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75–160PDF 2012

TO APPROVE THE AGREEMENT PROVIDING TERMS

FOR A CONTINUATION OF THE FREE

ASSOCIATION BETWEEN THE UNITED STATES AND

PALAU, AND FOR OTHER PURPOSES

MARKUP

BEFORE THE

SUBCOMMITTEE ON ASIA AND THE PACIFIC

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

ON

H.R. 6040

JULY 18, 2012

Serial No. 112–154

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

ILEANA ROS-LEHTINEN, Florida, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

RON PAUL, Texas 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

GUS M. BILIRAKIS, Florida 

JEAN SCHMIDT, Ohio 

BILL JOHNSON, Ohio 

DAVID RIVERA, Florida 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ANN MARIE BUERKLE, New York 

RENEE ELLMERS, North Carolina 

ROBERT TURNER, New York 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

GREGORY W. MEEKS, New York 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

DENNIS CARDOZA, California 

BEN CHANDLER, Kentucky 

BRIAN HIGGINS, New York 

ALLYSON SCHWARTZ, Pennsylvania 

CHRISTOPHER S. MURPHY, Connecticut 

FREDERICA WILSON, Florida 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

YLEEM D.S. POBLETE, Staff Director 

RICHARD J. KESSLER, Democratic Staff Director 

SUBCOMMITTEE ON ASIA AND THE PACIFIC

DONALD A. MANZULLO, Illinois, Chairman 

RON PAUL, Texas 

BILL JOHNSON, Ohio 

DAN BURTON, Indiana 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

MIKE KELLY, Pennsylvania 

JEFF DUNCAN, South Carolina 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

FREDERICA WILSON, Florida 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

DENNIS CARDOZA, California 

BEN CHANDLER, Kentucky 

(III)

C O N T E N T S 

Page

MARKUP OF 

H.R. 6040, To approve the Agreement providing terms for a continuation 

of the free association between the United States and Palau, and for other 

purposes ................................................................................................................ 2

Amendment in the nature of a substitute to H.R. 6040 offered by the 

Honorable Donald A. Manzullo, a Representative in Congress from the 

State of Illinois, and chairman, Subcommittee on Asia and the Pacific ...... 13

APPENDIX 

Markup notice .......................................................................................................... 26

Markup minutes ...................................................................................................... 27

The Honorable Eni F.H. Faleomavaega, a Representative in Congress from 

American Samoa: Prepared statement ............................................................... 28

(1)

TO APPROVE THE AGREEMENT PROVIDING 

TERMS FOR A CONTINUATION OF THE 

FREE ASSOCIATION BETWEEN THE UNITED 

STATES AND PALAU, AND FOR OTHER PURPOSES 

WEDNESDAY, JULY 18, 2012

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ASIA AND THE PACIFIC, 

COMMITTEE ON FOREIGN AFFAIRS, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 2 p.m., in room 

2172, Rayburn House Office Building, Hon. Donald A. Manzullo 

(chairman of the subcommittee) presiding. 

Mr. MANZULLO. The subcommittee will come to order. Pursuant 

to notice, and for purposes of a markup, I call up H.R. 6040, the 

Continued Free Association with Palau Act of 2012. 

The clerk will designate the bill. 

Ms. SANTANA. H.R. 6040, to approve the agreement providing 

terms for continuation of the free association between the United 

States and Palau, and for other purposes. Be it enacted——

Mr. MANZULLO. Without objection, the measure is considered 

read and open for amendment. 

[H.R. 6040 follows:]

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Mr. MANZULLO. I have a bipartisan amendment in the nature of 

a substitute that makes a few changes to the underlying legislation. The amendment, which was sent to the members’ offices yesterday, was carefully considered and improves the underlying legislation by fully offsetting the costs. 

The clerk will report the amendment. 

Ms. SANTANA. Amendment in the nature of a substitute to H.R. 

6040 offered by Mr. Manzullo of Illinois. Strike all after the enacting clause——

Mr. MANZULLO. Without objection, the amendment in the nature 

of a substitute is considered read. 

[The amendment in the nature of a substitute offered by Mr. 

Manzullo follows:]

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Mr. MANZULLO. The amendment in the nature of a substitute replaces section 3 of the underlying legislation with a mandatory 

spending offset that fully covers the $183 million cost of the bill. 

This provision titled ‘‘Denial and Revocation of Passports’’ amends 

the Passport Act of 1926 to provide the Secretary of State the authority to deny or revoke the passports of anyone who owes $50,000 

or more in Federal back taxes and is seriously delinquent in payment. 

There is legal precedence for the State Department to withhold 

the issuance of passports for a number of reasons, including parents owing more than $2,500 in back childcare payments. The Supreme Court specifically held that that law is constitutional. The 

offset in the amendment is modeled after this highly successful 

program and has several built-in safety nets to ensure that only 

those who are seriously delinquent are affected. 

The Government Accountability Office released a report last year 

that studied the feasibility of using passport issuance as a tool for 

collecting billions of dollars in unpaid taxes. According to GAO, 

over 1 percent of total passport issuances in Fiscal Year 2008 were 

to people who owed over $5.8 billion in unpaid Federal taxes. The 

Joint Committee on Taxation estimates that the U.S. Government 

stands to generate over $400 million over 10 years if even a small 

fraction of the back taxes were collected as a result of this provision. In fact, a similar provision passed the Senate as part of the 

Senate’s transportation bill, S. 1813, with a bipartisan margin of 

74 to 22. 

I urge my colleagues to support the amendment in the nature of 

a substitute and the underlying legislation. The compact renewal 

with the Republic of Palau preserves an important relationship 

that is vital to our national security. Palau is a strong supporter 

of Israel at the U.N., votes consistently to condemn Communist 

Cuba, and even supports Taiwan over China. Citizens from Palau 

serve in the U.S. Armed Forces and have paid the ultimate sacrifice in defense of this Nation. With China’s rapid rise in the 

South China Sea, is it is critical that we secure America’s vital interests in the Western Pacific. 

I now recognize the ranking member, Mr. Faleomavaega. 

Mr. FALEOMAVAEGA. Mr. Chairman, thank you for calling this 

markup, as it is very important. And I want to ask unanimous consent that the full text of my statement be made part of the record. 


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Mr. MANZULLO. Without objection, the complete statement will 

be made a part of the record. 

Mr. FALEOMAVAEGA. Thank you. 

And I kind of wanted to gloss over it a little bit. I want to say 

how deeply I appreciate not only your leadership, but your commitment and being helpful to this piece of legislation, which is very 

important not only to the people of Palau, but certainly to the interests of our own Government. 

I can give you all the historical overview of this issue and the 

problems in terms of our investment in the Pacific—especially the 

Micronesia entities—immediately following World War II. 

I do want to say, Mr. Chairman, that the U.S. interests relating 

to Palau are being preserved because of your leadership, Mr. Chairman, finding alternative offsets and those that are in the bill now. 

The offset is in the substitute that I joined you in developing. 

The law that will come from this legislation and the preservation 

of U.S. strategic and economic interests for the next dozen years 

will be a major issue to the legacy you have given to our Nation, 

and especially to the good people and the leaders of Palau. 

And with that, Mr. Chairman, I fully support the substitute that 

you have introduced, and I ask my colleagues to support and endorse this. 

Mr. MANZULLO. Thank you. 

Are there any other members who wish to strike the last word 

and speak briefly on the measure? 

Hearing no further amendments, the question is on agreeing to 

the bipartisan amendment in the nature of a substitute. 

All those in favor, signify by saying aye. 

All those opposed, no. 

In the opinion of the Chair, the ayes have it, and the amendment 

in the nature of a substitute is agreed to. 

The question now occurs on adopting the legislation as amended. 

All those in favor, signify by saying aye. 

All those opposed, no. 

In the opinion of the Chair, the ayes have it, and the amended 

legislation is agreed to. 

Without objection, H.R. 6040, as amended, is reported favorably 

to the full Committee on Foreign Affairs, and the staff is authorized to make any technical and conforming changes. 

That concludes our business. Without objection, the subcommittee stands adjourned. 

[Whereupon, at 2:07 p.m., the subcommittee was adjourned.] 

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A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

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