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[House Report 109-462]
[From the U.S. Government Publishing Office]

109th Congress                                            Rept. 109-462
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

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

 
                 PALESTINIAN ANTI-TERRORISM ACT OF 2006

                                _______
                                

  May 11, 2006.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hyde, from the Committee on International Relations, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 4681]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on International Relations, to whom was 
referred the bill (H.R. 4681) to promote the development of 
democratic institutions in areas under the administrative 
control of the Palestinian Authority, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SEC. 1. SHORT TITLE.

  This Act may be cited as the ``Palestinian Anti-Terrorism Act of 
2006''.

SEC. 2. LIMITATION ON ASSISTANCE TO THE PALESTINIAN AUTHORITY.

  (a) Declaration of Policy.--It shall be the policy of the United 
States--
          (1) to support a peaceful, two-state solution to end the 
        conflict between Israel and the Palestinians in accordance with 
        the Performance-Based Roadmap to a Permanent Two-State Solution 
        to the Israeli-Palestinian Conflict (commonly referred to as 
        the ``Roadmap'');
          (2) to oppose those organizations, individuals, and countries 
        that support terrorism and violence;
          (3) to urge members of the international community to avoid 
        contact with and refrain from financially supporting the 
        terrorist organization Hamas or a Hamas-controlled Palestinian 
        Authority until Hamas agrees to recognize Israel, renounce 
        violence, disarm, and accept prior agreements, including the 
        Roadmap;
          (4) to promote the emergence of a democratic Palestinian 
        governing authority that--
                  (A) denounces and combats terrorism;
                  (B) has agreed to and is taking action to disarm and 
                dismantle any terrorist agency, network, or facility;
                  (C) has agreed to work to eliminate anti-Israel and 
                anti-Semitic incitement and the commemoration of 
                terrorists in Palestinian society;
                  (D) has agreed to respect the sovereignty of its 
                neighbors;
                  (E) acknowledges, respects, and upholds the human 
                rights of all people;
                  (F) implements the rule of law, good governance, and 
                democratic practices, including conducting free, fair, 
                and transparent elections in compliance with 
                international standards;
                  (G) ensures institutional and financial transparency 
                and accountability; and
                  (H) has agreed to recognize the State of Israel as an 
                independent, sovereign, Jewish, democratic state; and
          (5) to continue to support assistance to the Palestinian 
        people.
  (b) Amendments.--Chapter 1 of part III of the Foreign Assistance Act 
of 1961 (22 U.S.C. 2351 et seq.) is amended--
          (1) by redesignating the second section 620G (as added by 
        section 149 of Public Law 104-164 (110 Stat. 1436)) as section 
        620J; and
          (2) by adding at the end the following new section:

``SEC. 620K. LIMITATION ON ASSISTANCE TO THE PALESTINIAN AUTHORITY.

  ``(a) Limitation.--Except as provided in subsection (e), assistance 
may be provided under this Act to the Palestinian Authority only during 
a period for which a certification described in subsection (b) is in 
effect.
  ``(b) Certification.--A certification described in this subsection is 
a certification transmitted by the President to Congress that contains 
a determination of the President that--
          ``(1) no ministry, agency, or instrumentality of the 
        Palestinian Authority is controlled by a foreign terrorist 
        organization and no member of a foreign terrorist organization 
        serves in a senior policy making position in a ministry, 
        agency, or instrumentality of the Palestinian Authority;
          ``(2) the Palestinian Authority has--
                  ``(A) publicly acknowledged Israel's right to exist 
                as a Jewish state; and
                  ``(B) recommitted itself and is adhering to all 
                previous agreements and understandings by the Palestine 
                Liberation Organization and the Palestinian Authority 
                with the Government of the United States, the 
                Government of Israel, and the international community, 
                including agreements and understandings pursuant to the 
                Performance-Based Roadmap to a Permanent Two-State 
                Solution to the Israeli-Palestinian Conflict (commonly 
                referred to as the `Roadmap'); and
          ``(3) the Palestinian Authority has taken effective steps and 
        made demonstrable progress toward--
                  ``(A) completing the process of purging from its 
                security services individuals with ties to terrorism;
                  ``(B) dismantling all terrorist infrastructure, 
                confiscating unauthorized weapons, arresting and 
                bringing terrorists to justice, destroying unauthorized 
                arms factories, thwarting and preempting terrorist 
                attacks, and fully cooperating with Israel's security 
                services;
                  ``(C) halting all anti-Israel incitement in 
                Palestinian Authority-controlled electronic and print 
                media and in schools, mosques, and other institutions 
                it controls, and replacing these materials, including 
                textbooks, with materials that promote tolerance, 
                peace, and coexistence with Israel;
                  ``(D) ensuring democracy, the rule of law, and an 
                independent judiciary, and adopting other reforms such 
                as ensuring transparent and accountable governance; and
                  ``(E) ensuring the financial transparency and 
                accountability of all government ministries and 
                operations.
  ``(c) Recertifications.--Not later than 90 days after the date on 
which the President transmits to Congress an initial certification 
under subsection (b), and every six months thereafter--
          ``(1) the President shall transmit to Congress a 
        recertification that the requirements contained in subsection 
        (b) are continuing to be met; or
          ``(2) if the President is unable to make such a 
        recertification, the President shall transmit to Congress a 
        report that contains the reasons therefor.
  ``(d) Congressional Notification.--Assistance made available under 
this Act to the Palestinian Authority may not be provided until 15 days 
after the date on which the President has provided notice thereof to 
the Committee on International Relations and the Committee on 
Appropriations of the House of Representatives and to the Committee on 
Foreign Relations and the Committee on Appropriations of the Senate in 
accordance with the procedures applicable to reprogramming 
notifications under section 634A(a) of this Act.
  ``(e) Exceptions.--
          ``(1) In general.--Subsection (a) shall not apply with 
        respect to the following:
                  ``(A) Assistance to independent elections 
                commissions.--Assistance to any Palestinian independent 
                election commission if the President transmits to 
                Congress a certification that contains a determination 
                of the President that--
                          ``(i) no member of such commission is a 
                        member of, affiliated with, or appointed by a 
                        foreign terrorist organization; and
                          ``(ii) each member of such commission is 
                        independent of the influence of any political 
                        party or movement.
                  ``(B) Assistance to support the middle east peace 
                process.--Assistance to the Office of the President of 
                the Palestinian Authority for non-security expenses 
                directly related to facilitating a peaceful resolution 
                of the Israeli-Palestinian conflict or for the personal 
                security detail of the President of the Palestinian 
                Authority if the President transmits to Congress a 
                certification that contains a determination of the 
                President that--
                          ``(i) such assistance is critical to 
                        facilitating a peaceful resolution of the 
                        Israeli-Palestinian conflict;
                          ``(ii) the President of the Palestinian 
                        Authority is not a member of or affiliated with 
                        a foreign terrorist organization and has 
                        rejected the use of terrorism to resolve the 
                        Israeli-Palestinian conflict;
                          ``(iii) such assistance will not be used to 
                        provide funds to any individual who is a member 
                        of or affiliated with a foreign terrorist 
                        organization or who has not rejected the use of 
                        terrorism to resolve the Israeli-Palestinian 
                        conflict; and
                          ``(iv) such assistance will not be 
                        retransferred to any other entity within or 
                        outside of the Palestinian Authority except as 
                        payment for legal goods or services rendered.
          ``(2) Additional requirements.--Assistance described in 
        paragraph (1) may be provided only if the President--
                  ``(A) determines that the provision of such 
                assistance is important to the national security 
                interests of the United States; and
                  ``(B) not less than 30 days prior to the obligation 
                of amounts for the provision of such assistance--
                          ``(i) consults with the appropriate 
                        congressional committees regarding the specific 
                        programs, projects, and activities to be 
                        carried out using such assistance; and
                          ``(ii) submits to the appropriate 
                        congressional committees a written memorandum 
                        that contains the determination of the 
                        President under subparagraph (A).
          ``(3) Definition.--In this subsection, the term `appropriate 
        congressional committees' means--
                  ``(A) the Committee on International Relations and 
                the Committee on Appropriations of the House of 
                Representatives; and
                  ``(B) the Committee on Foreign Relations and the 
                Committee on Appropriations of the Senate.
  ``(f) Definitions.--In this section:
          ``(1) Foreign terrorist organization.--The term `foreign 
        terrorist organization' means an organization designated as a 
        foreign terrorist organization by the Secretary of State in 
        accordance with section 219(a) of the Immigration and 
        Nationality Act (8 U.S.C. 1189(a)).
          ``(2) Palestinian authority.--The term `Palestinian 
        Authority' means the interim Palestinian administrative 
        organization that governs part of the West Bank and all of the 
        Gaza Strip (or any successor Palestinian governing entity), 
        including the Palestinian Legislative Council.''.
  (c) Applicability to Unexpended Funds.--Section 620K of the Foreign 
Assistance Act of 1961, as added by subsection (b), applies with 
respect to unexpended funds obligated for assistance under the Foreign 
Assistance Act of 1961 to the Palestinian Authority before the date of 
the enactment of this Act.
  (d) Report by Comptroller General.--Not later than 180 days after the 
date of the enactment of this Act, the Comptroller General of the 
United States shall submit to the appropriate congressional committees 
a report that contains a review of the proposed procedures by which 
United States assistance to the Palestinian Authority under the Foreign 
Assistance Act of 1961 will be audited by the Department of State, the 
United States Agency for International Development, and all other 
relevant departments and agencies of the Government of the United 
States and any recommendations for improvement of such procedures.
  (e) Sense of Congress.--It is the sense of Congress that the 
President should be guided by the principles and procedures described 
in section 620K of the Foreign Assistance Act of 1961, as added by 
subsection (b), in providing direct assistance to the Palestinian 
Authority under any provision of law other than the Foreign Assistance 
Act of 1961.

SEC. 3. LIMITATION ON ASSISTANCE FOR THE WEST BANK AND GAZA.

  (a) Amendment.--Chapter 1 of part III of the Foreign Assistance Act 
of 1961 (22 U.S.C. 2351 et seq.), as amended by section 2(b)(2) of this 
Act, is further amended by adding at the end the following new section:

``SEC. 620L. LIMITATION ON ASSISTANCE FOR THE WEST BANK AND GAZA.

  ``(a) Limitation.--Except as provided in subsection (d), assistance 
may be provided under this Act to nongovernmental organizations for the 
West Bank and Gaza only during a period for which a certification 
described in section 620K(b) of this Act is in effect with respect to 
the Palestinian Authority.
  ``(b) Marking Requirement.--Assistance provided under this Act to 
nongovernmental organizations for the West Bank and Gaza shall be 
marked as assistance from the Government of the United States unless 
the Secretary of State or the Administrator of the United States Agency 
for International Development determines that such marking will 
endanger the lives or safety of persons delivering or receiving such 
assistance or would have a material adverse effect on the 
implementation of such assistance.
  ``(c) Congressional Notification.--Assistance made available under 
this Act to nongovernmental organizations for the West Bank and Gaza 
may not be provided until 15 days after the date on which the President 
has provided notice thereof to the Committee on International Relations 
and the Committee on Appropriations of the House of Representatives and 
to the Committee on Foreign Relations and the Committee on 
Appropriations of the Senate in accordance with the procedures 
applicable to reprogramming notifications under section 634A(a) of this 
Act.
  ``(d) Exceptions.--Subsection (a) shall not apply with respect to the 
following:
          ``(1) Assistance to meet basic human health needs.--The 
        provision of food, water, medicine, sanitation services, or 
        other assistance to directly meet basic human health needs.
          ``(2) Other types of assistance.--The provision of any other 
        type of assistance if the President--
                  ``(A) determines that the provision of such 
                assistance will further the national security interests 
                of the United States; and
                  ``(B) not less than 25 days prior to the obligation 
                of amounts for the provision of such assistance--
                          ``(i) consults with the appropriate 
                        congressional committees regarding the specific 
                        programs, projects, and activities to be 
                        carried out using such assistance; and
                          ``(ii) submits to the appropriate 
                        congressional committees a written memorandum 
                        that contains the determination of the 
                        President under subparagraph (A) and an 
                        explanation of how failure to provide the 
                        proposed assistance would be inconsistent with 
                        furthering the national security interests of 
                        the United States.
          ``(3) Definition.--In this subsection, the term `appropriate 
        congressional committees' means--
                  ``(A) the Committee on International Relations and 
                the Committee on Appropriations of the House of 
                Representatives; and
                  ``(B) the Committee on Foreign Relations and the 
                Committee on Appropriations of the Senate.''.
  (b) Oversight and Related Requirements.--
          (1) Oversight.--For each of the fiscal years 2007 and 2008, 
        the Secretary of State shall certify to the appropriate 
        congressional committees not later than 30 days prior to the 
        initial obligation of amounts for assistance to nongovernmental 
        organizations for the West Bank or Gaza under the Foreign 
        Assistance Act of 1961 that procedures have been established to 
        ensure that the Comptroller General of the United States will 
        have access to appropriate United States financial information 
        in order to review the use of such assistance.
          (2) Vetting.--Prior to any obligation of amounts for 
        assistance to nongovernmental organizations for the West Bank 
        or Gaza under the Foreign Assistance Act of 1961, the Secretary 
        of State shall take all appropriate steps to ensure that such 
        assistance is not provided to or through any individual or 
        entity that the Secretary knows, or has reason to believe, 
        advocates, plans, sponsors, engages in, or has engaged in, 
        terrorist activity. The Secretary shall, as appropriate, 
        establish procedures specifying the steps to be taken in 
        carrying out this paragraph and shall terminate assistance to 
        any individual or entity that the Secretary has determined 
        advocates, plans, sponsors, or engages in terrorist activity.
          (3) Prohibition.--No amounts made available for any fiscal 
        year for assistance to nongovernmental organizations for the 
        West Bank or Gaza under the Foreign Assistance Act of 1961 may 
        be made available for the purpose of recognizing or otherwise 
        honoring individuals or the families of individuals who commit, 
        or have committed, acts of terrorism.
          (4) Audits.--
                  (A) In general.--The Administrator of the United 
                States Agency for International Development shall 
                ensure that independent audits of all contractors and 
                grantees, and significant subcontractors and 
                subgrantees, that receive amounts for assistance to 
                nongovernmental organizations for the West Bank or Gaza 
                under the Foreign Assistance Act of 1961 are conducted 
                to ensure, among other things, compliance with this 
                subsection.
                  (B) Audits by inspector general of usaid.--Of the 
                amounts available for any fiscal year for assistance to 
                nongovernmental organizations for the West Bank or Gaza 
                under the Foreign Assistance Act of 1961, up to 
                $1,000,000 for each such fiscal year may be used by the 
                Office of the Inspector General of the United States 
                Agency for International Development for audits, 
                inspections, and other activities in furtherance of the 
                requirements of subparagraph (A). Such amounts are in 
                addition to amounts otherwise available for such 
                purposes.
  (c) Sense of Congress.--It is the sense of Congress that the 
President should be guided by the principles and procedures described 
in section 620L of the Foreign Assistance Act of 1961, as added by 
subsection (a), in providing assistance to nongovernmental 
organizations for the West Bank and Gaza under any provision of law 
other than the Foreign Assistance Act of 1961.

SEC. 4. UNITED NATIONS AGENCIES AND PROGRAMS.

  (a) Review and Report.--
          (1) In general.--Not later than 60 days after the date of the 
        enactment of this Act, the President shall--
                  (A) conduct an audit of the functions of the entities 
                specified in paragraph (2); and
                  (B) transmit to the appropriate congressional 
                committees a report containing recommendations for the 
                elimination of such entities and efforts that are 
                duplicative or fail to ensure balance in the approach 
                of the United Nations to Israeli-Palestinian issues.
          (2) Entities specified.--The entities referred to in 
        paragraph (1) are the following:
                  (A) The United Nations Division for Palestinian 
                Rights.
                  (B) The Committee on the Exercise of the Inalienable 
                Rights of the Palestinian People.
                  (C) The United Nations Special Coordinator for the 
                Middle East Peace Process and Personal Representative 
                to the Palestine Liberation Organization and the 
                Palestinian Authority.
                  (D) The NGO Network on the Question of Palestine.
                  (E) The Special Committee to Investigate Israeli 
                Practices Affecting the Human Rights of the Palestinian 
                People and Other Arabs of the Occupied Territories.
                  (F) Any other entity the Secretary determines results 
                in duplicative efforts or funding or fails to ensure 
                balance in the approach to Israeli-Palestinian issues.
  (b) Implementation of Recommendations by Permanent Representative.--
          (1) In general.--The United States Permanent Representative 
        to the United Nations shall use the voice, vote, and influence 
        of the United States at the United Nations to seek the 
        implementation of the recommendations contained in the report 
        required under subsection (a)(1)(B).
          (2) Withholding of funds.--Until such recommendations have 
        been implemented, the Secretary of State is authorized to 
        withhold from United States contributions to the regular 
        assessed budget of the United Nations for a biennial period 
        amounts that are proportional to the percentage of such budget 
        that are expended for such entities.
  (c) GAO Audit.--The Comptroller General shall conduct an audit of the 
status of the implementation of the recommendations contained in the 
report required under subsection (a)(1)(B).
  (d) Withholding of Funds With Respect to the Palestinian Authority.--
The Secretary of State is authorized to withhold from United States 
contributions to the regular assessed budget of the United Nations for 
a biennial period amounts that are proportional to the percentage of 
such budget that are expended for any United Nations affiliated or 
specialized agency that provides assistance directly to the Palestinian 
Authority during any period for which a certification described in 
section 620K(b) of the Foreign Assistance Act of 1961 (as added by 
section 2(b)(2) of this Act) is not in effect with respect to the 
Palestinian Authority.

SEC. 5. DESIGNATION OF TERRITORY CONTROLLED BY THE PALESTINIAN 
                    AUTHORITY AS TERRORIST SANCTUARY.

  It is the sense of Congress that, during any period for which a 
certification described in section 620K(b) of the Foreign Assistance 
Act of 1961 (as added by section 2(b)(2) of this Act) is not in effect 
with respect to the Palestinian Authority, the territory controlled by 
the Palestinian Authority should be deemed to be in use as a sanctuary 
for terrorists or terrorist organizations for purposes of section 
6(j)(5) of the Export Administration Act of 1979 (50 U.S.C. App. 
2405(j)(5)) and section 140 of the Foreign Relations Authorization Act, 
Fiscal Years 1988 and 1989 (22 U.S.C. 2656f).

SEC. 6. DENIAL OF VISAS FOR OFFICIALS OF THE PALESTINIAN AUTHORITY.

  (a) In General.--A visa shall not be issued to any alien who is an 
official of, affiliated with, or serving as a representative of the 
Palestinian Authority during any period for which a certification 
described in section 620K(b) of the Foreign Assistance Act of 1961 (as 
added by section 2(b)(2) of this Act) is not in effect with respect to 
the Palestinian Authority.
  (b) Waiver.--Subsection (a) shall not apply--
          (1) if the President determines and certifies to the 
        appropriate congressional committees, on a case-by-case basis, 
        that the issuance of a visa to an alien described in such 
        subsection is important to the national security interests of 
        the United States; or
          (2) with respect to visas issued in connection with United 
        States obligations under the Act of August 4, 1947 (61 Stat. 
        756) (commonly known as the ``United Nations Headquarters 
        Agreement Act'').

SEC. 7. TRAVEL RESTRICTIONS ON OFFICIALS AND REPRESENTATIVES OF THE 
                    PALESTINIAN AUTHORITY AND THE PALESTINE LIBERATION 
                    ORGANIZATION STATIONED AT THE UNITED NATIONS IN NEW 
                    YORK CITY.

  The President shall restrict the travel of officials and 
representatives of the Palestinian Authority and of the Palestine 
Liberation Organization who are stationed at the United Nations in New 
York City to a 25-mile radius of the United Nations headquarters 
building during any period for which a certification described in 
section 620K(b) of the Foreign Assistance Act of 1961 (as added by 
section 2(b)(2) of this Act) is not in effect with respect to the 
Palestinian Authority.

SEC. 8. PROHIBITION ON PALESTINIAN AUTHORITY REPRESENTATION IN THE 
                    UNITED STATES.

  (a) Prohibition.--Notwithstanding any other provision of law, it 
shall be unlawful to establish or maintain an office, headquarters, 
premises, or other facilities or establishments within the jurisdiction 
of the United States at the behest or direction of, or with funds 
provided by, the Palestinian Authority or the Palestine Liberation 
Organization during any period for which a certification described in 
section 620K(b) of the Foreign Assistance Act of 1961 (as added by 
section 2(b)(2) of this Act) is not in effect with respect to the 
Palestinian Authority.
  (b) Enforcement.--
          (1) Attorney general.--The Attorney General shall take the 
        necessary steps and institute the necessary legal action to 
        effectuate the policies and provisions of subsection (a).
          (2) Relief.--Any district court of the United States for a 
        district in which a violation of subsection (a) occurs shall 
        have authority, upon petition of relief by the Attorney 
        General, to grant injunctive and such other equitable relief as 
        it shall deem necessary to enforce the provisions of subsection 
        (a).
  (c) Waiver.--
          (1) Authority.--The President may waive the application of 
        subsection (a) for a period of 180 days if the President 
        determines and certifies to the appropriate congressional 
        committees that such waiver is vital to the national security 
        interests of the United States and provides an explanation of 
        how the failure to waive the application of subsection (a) 
        would be inconsistent with the vital national security 
        interests of the United States.
          (2) Renewal.--The President may renew the waiver described in 
        paragraph (1) for successive 180-day periods if the President 
        makes the determination and certification described in such 
        paragraph for each such period.

SEC. 9. INTERNATIONAL FINANCIAL INSTITUTIONS.

  (a) United States Policy.--It shall be the policy of the United 
States that the United States Executive Director at each international 
financial institution shall use the voice, vote, and influence of the 
United States to prohibit assistance to the Palestinian Authority 
during any period for which a certification described in section 
620K(b) of the Foreign Assistance of 1961 (as added by section 2(b)(2) 
of this Act) is not in effect with respect to the Palestinian 
Authority.
  (b) Definition.--In this section, the term ``international financial 
institution'' has the meaning given the term in section 1701(c)(2) of 
the International Financial Institutions Act.

SEC. 10. DIPLOMATIC CONTACTS WITH PALESTINIAN TERROR ORGANIZATIONS.

  It shall be the policy of the United States that no officer or 
employee of the United States Government shall negotiate or have 
substantive contacts with members or official representatives of Hamas, 
Palestinian Islamic Jihad, the Popular Front for the Liberation of 
Palestine, al-Aqsa Martyrs Brigade, or any other Palestinian terrorist 
organization, unless and until such organization--
          (1) recognizes Israel's right to exist;
          (2) renounces the use of terrorism;
          (3) dismantles the infrastructure necessary to carry out 
        terrorist acts, including the disarming of militias and the 
        elimination of all instruments of terror; and
          (4) recognizes and accepts all previous agreements and 
        understandings between the State of Israel and the Palestine 
        Liberation Organization and the Palestinian Authority.

SEC. 11. DEFINITIONS.

  In this Act:
          (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                  (A) the Committee on International Relations and the 
                Committee on Appropriations of the House of 
                Representatives; and
                  (B) the Committee on Foreign Relations and the 
                Committee on Appropriations of the Senate.
          (2) Palestinian authority.--The term ``Palestinian 
        Authority'' has the meaning given the term in section 
        620K(e)(2) of the Foreign Assistance Act of 1961 (as added by 
        section 2(b)(2) of this Act).

                          Purpose and Summary

    H.R. 4681, the ``Palestinian Anti-Terrorism Act of 2006,'' 
as reported by the Committee on International Relations, both 
demonstrates Congress's disapproval of the policies of the new 
Hamas-dominated government of the Palestinian Authority and 
prevents United States taxpayer funds from supporting Hamas. 
H.R. 4681 sets out clear criteria which the Palestinian 
Authority must meet before it may receive funds pursuant to the 
Foreign Assistance Act, and restricts United States Government 
funding under that Act for nongovernmental organizations, 
preventing them from, in effect, supporting the Palestinian 
Authority indirectly. Once the Palestinian Authority has 
credibly demonstrated that it has changed course, assistance to 
it and to nongovernmental organizations in the West Bank and 
Gaza may resume flowing without significant restrictions 
imposed under H.R. 4681.
    The bill also includes language intended to restrict 
funding for the Palestinian Authority through other mechanisms, 
such as the international financial institutions, and to 
restrict the presence of the Palestinian Authority or the 
Palestinian Liberation Organization in the United States.

                Background and Need for the Legislation

    The United States has provided, albeit with restrictions, 
hundreds of millions of dollars in assistance to the 
Palestinian people since the beginning of the Oslo process. 
Because of the problematic nature of the government of the 
Palestinian Authority, in particular its corruption and its 
weak adherence to its commitments to cooperate with Israel in 
the security realm, relatively little funding has been given 
directly to the Palestinian Authority. Rather, the bulk of the 
funding has gone to Palestinian nongovernmental organizations 
or through non-Palestinian based contractors or grantees of the 
United States Agency for International Development (USAID).
    During Fiscal Years 2005 and 2006, the United States took 
the following actions to support the Palestinians and the 
Palestinian Authority financially: (1) Congress provided for 
$75 million in Economic Support Funds (ESF) for the United 
States Agency of International Development's West Bank and Gaza 
program in the 2005 Consolidated Appropriations Act (P.L. 108-
447); 2) Congress appropriated $200 million in supplemental ESF 
in the Fiscal Year 2005 Iraq Supplemental Appropriations Act 
(P.L. 109-13); and 3) in the FY2006 Foreign Operations 
Appropriations Act (P.L. 109-102), Congress provided $150 
million in ESF for the West Bank and Gaza Strip.
    After Mahmud Abbas (``Abu Mazen'') became Prime Minister of 
the Palestinian Authority and, later, when he became President 
of the Authority after the death of Palestinian leader Yasir 
Arafat, the United States began to provide more funds directly 
to the Palestinian Authority. This new direction was an attempt 
to assist, and to be seen to be assisting, the Palestinian 
Authority as it came out from under the domination of Arafat, 
and to encourage it to fully live up to its commitments and to 
govern properly.
    Direct United States funding for the Palestinian Authority 
amounted to $41 million in 1993-94. There was no direct funding 
from that time until 2003, when $20 million was provided for 
Palestinian Authority infrastructure projects. In December, 
2004, $20 million was used to pay overdue Palestinian utility 
bills owed to Israeli companies. In May, 2005, an additional 
$50 million as transferred to the Palestinian Authority, using 
a waiver, to improve roads, schools, health clinics, and water 
facilities. The direct aid was aimed to help ease the 
transition after Israel withdrew from Gaza. (The United States 
Government has since sought the return of these funds because 
of the Administration's cut-off of assistance, and as of April 
2006, $30 million has been returned. The State Department has 
said that it will continue to seek the return of the 
remainder.) In addition, $2.3 million was used to by the United 
States Security Coordinator to provide non-lethal assistance 
(vehicles, riot gear, and basic provisions) to security forces 
under the command of the Palestinian Authority's Interior 
Ministry
    Hamas, the Arabic acronym for the ``Islamic Resistance 
Movement,'' is a terrorist organization responsible for the 
deaths of many innocent Israelis (of various religions and 
ethnicities) and Americans. It also acts in the political 
sphere and carries on welfare activities in support of its 
larger aim of remaking the Palestinian Authority as an Islamic 
state and destroying Israel.
    The House has long been on record as opposing the 
participation of Hamas in the Palestinian government. On 
December 16, 2005, by a vote of 397-17, with seven voting 
``present,'' the House passed House Resolution 575, asserting 
that ``the inclusion of Hamas, or any other terrorist group on 
the State Department list of foreign terrorist organizations, 
into the Palestinian governing structure will inevitably raise 
serious policy considerations for the United States, 
potentially undermining the continued ability of the United 
States to provide financial assistance and conduct normal 
relations with the Palestinian Authority.''
    Hamas subsequently won a significant majority of the seats 
(although only a plurality of votes cast) in the Palestinian 
elections in January of 2006.
    In February, 2006, the Senate and the House passed Senate 
Concurrent Resolution 79, expressing, in clear and simple 
language, the sense of Congress that no United States 
assistance should be provided directly to the Palestinian 
Authority if any representative political party holding a 
majority of parliamentary seats within it maintains a position 
calling for the destruction of Israel.
    Representative Ileana Ros-Lehtinen introduced H.R. 4681, 
the ``Palestinian Anti-Terrorism Act of 2006'' on February 1, 
2006. This bill was referred to the House International 
Relations Committee. On April 6, 2006, the Committee considered 
the bill and ordered it reported favorably, with an amendment 
in the nature of a substitute.

                                Hearings

    During recent years, the Committee on International 
Relations held the following hearings regarding the 
Palestinians or the Middle East peace process: March 2, 2006, 
United States Policy Toward the Palestinians in the Aftermath 
of Parliamentary Elections; February 10, 2005, The Way Forward 
in the Middle East Peace Process; and June 11, 2003, The Middle 
East Peace Process at a Crossroads.
    The Subcommittee on the Middle East and Central Asia held 
hearings on the same topics as follows: March 8, 2006: 
Palestinian Authority Elections: Implications for Peace, 
Regional Security, and U.S. Assistance; September 21, 2005: The 
Middle East Peace Process and U.S. Strategic Priorities Post-
Disengagement; and March 9, 2005: U.S. Policy Toward the 
Palestinians in the Post-Arafat Era.
    In addition, on May 25, 2005, the Committee received Mr. 
Mahmud Abbas, President of the Palestinian Authority. On May 
15, 2003, a classified briefing was given to Members by the 
Honorable William J. Burns, Assistant Secretary, Bureau of Near 
Eastern Affairs, Department of State.
    Under the auspices of the Subcommittee on the Middle East 
and Central Asia or its Chair, meetings or briefings have been 
held with His Excellency Natan Sharansky, Minister for 
Jerusalem and Diaspora Affairs of the State of Israel (February 
9, 2005); the Honorable William J. Burns, Assistant Secretary, 
Bureau of Near Eastern Affairs, U.S. Department of State (March 
16, 2004, November 6, 2003, May 13, 2003, and February 13, 
2003); and Ambassador Marc Otte, the European Union's Special 
Representative for the Middle East Peace Process (March 10, 
2004).

                        Committee Consideration

    On April 6, 2006, the Committee on International Relations 
met in open session and ordered favorably reported the bill, 
H.R. 4681, as amended, by a vote of 36-2, a quorum being 
present.

                        Vote(s) of the Committee

    Clause (3)(b) of rule XIII of the Rules of the House of 
Representatives requires that the results of each record vote 
on an amendment or motion to report, together with the names of 
those voting for or against, be printed in the Committee 
Report.
    A motion to report H.R. 4681, as amended, favorably to the 
House was agreed to by a record vote of 36 ayes to 2 noes.
    Voting yes: Hyde, Smith (NJ), Burton, Gallegly, Ros-
Lehtinen, Rohrabacher, Royce, Chabot, Tancredo, Issa, Flake, 
Green, Weller, McCotter, Harris, Wilson, Boozman, Barrett, 
Fortenberry, McCaul, Poe, Lantos, Berman, Ackerman, 
Faleomavaega, Sherman, Wexler, Engel, Meeks, Crowley, Berkley, 
Schiff, Smith (WA), Chandler, Cardoza, and Carnahan.
    Voting no: Blumenauer and McCollum.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

                                                       May 4, 2006.
Hon. Henry J. Hyde,
Chairman, Committee on International Relations,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4681, the 
Palestine Anti-Terrorism Act of 2006.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sam 
Papenfuss.
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

H.R. 4681--Palestine Anti-Terrorism Act of 2006

    H.R. 4681 would impose restrictions on aid provided to the 
Palestinian Authority (PA) and impose other restrictions on 
activity by the PA and its officials in the United States. CBO 
estimates that implementing H.R. 4681 would have no significant 
budgetary impact because the Administration has effectively 
implemented the provisions in the bill. CBO estimates that the 
bill would not affect direct spending or receipts. H.R. 4681 
contains no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and would not 
affect the budgets of state, local, or tribal governments.
    Section 2 would prohibit the United States from providing 
aid to the PA unless the President has certified that:
           No elements of the PA have any ties to 
        terrorist organizations,
           The PA has publicly recognized Israel's 
        right to exist as a Jewish state,
           The PA is recognizing and following previous 
        agreements with respect to establishing peace between 
        Israel and the PA,
           The PA is working to eliminate terrorism in 
        its jurisdiction, and
           The PA is moving towards a more transparent 
        and accountable government.
    The prohibition would not apply to support for independent 
elections commissions and the Middle East peace process.
    Section 3 would allow aid to the West Bank or Gaza only if 
such aid promotes the national security interests of the United 
States and for basic human health needs, such as water, food, 
medicine, or sanitation. According to the Department of State, 
this humanitarian aid will total about $250 million in 2006 
(from funds already appropriated), though aid for future years 
is uncertain.
    Section 4 would authorize the Secretary of State to 
withhold, in part, U.S. contributions to the assessed budget of 
the United Nations (UN) under the following conditions:
           The UN fails to implement recommendations 
        from an audit of its approach to Israeli-Palestinian 
        issues, or
           UN specialized or affiliated agencies 
        provide direct assistance to the PA.
    Based on information from the Department of State, CBO does 
not expect that these conditions would be met. Consequently, 
the department would continue to make contributions. (Enacting 
the bill could result in direct spending savings if the 
department does withhold contributions after the appropriation 
of funds for that purpose, because it would affect outlays from 
funds already appropriated. However, CBO believes that action 
would be unlikely.)
    The CBO staff contact is Sam Papenfuss. This estimate was 
approved by Peter H. Fontaine, Deputy Assistant Director for 
Budget Analysis.

                    Performance Goals and Objectives

    This bill will have accomplished its principle goals if it 
results either in a change in the policies of the Palestinian 
Authority or the withholding of direct United States assistance 
to it (except as specifically provided).

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8, of the Constitution.

                      Section-by-Section Analysis

    Section-by-section Analysis of the Amendment in the Nature 
of a Substitute adopted by the Committee on International 
Relations:
    Section 1 provides a short title for the bill.
    Section 2(a) contains a declaration of policy. According to 
the declaration of policy, it shall be the policy of the United 
States: (1) to support a peaceful, two-state solution to end 
the conflict between Israel and the Palestinians in accordance 
with the ``Roadmap''; (2) to oppose those organizations, 
individuals, and countries that support terrorism and violence; 
(3) to urge members of the international community to avoid 
contact with and refrain from financially supporting Hamas or a 
Hamas-controlled Palestinian Authority until Hamas agrees to 
recognize Israel, renounce violence, disarm, and accept prior 
agreements, including the roadmap; (4) to promote the emergence 
of a democratic Palestinian governing authority that: (A) 
denounces and combats terrorism; (B) has agreed to and is 
taking action to disarm and dismantle any terrorist agency, 
network, or facility; (C) has agreed to work to eliminate anti-
Israel and anti-Semitic incitement and the commemoration of 
terrorists in Palestinian society; (D) has agreed to respect 
the sovereignty of its neighbors; (E) acknowledges, respects, 
and upholds the human rights of all people; (F) implements the 
rule of law, good governance, and democratic practices, 
including conducting free, fair, and transparent elections in 
compliance with international standards; (G) ensures 
institutional and financial transparency and accountability; 
and (H) has agreed to recognize the State of Israel as an 
independent, sovereign, Jewish, democratic state; and (5) to 
continue to support assistance to the Palestinian people.
    It is the view of the Committee that funding levels for 
assistance to the Palestinian people should be maintained, or 
even increased, given their needs, in coming years.
    Section 2(b) redesignates an improperly designated 
provision added to the Foreign Assistance Act during the 104th 
Congress and adds a new section 620K of the Foreign Assistance 
Act entitled ``Limitation on Assistance to the Palestinian 
Authority.'' The remainder of the analysis of this subsection 
consists of an analysis of new section 620K.
    Under subsection (a) (of new section 620K), except as 
provided in subsection (e), assistance under the Foreign 
Assistance Act may be provided to the Palestinian Authority 
only during a period for which a certification under subsection 
(b) (a ``certification'') is in effect.
    It should be noted that the section speaks in a mandatory 
sense only to assistance under the Foreign Assistance Act and 
only to direct assistance to the Palestinian Authority (as 
defined in section 620K). However, it is the sense of Congress, 
as noted in Subsection (e) of section 2, that the President 
should be guided by the principles and procedures described in 
section 620K of the Foreign Assistance Act, as added by 
subsection (b) of section 2, in providing direct assistance to 
the Palestinian Authority under any provision of law other than 
the Foreign Assistance Act of 1961.
    In addition, it should be noted that all of the special 
authorities of the Foreign Assistance Act apply, including the 
provisions providing that assistance to protect human health 
may be provided even if assistance would otherwise be 
prohibited (section 104 of the Act). For example, the Committee 
did not include a specific exception to permit direct 
assistance to the Palestinian Authority to help it deal with 
avian flu: sufficient authority for such assistance is already 
included in the Foreign Assistance Act.
    Subsection (b) defines a certification as being one which 
is transmitted by the President to Congress that contains a 
determination of the President that: (a) no ministry, agency, 
or instrumentality of the Palestinian Authority is controlled 
by a foreign terrorist organization and no member of a foreign 
terrorist organization serves in a senior policy-making 
position in a ministry, agency, or instrumentality of the 
Palestinian Authority; (b) the Palestinian Authority has 
publicly acknowledged Israel's right to exist as a Jewish 
state; and recommitted itself and is adhering to all previous 
agreements and understandings with the Government of the United 
States, the Government of Israel, and the international 
community, including agreements and understandings pursuant to 
the Roadmap; and (c) the Palestinian Authority has taken 
effective steps and made demonstrable progress toward: 
completing the process of purging from its security services 
individuals with ties to terrorism; dismantling all terrorist 
infrastructure within its jurisdiction, confiscating 
unauthorized weapons, arresting and bringing terrorists to 
justice, destroying unauthorized arms factories, thwarting and 
preempting terrorist attacks, and fully cooperating with 
Israel's security services; halting all anti-Israel incitement 
in Palestinian Authority-controlled electronic and print media 
and in schools, mosques, and other institutions it controls, 
and replacing these materials, including textbooks, with 
materials that promote tolerance, peace, and coexistence with 
Israel; ensuring democracy, the rule of law, and an independent 
judiciary, and adopting other reforms such as ensuring 
transparent and accountable governance; and ensuring the 
financial transparency and accountability of all government 
ministries and operations. It is the intent of the Committee 
that the reference to ``adherence'' to agreements and 
understandings does not require perfect performance, but that a 
rule of reason apply.
    Subsection (c) provides that in order to maintain a 
certification in effect, the President must transmit a 
recertification within 6 months of the President's last 
certification (except that a recertification must be made 
within 90 days, in the case of the first recertification under 
the subsection). If the President is unable to make a 
recertification, he shall transmit to Congress a report that 
contains the reasons the President is unable to make such a 
recertification.
    Subsection (d) provides that assistance to the Palestinian 
Authority under the Foreign Assistance Act not be provided 
until 15 days until after a notice thereof is provided by the 
President to the Committees on International Relations and 
Appropriations of the House and to the Committees on Foreign 
Relations and Appropriations of the Senate under the provisions 
of section 634A of the Foreign Assistance Act.
    Subsection (e) provides for exceptions to the general rule 
of subsection (a). The following kinds of assistance may be 
provided to the Palestinian Authority:
    (1) Assistance to any Palestinian independent election 
commission, if the President transmits to Congress a 
certification that contains a determination of the President 
that no member of the commission is a member of, affiliated 
with, or appointed by, a foreign terrorist organization and 
that each member of such commission is independent of the 
influence of any political party or movement.
    (2) Assistance to the Office of the President of the 
Palestinian Authority, which may only be provided for non-
security expenses directly related to facilitating a peaceful 
solution of the Israeli-Palestinian conflict, or for the 
personal security detail of the President of the Palestinian 
Authority, if the President transmits to Congress a 
certification containing a determination of the President that: 
(A) such assistance is critical to facilitating a peaceful 
solution of the Israeli-Palestinian conflict; (B) the President 
of the Palestinian Authority is not a member of or affiliated 
with a foreign terrorist organization and has rejected the use 
of terrorism to resolve the Israeli-Palestinian conflict; (C) 
such assistance will not be used to provide funds to any 
individual who is a member of or affiliated with a foreign 
terrorist organization or who has not rejected the use of 
terrorism to resolve the Israeli-Palestinian conflict; and (D) 
such assistance will not be retransferred to an other entity 
within or outside of the Palestinian Authority except as 
payment for legal goods supplied or services rendered.
    Some members of the Committee believe that the 
Administration has made a determination to treat the 
Palestinian Authority in its constituent parts, with parts of 
the Palestinian Authority that are not controlled by the Hamas 
Prime Minister or ministries that report to the Prime Minister 
as not being subject to the administrative cutoff of funding 
that was announced earlier this year. Some members of the 
Committee have also expressed concern regarding President 
Abbas' ability to promote meaningful change and dialogue, based 
on his past performance and, therefore, with the notion that 
broad assistance to the office of the President is appropriate.
    The Committee approved the narrow exceptions in subsection 
(e) to allow certain flexibility to promote democratic change 
through support for truly independent election commissions. The 
Committee believes that providing assistance for the 
President's office for the limited purposes of maintaining 
personal protection for President Abbas and to fund expenses 
directly related to facilitating a peaceful solution of the 
Israeli-Palestinian conflict is appropriate. In determining 
what expenses qualify as ``directly related to facilitating a 
peaceful solution of the Israeli-Palestinian conflict,'' the 
Committee expects close consultation from the Administration 
with respect to such expenses. At the same time, the Committee 
does not intend that the expression ``directly relating to 
facilitating a peaceful resolution'' be limited to assistance, 
for example, for travel, or to pay the salaries of negotiating 
teams.
    Assistance under this subsection (e) is subject to the 
requirement that the President determine that the provision of 
such assistance is important to the national security interests 
of the United States and that 30 days prior to the obligation 
of such amounts the President consult with the appropriate 
congressional committees regarding the specific programs, 
projects, and activities to be carried out and submit a written 
memorandum containing that determination.
    The 30-day consultation period may run concurrently with 
the 15-day notification period under subsection (d) (relating 
to procedures under section 634A of the Foreign Assistance 
Act).
    Subsection (f) provides definitions for the section. The 
Palestinian Authority is defined as the ``interim Palestinian 
administrative organization that governs part of the West Bank 
and all of the Gaza Strip (or any successor Palestinian 
governing entity), including the Palestinian Legislative 
Council.'' It does not include municipalities within the area 
governed by the Palestinian Authority.
    Subsection (c) of Section 2 makes the provisions of section 
620K of the Foreign Assistance Act of 1961, as added by 
subsection (b), applicable to the unexpended balances of funds 
obligated prior to the date of the enactment of this Act. It is 
the view of the Committee that this provision should not result 
in any diminution of funding available for the Palestinian 
people, and that such funds should be made available for the 
Palestinian people through other mechanisms.
    Subsection (d) of Section 2 requires the Comptroller 
General to submit within 180 days of enactment a report on 
proposed procedures by which United States assistance to the 
Palestinian Authority under the Foreign Assistance Act will be 
audited by relevant departments and agencies of the United 
States and to make any recommendations for the improvement of 
such procedures.
    Subsection (e) of Section 2 expresses the sense of Congress 
that the President should be guided by the principles and 
procedures described in section 620K of the Foreign Assistance 
Act, as added by subsection (b) of Section 2, in providing 
direct assistance to the Palestinian Authority under any 
provision of law other than the Foreign Assistance Act of 1961. 
Although new section 620K does not purport to govern assistance 
provided outside the Foreign Assistance Act, it is important 
that the spirit of section 620K be followed insofar as possible 
in the provision of other assistance.
    Section 3(a) adds a new section 620L of the Foreign 
Assistance Act entitled ``Limitation on Assistance for the West 
Bank and Gaza.'' The remainder of the analysis of this 
subsection consists of an analysis of new section 620L.
    Under subsection (a) (of new section 620L) assistance may 
be provided under the Foreign Assistance Act to nongovernmental 
organizations for the West Bank and Gaza (except as provided in 
subsection (d)) only during a period for which a certification 
described in section 620K(b) of this Act is in effect with 
respect to the Palestinian Authority.
    Subsection (b) provides a statutory-enhanced marking 
requirement for aid provided to the Palestinians through 
nongovernmental organizations because the Committee deems it 
especially important that the Palestinians understand that the 
Congress is concerned about their welfare and endeavoring to 
help them, despite the government that they elected. Assistance 
provided under the Foreign Assistance Act to nongovernmental 
organizations for the West Bank and Gaza shall be marked as 
assistance from the Government of the United States unless the 
Secretary, or the Administrator of the United States Agency for 
International Development, determines that such marking will 
endanger the lives or safety of persons delivering or receiving 
such assistance or would have a material adverse effect on the 
implementation of that assistance.
    Subsection (c) requires notification to the Committee on 
International Relations and the Committee on Appropriations of 
the House of Representatives and to the Committee on Foreign 
Relations and the Committee on Appropriations of the Senate 15 
days prior to the provision of anyassistance under section 
620L, in accordance with the procedures applicable to reprogramming 
notifications under section 634A(a) of the Foreign Assistance Act.
    The Committee is concerned that notifications for the 
purpose of this subsection, as well as for other purposes under 
section 634A, not be made during Congressional recesses absent 
mutually acceptable arrangements, made in advance, with each of 
the relevant Committees.
    This notification period may run concurrently with the 
consultation period of 25 days applicable to ``any other'' 
assistance specified in paragraph (2) of subsection (d) of 
proposed section 620L.
    Subsection (d) provides exceptions to the general rule of 
subsection (a), allowing:
    (1) The provision of food, water, medicine, sanitation 
services, or other assistance to meet basic human health needs; 
and
    (2) Any other type of assistance, if the President: (A) 
determines that the provision of such assistance will further 
the national security interests of the United States; and (B) 
not less than 25 days prior to the obligation of amounts for 
the provision of such assistance: (1) consults with the 
appropriate congressional committees regarding the specific 
programs, projects, and activities to be carried out using such 
assistance; and (2) submits to the appropriate congressional 
committees a written memorandum that contains the determination 
of the President under subparagraph (A) and an explanation of 
how failure to provide the proposed assistance would be 
inconsistent with furthering the national security interests of 
the United States.
    The exceptions were reviewed carefully in the Committee's 
approach to H.R. 4681. The Committee believes that despite (or, 
perhaps, because of) the results of the January elections the 
United States must maintain its historical commitment to help 
meet the humanitarian needs of the Palestinian people. In 
addition, the Committee recognized that, beyond such 
assistance, it may be prudent to engage in programs other than 
those designed to meet basic human health needs, such as 
democracy or rule-of-law programs that support the growth of 
institutions outside the Palestinian Authority, or other 
critical needs. The Committee therefore agreed that the 
Administration could reasonably propose such assistance 
consistent with furthering United States national security 
interest, and subject to the statutory mandate for 
congressional consultation. The Committee expects full 
consultation from the Executive Branch as it carries forward 
all its assistance programs, but particularly programs other 
than those described as meeting basic human health needs, and 
for that reason an extended congressional consultation period 
is required for such ``other'' assistance.
    For this subsection, the term `appropriate congressional 
committees' means the Committee on International Relations and 
the Committee on Appropriations of the House of 
Representatives, and the Committee on Foreign Relations and the 
Committee on Appropriations of the Senate.
    Subsection (b) of section 3 provides for several enhanced 
procedures to oversee the operations under new section 620L.
    (1) For each of the fiscal years 2007 and 2008, the 
Secretary of State shall certify to the appropriate 
congressional committees not later than 30 days prior to the 
initial obligation of amounts for assistance to nongovernmental 
organizations for the West Bank or Gaza under the Foreign 
Assistance Act of 1961 that procedures have been established to 
ensure that the Comptroller General of the United States will 
have access to appropriate United States financial information 
in order to review the use of such assistance.
    (2) Prior to any obligation of amounts for each fiscal year 
for assistance to nongovernmental organizations for the West 
Bank or Gaza under the Foreign Assistance Act of 1961 the 
Secretary of State shall take all appropriate steps to ensure 
that such assistance is not provided to or through any 
individual or entity that the Secretary knows, or has reason to 
believe, advocates, plans, sponsors, engages in, or has engaged 
in, terrorist activity. The Secretary shall, as appropriate, 
establish procedures specifying the steps to be taken to carry 
out this paragraph and shall terminate assistance to any 
individual or entity that the Secretary has determined 
advocates, plans, sponsors, or engages in terrorist activity.
    (3) No amounts made available for assistance to 
nongovernmental organizations for the West Bank or Gaza under 
the Foreign Assistance Act of 1961 may be made available for 
the purpose of recognizing or otherwise honoring individuals, 
or the families of individuals, who commit, or have committed, 
acts of terrorism.
    (4) The Administrator of the United States Agency for 
International Development shall ensure that independent audits 
of all contractors and grantees, and significant subcontractors 
and subgrantees, which receive amounts for assistance to 
nongovernmental organizations for the West Bank or Gaza under 
the Foreign Assistance Act of 1961 are conducted to ensure, 
among other things, compliance with this subsection. Of the 
amounts available for any fiscal year for assistance to 
nongovernmental organizations for the West Bank or Gaza under 
the Foreign Assistance Act of 1961, up to $1,000,000 for each 
such fiscal year may be used by the Office of the Inspector 
General of the United States Agency for International 
Development for audits, inspections, and other activities in 
furtherance of the requirements described in the preceding 
sentence. Such amounts are in addition to amounts otherwise 
available for such purposes.
    Subsection (c) of section 3 expresses the sense of Congress 
that the President should be guided by the principles and 
procedures described in section 620L of the Foreign Assistance 
Act, as added by subsection (a) of section 3, in providing 
direct assistance to the Palestinian Authority under any 
provision of law other than the Foreign Assistance Act of 1961. 
Although new section 620L doesnot purport to govern assistance 
provided outside the Foreign Assistance Act, it is important that the 
spirit of section 620L be followed insofar as possible in the provision 
of other assistance.
    Section 4 (a) provides that not later than 60 days after 
the date of the enactment of this Act, the President shall (A) 
conduct an audit of the functions of the United Nations 
Division for Palestinian Rights, the Committee on the Exercise 
of the Inalienable Rights of the Palestinian People, the United 
Nations Special Coordinator for the Middle East Peace Process 
and Personal Representative to the Palestine Liberation 
Organization and the Palestinian Authority, the NGO Network on 
the Question of Palestine, the Special Committee to Investigate 
Israeli Practices Affecting the Human Rights of the Palestinian 
People and Other Arabs of the Occupied Territories, and any 
other entity the Secretary determines results in duplicative 
efforts or funding or fails to ensure balance in the approach 
to Israeli-Palestinian issues; and (B) transmit to the 
appropriate congressional committees a report containing 
recommendations for the elimination of such entities and 
efforts that are duplicative or fail to ensure balance in the 
approach of the United Nations to Israeli-Palestinian issues.
    Section 4(b)(1) provides that the United States Permanent 
Representative to the United Nations shall use the voice, vote, 
and influence of the United States at the United Nations to 
seek the implementation of the recommendations contained in the 
report required under subsection (a).
    Section 4(b)(2) provides that until such recommendations 
have been implemented, the Secretary of State is authorized to 
withhold from United States contributions to the regular 
assessed budget of the United Nations for a biennial period 
amounts that are proportional to the percentage of such budget 
that are expended for such entities. This language is not 
mandatory.
    Section 4(c) provides that the Comptroller General shall 
conduct an audit of the status of the implementation of the 
recommendations contained in the report required under 
subsection (a)(1)(B).
    Section 4(d) provides that the Secretary of State is 
authorized to withhold from United States contributions to the 
regular assessed budget of the United Nations for a biennial 
period amounts that are proportional to the percentage of such 
budget that are expended for any United Nations affiliated or 
specialized agency that provides assistance directly to the 
Palestinian Authority during any period for which a 
certification described in section 620K(b) of the Foreign 
Assistance Act of 1961 (as added by section 2(b)(2) of this 
Act) is not in effect with respect to the Palestinian 
Authority. This language is not mandatory.
    Section 5 expresses the sense of Congress that, during any 
period for which a certification described in section 620K(b) 
of the Foreign Assistance Act of 1961 (as added by this Act) is 
not in effect with respect to the Palestinian Authority, the 
territory controlled by the Palestinian Authority should be 
deemed to be in use as a sanctuary for terrorists or terrorist 
organizations for purposes of section 6(j)(5) of the Export 
Administration Act of 1979 (50 U.S.C. App. 2405(j)(5)) and 
section 140 of the Foreign Relations Authorization Act, Fiscal 
Years 1988 and 1989 (22 U.S.C. 2656f). This language is not 
mandatory.
    Section 6 provides, in its subsection (a), a general rule 
that a visa shall not be issued to any alien who is an official 
of, affiliated with, or serving as a representative of the 
Palestinian Authority during any period for which a 
certification described in section 620K(b) of the Foreign 
Assistance Act of 1961 (as added by section 2(b)(2) of this 
Act) is not in effect with respect to the Palestinian 
Authority. Under subsection (b), the general rule will not 
apply if the President or the President's designee determines 
and certifies to the appropriate congressional committees, on a 
case-by-case basis, that the issuance of a visa to an alien 
described in such subsection is important to the national 
security interests of the United States, or to the President of 
the Palestinian Authority and such President's personal 
assistants or representatives during the time such President is 
not determined to be a member of Hamas or any other foreign 
terrorist organization. The general rule of subsection (a) also 
does not apply in the case of visas granted in connection with 
obligations of the United States under the United Nations 
Headquarters Agreement Act.
    Section 7 requires the President to restrict the travel of 
officials and representatives of the Palestinian Authority and 
of the Palestine Liberation Organization who are stationed at 
the United Nations in New York City to a 25-mile radius of the 
United Nations headquarters building during any period for 
which a certification described in section 620K(b) of the 
Foreign Assistance Act of 1961 (as added by section 2(b)(2) of 
this Act) is not in effect with respect to the Palestinian 
Authority.
    The Committee is aware that the representatives stationed 
at the United Nations are appointed as representatives of the 
Palestine Liberation Organization (PLO), not the Palestinian 
Authority (PA). The legislation specifies ``of the Palestinian 
Authority and of the Palestine Liberation Organization'' 
because of past efforts by the PA to assume greater control 
over Palestinian representative offices abroad, which creates 
uncertainty as to which of these entities, the PA or the PLO, 
will have control over these representative offices in the 
future.
    Section 8 (a) provides the general rule that it shall be 
unlawful to establish or maintain an office, headquarters, 
premises, or other facilities or establishments within the 
jurisdiction of the United States at the behest or direction 
of, or with funds provided by, the Palestinian Authority or the 
Palestine Liberation Organization during any period for which a 
certification described in section 620K(b) of the Foreign 
Assistance Act (as added by section 2(b)(2) of this Act) is not 
in effect with respect to the Palestinian Authority.
    The Committee is aware that the representatives stationed 
at the United Nations are appointed as representatives of the 
Palestine Liberation Organization (PLO), not the Palestinian 
Authority (PA).The legislation specifies ``the Palestinian 
Authority or the Palestine Liberation Organization'' because of past 
efforts by the PA to assume greater control over Palestinian 
representative offices abroad, which creates uncertainty as to which of 
these entities, the PA or the PLO, will have control over these 
representative offices in the future.
    Section 8(b) provides that the Attorney General shall take 
the necessary steps and institute the necessary legal action to 
effectuate the policies and provisions of subsection (a), and 
that any district court of the United States for a district in 
which a violation of subsection (a) occurs shall have 
authority, upon petition of relief by the Attorney General, to 
grant injunctive and such other equitable relief as it shall 
deem necessary to enforce the provisions of subsection (a) of 
this section 8.
    Section 8(c)(1) provides that the President may waive the 
application of subsection (a) for a period of 180 days if the 
President determines and certifies to the appropriate 
congressional committees that such waiver is vital to the 
national security interests of the United States and provides 
an explanation of how the failure to waive the application of 
subsection (a) would be inconsistent with the vital national 
security interests of the United States.
    Section 8(c)(2) permits the President to renew the waiver 
described in paragraph (1) of subsection 8(c) for successive 
180-day periods if the President makes the determination and 
certification described in such paragraph for each such period.
    Section 9(a) provides the general rule that it shall be the 
policy of the United States that the United States Executive 
Director at each international financial institution shall use 
the voice, vote, and influence of the United States to prohibit 
assistance to the Palestinian Authority during any period for 
which a certification described in section 620K(b) of the 
Foreign Assistance of 1961 (as added by section 2(b)(2) of this 
Act) is not in effect with respect to the Palestinian 
Authority. This is not a mandatory provision.
    Section 9(b) defines the term ``international financial 
institution'' as having the meaning given the term in section 
1701(c)(2) of the International Financial Institutions Act.
    Section 10 provides that it shall be the policy of the 
United States that no officer or employee of the United States 
Government shall negotiate or have substantive contacts with 
members or official representatives of Hamas, Palestinian 
Islamic Jihad, the Popular Front for the Liberation of 
Palestine, al-Aqsa Martyrs Brigade, or any other Palestinian 
terrorist organization, unless and until such organization (1) 
recognizes Israel's right to exist; (2) renounces the use of 
terrorism; (3) dismantles the infrastructure necessary to carry 
out terrorist acts, including the disarming of militias and the 
elimination of all instruments of terror; and (4) recognizes 
and accepts all previous agreements and understandings between 
the State of Israel and the Palestine Liberation Organization 
and the Palestinian Authority. This is a non-mandatory policy 
provision; but the Committee expects that it will be adhered to 
by the Administration.
    Section 11 provides definitions for the bill. The term 
``appropriate congressional committees'' means the Committee on 
International Relations and the Committee on Appropriations of 
the House of Representatives, and the Committee on Foreign 
Relations and the Committee on Appropriations of the Senate. 
The term ``Palestinian Authority'' has the meaning given the 
term in section 620K(e)(2) of the Foreign Assistance Act of 
1961 (as added by section 2(b)(2) of this Act).

                        New Advisory Committees

    H.R. 4681 does not establish or authorize any new advisory 
committees.

                    Congressional Accountability Act

    H.R. 4681 does not apply to the legislative branch.

                            Federal Mandates

    H.R. 4681 provides no Federal mandates.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as 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):

FOREIGN ASSISTANCE ACT OF 1961

           *       *       *       *       *       *       *

                                PART III

Chapter 1--General Provisions

           *       *       *       *       *       *       *

SEC. [620G] 620J. DEPLETED URANIUM AMMUNITION.

  (a)  * * *

           *       *       *       *       *       *       *

SEC. 620K. LIMITATION ON ASSISTANCE TO THE PALESTINIAN AUTHORITY.

  (a) Limitation.--Except as provided in subsection (e), 
assistance may be provided under this Act to the Palestinian 
Authority only during a period for which a certification 
described in subsection (b) is in effect.
  (b) Certification.--A certification described in this 
subsection is a certification transmitted by the President to 
Congress that contains a determination of the President that--
          (1) no ministry, agency, or instrumentality of the 
        Palestinian Authority is controlled by a foreign 
        terrorist organization and no member of a foreign 
        terrorist organization serves in a senior policy making 
        position in a ministry, agency, or instrumentality of 
        the Palestinian Authority;
          (2) the Palestinian Authority has--
                  (A) publicly acknowledged Israel's right to 
                exist as a Jewish state; and
                  (B) recommitted itself and is adhering to all 
                previous agreements and understandings by the 
                Palestine Liberation Organization and the 
                Palestinian Authority with the Government of 
                the United States, the Government of Israel, 
                and the international community, including 
                agreements and understandings pursuant to the 
                Performance-Based Roadmap to a Permanent Two-
                State Solution to the Israeli-Palestinian 
                Conflict (commonly referred to as the 
                `Roadmap'); and
          (3) the Palestinian Authority has taken effective 
        steps and made demonstrable progress toward--
                  (A) completing the process of purging from 
                its security services individuals with ties to 
                terrorism;
                  (B) dismantling all terrorist infrastructure, 
                confiscating unauthorized weapons, arresting 
                and bringing terrorists to justice, destroying 
                unauthorized arms factories, thwarting and 
                preempting terrorist attacks, and fully 
                cooperating with Israel's security services;
                  (C) halting all anti-Israel incitement in 
                Palestinian Authority-controlled electronic and 
                print media and in schools, mosques, and other 
                institutions it controls, and replacing these 
                materials, including textbooks, with materials 
                that promote tolerance, peace, and coexistence 
                with Israel;
                  (D) ensuring democracy, the rule of law, and 
                an independent judiciary, and adopting other 
                reforms such as ensuring transparent and 
                accountable governance; and
                  (E) ensuring the financial transparency and 
                accountability of all government ministries and 
                operations.
  (c) Recertifications.--Not later than 90 days after the date 
on which the President transmits to Congress an initial 
certification under subsection (b), and every six months 
thereafter--
          (1) the President shall transmit to Congress a 
        recertification that the requirements contained in 
        subsection (b) are continuing to be met; or
          (2) if the President is unable to make such a 
        recertification, the President shall transmit to 
        Congress a report that contains the reasons therefor.
  (d) Congressional Notification.--Assistance made available 
under this Act to the Palestinian Authority may not be provided 
until 15 days after the date on which the President has 
provided notice thereof to the Committee on International 
Relations and the Committee on Appropriations of the House of 
Representatives and to the Committee on Foreign Relations and 
the Committee on Appropriations of the Senate in accordance 
with the procedures applicable to reprogramming notifications 
under section 634A(a) of this Act.
  (e) Exceptions.--
          (1) In general.--Subsection (a) shall not apply with 
        respect to the following:
                  (A) Assistance to independent elections 
                commissions.--Assistance to any Palestinian 
                independent election commission if the 
                President transmits to Congress a certification 
                that contains a determination of the President 
                that--
                          (i) no member of such commission is a 
                        member of, affiliated with, or 
                        appointed by a foreign terrorist 
                        organization; and
                          (ii) each member of such commission 
                        is independent of the influence of any 
                        political party or movement.
                  (B) Assistance to support the middle east 
                peace process.--Assistance to the Office of the 
                President of the Palestinian Authority for non-
                security expenses directly related to 
                facilitating a peaceful resolution of the 
                Israeli-Palestinian conflict or for the 
                personal security detail of the President of 
                the Palestinian Authority if the President 
                transmits to Congress a certification that 
                contains a determination of the President 
                that--
                          (i) such assistance is critical to 
                        facilitating a peaceful resolution of 
                        the Israeli-Palestinian conflict;
                          (ii) the President of the Palestinian 
                        Authority is not a member of or 
                        affiliated with a foreign terrorist 
                        organization and has rejected the use 
                        of terrorism to resolve the Israeli-
                        Palestinian conflict;
                          (iii) such assistance will not be 
                        used to provide funds to any individual 
                        who is a member of or affiliated with a 
                        foreign terrorist organization or who 
                        has not rejected the use of terrorism 
                        to resolve the Israeli-Palestinian 
                        conflict; and
                          (iv) such assistance will not be 
                        retransferred to any other entity 
                        within or outside of the Palestinian 
                        Authority except as payment for legal 
                        goods or services rendered.
          (2) Additional requirements.--Assistance described in 
        paragraph (1) may be provided only if the President--
                  (A) determines that the provision of such 
                assistance is important to the national 
                security interests of the United States; and
                  (B) not less than 30 days prior to the 
                obligation of amounts for the provision of such 
                assistance--
                          (i) consults with the appropriate 
                        congressional committees regarding the 
                        specific programs, projects, and 
                        activities to be carried out using such 
                        assistance; and
                          (ii) submits to the appropriate 
                        congressional committees a written 
                        memorandum that contains the 
                        determination of the President under 
                        subparagraph (A).
          (3) Definition.--In this subsection, the term 
        ``appropriate congressional committees'' means--
                  (A) the Committee on International Relations 
                and the Committee on Appropriations of the 
                House of Representatives; and
                  (B) the Committee on Foreign Relations and 
                the Committee on Appropriations of the Senate.
  (f) Definitions.--In this section:
          (1) Foreign terrorist organization.--The term 
        ``foreign terrorist organization'' means an 
        organization designated as a foreign terrorist 
        organization by the Secretary of State in accordance 
        with section 219(a) of the Immigration and Nationality 
        Act (8 U.S.C. 1189(a)).
          (2) Palestinian authority.--The term ``Palestinian 
        Authority'' means the interim Palestinian 
        administrative organization that governs part of the 
        West Bank and all of the Gaza Strip (or any successor 
        Palestinian governing entity), including the 
        Palestinian Legislative Council.

SEC. 620L. LIMITATION ON ASSISTANCE FOR THE WEST BANK AND GAZA.

  (a) Limitation.--Except as provided in subsection (d), 
assistance may be provided under this Act to nongovernmental 
organizations for the West Bank and Gaza only during a period 
for which a certification described in section 620K(b) of this 
Act is in effect with respect to the Palestinian Authority.
  (b) Marking Requirement.--Assistance provided under this Act 
to nongovernmental organizations for the West Bank and Gaza 
shall be marked as assistance from the Government of the United 
States unless the Secretary of State or the Administrator of 
the United States Agency for International Development 
determines that such marking will endanger the lives or safety 
of persons delivering or receiving such assistance or would 
have a material adverse effect on the implementation of such 
assistance.
  (c) Congressional Notification.--Assistance made available 
under this Act to nongovernmental organizations for the West 
Bank and Gaza may not be provided until 15 days after the date 
on which the President has provided notice thereof to the 
Committee on International Relations and the Committee on 
Appropriations of the House of Representatives and to the 
Committee on Foreign Relations and the Committee on 
Appropriations of the Senate in accordance with the procedures 
applicable to reprogramming notifications under section 634A(a) 
of this Act.
  (d) Exceptions.--Subsection (a) shall not apply with respect 
to the following:
          (1) Assistance to meet basic human health needs.--The 
        provision of food, water, medicine, sanitation 
        services, or other assistance to directly meet basic 
        human health needs.
          (2) Other types of assistance.--The provision of any 
        other type of assistance if the President--
                  (A) determines that the provision of such 
                assistance will further the national security 
                interests of the United States; and
                  (B) not less than 25 days prior to the 
                obligation of amounts for the provision of such 
                assistance--
                          (i) consults with the appropriate 
                        congressional committees regarding the 
                        specific programs, projects, and 
                        activities to be carried out using such 
                        assistance; and
                          (ii) submits to the appropriate 
                        congressional committees a written 
                        memorandum that contains the 
                        determination of the President under 
                        subparagraph (A) and an explanation of 
                        how failure to provide the proposed 
                        assistance would be inconsistent with 
                        furthering the national security 
                        interests of the United States.
          (3) Definition.--In this subsection, the term 
        ``appropriate congressional committees'' means--
                  (A) the Committee on International Relations 
                and the Committee on Appropriations of the 
                House of Representatives; and
                  (B) the Committee on Foreign Relations and 
                the Committee on Appropriations of the Senate.

           *       *       *       *       *       *       *

                ADDITIONAL VIEWS OF HON. EARL BLUMENAUER

    All of us agree with current law that the United States 
cannot provide assistance to foreign terrorist organizations or 
governments controlled by terrorists, as well as the Quartet's 
demands that Hamas recognize Israel's right to exist, forswear 
violence, and accept previous Israeli-Palestinian agreements. 
However, this bill goes much further by permanently prohibiting 
all direct assistance to the Palestinian Authority and almost 
all non-governmental assistance to the Palestinian people 
unless any Palestinian government--Hamas, Fatah or otherwise--
meets a series of unlikely all-or-nothing conditions. It even 
restricts aid to Hamas' opponents, limits diplomatic contacts 
with moderate Palestinian officials and insists on conditions 
that have nothing to do with Hamas' election or achieving the 
vision of a Palestinian state living side by side with Israel 
in peace.
    Though I know it is not the intent of the authors, this 
legislation risks harming Israel's security by making the 
possibility of constructive engagement more difficult and less 
likely. It ignores the possibility of progress with any 
Palestinian government being made in the context of 
negotiations. By placing permanent restrictions on the tools 
that the United States can use to promote Palestinian reform 
and Israeli security, this is the wrong answer to a most 
difficult challenge.

                                                   Earl Blumenauer.

                                  
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