Federal Programs and Services 
        Agreement referred to in section 231.
    (c) The Government of the United States shall have and 
exercise such authority as is necessary to carry out its 
responsibilities under this Title and the separate [agreements] 
agreement referred to in amended section 231, including the 
authority to monitor and administer all service and program 
assistance provided by the United States to the Federated 
States of Micronesia. The Federal Programs and Services 
Agreement referred to in amended section 231 shall also set 
forth the extent to which services and programs shall be 
provided to the Federated States of Micronesia.
    (d) Except as provided elsewhere in this Compact, as 
amended, under any separate agreement entered into under this 
Compact, as amended, or otherwise under U.S. law, all Federal 
domestic programs extended to or operating in the Federated 
States of Micronesia shall be subject to all applicable 
criteria, standards, reporting requirements, auditing 
procedures, and other rules and regulations applicable to such 
programs and services when operating in the United States.
    (e) The Government of the United States shall make 
available to the Federated States of Micronesia alternate 
energy development projects, studies, and conservation measures 
to the extent provided for the Freely Associated States in the 
laws of the United States.

Section 222

    The Government of the United States and the Government of 
the Federated States of Micronesia may agree from time to time 
to extend to the Federated States of Micronesia additional 
United States grant assistance, services and programs, as 
provided under the laws of the United States. Unless 
inconsistent with such laws, or otherwise specifically 
precluded by the Government of the United States at the time 
such additional grant assistance, services, or programs are 
extended, the Federal Programs and Services Agreement referred 
to in section 231 shall apply to any such assistance, services 
or programs.

           *       *       *       *       *       *       *

Section 232

    The Government of the United States, in consultation with 
the Government of the Federated States of Micronesia, shall 
determine and implement procedures for the periodic audit of 
all grants and other assistance made under Article I of this 
Title and of all funds expended for the services and programs 
provided under Article II of this Title. Further, in accordance 
with the Fiscal Procedures Agreement described in subsection 
(a) of section 211, the Comptroller General of the United 
States shall have such powers and authorities as described in 
[sections 102(c) and 110(c) of Public Law 99-239, 99 Stat. 
1777-78, and 99 Stat. 1799 (January 14, 1986)] section 102(b) 
of Public Law 108-188, 117 Stat. 2726, December 17, 2003.

           *       *       *       *       *       *       *

Section 252

    The Government of the Federated States of Micronesia may, 
with respect to United States persons, tax income derived from 
sources within its respective jurisdiction, property situated 
therein, including transfers of such property by gift or at 
death, and products consumed therein, in such manner as the 
Government of the Federated States of Micronesia deems 
appropriate. The determination of the source of any income, or 
the situs of any property, shall for purposes of this Compact, 
as amended, be made according to the United States Internal 
Revenue Code.

           *       *       *       *       *       *       *

Section 341

    Any person entitled to the privileges set forth in [Section 
141] section 141 (with the exception of any person described in 
section 141(a)(5) who is not a citizen of the Federated States 
of Micronesia) shall be eligible to volunteer for service in 
the Armed Forces of the United States, but shall not be subject 
to involuntary induction into military service of the United 
States as long as such person has resided in the United States 
for a period of less than one year, provided that no time shall 
count towards this one year while a person admitted to the 
United States under the Compact, or the Compact, as amended, is 
engaged in full-time study in the United States. Any person 
described in section 141(a)(5) who is not a citizen of the 
Federated States of Micronesia shall be subject to United 
States laws relating to selective service.

Section 342

    The Government of the United States shall have enrolled, at 
any one time, at least one qualified student from the Federated 
States of Micronesia, as may be nominated by the Government of 
the Federated States of Micronesia, in each of:
    (a) The United States Coast Guard Academy pursuant to [14 
U.S.C. 195] section 195 of Title 14, United States Code.
    (b) The United States Merchant Marine Academy pursuant to 
[46 U.S.C. 1295(b)(6)] section 1303(b)(6) of the Merchant 
Marine Act, 1936 (46 U.S.C. 1295b(b)(6)), provided that the 
provisions of [46 U.S.C. 1295b(b)(6)(C)] section 1303(b)(6)(C) 
of that Act shall not apply to the enrollment of students 
pursuant to section 342(b) of this Compact, as amended.

           *       *       *       *       *       *       *

Section 354

    (a) The Government of the United States and the Government 
of the Federated States of Micronesia are jointly committed to 
continue their security and defense relations, as set forth in 
this Title. Accordingly, it is the intention of the two 
countries that the provisions of this Title shall remain 
binding as long as this Compact, as amended, remains in effect, 
and thereafter as mutually agreed,unless earlier terminated by 
mutual agreement pursuant to section 441, or amended pursuant to 
Article III of Title Four. If at any time the Government of the United 
States, or the Government of the Federated States of Micronesia, acting 
unilaterally, terminates this Title, such unilateral termination shall 
be considered to be termination of the entire Compact, in which case 
the provisions of [section 442 and 452] sections 442 and 452 (in the 
case of termination by the Government of the United States) or sections 
443 and 453 (in the case of termination by the Government of the 
Federated States of Micronesia), with the exception of paragraph (3) of 
subsection (a) of section 452 or paragraph (3) of subsection (a) of 
section 453, as the case may be, shall apply.

           *       *       *       *       *       *       *

Section 461

    For the purpose of this Compact, as amended, only, and 
without prejudice to the views of the Government of the United 
States or the Government of the Federated States of Micronesia 
as to the nature and extent of the jurisdiction of either of 
them under international law, the following terms shall have 
the following meanings:
    (a) ``Trust Territory of the Pacific Islands'' means the 
area established in the Trusteeship Agreement consisting of the 
former administrative districts of Kosrae, Yap, Ponape, the 
Marshall Islands and Truk as described in Title One, Trust 
Territory Code, section 1, in force on January 1, 1979. This 
term does not include the area of Palau or the Northern Mariana 
Islands.

           *       *       *       *       *       *       *

    (h) The following terms shall be defined consistent with 
the 1998 Edition of the Radio Regulations of the International 
[Telecommunications] Telecommunication Union as follows:

           *       *       *       *       *       *       *

Section 462

    (b) The Government of the United States and the Government 
of the Federated States of Micronesia shall conclude prior to 
the date of submission of this Compact, as amended, to the 
legislatures of the two countries, the following related 
agreements which shall come into effect on the effective date 
of this Compact, as amended, and shall survive in accordance 
with their terms, as follows:

           *       *       *       *       *       *       *

          (4) Agreement concerning Procedures for the 
        Implementation of United States Economic Assistance 
        Provided in the Compact of Free Association, as 
        Amended, [of Free Association] Between the Government 
        of the United States of America and the Government of 
        the Federated States of Micronesia;

           *       *       *       *       *       *       *

Section 463

    (a) Except as set forth in subsection (b) of this section, 
any reference in this Compact, as amended, to a provision of 
the United States Code or the Statutes at Large of the United 
States constitutes the incorporation of the language of such 
provision into this Compact, as amended, as such provision was 
in force on the effective date of this Compact, as amended.
    (b) Any reference in [Articles IV] Article IV and Article 
VI of Title One and Sections 174, 175, 178 and 342 to a 
provision of the United States Code or the Statutes at Large of 
the United States or to the Privacy Act, the Freedom of 
Information Act, the Administrative Procedure Act or the 
Immigration and Nationality Act constitutes the incorporation 
of the language of such provision into this Compact, as 
amended, as such provision was in force on the effective date 
of this Compact, as amended, or as it may be amended thereafter 
on a non-discriminatory basis according to the constitutional 
processes of the United States.

           *       *       *       *       *       *       *

    (b) Compact of Free Association, as Amended, Between the 
Government of the United States of America and the Government 
of the Republic of the Marshall Islands.--The Compact of Free 
Association, as amended, between the Government of the United 
States of America and the Government of the Republic of the 
Marshall Islands is as follows:

                                PREAMBLE

 The Government of the United States of America and the Government of 
the Republic of the Marshall Islands

           *       *       *       *       *       *       *

Section 174

    Except as otherwise provided in this Compact, as amended, 
and its related agreements:
    (a) The Government of the Republic of the Marshall Islands, 
and its agencies and officials, shall be immune from the 
jurisdiction of the [court] courts of the United States, and 
the Government of the United States, and its agencies and 
officials, shall be immune from the jurisdiction of the courts 
of the Republic of the Marshall Islands.

           *       *       *       *       *       *       *

Section 177

    Section 177 of the Compact entered into force with respect 
to the Marshall Islands on October 21, 1986 as follows: ``(a) 
The Government of the United States accepts the responsibility 
for compensation owing to citizens of the Marshall Islands, or 
the Federated States of Mirconesia[,] (or Palau) for loss or 
damage to property and person of the citizens of the Marshall 
Islands, or the Federated States of Micronesia, resulting from 
the nuclear testing program which the Government of the United 
States conducted in the Northern Marshall Islands between June 
30, 1946, and August 18, 1958.

           *       *       *       *       *       *       *

Section 179

    (a) The courts of the Republic of the Marshall Islands 
shall not exercise criminal jurisdiction over the Government of 
the United States, or its instrumentalities.
    (b) The courts of the Republic of the Marshall Islands 
shall not exercise criminal jurisdiction over any person if the 
Government of the United States provides notification to the 
Government of the Republic of the Marshall Islands that such 
person was acting on behalf of the Government of the United 
States, for actions taken in furtherance of section 221 or 224 
of this [amended Compact,] Compact, as amended, or any other 
provision of law authorizing financial, program, or service 
assistance to the Republic of the Marshall Islands.

                     TITLE TWO--ECONOMIC RELATIONS

                               ARTICLE I

                            GRANT ASSISTANCE

Section 211--Annual Grant Assistance

    (a) In order to assist the Government of the Republic of 
the Marshall Islands in its efforts to promote the economic 
advancement and budgetary self-reliance of its people, and in 
recognition of the special relationship that exists between the 
Republic of the Marshall Islands and the United States, the 
Government of the United States shall provide assistance on a 
grant basis for a period of twenty years in the amounts set 
forth in section 217, commencing on the effective date of this 
Compact, as amended. Such grants shall be used for assistance 
in education, health care, the environment, public sector 
capacity building, and private sector development, or for other 
areas as mutually agreed, with priorities in the education and 
health care sectors. Consistent with the medium-term budget and 
investment framework described in subsection (f) of this 
section, the proposed division of this amount among the 
identified areas shall require the concurrence of both the 
Government of the United States and the Government of the 
Republic of the Marshall Islands, through the Joint Economic 
Management and Financial Accountability Committee described in 
section 214. The Government of the United States shall disburse 
the grant assistance and monitor the use of such grant 
assistance in accordance with the provisions of this Article 
and an Agreement Concerning Procedures for the Implementation 
of United States Economic Assistance Provided in the [Compact, 
as Amended, of Free Association] Compact of Free Association, 
as amended, Between the Government of the United States of 
America and the Government of the Republic of the Marshall 
Islands (``Fiscal Procedures Agreement'') which shall come into 
effect simultaneously with this, Compact, as amended.
    (b) Kwajalein Atoll.--
          (1) Of the total grant assistance made available 
        under subsection (a) of this section, the amount 
        specified herein shall be allocated annually from 
        fiscal year 2004 through fiscal year 2023 (and 
        thereafter in accordance with the [Agreement Between 
        the Government of the United States and the Government 
        of the Republic of the Marshall Islands Regarding 
        Military Use and Operating Rights] Agreement Regarding 
        the Military Use and Operating Rights of the Government 
        of the United States in the Republic of the Marshall 
        Islands concluded Pursuant to Sections 321 and 323 of 
        the Compact of Free Association, as Amended (Agreement 
        Between the Government of the United States and the 
        Government of the Republic of the Marshall Islands 
        Regarding Military Use and Operating Rights) to advance 
        the objectives and specific priorities set forth in 
        subsections (a) and (d) of this section and the Fiscal 
        Procedures Agreement, to address the special needs of 
        the community at Ebeye, Kwajalein Atoll and other 
        Marshallese communities within Kwajalein Atoll. This 
        United States grant assistance shall be made available, 
        in accordance with the medium-term budget and 
        investment framework described in subsection (f) of 
        this section, to support and improve the infrastructure 
        and delivery of services and develop the human and 
        material resources necessary for the Republic of the 
        Marshall Islands to carry out its responsibility to 
        maintain such infrastructure and deliver such services. 
        The amount of this assistance shall be $3,100,000, with 
        an inflation adjustment as provided in section 218, 
        from fiscal year 2004 through fiscal year 2013 and the 
        fiscal year 2013 level of funding, with an inflation 
        adjustment as provided in section 218, will be 
        increased by $2 million for fiscal year 2014. The 
        fiscal year 2014 level of funding, with an inflation 
        adjustment as provided in section 218, will be 
madeavailable from fiscal year 2015 through fiscal year 2023 (and 
thereafter as noted above).

           *       *       *       *       *       *       *

    (e) Disaster Assistance Emergency Fund.--Of the total grant 
assistance made available under subsection (a) of this section, 
an amount of two hundred thousand dollars ($200,000) shall be 
provided annually, with an equal contribution from the 
Government of the Republic of the Marshall Islands, as a 
contribution to a Disaster Assistance Emergency Fund 
(``DAEF''). Any funds from the DAEF may be used only for 
assistance and rehabilitation resulting from disasters and 
emergencies. The funds will be accessed upon declaration of a 
State of Emergency by the Government of the Republic of the 
Marshall Islands, with the concurrence of the United States 
Chief of Mission to the Republic of the Marshall Islands. 
Administration of the DAEF shall be governed by the Fiscal 
Procedures Agreement and the Federal Programs and Services 
Agreement referred to in section 231.

           *       *       *       *       *       *       *

Section 221

    (a) Services.--The Government of the United States shall 
make available to the Republic of the Marshall Islands, in 
accordance with and to the extent provided in the Federal 
Programs and Services Agreement referred to in [Section 231] 
section 231, the services and related programs of:
          (1) The United States Weather Service;
          (2) The United States Postal Service;
          (3) The United States Federal Aviation 
        Administration;
          (4) The United States Department of Transportation; 
        and
          (5) The Department of Homeland Security (Federal 
        Emergency Management Agency), and the United States 
        Agency for International Development, Office of Foreign 
        Disaster Assistance.
    Upon the effective date of this Compact, as amended, the 
United States Departments and Agencies named or having 
responsibility to provide these services and related programs 
shall have the authority to implement the relevant provisions 
of the Federal Programs and Services Agreement referred to in 
section 231.

           *       *       *       *       *       *       *

Section 232

    The Government of the United States, in consultation with 
the Government of the Republic of the Marshall Islands, shall 
determine and implement procedures for the periodic audit of 
all grants and other assistance made under Article I of this 
Title and of all funds expended for the services and programs 
provided under Article II of this Title. Further, in accordance 
with the Fiscal Procedures Agreement described in subsection 
(a) of section 211, the Comptroller General of the United 
States shall have such powers and authorities as described in 
[sections 103(m) and 110(c) of Public Law 99-239, 99 State. 
1777-78, and 99 Stat. 1799 (January 14, 1986)] section 103(k) 
of Public Law 108-188, 117 Stat. 2734, December 17, 2003.

           *       *       *       *       *       *       *

Section 341

    Any person entitled to the privileges set forth in [Section 
141] section 141 (with the exception of any person described in 
section 141(a)(5) who is not a citizen of the Republic of the 
Marshall Islands) shall be eligible to volunteer for service in 
the Armed Forces of the United States, but shall not be subject 
to involuntary induction into military service of the United 
States as long as such person has resided in the United States 
for a period of less than one year, provided that no time shall 
count towards this one year while a person admitted to the 
United States under the Compact, or the Compact, as amended, is 
engaged in full-time study in the United States. Any person 
described in section 141(a)(5) who is not a citizen of the 
Republic of the Marshall Islands shall be subject to United 
States laws relating to selective service.

Section 342

    The Government of the United States shall have enrolled, at 
any one time, at least one qualified student from the Republic 
of the Marshall Islands, as may be nominated by the Government 
of the Republic of the Marshall Islands, in each of:
    (a) The United States Coast Guard Academy pursuant to [14 
U.S.C. 195] section 195 of title 14, United States Code.
    (b) The United States Merchant Marine Academy pursuant to 
[46 U.S.C. 1295(b)(6)] section 1303(b)(6) of the Merchant 
Marine Act of 1936 (46 U.S.C. 1295b(b)(6)), provided that the 
provisions of [46 U.S.C. 1295b(b)(6)(C)] section 1303(b)(6)(C) 
of that Act shall not apply to the enrollment of students 
pursuant to section 342(b) of this Compact, as amended.

           *       *       *       *       *       *       *

Section 354

    (a) The Government of the United States and the Government 
of the Republic of the Marshall Islands are jointly committed 
to continue their security and defense relations, as set forth 
in this Title. Accordingly, it is the intention of the two 
countries that the provisions of this Title shall remain 
binding as long as this Compact, as amended, remains in effect, 
and thereafter as mutually agreed, unless earlier terminated by 
mutual agreement pursuant to section 441, or amended pursuant 
to Article III of Title Four. If at any time the Government of 
the United States, or the Government of the Republic of the 
Marshall Islands, acting unilaterally, terminates this Title, 
such unilateral termination shall be considered to be 
termination of the entire Compact, as amended, in which case 
the provisions of [section 442 and 452] sections 442 and 452 
(in the case of termination by the Government of the United 
States) or sections 443 and 453 (in the case of termination by 
the Government of the Republic of the Marshall Islands), with 
the exceptionof paragraph (3) of subsection (a) of section 452 
or paragraph (3) of subsection (a) of section 453, as the case may be, 
shall apply.

           *       *       *       *       *       *       *

Section 443

    This Compact, as amended, shall be terminated by the 
Government of the Republic of the Marshall Islands, pursuant to 
its constitutional processes, subject to section 453 if the 
people represented by that Government vote in a plebiscite to 
terminate the Compact, as amended. The Government of the 
Republic of the Marshall Islands shall notify the Government of 
the United States of its intention to call such a plebiscite, 
which shall take place not earlier than three months after 
delivery of such notice. The plebiscite shall be administered 
by the Government of the Republic of the Marshall Islands in 
accordance with its constitutional and legislative processes, 
but the Government of the United States may send its own 
observers and invite observers from a mutually agreed party. If 
a majority of the valid ballots cast in the plebiscite favors 
termination, the Government of the Republic of the Marshall 
Islands shall, upon certification of the results of the 
plebiscite, give notice of termination to the Government of the 
United States, such termination to be effective on the date 
specified in such notice but not earlier than three months 
[following the date of delivery of such notice. The time 
specified in the notice of termination may be extended.

           *       *       *       *       *       *       *

Section 461

    For the purpose of this Compact, as amended, only, and 
without prejudice to the views of the Government of the United 
States or the Government of the Republic of the Marshall 
Islands as to the nature and extent of the jurisdiction of 
either of them under international law, the following terms 
shall have the following meanings:

           *       *       *       *       *       *       *

    (h) The following terms shall be defined consistent with 
the [1978] 1998 Edition of the Radio Regulations of the 
International [Telecommunications] Telecommunication Union as 
follows:

           *       *       *       *       *       *       *

Section 463

    (a) Except as set forth in subsection (b) of this section, 
any reference in this Compact, as amended, to a provision of 
the United States Code or the Statutes at Large of the United 
States constitutes the incorporation of the language of such 
provision into this Compact, as amended, as such provision was 
in force on the effective date of this Compact, as amended.
    (b) Any reference in [Article] Articles IV and VI of Title 
One, and Sections 174, 175, 178 and 342 to a provision of the 
United States Code or the Statutes at Large of the United 
States or to the Privacy Act, the Freedom of Information Act, 
the Administrative Procedure Act or the Immigration and 
Nationality Act constitutes the incorporation of the language 
of such provision into this Compact, as amended, as such 
provision was in force on the effective date of this Compact, 
as amended, or as it may be amended thereafter on a non-
discriminatory basis according to the constitutional processes 
of the United States.

           *       *       *       *       *       *       *

                                  
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