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21–971 2017

S. HRG. 114–426 

ISSUES FACING U.S.-AFFILIATED ISLANDS AS REPORTED BY THE U.S. GOVERNMENT ACCOUNTABILITY OFFICE AND CONSIDERATION OF TWO 

MEASURES RELATED TO U.S.-AFFILIATED ISLANDS: S. 2360, THE OMNIBUS TERRITORIES 

ACT OF 2015, AND S. 2610, A BILL TO 

APPROVE AN AGREEMENT BETWEEN THE 

UNITED STATES AND THE REPUBLIC OF PALAU 

HEARING 

BEFORE THE 

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

APRIL 5, 2016 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 

Available via the World Wide Web: http://fdsys.gov 

(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

LISA MURKOWSKI, Alaska, Chairman 

JOHN BARRASSO, Wyoming 

JAMES E. RISCH, Idaho 

MIKE LEE, Utah 

JEFF FLAKE, Arizona 

STEVE DAINES, Montana 

BILL CASSIDY, Louisiana 

CORY GARDNER, Colorado 

ROB PORTMAN, Ohio 

JOHN HOEVEN, North Dakota 

LAMAR ALEXANDER, Tennessee 

SHELLEY MOORE CAPITO, West Virginia 

MARIA CANTWELL, Washington 

RON WYDEN, Oregon 

BERNARD SANDERS, Vermont 

DEBBIE STABENOW, Michigan 

AL FRANKEN, Minnesota 

JOE MANCHIN III, West Virginia 

MARTIN HEINRICH, New Mexico 

MAZIE K. HIRONO, Hawaii 

ANGUS S. KING, JR., Maine 

ELIZABETH WARREN, Massachusetts 

COLIN HAYES, Staff Director 

PATRICK J. McCORMICK III, Chief Counsel 

ISAAC EDWARDS, Senior Counsel 

ANGELA BECKER-DIPPMANN, Democratic Staff Director 

SAM E. FOWLER, Democratic Chief Counsel 

ALLEN STAYMAN, Democratic Senior Professional Staff Member 

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Gardner, Hon. Cory, a U.S. Senator from Colorado ............................................. 1 

Cantwell, Hon. Maria, Ranking Member, and a U.S. Senator from Washington .................................................................................................................... 2 

WITNESSES 

Kia’aina, Hon. Esther, Assistant Secretary for Insular Areas, U.S. Department of the Interior ............................................................................................. 4 

Gootnick, David, Director, International Affairs and Trade, U.S. Government 

Accountability Office ............................................................................................ 15 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED 

Bordallo, Hon. Madeleine: 

Statement for the Record ................................................................................. 95 

Cantwell, Hon. Maria: 

Opening Statement ........................................................................................... 2 

Gardner, Hon. Cory: 

Opening Statement ........................................................................................... 1 

Gootnick, David: 

Opening Statement ........................................................................................... 15 

Written Testimony ............................................................................................ 17 

Response to Questions for the Record ............................................................. 84 

Kia’aina, Hon. Esther: 

Opening Statement ........................................................................................... 4 

Written Testimony ............................................................................................ 6 

Responses to Questions for the Record ........................................................... 79 

Kyota, Hon. Hersey: 

Letter for the Record ........................................................................................ 100 

People of Bikini: 

Statement for the Record ................................................................................. 111 

Plaskett, Hon. Stacey: 

Statement for the Record ................................................................................. 98 

S. 2360, the Omnibus Territories Act of 2015 ....................................................... 65 

S. 2610, a bill to approve an agreement between the United States and 

the Republic of Palau ........................................................................................... 68 

Sablan, Hon. Gregorio Kilili Camacho: 

Letter for the Record ........................................................................................ 103 

Silk, Hon. John: 

Statement for the Record ................................................................................. 105 

(1) 

ISSUES FACING U.S.-AFFILIATED ISLANDS AS 

REPORTED BY THE U.S. GOVERNMENT ACCOUNTABILITY OFFICE AND CONSIDERATION OF TWO MEASURES RELATED TO 

U.S.-AFFILIATED ISLANDS: S. 2360, THE OMNIBUS TERRITORIES ACT OF 2015, AND S. 

2610, A BILL TO APPROVE AN AGREEMENT 

BETWEEN THE UNITED STATES AND THE 

REPUBLIC OF PALAU 

TUESDAY, APRIL 5, 2016 

U.S. SENATE, 

COMMITTEE ON ENERGY AND NATURAL RESOURCES, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:04 a.m. in Room 

SD–366, Dirksen Senate Office Building, Hon. Cory Gardner, presiding. 

OPENING STATEMENT OF HON. CORY GARDNER, 

U.S. SENATOR FROM COLORADO 

Senator GARDNER. Good morning and welcome to the Senate Energy and Natural Resources Committee’s hearing on issues relating 

to the U.S. territories and the Freely Associated States. 

I call this Committee hearing to order. 

Specifically, we will be looking this morning at two bills: S. 2360, 

the Omnibus Territories Act of 2015, and S. 2610, a bill to approve 

the 2010 agreement between the United States and Palau. 

We will also review reports by the U.S. Government Accountability Office (GAO) relating to the agreement with Palau as well 

as a review of the compacts of free association with the Marshall 

Islands and Micronesia and the impact of compact migrants in our 

states and territories. 

Let me begin my remarks first on the legislation to approve the 

2010 agreement. 

Palau has been one of the United States’ most steadfast allies. 

They vote with the U.S. in the United Nations more than any other 

nation except for Israel. Out of a total population of around 21,000 

approximately 500 of their men and women serve in the United 

States Armed Forces. We should be mindful of and grateful for 

their support. 

This Committee has held two hearings on this agreement in prior 

Congresses. To the best of my knowledge I am unaware of any polVerDate Nov 24 2008 08:32 Jan 12, 2017 Jkt 021971 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\21971\D21971.TXT D21971
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icy objections to the agreement’s plan of continued financial assistance through Fiscal Year 2024. The difficulty has always been finding an acceptable and viable offset to pay for that financial assistance. 

I would note that since the 2010 agreement was signed by this Administration, Congress has annually provided over $13 million 

in discretionary funding for just over $90 million total so far, bringing the cost of the agreement to $150 million over ten years, down 

from $240 million. 

Unfortunately however, the Administration has not been able to 

identify a politically viable option to cover the remaining amount. 

I am hopeful that the Administration’s witness today will be able 

to provide an update on where things stand with finding that offset. 

The other piece of legislation that we will consider has three different parts to it relating to the people of Bikini Atoll’s ability to 

resettle in a location outside of the Marshall Islands, the authority 

to permit a foreign carrier to operate between the American Samoa 

Islands of Tutuila and Manu’a without the need for an emergency 

service designation, and an amendment to the REAL ID Act so that 

the citizens of the Freely Associated States (FAS) would be eligible 

for driver’s licenses or personal identification cards. 

The first two issues were introduced at the request of the Administration while the latter issue has previously been reported out of 

this Committee and passed by the Senate last Congress. 

With regard to GAO’s report we certainly appreciate the expertise and institutional knowledge and memory that GAO’s experts 

provide on topics like the Territories and Freely Associated States. 

With fewer and fewer Members of Congress in office who served in 

the Pacific theater of World War II and experienced how that period in history shaped the United States engagement with the Pacific Islands and particularly our relationship with the U.S.-affiliated islands, retaining that knowledge is very important for us to 

be able to put some of these legislative proposals into the proper 

context. 

Certainly the topic of compact impact is important to Hawaii and 

Guam and a growing importance to states like Arkansas, Missouri 

and Oregon, as citizens of the Freely Associated States migrate further into the United States. 

I look forward to hearing from our witnesses this morning on 

these topics, and I will turn to Senator Cantwell for any comments 

she may wish to provide. 

STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM 

WASHINGTON 

Senator CANTWELL. Thank you, Chairman Gardner. [Laughter.] 

For chairing the hearing and for this important subject this morning. 

As many of my colleagues know, this Committee was once named 

the Committee on Interior and Insular Affairs which has jurisdiction over numerous U.S.-affiliated islands including Hawaii and 

the Philippines. Today the scope of the hearing jurisdiction is narrower but still includes the five territories of Puerto Rico, the U.S. 

Virgin Islands, American Samoa, Guam, the Northern Mariana IsVerDate Nov 24 2008 08:32 Jan 12, 2017 Jkt 021971 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\21971\D21971.TXT D21971
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lands and the U.S. assistance to Freely Associated States of Palau, 

Micronesia and the Marshall Islands. 

Each of these island governments has a separate and unique relationship with the United States that requires our oversight and 

from time to time changes in Federal law. Today the Committee 

will consider two bills and three GAO reports regarding the insular 

issues. 

But before I get to that, I would like to say a word about another 

territorial topic that is not on today’s agenda, and that is Puerto 

Rico. For several months, bills have been introduced and hearings 

have been held on the financial crisis in our largest territory, a financial crisis that is quickly becoming a humanitarian crisis for 3.5 

million U.S. citizens. The Senate has just gotten back from a twoweek recess, but we have to get serious about passing legislation 

giving Puerto Rico the tools they need to restructure their debt and 

begin to rebuild their economy. 

Turning back to today’s agenda, the first bill, S. 2360, the Omnibus Territories Acts of 2015, would make three changes to Federal 

law requested by the island governments. First, it would allow the 

use of the Bikini Resettlement Trust Fund for the people of Bikini 

to resettle outside the Marshall Islands. Second, it would allow foreign air carriers to provide service to American Samoa between the 

islands of Tutuila and Manua. Third, it would make a technical 

correction to the REAL ID bill by replacing the reference to the 

Trust Territory of the Pacific Islands with the names of three successor states. This would allow citizens who legally reside in the 

U.S. to get state identity documents. 

The second bill would approve the 2010 agreement between the 

U.S. and the Republic of Palau to update and extend provisions of 

the compact free association that governs relations between our nations. 

This bill is a national security priority because Palau is strategically located in the Western Pacific, a region of growing international tension. In its letter of transmittal of the legislation, the 

Administration concludes, ‘‘Approving this agreement is important 

to the national security of the United States’, stability in the Western Pacific region, our bilateral relationship with Palau and to the 

United States’ broader strategic interest in the Asia-Pacific region.’’ 

Palau is arguably among the United States’ closest allies, as my 

colleague was mentioning. Nonetheless, despite this national security imperative and broad bipartisan support, the Committee has 

been unable to move the bill forward for five years because of a 

failure to find a viable offset for the mandatory spending cost of 

$149 million over eight years. I hope that this is the year that we 

will do better here. 

I am looking forward to hearing about these bills from the Assistant Secretary of Insular Affairs, Esther Kia’aina, and hope that 

people remember her from her work with Senator Akaka, who is 

remembered as a champion of these island policies. 

I also want to welcome Dr. Gootnick, Director of International 

Affairs and Trade at the Government Accountability Office. I would 

like to thank him for his work over these many years in evaluating 

these Federal programs. 

4 

Financial assistance under the three compacts of free association totals nearly $200 million a year and is vital to providing services 

to these Free Associated States. In addition, there is $30 million 

a year provided to Guam and Hawaii and the Commonwealth of 

the Northern Mariana Islands to help mitigate the impact of compact migrants on these communities and for services where they 

have settled. 

So as part of the Committee’s oversight responsibilities for these 

GAO programs, we have the GAO presenting their reports which 

we will hear about this morning. 

So again, Mr. Chairman, I so appreciate having this hearing. I 

look forward to hearing about these issues and from the Administration. This will further assist in making sure we get these legislative issues resolved this year. 

Thank you. 

Senator GARDNER. Thank you, Senator Cantwell. 

We are hearing this morning from two witnesses, David Gootnick 

from GAO as well as Esther Kia’aina, the Assistant Secretary for 

Insular Areas at Department of the Interior. 

Ms. Kia’aina, we will begin with your testimony. 

Thank you. 

STATEMENT OF HON. ESTHER KIA’AINA, ASSISTANT SECRETARY FOR INSULAR AREAS, U.S. DEPARTMENT OF THE INTERIOR 

Ms. KIA’AINA. Thank you, Mr. Chairman and members of the 

Committee. I appreciate the opportunity to testify on S. 2360 and 

2610. Most of the provisions in both bills were requested by the Administration, and we are appreciative of Chair Murkowski’s leadership to introduce the bills which we support. 

The Administration supports S. 2360, the Omnibus Territories 

Act of 2015, with its provisions for broadening Bikini resettlement 

options, promoting reliable air transportation services within 

American Samoa and amending the REAL ID Act to improve the 

availability of drivers licenses and personal identification cards for 

the citizens of the three Freely Associated States and Micronesia. 

The Administration also supports S. 2610 which would approve 

the 15-year review agreement with the Republic of Palau between 

the United States which called for a U.S. appropriation of $229 

million through 2024. Instead, because the agreement has not yet 

been brought into force the United States, through the U.S. Department of the Interior, has made annual payments beginning 

with Fiscal Year 2010 of approximately $13.1 million a year for a 

total of $92 million in discretionary funds thus far. This bill would 

fund the remaining amount of $149 million which includes remaining moneys from the U.S. Postal Service. 

As was mentioned by Senator Cantwell, approving the agreement 

with Palau is important to the national security of the United 

States, our bilateral relationship with Palau and stability in the 

Western Pacific region. 

Besides the two bills today, I wanted to raise a few issues that 

are important to the insular areas. 

The first is the growing number of migrants under the compacts 

of free association in U.S. jurisdictions, particularly Guam and HaVerDate Nov 24 2008 08:32 Jan 12, 2017 Jkt 021971 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\21971\D21971.TXT D21971
5 

waii, and its financial impacts on these jurisdictions. The Department believes the concerns of these jurisdictions deserve attention. 

The Department concurs that the current allocation of mandatory 

and discretionary funds of $33 million are insufficient to defray the 

costs and welcomes revisiting the exclusion of FAS citizens from 

Federal public benefits with Congress and other Federal departments. 

The second issue is the elimination of the Commonwealth of the 

Northern Mariana Islands (CNMI) only transitional worker visa 

classification in 2019, the recovery of the CNMI economy and efforts to train the CNMI work force continues to be an issue of utmost importance. 

Lastly, last fall the Administration forwarded a road map to the 

Congress to deal with the economic and fiscal crisis in Puerto Rico. 

The Department believes the other territories should be considered 

for inclusion in the health and tax provisions that may be extended 

to Puerto Rico, namely the Earned Income Tax Credit and the 

Medicaid provisions. This would equalize treatment among all of 

the territories and the states as well as take steps to prevent a crisis in the other smaller territories based on unequal treatment 

from development in these islands. 

Again, I appreciate the opportunity to testify and urge expeditious approval of S. 2360 and 2610. 

Thank you, Mr. Chairman. 

[The prepared statement of Ms. Kia’aina follows:] 

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Senator GARDNER. Thank you for your testimony. 

David Gootnick, the Director of International Affairs and Trade, 

thank you very much. I look forward to hearing your testimony. 

STATEMENT OF DAVID GOOTNICK, DIRECTOR, INTERNATIONAL AFFAIRS AND TRADE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. GOOTNICK. Thank you, Mr. Chairman. 

Mr. Chairman and members of the Committee, thank you for 

asking GAO to participate in this hearing. My statement today will 

touch on three key issues associated with the compacts of free association. First, an analysis of S. 2610. Second, key challenges under 

the amended compacts with Micronesia and the Marshall Islands. 

And third, compact migration and its effects on U.S. areas. 

First on Palau. As has been stated, S. 2610 would approve, fund 

and make modifications to the 2010 agreement. Over the past five 

years, in the absence of implementing legislation, the U.S. has provided $67 million less than the agreement had anticipated. S. 2610, 

in essence, establishes a new schedule of economic assistance that 

would erase this gap. 

In addition to the allocation funds to government operations, infrastructure, debt relief and Palau’s trust fund, the agreement 

places some conditions on the economic package. I’ll mention four. 

First, funding to government operations would be directed to specific purposes such as health and education. Second, an advisory 

group would be charged with overseeing the implementation of reforms such as those recommended by the IMF and the Asian Development Bank. Third, infrastructure funds would get additional 

scrutiny prior to funding. And fourth, infrastructure maintenance 

would prioritize the compact road and Palau’s principle airport. 

The agreement would also markedly improve the outlook for 

Palau’s trust fund. In fact, under the agreed upon schedule and at 

its historic rate of return, the fund would continue to grow through 

2044. 

Importantly, the agreement extends authority to continue discretionary U.S. Federal programs such as Head Start, Community 

Health Centers, special education and PELL Grants. These programs have represented roughly one-third of all U.S. support since 

1994 and projections of Palau’s fiscal balance assume their continued presence. 

Next, regarding the compacts with Micronesia and the Marshall 

Islands. Now roughly two-thirds of the way through the amended 

compact period both economies remain largely dependent on compact grants and U.S. program support. Compact grants are decreasing and will end in 2023. Both country’s plans for this decrement are on increasing tax revenue, distributions from their trust 

funds, reduced government spending and a growing private sector. 

However, neither country has made significant progress on tax reform. Private sector investment is limited. And both trust funds 

face obstacles. Private sector growth, in particular, faces significant 

constraints, specifically the Islands’ geographic isolation and their 

lack of infrastructure. 

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for U.S. funds. In particular, their single audits show ongoing probVerDate Nov 24 2008 08:32 Jan 12, 2017 Jkt 021971 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\21971\D21971.TXT D21971
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lems with procurement, cash management and managing government inventories, amongst other things. 

Now last, regarding compact migration. As you know FAS citizens can enter and reside in the U.S. and its territories. The 2011 

census estimated that over 56,000 compact migrants, nearly one 

quarter of all FAS citizens were living in the U.S. with more than 

half residing in Hawaii and Guam. 

Under the amended compacts Hawaii, Guam and the Mariana Islands have received over $400 million in Federal support toward 

the cost of health, education and social services attributed to compact migrants. Yet, over this period these affected jurisdictions 

have estimated more than $2 billion in increased outlays for these 

services. 

Finally, as you mentioned, FAS citizens may serve in the military. They also often contribute by taking hard to fail, low-skill 

jobs. At the same time, many compact migrants struggle with language barriers, their kids face special challenges at school and 

many need access to health care not available to them back home. 

Since 1996 compact migrants have not had access to most Medicaid benefits and they are not eligible for many other Federal programs, Federal benefits. 

In sum, compact migration, a cornerstone of these three compacts, has emerged as a significant and growing challenge moving 

forward. 

Mr. Chairman, this completes my remarks and I’m happy to answer your questions. 

[The prepared statement of Mr. Gootnick follows:] 

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Senator GARDNER. Thank you, Mr. Gootnick. 

Thank you both, again, for the time before this Committee this 

morning and your testimony. 

Ms. Kia’aina, I would just start with you in terms of the questions this morning. 

Former White House Advisor, Senior Advisor John Podesta, visited Palau in 2014 for the Pacific Islands Forum. After his trip, we 

were told that finding an offset for the Palau agreement was a priority for the Administration, yet it does not appear that there has 

been movement on the matter. I would just ask you what the current situation within the Administration for finding that offset is 

today? 

Ms. KIA’AINA. Thank you, Mr. Chairman. 

That is correct. Mr. Podesta endeavored to find alternative mechanisms to fund the Palau compact agreement last year which have 

failed, and we continue to work with senior leadership of the Office 

of Management and Budget and the Department of State and the 

Department of Defense, given the urgency of the matter and the 

need to, once and for all, collectively find a viable offset. We admit 

that for the offsets provided by the Department we continue to 

work with the Committee, but we believe that it would have to 

take a collective approach by all three agencies, in concert with the 

Office of Management and Budget, to take care of the remaining 

$149 million. 

When Palau signed the compact agreement, they signed it with 

the United States of America, not the U.S. Department of the Interior or any individual agency. 

Senator GARDNER. You mentioned the three other agencies or the 

three agencies working together, Defense, State, and Interior, is 

that correct, the three? 

Ms. KIA’AINA. That’s correct. 

Senator GARDNER. The offset burden, it does not lie solely with 

Interior then. It lies with all three. Are they actively engaged in 

finding or is this simply—— 

Ms. KIA’AINA. That has been the challenge. At the moment the 

President’s budget solely has it residing in the Department of the 

Interior. We have already provided $92 million in discretionary 

funds out of the Office of Insular Affairs, and we believe that given 

the magnitude of the amount of money and the continuing challenge for all offsets that we are working with the Office of Management and Budget and the other two Departments who clearly have 

a vested interest. 

Palau is an independent nation. The Department of Defense has 

control of helping to safeguard the national security, not only of the 

United States, but the Republic of Palau. And again, we believe 

that given the amount that it would be a prudent approach for the 

Office of Management and Budget to work with the Department of 

the Interior and the other two Departments to find viable offsets 

that would be satisfactory to the U.S. Congress. 

Senator GARDNER. What is the reasoning behind the Administration submitting a budget that leaves it solely within Interior without reaching into the other Departments? 

Ms. KIA’AINA. Mr. Chairman, historically during the first compact when Palau was a U.S. trust territory under the purview of 

56 

the Department of Interior, we had funded the underlying compact 

agreement. And during the negotiations, I guess, of this recent review agreement, I just came on board in 2014, but that was the approach that was undertaken. And we are respectfully asking for reconsideration of the approach. 

Senator GARDNER. Thank you. 

Have the people of Bikini Atoll identified any locations outside 

of the Marshall Islands where they would like to use their resettlement/relocation funds? 

Ms. KIA’AINA. That’s a good question, Mr. Chairman. 

I know that the previous mayor publicly has stated certain, has 

mentioned certain states, including Hawaii and Arkansas, where 

there are significant Marshallese populations including Bikinians. 

But to my knowledge, collectively, the Bikinian Council has not determined in concert with the people where they intend to reside. 

Senator GARDNER. Thank you, and a final question. 

The 2010 agreement with Palau requires meaningful reforms by 

Palau in financial accountability and efficiency. What steps has 

your office taken to have an effective plan and process in place to 

review those reforms taken by Palau toward that end should this 

agreement be signed into law? 

Ms. KIA’AINA. I’m going to have to get back to you on that, Mr. 

Chairman. 

I do know that out of all of the three Freely Associated States, 

Palau has been the model nation in the region for accountability. 

Senator GARDNER. Well, if you could get back to us on that question, that would be fantastic for the record. 

Ms. KIA’AINA. Thank you. 

[The information referred to was not provided as of the date of 

printing.] 

Senator GARDNER. Thank you. 

Senator Cantwell? 

Senator CANTWELL. Thank you, Mr. Chairman. 

Again I thank the witnesses for being here and covering these 

important responsibilities that are before our Committee. 

I am going to defer to Senator Hirono to ask questions. 

Senator HIRONO. Thank you very much, Mr. Chairman, for this 

hearing. 

Hawaii is very well aware of the challenges facing our compact 

citizens and so clearly one topic of this hearing is where we need 

to meet our obligations to the Palauans. I met with their Ambassador and he is clearly frustrated with the fact that our country, 

having entered into this Agreement, has not lived up to its Agreement. 

I would like to follow up on the Chairman’s questioning with regard to these agreements and with Palau because the State Department and DOD are very much involved and should be involved 

in coming up with a way that we can meet our obligations with regard to Palau, in particular. 

So, I would really like this Committee, Mr. Chairman, to focus 

very clearly on the obligations of these other Departments and not 

just Interior. 

With regard to the impact of the compact citizens on Guam and 

Hawaii, I have visited with the Governor of Guam and of course, 

57 

I stay in touch with the Governor of Hawaii. In spite of the fact 

that there is $30 million appropriated annually for the compact impact, that is woefully short. I think it would be very helpful if there 

was a concerted effort to enable our compact citizens to be eligible, 

and this is also a question for the person from GAO, for Medicaid, 

for TANF, for SNAP. That would be helpful to our states and to 

Guam, would it not? Either one of you can respond. Perhaps Mr. 

Gootnick from GAO because I think you mentioned it? 

Mr. GOOTNICK. Well certainly there have been numerous proposals from the Governors and legislation introduced on that subject. It’s important to recognize that the $30 million that you mentioned, the authorization for the $30 million a year, as well as the 

authorization for other funds, will expire in 2023. So, while compact migration is likely to continue to grow, that source of funding 

will also go away. 

Senator HIRONO. That is why it is even more important that 

after the 1997 welfare reform law when suddenly our compact citizens no longer qualified for Medicaid, that that be restored. Those 

kinds of institutional changes need to occur because in 2023 when 

the impact funds end, that will leave places like Guam, Hawaii, 

and other states now, basically having to bear the full burden. 

Mr. GOOTNICK. Right. And you know, in addition to the fiscal 

issues I’m in close touch with some of the public health officials in 

Hawaii who have briefed me on the process of enrolling compact 

migrants. 

Senator HIRONO. Yes. 

Mr. GOOTNICK. And now the Affordable Care Act. 

Senator HIRONO. Yes. 

Mr. GOOTNICK. And there are, there’s a significant administrative burden, as well as many compact migrants who are falling 

through the cracks who need health care attention. And that, I 

think the same could be said in the other sectors, education, social 

services. 

Senator HIRONO. I think that we really need to push forward, not 

only, you know, I would love to see an increase in the $30 million 

but that all ends soon. 

So as I said, I would like to see a much more concerted effort on 

the part of the Administration to support efforts to enable the compact citizens to qualify for these Federal programs because granted, 

many of them do come for health care. They have huge educational 

needs. I am very familiar with the gap in enrolling our compact 

citizens into our Affordable Care Plan. In Hawaii there are language issues, all kinds of things. 

In fact, I had to step in and ask for an extension of time to enable our, especially our Marshall Island citizens in Hawaii, to be 

able to enroll for health care. So this is going to be an ongoing effort. 

But first and foremost regarding Palau, it just really bothers me 

that the State Department and the Defense Department are not 

stepping forward to help fulfill our country’s obligations. 

Now the Governor of Hawaii, Madam Secretary, mentioned that 

maybe some of the money that goes directly to these Freely Associated States could be used by them to contract for various programs. 

What do you think of that idea? 

58 

Ms. KIA’AINA. Sure. Well thank you, Senator Hirono. 

Maybe, let me just step back here and give you an update on the 

Administration’s approach on the overall issue of compact impact 

which will address your issue. 

The issue, clearly, is complicated. It deals with our nation’s obligations to hold accountable the use of compact funds to the Freely 

Associated States. And to that end last year there was about $150 

million backlog in infrastructure funds that were not spent by the 

Marshall Islands or to the Federated States of Micronesia. This impacts quality of life issues for health and education because a lot 

of the infrastructure funds were for that purpose. And the citizens 

migrate. 

So we worked feverishly with both governments, and I am 

pleased to report that we have set up mechanisms which would 

satisfy our concerns and have released all $150 million last year. 

Second, we believe that Federal authorities, current Federal authorities, should be exercised. Last year we established ‘‘one-stop’’ 

Micronesian service centers in both Guam and Hawaii. And in fact, 

the service center in Hawaii helped to enroll FAS citizens in health 

care. 

We’ve set up a Federal interagency approach to look at all of the 

statutory authorities including your proposal on Medicaid re-eligibility to determine what statutory changes would be needed. And 

also we, now that the infrastructure challenge is over, we intend 

at the next joint financial meetings, to agendize compact impact aid 

before the Marshall Islands and the Federated States of Micronesia 

to ensure that they know that this is a serious problem. 

We will consult with our attorneys but they provide scholarships 

to students who leave. At the moment we do not see anything that 

would preclude them of providing some of their funds to help their 

citizens in Guam and Hawaii. 

Senator HIRONO. If I may, Mr. Chairman, the funding for the one 

stop center is only for one year, I believe. And I am glad that Interior stepped up and provided some of that funding. And this is a 

one stop center. I have worked very closely with those folks from 

the Marshall Islands, in particular. 

But as we go forward I think that we need to restore some of the 

eligibility of our compact citizens for particularly three programs, 

Medicare, TANF and SNAP. So that is where we are going, and it 

is not as though we do not have the language because the language 

to restore Medicaid eligibility was put into the immigration bill two 

years ago in the Senate. 

Ms. KIA’AINA. Senator, if you don’t mind I wanted to follow up. 

During the last year we have found that Federal agencies, including FEMA, are broadly interpreting the Welfare Reform Act. So 

in fact, it’s not narrowly tailored to just those four programs. It is 

a broader approach. 

So the easiest fix would be to modify the Welfare Reform Act to 

make re-eligible FAS citizens for the term of public benefit—— 

Senator HIRONO. Yes. 

Ms. KIA’AINA. Under the act. 

Senator HIRONO. And quite possibly, looking at the existing legislation, there may be a way to more broadly interpret the existing 

59 

legislation so that we do not have to pass another bill. I would like 

to have further discussions with you all on that. 

Ms. KIA’AINA. Thank you. 

Senator HIRONO. Thank you very much, Mr. Chairman. 

Senator GARDNER. Thank you, Senator Hirono. 

Senator Warren? 

Senator WARREN. Thank you, Mr. Chairman. 

So the five populated U.S. territories, Guam, Puerto Rico, the 

U.S. Virgin Islands, American Samoa and the Northern Mariana 

Islands, are part of America. And the 4,000,000 people who live on 

those islands are Americans. They are subject to Federal law. More 

than 150,000 people from these islands have served our country in 

the Armed Forces. Many have died in the service. 

It is a central principle of our American democracy that Americans, through their votes, can have a say in their own governments, and yet these 4,000,000 Americans have almost no say in 

Federal decision-making, even when it directly affects the islands 

they live on. They cannot vote in Presidential elections, they have 

no Senators, and each territory gets only one, non-voting representative in the House of Representatives. 

Assistant Secretary Kia’aina, your agency coordinates Federal 

policy for most of the territories so maybe you can help me understand exactly how this works. If a U.S. citizen is born in Guam, she 

can’t vote for President as long as she lives on the island. Is that 

right? 

Ms. KIA’AINA. That’s correct. 

Senator WARREN. But if she moves to a U.S. state, say California, can she vote there? 

Ms. KIA’AINA. If she, her residence requirements and voter registration was in California and her permanent record was not in 

Guam, the answer is yes. 

Senator WARREN. Okay, so she can register and vote in California, as long as she moves her paperwork. 

Ms. KIA’AINA. And meets the requirements of the State of California. 

Senator WARREN. Of whatever California has. 

Let’s say she moves from California to a foreign country. For example, she goes from California to Italy. Can she vote for President 

from Italy? 

Ms. KIA’AINA. It depends on her record of residency. 

Senator WARREN. But if she moves from California? 

Ms. KIA’AINA. Yes. 

Senator WARREN. If she is registered to vote in California? 

Ms. KIA’AINA. That’s correct. 

Senator WARREN. So this U.S. citizen from Guam can vote in 

California or can vote in Italy but if she moves from Italy back to 

Guam, she still cannot vote there. Is that right? 

Ms. KIA’AINA. It depends on where her record of residency is. If 

it’s still in California because it was, if it was California when she 

was in Italy and she still determined—— 

Senator WARREN. Well but that is my point. If she moves back. 

If her residency is now in Guam she loses her ability to vote. 

Ms. KIA’AINA. That’s correct. 

60 

Senator WARREN. You know, I just have to say this is absurd. 

Four million Americans live on American soil and can fully participate in our democracy, but only if they leave home. At their homes, 

on U.S. soil, all of their representational rights disappear. 

This kind of second class status is not how our government is 

supposed to work and it has real implications. Right now Puerto 

Rico is a $72 billion hole. Much of its debt is held by Wall Street 

vulture funds that have intimidated local government into slashing 

funding for schools, for hospitals, for first responders. There is 

broad agreement that the current situation is unsustainable, and 

there have been several congressional proposals to create an orderly process for Puerto Rico to restructure its debt. But powerful 

financial interests would prefer we do nothing, and so far Congress 

still has not acted. Congress should approve a plan to help Puerto 

Rico immediately. And that would be much more likely if the millions of Americans who live in Puerto Rico were allowed to participate fully in our democracy. 

The 4,000,000 people who live in the territories are not the subjects of a King. They are Americans. They live in America but their 

interests will never be fully represented within our government 

until they have full voting rights, just like every other American. 

Thank you, Mr. Chairman. 

Senator FLAKE. [presiding]: Thank you. 

Let me follow up with a couple of questions with regard to the 

first bill, finding authorization for use of established trust fund to 

resettle former residents of the Bikini Atoll outside of the Marshall 

Islands. 

Tell me, give examples of how this might be used, what problems 

are they facing now and how this would remedy it? 

Ms. KIA’AINA. Well, thank you, Mr. Chairman. 

Under current Federal law the funds for the Bikini resettlement 

trust fund is limited to resettlement in the Marshall Islands, more 

specifically on the Islands of Kili and Ejit. We face dire circumstances at the moment on the Island of Kili where when the 

King Tides come in now it inundates almost half of the Island. The 

people, that number between 800 to 1,000 people there, literally 

running for their lives to the other side of the Island. As a result 

their public safety is at risk and they have requested that they be 

given the opportunity to use their resettlement funds to resettle 

outside of the Marshall Islands, if that could be in the United 

States or anywhere else in the world. 

Senator FLAKE. How many, do we believe, would take advantage 

of this new provision to utilize those resources? 

Ms. KIA’AINA. I don’t have an answer to that question. There are 

over, I understand, over 5,000 Bikinians, both collectively in the 

Marshall Islands as well as in the United States. 

It’s a very difficult issue for a lot of the elders who, many who 

don’t want to leave. A lot are actually leaving for health purposes 

now to be with their families who live in Arkansas and other 

states. 

Senator FLAKE. Thank you. 

I have a bit of a soft spot for the Marshalls. I spent some time 

there, and I want to make sure that they can utilize these funds 

61 

and we can address these problems that have festered for not just 

years, but decades and decades, as we know. 

Ms. KIA’AINA. Sure. 

Senator FLAKE. With regard to the REAL ID Act, the government 

of the Marshall Islands has contacted our office with these issues. 

Will this provide the remedy, simply going back to the REAL ID 

Act and taking out the reference? 

Ms. KIA’AINA. Yes. 

Senator FLAKE. To the trust territory of the Pacific? Do we think 

that will then? 

Ms. KIA’AINA. Yeah. 

Senator FLAKE. Will that take care of it? 

Ms. KIA’AINA. My understanding from the Department of Homeland Security is this would be a helpful fix because while they have 

provided guidance to the states, it has been very challenging. And 

so this would provide clarity across the nation to ensure the, or improve the availability of licenses and other official IDs for a longer 

period of time. At the moment it’s being restricted to one year. 

Senator FLAKE. Okay. 

Ms. KIA’AINA. Because of the REAL ID Act. 

So this would be a statutory fix to allow FAS citizens, regardless 

of where they live, to be able to get a license or other ID for a 

longer duration of time. 

Senator FLAKE. Alright. 

Well, thank you. 

Senator Wyden? 

Senator WYDEN. Thank you very much, Mr. Chairman. 

I want to welcome our guests. I can tell you, those of us who 

have had the honor of chairing this Committee over the last few 

years have been wrestling with these issues for years and years. 

It is time, in my view, to actually get some resolution. These relationships are extraordinarily important. 

On the Omnibus Territories bill I want to note my support. This 

bill contains a number of common sense solutions, as I said, to 

issues that have gone on for, this feels like the longest running battle since the Trojan War. It just goes on and on and on. 

And there are problems from allowing compact migrants to get 

driver licenses in states like Oregon, give flexibility in terms of how 

resettlement funds are used. 

And so, I want to ask a question of the Assistant Secretary here 

in a moment. 

It is hard to place a dollar value on an unsinkable aircraft carrier in the Pacific, unchallenged, with the ability to defend a huge 

swath of ocean and a steadfast ally. But we do know the cost. The 

cost is $149 million, about the cost of one F35 fighter jet. So it is 

hard to overstate the value and the strategic necessity of approving 

the agreement. 

Obviously China has been interested in expanding its sphere of 

influence throughout that region, so a failure to get an agreement 

with Palau, to approve it, would give China, in my view, an opening in the Pacific and send a very bad signal to the allies in the 

region. So our country has made an agreement with the people of 

Palau, and the bill allows us to keep our word. 

62 

I want to ask the Assistant Secretary, of the $92 million in stop 

gap funding already paid to Palau, how much has come from the 

Department of State or Defense? 

Ms. KIA’AINA. Thank you, Senator. 

Those funds have come from the Department of the Interior. 

Senator WYDEN. Okay. 

I would like the Administration to give to the Committee, the 

Chair and the Ranking Minority Member, I am just a member of 

the Committee, not Chair or the Ranking Minority Member, but I 

have been very involved in this issue. Chairman Bingaman tried to 

resolve it. I tried to resolve it. It has gone on and on, literally 

Democratic Chairs and Republican Chairs. 

So I would like the Administration to send the Committee what 

they would consider viable offsets for the Palau agreement. In 

other words, offsets that would be agreeable to the Administration 

so that we can actually get this done. I would like that within two 

weeks. Is that acceptable to you? 

Ms. KIA’AINA. Yes, Senator. We’ve, in concert with the Assistant 

Secretary for Policy Management and Budget we’ve already put in 

a request with Senior Management at OMB to have a collective 

meeting with the Departments of State and Defense to talk about 

this matter. 

Senator WYDEN. I think that is great. I think collective meetings 

are wonderful. We have lots of them in Washington. I wish I had 

a nickel for every time I went to a collective meeting. 

I would like you to say whether it is acceptable to you that we 

will get an answer to the question within two weeks. What would 

be offsets acceptable to the Administration within two weeks? Is 

that acceptable to you? 

Ms. KIA’AINA. Senator, I can only speak for the Department of 

the Interior. I can’t speak for OMB or the other Departments. So 

in the President’s budget we do have offsets identified from the Department of Interior which clearly has not been viable. And so, 

again, I can only speak for our Department but I will work with 

the OMB and the other Departments to send you other viable offsets. 

Senator WYDEN. I appreciate that. 

[The information referred to was not provided as of the date of 

printing.] 

Senator WYDEN. I think this has been part of the problem. Everybody points at everybody else. In other words, Interior and State 

and Defense, and when we are done with all the pointing we are 

no further along in getting this resolved. 

So in effect what I am asking is that because your expertise is 

well known and you are well regarded by me and others, that you 

be the point person because you are in front of us and you are the 

person that we have. Can we ask you to take on that assignment? 

It is, sort of, status in lieu of salary, I guess. But we need somebody to be the point person to drive this. 

Ms. KIA’AINA. I will try my best, Senator. 

Senator WYDEN. I can’t ask for more. 

Thank you very much. I look forward to following up. 

Mr. Chairman, the point of this is, I do not want us to be back 

here in another five, eight, ten years asking yet another dedicated 

63 

public servant exactly the same question because we have been 

doing that year after year after year, and we obviously want to do 

this in a bipartisan way. Senator Flake and I work on forestry, all 

kinds of things, in a bipartisan way. 

I appreciate you are trying to step in and seeing if you can coordinate this. You are here with us today, you are well respected, 

and I appreciate your willingness to approach it that way. 

Thank you, Mr. Chairman. 

Senator FLAKE. Thank you, Senator Wyden. 

Let me just follow up with regard to the REAL ID issue with regard to Palau. Provisions in S. 2610 would require Palau to issue 

different passports for U.S. citizens in order for them to qualify for 

REAL ID. Instead of stipulating how Palau issues its own IDs, 

would it be sufficient to just require Palau citizens to have a qualifying passport to work or to travel/reside, the one that complies? 

Is there another way, an easier way, to go about this then simply 

strike the reference to the trust territories? 

Ms. KIA’AINA. Mr. Chairman, I’m going to try to answer that 

question. I don’t know if I have—I’m going to get this right. But 

I don’t think the burden is on that part. The burden is on the part 

of the states, the various states, to issue IDs for a longer duration 

of time and it’s become very challenging. 

The issue is that some states are only, because of the REAL ID 

Act, are only issuing it for one year. And it makes it very hard for 

FAS citizens, who are working in the United States, to have valid 

licenses. 

So I don’t know if it is more an issue of what the FAS states provide to the states, it’s rather that the states, because of the REAL 

ID Act, are not allowing, even if the Department of Homeland Security has directed them, to issue licenses to up to eight years. 

Maybe David has an answer as well? 

Mr. GOOTNICK. We’ve not actually looked at it, so I don’t have 

anything to add. 

Senator FLAKE. Okay. 

Well I guess the concern that I think the states have, or some 

people have, is that allowing the residents of the Freely Associated 

States simply to prove legal status there by demonstrating citizenship that that potentially causes some national security concerns 

that we need to go beyond that. 

I know that it is an issue that is of great concern. I hope that 

we can come to some resolution that won’t place an unnecessary 

burden on those traveling or working or residing here. 

I look forward to working with your offices on something that 

will work, not just for the short term, but for the longer term as 

well. 

Alright, well thank you for your testimony. 

This hearing is adjourned. 

[Whereupon, at 10:50 a.m. the hearing was adjourned.] 

(64) 

APPENDIX MATERIAL SUBMITTED 

65 

II

114TH CONGRESS 1ST SESSION S. 2360 To improve the administration of certain programs in the insular areas,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

DECEMBER 7, 2015

Ms. MURKOWSKI (for herself and Ms. CANTWELL) (by request) introduced the

following bill; which was read twice and referred to the Committee on Energy and Natural Resources

A BILL 

To improve the administration of certain programs in the

insular areas, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Omnibus Territories

5 Act of 2015’’.

6 SEC. 2. RESETTLEMENT AND RELOCATION FOR THE PEO7 PLE OF BIKINI.

8 The first proviso under the heading ‘‘TRUST TERRI9 TORY OF THE PACIFIC ISLANDS’’ under the heading ‘‘OF10 FICE OF TERRITORIAL AFFAIRS’’ under the heading ‘‘DEVerDate Sep 11 2014 02:24 Dec 08, 2015 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2360.IS S2360 smartinez on DSK4TPTVN1PROD with BILLS


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66 

2

•S 2360 IS

1 PARTMENT OF THE INTERIOR’’ in chapter VIII of

2 title I of the Supplemental Appropriations Act, 1982

3 (Public Law 97–257; 96 Stat. 840), is amended by strik4 ing ‘‘in the Marshall Islands, principally on Kili and Ejit

5 Islands’’.

6 SEC. 3. RELIABLE AIR SERVICE IN AMERICAN SAMOA.

7 Section 41703(c) of title 49, United States Code, is

8 amended—

9 (1) in paragraph (1), by striking ‘‘or’’ at the

10 end;

11 (2) in paragraph (2), by striking the period at

12 the end and inserting ‘‘; or’’; and

13 (3) by adding at the end the following:

14 ‘‘(3) notwithstanding subsection (a)(1), the

15 navigation under this subsection is necessary to pro16 vide and sustain air commerce in American Samoa

17 between the islands of Tutuila and Manu’a.’’.

18 SEC. 4. DRIVERS’ LICENSES AND PERSONAL IDENTIFICA19 TION CARDS.

20 (a) DEFINITION OF STATE.—Section 201(5) of the

21 REAL ID Act of 2005 (49 U.S.C. 30301 note; Public Law

22 109–13) is amended by striking ‘‘the Trust Territory of

23 the Pacific Islands,’’.



Insert offset folio 97 here 21971.097
67 

3

•S 2360 IS

1 (b) EVIDENCE OF LAWFUL STATUS.—Section

2 202(c)(2)(B) of the REAL ID Act of 2005 (49 U.S.C.

3 30301 note; Public Law 109–13) is amended—

4 (1) in clause (viii), by striking ‘‘or’’ at the end;

5 (2) in clause (ix), by striking the period at the

6 end and inserting ‘‘; or’’; and

7 (3) by adding at the end the following:

8 ‘‘(x) is a citizen of the Republic of the

9 Marshall Islands, the Federated States of

10 Micronesia, or the Republic of Palau who

11 has been admitted to the United States as

12 a nonimmigrant pursuant to a Compact of

13 Free Association between the United

14 States and the Republic or Federated

15 States.’’.

Æ 



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68 

II

114TH CONGRESS 2D SESSION S. 2610 To approve an agreement between the United States and the Republic of

Palau.

IN THE SENATE OF THE UNITED STATES

MARCH 1, 2016

Ms. MURKOWSKI (for herself, Ms. CANTWELL, and Ms. HIRONO) introduced

the following bill; which was read twice and referred to the Committee

on Energy and Natural Resources

A BILL 

To approve an agreement between the United States and

the Republic of Palau.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. APPROVAL OF AGREEMENT BETWEEN UNITED 

4 STATES AND REPUBLIC OF PALAU.

5 (a) DEFINITIONS.—In this section:

6 (1) AGREEMENT.—The term ‘‘Agreement’’

7 means the Agreement and appendices signed by the

8 United States and the Republic of Palau on Sep9 tember 3, 2010.


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69 

2

•S 2610 IS

1 (2) COMPACT.—The term ‘‘Compact’’ means

2 the Compact of Free Association between the Gov3 ernment of the United States of America and the

4 Government of Palau, as contained in section 201 of

5 Public Law 99–658 (48 U.S.C. 1931 note).

6 (b) RESULTS OF COMPACT REVIEW.—

7 (1) IN GENERAL.—Title I of Public Law 99–

8 658 (48 U.S.C. 1931 et seq.) is amended by adding

9 at the end the following:

10 ‘‘SEC. 105. RESULTS OF COMPACT REVIEW.

11 ‘‘(a) IN GENERAL.—The agreement and appendices

12 signed by the United States and the Republic of Palau

13 on September 3, 2010 (referred to in this section as the

14 ‘Agreement’), pursuant to section 432 of the Compact, are

15 approved—

16 ‘‘(1) except for the extension of article X of the

17 Agreement regarding Federal programs and services,

18 concluded pursuant to article II of title II and sec19 tion 232 of the Compact; and

20 ‘‘(2) subject to the provisions of this section.

21 ‘‘(b) WITHHOLDING OF FUNDS.—If the Republic of

22 Palau withdraws more than $5,000,000 from the trust

23 fund established under section 211(f) of the Compact dur24 ing fiscal year 2016, or more than $8,000,000 during fis25 cal year 2017, the amounts payable under sections 1, 2(a),


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70 

3

•S 2610 IS

1 3, and 4(a) of the Agreement shall be withheld from the

2 Republic of Palau until the date on which the Republic

3 of Palau reimburses the trust fund for the total amounts

4 withdrawn that exceeded $5,000,000 during fiscal year

5 2016 or $8,000,000 during fiscal year 2017, as applicable.

6 ‘‘(c) FUNDING FOR CERTAIN PROVISIONS.—Not later

7 than 30 days after the date of enactment of this section,

8 out of any funds in the Treasury not otherwise appro9 priated, the Secretary of the Treasury shall transfer to

10 the Secretary of the Interior such sums as are necessary

11 for the Secretary of the Interior to implement sections 1,

12 2(a), 3, 4(a), and 5 of the Agreement, to remain available

13 until expended, without any further appropriation.

14 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There

15 are authorized to be appropriated—

16 ‘‘(1) to the Secretary of the Interior to sub17 sidize postal services provided by the United States

18 Postal Service to the Republic of Palau, the Repub19 lic of the Marshall Islands, and the Federated States

20 of Micronesia $1,500,000 for each of fiscal years

21 2017 through 2024, to remain available until ex22 pended; and

23 ‘‘(2) to the head of each Federal entity de24 scribed in paragraphs (1), (3), and (4) of section

25 221(a) of the Compact (including any successor of


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71 

4

•S 2610 IS

1 such a Federal entity) to carry out the responsibil2 ities of the Federal entity under section 221(a) of

3 the Compact such sums as are necessary, to remain

4 available until expended.’’.

5 (2) OFFSET.—Section 3 of the Act of June 30,

6 1954 (68 Stat. 330, 82 Stat. 1213, chapter 423), is

7 repealed.

8 (c) PAYMENT SCHEDULE; WITHHOLDING OF FUNDS;

9 FUNDING.—

10 (1) COMPACT FUND.—Section 1 of the Agree11 ment is amended to read as follows:

12 ‘‘SECTION 1. COMPACT FUND.

13 ‘‘The Government of the United States shall con14 tribute $30,250,000 to the Fund established under section

15 211(f) of the Compact in accordance with the following

16 schedule:

17 ‘‘(1) $20,000,000 for fiscal year 2017.

18 ‘‘(2) $2,000,000 for each of fiscal years 2018

19 through 2022.

20 ‘‘(3) $250,000 for fiscal year 2023.’’.

21 (2) INFRASTRUCTURE MAINTENANCE FUND.—

22 Subsection (a) of section 2 of the Agreement is

23 amended to read as follows:

24 ‘‘(a) GRANT.—


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5

•S 2610 IS

1 ‘‘(1) IN GENERAL.—The Government of the

2 United States shall provide a grant in an amount

3 equal to $3,500,000 for each of fiscal years 2017

4 through 2024 to create a trust fund (referred to in

5 this agreement as the ‘Infrastructure Maintenance

6 Fund’), to be used for the routine and periodic

7 maintenance of major capital improvement projects

8 financed using funds provided by the Government of

9 the United States.

10 ‘‘(2) CONTRIBUTIONS BY PALAU.—The Govern11 ment of Palau shall match the contributions made

12 by the Government of the United States by making

13 contributions of $150,000 to the Infrastructure

14 Maintenance Fund on a quarterly basis during the

15 period beginning on October 1, 2016, and ending on

16 September 30, 2024.

17 ‘‘(3) REQUIREMENT.—The implementation of

18 this subsection shall be carried out in accordance

19 with appendix A to this agreement.’’.

20 (3) FISCAL CONSOLIDATION FUND.—Section 3

21 of the Agreement is amended to read as follows:

22 ‘‘SEC. 3. FISCAL CONSOLIDATION FUND.

23 ‘‘(a) IN GENERAL.—The Government of the United

24 States shall provide to the Government of Palau

25 $5,000,000 for each of fiscal years 2017 and 2018 for


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73 

6

•S 2610 IS

1 deposit in an interest-bearing account to be used to reduce

2 government arrears of the Government of Palau.

3 ‘‘(b) REQUIREMENT.—The implementation of this

4 section shall be carried out in accordance with appendix

5 B to this agreement.’’.

6 (4) DIRECT ECONOMIC ASSISTANCE.—Sub7 section (a) of section 4 of the Agreement is amended

8 to read as follows:

9 ‘‘(a) DIRECT ECONOMIC ASSISTANCE.—

10 ‘‘(1) IN GENERAL.—In addition to economic as11 sistance in an amount equal to $13,147,000 pro12 vided to the Government of Palau by the Govern13 ment of the United States for each of fiscal years

14 2010 through 2016, and unless otherwise specified

15 in this agreement or an appendix to this agreement,

16 the Government of the United States shall provide

17 to the Government of Palau $28,721,000 in eco18 nomic assistance, as follows:

19 ‘‘(A) $7,500,000 for fiscal year 2017.

20 ‘‘(B) $6,250,000 for fiscal year 2018.

21 ‘‘(C) $5,000,000 for fiscal year 2019.

22 ‘‘(D) $4,000,000 for fiscal year 2020.

23 ‘‘(E) $3,000,000 for fiscal year 2021.

24 ‘‘(F) $2,000,000 for fiscal year 2022.

25 ‘‘(G) $971,000 for fiscal year 2023.


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7

•S 2610 IS

1 ‘‘(2) METHOD.—Unless otherwise specified in

2 this agreement or in an appendix to this agreement,

3 the funds provided for a fiscal year under this sub4 section shall be provided in 4 quarterly payments in

5 an amount equal to—

6 ‘‘(A) 30 percent of the total applicable

7 amount during the first quarter;

8 ‘‘(B) 30 percent of the total applicable

9 amount during the second quarter;

10 ‘‘(C) 20 percent of the total applicable

11 amount during the third quarter; and

12 ‘‘(D) 20 percent of the total applicable

13 amount during the fourth quarter.’’.

14 (5) INFRASTRUCTURE PROJECTS.—Section 5 of

15 the Agreement is amended to read as follows:

16 ‘‘SEC. 5. INFRASTRUCTURE PROJECTS.

17 ‘‘(a) IN GENERAL.—The Government of the United

18 States shall provide to the Government of Palau grants

19 in a total amount equal to $40,000,000, as follows:

20 ‘‘(1) $8,000,000 for each of fiscal years 2017

21 through 2019.

22 ‘‘(2) $6,000,000 for fiscal year 2020.

23 ‘‘(3) $5,000,000 for each of fiscal years 2021

24 and 2022.


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•S 2610 IS

1 ‘‘(b) USE.—The Government of Palau shall use each

2 grant provided under subsection (a) for 1 or more mutu3 ally agreed-upon infrastructure projects, in accordance

4 with appendix C to this agreement.’’.

5 (d) PASSPORT REQUIREMENT.—Section 141 of the

6 Compact is amended to read as follows:

7 ‘‘SEC. 141. PASSPORT REQUIREMENT.

8 ‘‘(a) ADMISSION.—

9 ‘‘(1) IN GENERAL.—Any person who meets the

10 requirements of any category described in paragraph

11 (2) may be admitted to, and lawfully engage in occu12 pations and establish residence as a nonimmigrant

13 in, the United States and its territories and posses14 sions, without regard to paragraph (5) or

15 (7)(B)(i)(II) of section 212(a) of the Immigration

16 and Nationality Act (8 U.S.C. 1182(a)), subject to

17 the condition that the passport presented to satisfy

18 paragraph (7)(B)(i)(I) of that section is a valid, un19 expired, machine-readable passport that satisfies the

20 internationally accepted standard for machine read21 ability.

22 ‘‘(2) DESCRIPTION OF CATEGORIES.—The cat23 egories referred to in paragraph (1) are the fol24 lowing:

25 ‘‘(A) A person who—


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•S 2610 IS

1 ‘‘(i) on September 30, 1994, was a

2 citizen of the Trust Territory of the Pacific

3 Islands (as defined in title 53 of the Trust

4 Territory Code in force on January 1,

5 1979); and

6 ‘‘(ii) has become, and remains, a cit7 izen of Palau.

8 ‘‘(B) A person who acquires the citizenship

9 of Palau, at birth, on or after the effective date

10 of the Constitution of Palau.

11 ‘‘(C) A naturalized citizen of Palau who—

12 ‘‘(i) has been an actual resident of

13 Palau for not less than 5 years after at14 taining that naturalization; and

15 ‘‘(ii) holds a certificate of that actual

16 residence.

17 ‘‘(3) EFFECT OF SUBSECTION.—Nothing in this

18 subsection—

19 ‘‘(A) confers on a citizen of Palau the

20 right—

21 ‘‘(i) to establish residence necessary

22 for naturalization under the Immigration

23 and Nationality Act (8 U.S.C. 1101 et

24 seq.); or


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•S 2610 IS

1 ‘‘(ii) to petition for benefits for alien

2 relatives under that Act; or

3 ‘‘(B) prevents a citizen of Palau from oth4 erwise acquiring—

5 ‘‘(i) a right described in subparagraph

6 (A); or

7 ‘‘(ii) lawful permanent resident alien

8 status in the United States.

9 ‘‘(b) ACCEPTANCE OF EMPLOYMENT.—Any person

10 who meets the requirements of any category described in

11 subsection (a)(2) shall be considered to have the permis12 sion of the Secretary of Homeland Security to accept em13 ployment in the United States.

14 ‘‘(c) ESTABLISHMENT OF HABITUAL RESIDENCE IN

15 CERTAIN TERRITORIES AND POSSESSIONS.—The right of

16 a person who meets the requirements of any category de17 scribed in subsection (a)(2) to establish habitual residence

18 in a territory or possession of the United States may be

19 subject to any nondiscriminatory limitation under any law

20 (including regulations) of—

21 ‘‘(1) the United States; or

22 ‘‘(2) the applicable territory or possession of the

23 United States.’’.

24 (e) CONTINUING PROGRAMS AND LAWS.—Section

25 105(f)(1)(B)(ix) of the Compact of Free Association


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•S 2610 IS

1 Amendments Act of 2003 (48 U.S.C. 1921d(f)(1)(B)(ix))

2 is amended by striking ‘‘2009’’ and inserting ‘‘2024’’.

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