29–010

Calendar No. 299

108TH CONGRESS REPORT " SENATE ! 1st Session 108–159 

COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF 

2003

OCTOBER 1, 2003.—Ordered to be printed 

Mr. DOMENICI, from the Committee on Energy and Natural 

Resources, submitted the following 

R E P O R T 

[To accompany S.J. Res. 16] 

The Committee on Energy and Natural Resources, to which was 

referred the joint resolution (S.J. Res. 16) to approve the ‘‘Compact 

of Free Association, as amended between the Government of the 

United States of America and the Government of the Federated 

States of Micronesia’’, and the ‘‘Compact of Free Association, as 

amended between the Government of the United State of America 

and the Government of the Republic of the Marshall Islands’’, and 

otherwise to amend Public Law 99–239, and to appropriate for the 

purposes of amended Public Law 99–239 for fiscal years ending on 

or before September 30, 2023, and for other purposes, having considered the same, reports favorably thereon with amendments and 

an amendment to the preamble and recommends that the joint resolution, as amended, do pass.

CONTENTS 

Page 

Purpose ..................................................................................................................... 43

Summary of Major Provisions ................................................................................ 43

Background and Need ............................................................................................. 43

Legislative History .................................................................................................. 46

Committee Recommendation .................................................................................. 46

Committee Amendments ......................................................................................... 46

Section-by-Section Analysis .................................................................................... 47

Title One ........................................................................................................... 47

Title Two ........................................................................................................... 56

U.S.-FSM Compact .................................................................................... 56

U.S.-RMI Compact .................................................................................... 69

Cost and Budgetary Considerations ....................................................................... 83

Regulatory Impact Evaluation ................................................................................ 89

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Executive Communications ..................................................................................... 89

Changes to Existing Law ........................................................................................ 97

AMENDMENTS

The amendments are as follows: 

1. Strike the preamble and insert in lieu thereof the following:

Whereas the United States (in accordance with the Trusteeship Agreement for the 

Trust Territory of the Pacific Islands, the United Nations Charter, and the objectives of the international trusteeship system of the United Nations) fulfilled 

its obligations to promote the development of the people of the Trust Territory 

toward self-government or independence as appropriate to the particular circumstances of the Trust Territory and its peoples and the freely expressed wishes of the peoples concerned; 

Whereas the United States, the Federated States of Micronesia, and the Republic 

of the Marshall Islands entered into the Compact of Free Association set forth 

in title II of Public Law 99–239, January 14, 1986, 99 Stat. 1770, to create and 

maintain a close and mutually beneficial relationship; 

Whereas the United States, in accordance with section 231 of the Compact of Free 

Association entered into negotiations with the Governments of the Federated 

States of Micronesia and the Republic of the Marshall Islands to provide continued United States assistance and to reaffirm its commitment to this close and 

beneficial relationship; and 

Whereas these negotiations, in accordance with section 431 of the Compact, resulted 

in the ‘‘Compact of Free Association, as amended between the Government of 

the United States of America and the Government of the Federated States of 

Micronesia’’, and the ‘‘Compact of Free Association, as amended between the 

Government of the United States of America and the Government of the Republic of the Marshall Islands’’, which, together with their related agreements, were 

signed by the Government of the United States and the Governments of the 

Federated States of Micronesia and the Republic of the Marshall Islands on 

May 14, and April 30, 2003, respectively: Now, therefore, be it

2. Beginning on page 2, strike line 3 and all that follows through 

page 69, line 25, and insert the following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This joint resolution, together with 

the table of contents in subsection (b) of this section, may 

be cited as the ‘‘Compact of Free Association Amendments 

Act of 2003’’. 

(b) TABLE OF CONTENTS.—The table of contents for this 

joint resolution is as follows:

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

U.S.-FSM COMPACT AND U.S.-RMI COMPACT; SUPPLEMENTAL 

PROVISIONS 

Sec. 101. Approval of U.S.-FSM Compact of Free Association and U.S.-

RMI Compact of Free Association. 

(a) Federated States of Micronesia. 

(b) Republic of the Marshall Islands. 

(c) References to the Compact, the U.S.-FSM Compact and 

the U.S.-RMI Compact; References to Subsidiary Agreements or Separate Agreements. 

(d) Amendment, Change, or Termination in the U.S.-FSM 

Compact, the U.S.-RMI Compact and Certain Agreements. 

(e) Subsidiary Agreements Deemed Bilateral. 

(f) Entry Into Force of Future Amendments to Subsidiary 

Agreements. 

Sec. 102. Agreements With Federated States of Micronesia. 

(a) Law Enforcement Assistance. 

(b) Agreement on Audits. 

Sec. 103. Agreements With and Other Provisions Related to the Republic 

of the Marshall Islands. 

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(a) Law Enforcement Assistance. 

(b) EJIT. 

(c) Section 177 Agreement. 

(d) Nuclear Test Effects. 

(e) Espousal Provisions. 

(f) DOE Radiological Health Care Program; USDA Agricultural and Food Programs. 

(g) Rongelap. 

(h) Four Atoll Health Care Program. 

(i) Enjebi Community Trust Fund. 

(j) Bikini Atoll Cleanup. 

(k) Agreement on Audits. 

(l) Kwajalein. 

Sec. 104. Interpretation of and United States Policy Regarding U.S.-FSM 

Compact and U.S.-RMI Compact. 

(a) Human Rights. 

(b) Immigration and Passport Security. 

(c) Nonalienation of Lands. 

(d) Nuclear Waste Disposal. 

(e) Impact of Compacts on the State of Hawaii, Guam, the 

Commonwealth of the Northern Mariana Islands and 

American Samoa; Related Authorization and Continuing 

Appropriation. 

(f) Foreign Loans. 

(g) Sense of Congress Concerning Funding of Public Infrastructure. 

(h) Reports and Reviews. 

(i) Construction of Section 141(f). 

(j) Construction of Section 216 of the U.S.-FSM Compact. 

(k) Construction of Section 217 of the U.S.-RMI Compact. 

(l) Inflation Adjustment. 

(m) Promotion of Telecommunications. 

(n) Participation by Secondary Schools in the Armed Services Vocational Aptitude Battery (ASVAB) Student Testing Program. 

Sec. 105. Supplemental Provisions. 

(a) Domestic Program Requirements. 

(b) Relations With the Federated States of Micronesia and 

the Republic of the Marshall Islands. 

(c) Continuing Trust Territory Authorization. 

(d) Survivability. 

(e) Noncompliance Sanctions; Actions Incompatible With 

United States Authority. 

(f) Continuing Programs and Laws. 

(g) College of Micronesia. 

(h) Trust Territory Debts to U.S. Federal Agencies. 

(i) Judicial Training. 

(j) Technical Assistance. 

(k) Prior Service Benefits Program. 

(l) Indefinite Land Use Payments. 

(m) Communicable Disease Control Program. 

(n) User Fees. 

(o) Treatment of Judgments of Courts of the Federated 

States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. 

(p) Establishment of Trust Funds; Expedition of Process. 

Sec. 106. Construction Contract Assistance. 

(a) Assistance to U.S. Firms. 

(b) Authorization of Appropriations. 

Sec. 107. Prohibition. 

Sec. 108. Compensatory Adjustments. 

(a) Additional Programs and Services. 

(b) Further Amounts. 

Sec. 109. Authorization and Continuing Appropriation. 

Sec. 110. Payment of Citizens of the Federated States of Micronesia, the 

Republic of the Marshall Islands, and the Republic of Palau 

Employed by the Government of the United States in the 

Continental United States.

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TITLE II—COMPACTS OF FREE ASSOCIATION WITH THE FEDERATED STATES OF MICRONESIA AND THE REPUBLIC OF THE 

MARSHALL ISLANDS 

Sec. 201. Compacts of Free Association, as Amended Between the Government of the United States of America and the Government of the Federated States of Micronesia and Between the 

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

(a) Compact of Free Association as amended between the 

Government of the United States of America and the 

Government of the Federated States of Micronesia. 

Title One—Governmental Relations 

Article I—Self-Government. 

Article II—Foreign Affairs. 

Article III—Communications. 

Article IV—Immigration. 

Article V—Representation. 

Article VI—Environmental Protection. 

Article VII—General Legal Provisions. 

Title Two—Economic Relations 

Article I—Grant Assistance. 

Article II—Services and Program Assistance. 

Article III—Administrative Provisions. 

Article IV—Trade. 

Article V—Finance and Taxation. 

Title Three—Security and Defense Relations 

Article I—Authority and Responsibility. 

Article II—Defense Facilities and Operating Rights. 

Article III—Defense Treaties and International Security 

Agreements. 

Article IV—Service in Armed Forces of the United States. 

Article V—General Provisions. 

Title Four—General Provisions 

Article I—Approval and Effective Date. 

Article II—Conference and Dispute Resolution. 

Article III—Amendment. 

Article IV—Termination. 

Article V—Survivability. 

Article VI—Definition of Terms. 

Article VII—Concluding Provisions. 

(b) Compact of Free Association, as amended, between the 

Government of the United States of America and the 

Government of the Republic of the Marshall Islands. 

Title One—Governmental Relations 

Article I—Self-Government. 

Article II—Foreign Affairs. 

Article III—Communications. 

Article IV—Immigration. 

Article V—Representation. 

Article VI—Environmental Protection. 

Article VII—General Legal Provisions. 

Title Two—Economic Relations 

Article I—Grant Assistance. 

Article II—Services and Program Assistance. 

Article III—Administrative Provisions. 

Article IV—Trade. 

Article V—Finance and Taxation. 

Title Three—Security and Defense Relations 

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Article I—Authority and Responsibility. 

Article II—Defense Facilities and Operating Rights. 

Article III—Defense Treaties and International Security 

Agreements. 

Article IV—Service in Armed Forces of the United States. 

Article V—General Provisions.

Title Four—General Provisions 

Article I—Approval and Effective Date. 

Article II—Conference and Dispute Resolution. 

Article III—Amendment. 

Article IV—Termination. 

Article V—Survivability. 

Article VI—Definition of Terms. 

Article VII—Concluding Provisions.

TITLE I—APPROVAL OF U.S.-FSM 

COMPACT AND U.S.-RMI COMPACT; INTERPRETATION OF, AND 

U.S. POLICIES REGARDING, U.S.-

FSM COMPACT AND U.S.-RMI 

COMPACT; SUPPLEMENTAL PROVISIONS 

SEC. 101. APPROVAL OF U.S.-FSM COMPACT OF FREE ASSOCIATION AND THE U.S.-RMI COMPACT OF FREE 

ASSOCIATION; REFERENCES TO SUBSIDIARY 

EXIT AGREEMENTS OR SEPARATE AGREEMENTS. 

(a) FEDERATED STATES OF MICRONESIA.—The Compact of 

Free Association, as amended with respect to the Federated States of Micronesia and signed by the United 

States and the Government of the Federated States of Micronesia and set forth in Title II (section 201(a)) of this 

joint resolution, is hereby approved, and Congress hereby 

consents to the subsidiary agreements and amended subsidiary agreements listed in section 462 of the U.S.-FSM 

Compact. Subject to the provisions of this joint resolution, 

the President is authorized to agree, in accordance with 

section 411 of the U.S.-FSM Compact, to an effective date 

for and thereafter to implement such U.S.-FSM Compact. 

(b) REPUBLIC OF THE MARSHALL ISLANDS.—The Compact 

of Free Association, as amended with respect to the Republic of the Marshall Islands and signed by the United States 

and the Government of the Republic of the Marshall Islands and set forth in Title II (section 201(b)) of this joint 

resolution, is hereby approved, and Congress hereby consents to the subsidiary agreements and amended subsidiary agreements listed in section 462 of the U.S.-RMI 

Compact. Subject to the provisions of this joint resolution, 

the President is authorized to agree, in accordance with 

section 411 of the U.S.-RMI Compact, to an effective date 

for and thereafter to implement such U.S.-RMI Compact. 

(c) REFERENCES TO THE COMPACT, THE U.S.-FSM COMPACT, AND THE U.S.-RMI COMPACT; REFERENCES TO SUBSIDIARY AGREEMENTS OR SEPARATE AGREEMENTS.—

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(1) Any reference in this joint resolution (except references in Title II) to ‘‘the Compact’’ shall be treated 

as a reference to the Compact of Free Association set 

forth in title II of Public Law 99–239, January 14, 

1986, 99 Stat. 1770. Any reference in this joint resolution to the ‘‘U.S.-FSM Compact’’ shall be treated as a 

reference to the Compact of Free Association, as 

amended between the Government of the United 

States of America and the Government of the Federated States of Micronesia and set forth in Title II 

(section 201(a)) of this joint resolution. Any reference 

in this joint resolution to the ‘‘U.S.-RMI Compact’’ shall be treated as a reference to the Compact of Free 

Association, as amended between the Government of 

the United States of America and the Government of 

the Republic of the Marshall Islands and set forth in 

Title II (section 201(b)) of this joint resolution. 

(2) Any reference to the term ‘‘subsidiary agreements’’ or ‘‘separate agreements’’ in this joint resolution shall be treated as a reference to agreements listed in section 462 of the U.S.-FSM Compact and the 

U.S.-RMI Compact, and any other agreements that the 

United States may from time to time enter into with 

either the Government of the Federated States of Micronesia or the Government of the Republic of the 

Marshall Islands, or with both such governments in 

accordance with the provisions of the U.S.-FSM Compact and the U.S.-RMI Compact. 

(d) AMENDMENT, CHANGE, OR TERMINATION IN THE U.S.-

FSM COMPACT AND U.S.-RMI COMPACT AND CERTAIN

AGREEMENTS.— (1) Any amendment, change, or termination by mutual agreement or by unilateral action of the Government of the United States of all or any part of the 

U.S.-FSM Compact or U.S.-RMI Compact shall not 

enter into force until after Congress has incorporated 

it in an Act of Congress. 

(2) The provisions of paragraph (1) shall apply—

(A) to all actions of the Government of the 

United States under the U.S.-FSM Compact or 

U.S.-RMI Compact including, but not limited to, 

actions taken pursuant to sections 431, 441, or 

442; 

(B) to any amendment, change, or termination 

in the Agreement Between the Government of the 

United States and the Government of the Federated States of Micronesia Regarding Friendship, 

Cooperation and Mutual Security Concluded Pursuant to Sections 321 and 323 of the Compact of 

Free Association referred to in section 462(a)(2) of 

the U.S.-FSM Compact and the Agreement Between the Government of the United States and 

the Government of the Marshall Islands Regarding Mutual Security Concluded Pursuant to Sections 321 and 323 of the Compact of Free AssociaVerDate Jan 31 2003 22:27 Oct 06, 2003 Jkt 029010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6969 E:\HR\OC\SR159.XXX SR159
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tion referred to in section 462(a)(5) of the U.S.-

RMI Compact; 

(C) to any amendment, change, or termination 

of the agreements concluded pursuant to Compact 

section 177, and section 215(a) of the U.S.-FSM 

Compact and section 216(a) of the U.S.-RMI Compact, the terms of which are incorporated by reference into the U.S.-FSM Compact and the U.S.-

RMI Compact; and 

(D) to the following subsidiary agreements, or 

portions thereof: 

(i) Articles III, IV, and X of the agreement 

referred to in section 462(b)(6) of the U.S.-

RMI Compact: 

(ii) Article III and IV of the agreement referred to in section 462(b)(6) of the U.S.-FSM 

Compact. 

(iii) Articles VI, XV, and XVII of the agreement referred to in section 462(b)(7) of the 

U.S.-FSM Compact and U.S.-RMI Compact. 

(e) SUBSIDIARY AGREEMENTS DEEMED BILATERAL.—For 

purposes of implementation of the U.S.-FSM Compact and 

the U.S.-RMI Compact and this joint resolution, the Agreement Concluded Pursuant to Section 234 of the Compact 

of Free Association and referred to in section 462(a)(1) of 

the U.S.-FSM Compact and section 462(a)(4) of the U.S.-

RMI Compact shall be deemed to be a bilateral agreement 

between the United States and each other party to such 

subsidiary agreement. The consent or concurrence of any 

other party shall not be required for the effectiveness of 

any actions taken by the United States in conjunction with 

either the Federated States of Micronesia or the Republic 

of the Marshall Islands which are intended to affect the 

implementation, modification, suspension, or termination 

of such subsidiary agreement (or any provision thereof) as 

regards the mutual responsibilities of the United States 

and the party in conjunction with whom the actions are 

taken.

(f) ENTRY INTO FORCE OF FUTURE AMENDMENTS TO SUBSIDIARY AGREEMENTS.—No agreement between the United 

States and the government of either the Federated States 

of Micronesia or the Republic of the Marshall Islands 

which would amend, change, or terminate any subsidiary 

agreement or portion thereof, other than those set forth in 

subsection (d) of this section shall enter into force until 

after the President has transmitted such agreement to the 

President of the Senate and the Speaker of the House of 

Representatives together with an explanation of the agreement and the reasons therefor. In the case of the agreement referred to in section 462(b)(3) of the U.S.-FSM Compact and the U.S.-RMI Compact, such transmittal shall include a specific statement by the Secretary of Labor as to 

the necessity of such amendment, change, or termination, 

and the impact thereof. 

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SEC. 102. AGREEMENTS WITH FEDERATED STATES OF MICRONESIA. 

(a) LAW ENFORCEMENT ASSISTANCE.—Pursuant to sections 222 and 224 of the U.S.-FSM Compact, the United 

States shall provide non-reimbursable technical and training assistance as appropriate, including training and 

equipment for postal inspection of illicit drugs and other 

contraband, to enable the Government of the Federated 

States of Micronesia to develop and adequately enforce 

laws of the Federated States of Micronesia and to cooperate with the United States in the enforcement of criminal 

laws of the United States. Funds appropriated pursuant to 

section 105(j) of this title may be used to reimburse State 

or local agencies providing such assistance. 

(b) AGREEMENT ON AUDITS.—The Comptroller General 

(and his duly authorized representatives) shall have the 

authorities necessary to carry out his responsibilities 

under section 232 of the U.S.-FSM Compact and the agreement referred to in section 462(b)(4) of the U.S.-FSM Compact, including the following authorities: 

(1) GENERAL AUTHORITY OF THE COMPTROLLER GENERAL TO AUDIT.—

(A) The Comptroller General of the United 

States (and his duly authorized representatives) 

shall have the authority to audit—

(i) all grants, program assistance, and other 

assistance provided to the Government of the 

Federated States of Micronesia under Articles 

I and II of Title Two of the U.S.-FSM Compact; and 

(ii) any other assistance provided by the 

Government of the United States to the Government of the Federated States of Micronesia. 

Such authority shall include authority for the 

Comptroller General to conduct or cause to be conducted any of the audits provided for in section 

232 of the U.S.-FSM Compact. The authority provided in this paragraph shall continue for at least 

three years after the last such grant has been 

made or assistance has been provided. 

(B) The Comptroller General (and his duly authorized representatives) shall also have authority 

to review any audit conducted by or on behalf of 

the Government of the United States. In this connection, the Comptroller General shall have access 

to such personnel and to such records, documents, 

working papers, automated data and files, and 

other information relevant to such review. 

(2) COMPTROLLER GENERAL ACCESS TO RECORDS.—

(A) In carrying out paragraph (1), the Comptroller General (and his duly authorized representatives) shall have such access to the personnel and (without cost) to records, documents, 

working papers, automated data and files, and 

9

other information relevant to such audits. The 

Comptroller General may duplicate any such 

records, documents, working papers, automated 

data and files, or other information relevant to 

such audits. 

(B) Such records, documents, working papers, 

automated data and files, and other information 

regarding each such grant or other assistance 

shall be maintained for at least five years after 

the date such grant or assistance was provided 

and in a manner that permits such grants, assistance, and payments to be accounted for distinct 

from any other funds of the Government of the 

Federated States of Micronesia. 

(3) STATUS OF COMPTROLLER GENERAL REPRESENTA- TIVES.—The Comptroller General and his duly authorized representatives shall be immune from civil and 

criminal process relating to words spoken or written 

and all acts performed by them in their official capacity and falling within their functions, except insofar as 

such immunity may be expressly waived by the Government of the United States. The Comptroller General and his duly authorized representatives shall not 

be liable to arrest or detention pending trial, except in 

the case of a grave crime and pursuant to a decision 

by a competent judicial authority, and such persons 

shall enjoy immunity from seizure of personal property, immigration restrictions, and laws relating to 

alien registration, fingerprinting, and the registration 

of foreign agents. Such persons shall enjoy the same 

taxation exemptions as are set forth in Article 34 of 

the Vienna Convention on Diplomatic Relations. The 

privileges, exemptions and immunities accorded under 

this paragraph are not for the personal benefit of the 

individuals concerned but are to safeguard the independent exercise of their official functions. Without 

prejudice to those privileges, exemptions and immunities, it is the duty of all such persons to respect the 

laws and regulations of the Government of the Federated States of Micronesia.

(4) AUDITS DEFINED.—As used in this subsection, the 

term ‘‘audits’’ includes financial, program, and management audits, including determining—

(A) whether the Government of the Federated 

States of Micronesia has met the requirements set 

forth in the U.S.-FSM Compact, or any related 

agreement entered into under the U.S.-FSM Compact, regarding the purposes for which such 

grants and other assistance are to be used; and 

(B) the propriety of the financial transactions of 

the Government of the Federated States of Micronesia pursuant to such grants or assistance. 

(5) COOPERATION BY FEDERATED STATES OF MICRO- NESIA.—The Government of the Federated States of 

Micronesia will cooperate fully with the Comptroller 

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General of the United States in the conduct of such 

audits as the Comptroller General determines necessary to enable the Comptroller General to fully discharge his responsibilities under this joint resolution. 

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

(a) LAW ENFORCEMENT ASSISTANCE.—Pursuant to sections 222 and 224 of the U.S.-RMI Compact, the United 

States shall provide non-reimbursable technical and training assistance as appropriate, including training and 

equipment for postal inspection of illicit drugs and other 

contraband, to enable the Government of the Marshall Islands to develop and adequately enforce laws of the Marshall Islands and to cooperate with the United States in 

the enforcement of criminal laws of the United States. 

Funds appropriated pursuant to section 105(j) of this title 

may be used to reimburse State or local agencies providing 

such assistance. 

(b) EJIT.— (1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that the President 

of the United States shall negotiate with the Government of the Marshall Islands an agreement whereby, 

without prejudice as to any claims which have been or 

may be asserted by any party as to rightful title and 

ownership of any lands on Ejit, the Government of the 

Marshall Islands shall assure that lands on Ejit used 

as of January 1, 1985, by the people of Bikini, will 

continue to be available without charge for their use, 

until such time as Bikini is restored and inhabitable 

and the continued use of Ejit is no longer necessary, 

unless a Marshall Islands court of competent jurisdiction finally determines that there are legal impediments to continued use of Ejit by the people of Bikini. 

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that if the impediments described in paragraph (1) do arise, the United 

States will cooperate with the Government of the Marshall Islands in assisting any person adversely affected by such judicial determination to remain on 

Ejit, or in locating suitable and acceptable alternative 

lands for such person’s use. 

(3) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that paragraph (1) 

shall not be applied in a manner which would prevent 

the Government of the Marshall Islands from acting in 

accordance with its constitutional processes to resolve 

title and ownership claims with respect to such lands 

or from taking substitute or additional measures to 

meet the needs of the people of Bikini with their 

democratically expressed consent and approval. 

(c) SECTION 177 AGREEMENT.—

(1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that in furtherance 

11

of the purposes of Article I of the Subsidiary Agreement for Implementation of Section 177 of the Compact, the payment of the amount specified therein 

shall be made by the United States under Article I of 

the Agreement between the Government of the United 

States and the Government of the Marshall Islands for 

the Implementation of section 177 of the Compact 

(hereafter in this subsection referred to as the ‘‘Section 

177 Agreement’’) only after the Government of the 

Marshall Islands has notified the President of the 

United States as to which investment management 

firm has been selected by such Government to act as 

Fund Manager under Article I of the Section 177 

Agreement.

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that in the event 

that the President determines that an investment 

management firm selected by the Government of the 

Marshall Islands does not meet the requirements specified in Article I of the Section 177 Agreement, the 

United States shall invoke the conference and dispute 

resolution procedures of Article II of Title Four of the 

Compact. Pending the resolution of such a dispute and 

until a qualified Fund Manager has been designated, 

the Government of the Marshall Islands shall place 

the funds paid by the United States pursuant to Article I of the Section 177 Agreement into an interestbearing escrow account. Upon designation of a qualified Fund Manager, all funds in the escrow account 

shall be transferred to the control of such Fund Manager for management pursuant to the Section 177 

Agreement. 

(3) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that if the Government of the Marshall Islands determines that some 

other investment firm should act as Fund Manager in 

place of the firm first (or subsequently) selected by 

such Government, the Government of the Marshall Islands shall so notify the President of the United 

States, identifying the firm selected by such Government to become Fund Manager, and the President 

shall proceed to evaluate the qualifications of such 

identified firm. 

(4) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that at the end of 

15 years after the effective date of the Compact, the 

firm then acting as Fund Manager shall transfer to 

the Government of the Marshall Islands, or to such account as such Government shall so notify the Fund 

Manager, all remaining funds and assets being managed by the Fund Manager under the Section 177 

Agreement. 

(d) NUCLEAR TEST EFFECTS.—In the joint resolution of 

January 14, 1986 (Public Law 99–239) Congress provided 

that in approving the Compact, the Congress understands 

12

and intends that the peoples of Bikini, Enewetak, 

Rongelap, and Utrik, who were affected by the United 

States nuclear weapons testing program in the Marshall 

Islands, will receive the amounts of $75,000,000 (Bikini); 

$48,750,000 (Enewetak); $37,500,000 (Rongelap); and 

$22,500,000 (Utrik), respectively, which amounts shall be 

paid out of proceeds from the fund established under Article I, section 1 of the subsidiary agreement for the implementation of section 177 of the Compact. The amounts 

specified in this subsection shall be in addition to any 

amounts which may be awarded to claimants pursuant to 

Article IV of the subsidiary agreement for the implementation of Section 177 of the Compact. Nothing in this subsection creates any rights or obligations beyond those provided for in the original enacted version of Public Law 99– 239. 

(e) ESPOUSAL PROVISIONS.— (1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that it is the intention of the Congress of the United States that the provisions of section 177 of the Compact of Free Association and the Agreement between the Government of 

the United States and the Government of the Marshall Islands for the Implementation of Section 177 of 

the Compact (hereafter in this subsection referred to 

as the ‘‘Section 177 Agreement’’) constitute a full and 

final settlement of all claims described in Articles X 

and XI of the Section 177 Agreement, and that any 

such claims be terminated and barred except insofar 

as provided for in the Section 177 Agreement. 

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that in furtherance 

of the intention of Congress as stated in paragraph (1) 

of this subsection, the Section 177 Agreement is hereby ratified and approved. It is the explicit understanding and intent of Congress that the jurisdictional 

limitations set forth in Article XII of such Agreement 

are enacted solely and exclusively to accomplish the 

objective of Article X of such Agreement and only as 

a clarification of the effect of Article X, and are not to 

be construed or implemented separately from Article 

X. 

(f) DOE RADIOLOGICAL HEALTH CARE PROGRAM; USDA 

AGRICULTURAL AND FOOD PROGRAMS.—

(1) MARSHALL ISLANDS PROGRAM.—Notwithstanding 

any other provision of law, upon the request of the 

Government of the Republic of the Marshall Islands, 

the President (either through an appropriate department or agency of the United States or by contract 

with a United States firm) shall continue to provide 

special medical care and logistical support thereto for 

the remaining members of the population of Rongelap 

and Utrik who were exposed to radiation resulting 

from the 1954 United States thermo-nuclear ‘‘Bravo’’ test, pursuant to Public Laws 95–134 and 96–205.

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(2) AGRICULTURAL AND FOOD PROGRAMS.— (A) IN GENERAL.—In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that notwithstanding any other provision of 

law, upon the request of the Government of the 

Marshall Islands, for the first fifteen years after 

the effective date of the Compact, the President 

(either through an appropriate department or 

agency of the United States or by contract with a 

United States firm or by a grant to the Government of the Republic of the Marshall Islands 

which may further contract only with a United 

States firm or a Republic of the Marshall Islands 

firm, the owners, officers and majority of the employees of which are citizens of the United States 

or the Republic of the Marshall Islands) shall provide technical and other assistance— (i) without reimbursement, to continue the 

planting and agricultural maintenance program on Enewetak, as provided in subparagraph (C); and 

(ii) without reimbursement, to continue the 

food programs of the Bikini and Enewetak 

people described in section 1(d) of Article II of 

the Subsidiary Agreement for the Implementation of Section 177 of the Compact and for 

continued waterborne transportation of agricultural products to Enewetak including operations and maintenance of the vessel used for 

such purposes. 

(B) POPULATION CHANGES.—The President shall 

ensure the assistance provided under these programs reflects the changes in the population since 

the inception of such programs. 

(C) PLANTING AND AGRICULTURAL MAINTENANCE

PROGRAM.— (i) IN GENERAL.—The planting and agricultural maintenance program on Enewetak 

shall be funded at a level of not less than 

$1,300,000 per year, as adjusted for inflation 

under section 218 of the U.S.-RMI Compact. 

(ii) AUTHORIZATION AND CONTINUING APPROPRIATION.—There is hereby authorized and 

appropriated to the Secretary of the Interior, 

out of any funds in the Treasury not otherwise appropriated, to remain available until 

expended, for each fiscal year from 2004 

through 2023, $1,300,000, as adjusted for inflation under section 218 of the U.S.-RMI 

Compact, for grants to carry out the planting 

and agricultural maintenance program. 

(3) PAYMENTS.—In the joint resolution of January 

14, 1986 (Public Law 99–239) Congress provided that 

payments under this subsection shall be provided to 

such extent or in such amounts as are necessary for 

14

services and other assistance provided pursuant to 

this subsection. It is the sense of Congress that after 

the periods of time specified in paragraphs (1) and (2) 

of this subsection, consideration will be given to such 

additional funding for these programs as may be necessary. 

(g) RONGELAP.— (1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that because 

Rongelap was directly affected by fallout from a 1954 

United States thermonuclear test and because the 

Rongelap people remain unconvinced that it is safe to 

continue to live on Rongelap Island, it is the intent of 

Congress to take such steps (if any) as may be necessary to overcome the effects of such fallout on the 

habitability of Rongelap Island, and to restore 

Rongelap Island, if necessary, so that it can be safely 

inhabited. Accordingly, it is the expectation of the 

Congress that the Government of the Marshall Islands 

shall use such portion of the funds specified in Article 

II, section 1(e) of the subsidiary agreement for the implementation of section 177 of the Compact as are necessary for the purpose of contracting with a qualified 

scientist or group of scientists to review the data collected by the Department of Energy relating to radiation levels and other conditions on Rongelap Island 

resulting from the thermonuclear test. It is the expectation of the Congress that the Government of the 

Marshall Islands, after consultation with the people of 

Rongelap, shall select the party to review such data, 

and shall contract for such review and for submission 

of a report to the President of the United States and 

the Congress as to the results thereof.

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that the purpose of 

the review referred to in paragraph (1) of this subsection shall be to establish whether the data cited in 

support of the conclusions as to the habitability of 

Rongelap Island, as set forth in the Department of Energy report entitled: ‘‘The Meaning of Radiation for 

Those Atolls in the Northern Part of the Marshall Islands That Were Surveyed in 1978’’, dated November 

1982, are adequate and whether such conclusions are 

fully supported by the data. If the party reviewing the 

data concludes that such conclusions as to habitability 

are fully supported by adequate data, the report to the 

President of the United States and the Congress shall 

so state. If the party reviewing the data concludes that 

the data are inadequate to support such conclusions as 

to habitability or that such conclusions as to habitability are not fully supported by the data, the Government of the Marshall Islands shall contract with 

an appropriate scientist or group of scientists to undertake a complete survey of radiation and other effects of the nuclear testing program relating to the 

15

habitability of Rongelap Island. Such sums as are necessary for such survey and report concerning the results thereof and as to steps needed to restore the habitability of Rongelap Island are authorized to be made 

available to the Government of the Marshall Islands. 

(3) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that it is the intent 

of Congress that such steps (if any) as are necessary 

to restore the habitability of Rongelap Island and return the Rongelap people to their homeland will be 

taken by the United States in consultation with the 

Government of the Marshall Islands and, in accordance with its authority under the Constitution of the 

Marshall Islands, the Rongelap local government 

council. 

(4) There is hereby authorized and appropriated to 

the Secretary of the Interior, out of any funds in the 

Treasury not otherwise appropriated, to remain available until expended, for fiscal year 2005, $5,300,000 as 

the final contribution of the United States to the 

Rongelap Resettlement Trust Fund as established pursuant to Public Law 102–154 (105 Stat. 1009), for the 

purposes of establishing a food importation program 

as a part of the overall resettlement program of 

Rongelap Island. 

(h) FOUR ATOLL HEALTH CARE PROGRAM.— (1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that services provided by the United States Public Health Service or 

any other United States agency pursuant to section 

1(a) of Article II of the Agreement for the Implementation of Section 177 of the Compact (hereafter in this 

subsection referred to as the ‘‘Section 177 Agreement’’) 

shall be only for services to the people of the Atolls of 

Bikini, Enewetak, Rongelap, and Utrik who were affected by the consequences of the United States nuclear testing program, pursuant to the program described in Public Law 95–134 (91 Stat. 1159) and Public Law 96–205 (94 Stat. 84) and their descendants 

(and any other persons identified as having been so affected if such identification occurs in the manner described in such public laws). Nothing in this subsection shall be construed as prejudicial to the views 

or policies of the Government of the Marshall Islands 

as to the persons affected by the consequences of the 

United States nuclear testing program. 

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that at the end of 

the first year after the effective date of the Compact 

and at the end of each year thereafter, the providing 

agency or agencies shall return to the Government of 

the Marshall Islands any unexpended funds to be returned to the Fund Manager (as described in Article 

I of the Section 177 Agreement) to be covered into the 

Fund to be available for future use. 

16

(3) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that the Fund 

Manager shall retain the funds returned by the Government of the Marshall Islands pursuant to paragraph (2) of this subsection, shall invest and manage 

such funds, and at the end of 15 years after the effective date of the Compact, shall make from the total 

amount so retained and the proceeds thereof annual 

disbursements sufficient to continue to make payments for the provision of health services as specified 

in paragraph (1) of this subsection to such extent as 

may be provided in contracts between the Government 

of the Marshall Islands and appropriate United States 

providers of such health services. 

(i) ENJEBI COMMUNITY TRUST FUND.—In the joint resolution of January 14, 1986 (Public Law 99–239) Congress 

provided that notwithstanding any other provision of law, 

the Secretary of the Treasury shall establish on the books 

of the Treasury of the United States a fund having the status specified in Article V of the subsidiary agreement for 

the implementation of Section 177 of the Compact, to be 

known as the ‘‘Enjebi Community Trust Fund’’ (hereafter 

in this subsection referred to as the ‘‘Fund’’), and shall 

credit to the Fund the amount of $7,500,000. Such amount, 

which shall be ex gratia, shall be in addition to and not 

charged against any other funds provided for in the Compact and its subsidiary agreements, this joint resolution, or 

any other Act. Upon receipt by the President of the United 

States of the agreement described in this subsection, the 

Secretary of the Treasury, upon request of the Government 

of the Marshall Islands, shall transfer the Fund to the 

Government of the Marshall Islands, provided that the 

Government of the Marshall Islands agrees as follows:

(1) ENJEBI TRUST AGREEMENT.—In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that the Government of the Marshall 

Islands and the Enewetak Local Government Council, 

in consultation with the people of Enjebi, shall provide 

for the creation of the Enjebi Community Trust Fund 

and the employment of the manager of the Enewetak 

Fund established pursuant to the Section 177 Agreement as trustee and manager of the Enjebi Community Trust Fund, or, should the manager of the 

Enewetak Fund not be acceptable to the people of 

Enjebi, another United States investment manager 

with substantial experience in the administration of 

trusts and with funds under management in excess of 

$250,000,000. 

(2) MONITOR CONDITIONS.—In the joint resolution of 

January 14, 1986 (Public Law 99–239) Congress provided that upon the request of the Government of the 

Marshall Islands, the United States shall monitor the 

radiation and other conditions on Enjebi and within 

one year of receiving such a request shall report to the 

Government of the Marshall Islands when the people 

17

of Enjebi may resettle Enjebi under circumstances 

where the radioactive contamination at Enjebi, including contamination derived from consumption of locally 

grown food products, can be reduced or otherwise controlled to meet whole body Federal radiation protection standards for the general population, including 

mean annual dose and mean 30-year cumulative dose 

standards. 

(3) RESETTLEMENT OF ENJEBI.—In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that in the event that the United 

States determines that the people of Enjebi can within 

25 years of January 14, 1986, resettle Enjebi under 

the conditions set forth in paragraph (2) of this subsection, then upon such determination there shall be 

available to the people of Enjebi from the Fund such 

amounts as are necessary for the people of Enjebi to 

do the following, in accordance with a plan developed 

by the Enewetak Local Government Council and the 

people of Enjebi, and concurred with by the Government of the Marshall Islands to assure consistency 

with the government’s overall economic development 

plan: 

(A) Establish a community on Enjebi Island for 

the use of the people of Enjebi. 

(B) Replant Enjebi with appropriate food-bearing and other vegetation. 

(4) RESETTLEMENT OF OTHER LOCATION.—In the joint 

resolution of January 14, 1986 (Public Law 99–239) 

Congress provided that in the event that the United 

States determines that within 25 years of January 14, 

1986, the people of Enjebi cannot resettle Enjebi without exceeding the radiation standards set forth in 

paragraph (2) of this subsection, then the fund manager shall be directed by the trust instrument to distribute the Fund to the people of Enjebi for their resettlement at some other location in accordance with 

a plan, developed by the Enewetak Local Government 

Council and the people of Enjebi and concurred with 

by the Government of the Marshall Islands, to assure 

consistency with the government’s overall economic 

development plan. 

(5) INTEREST FROM FUND.—In the joint resolution of 

January 14, 1986 (Public Law 99–239) Congress provided that prior to and during the distribution of the 

corpus of the Fund pursuant to paragraphs (3) and (4) 

of this subsection, the people of Enjebi may, if they so 

request, receive the interest earned by the Fund on no 

less frequent a basis than quarterly. 

(6) DISCLAIMER OF LIABILITY.—In the joint resolution 

of January 14, 1986 (Public Law 99–239) Congress 

provided that neither under the laws of the Marshall 

Islands nor under the laws of the United States, shall 

the Government of the United States be liable for any 

loss or damage to person or property in respect to the 

18

resettlement of Enjebi by the people of Enjebi, pursuant to the provision of this subsection or otherwise. 

(j) BIKINI ATOLL CLEANUP.— (1) DECLARATION OF POLICY.—In the joint resolution 

of January 14, 1986 (Public Law 99–239), the Congress determined and declared that it is the policy of 

the United States, to be supported by the full faith 

and credit of the United States, that because the 

United States, through its nuclear testing and other 

activities, rendered Bikini Atoll unsafe for habitation 

by the people of Bikini, the United States will fulfill 

its responsibility for restoring Bikini Atoll to habitability, as set forth in paragraphs (2) and (3) of this 

subsection. 

(2) CLEANUP FUNDS.—The joint resolution of January 14, 1986 (Public Law 99–239) authorized to be appropriated such sums as necessary to implement the 

settlement agreement of March 15, 1985, in The People of Bikini, et al. against United States of America, 

et al., Civ. No. 84–0425 (D. Ha.). 

(3) CONDITIONS OF FUNDING.—In the joint resolution 

of January 14, 1986 (Public Law 99–239) the Congress 

provided that the funds referred to in paragraph (2) 

were to be made available pursuant to Article VI, Section 1 of the Compact Section 177 Agreement upon 

completion of the events set forth in the settlement 

agreement referred to in paragraph (2) of this subsection. 

(k) AGREEMENT ON AUDITS.—The Comptroller General 

(and his duly authorized representatives) shall have the 

authorities necessary to carry out his responsibilities 

under section 232 of the U.S.-RMI Compact and the agreement referred to in section 462(b)(4) of the U.S.-RMI Compact, including the following authorities: 

(1) GENERAL AUTHORITY OF THE COMPTROLLER GEN- ERAL TO AUDIT.— (A) The Comptroller General of the United 

States (and his duly authorized representatives) 

shall have the authority to audit— (i) all grants, program assistance, and other 

assistance provided to the Government of the 

Republic of the Marshall Islands under Articles I and II of Title Two of the U.S.-RMI 

Compact; and 

(ii) any other assistance provided by the 

Government of the United States to the Government of the Republic of the Marshall Islands. 

Such authority shall include authority for the 

Comptroller General to conduct or cause to be conducted any of the audits provided for in section 

232 of the U.S.-RMI Compact. The authority provided in this paragraph shall continue for at least 

three years after the last such grant has been 

made or assistance has been provided. 

19

(B) The Comptroller General (and his duly authorized representatives) shall also have authority 

to review any audit conducted by or on behalf of 

the Government of the United States. In this connection, the Comptroller General shall have access 

to such personnel and to such records, documents, 

working papers, automated data and files, and 

other information relevant to such review. 

(2) COMPTROLLER GENERAL ACCESS TO RECORDS.—

(A) In carrying out paragraph (1), the Comptroller General (and his duly authorized representatives) shall have such access to the personnel and (without cost) to records, documents, 

working papers, automated data and files, and 

other information relevant to such audits. The 

Comptroller General may duplicate any such 

records, documents, working papers, automated 

data and files, or other information relevant to 

such audits. 

(B) Such records, documents, working papers, 

automated data and files, and other information 

regarding each such grant or other assistance 

shall be maintained for at least five years after 

the date such grant or assistance was provided 

and in a manner that permits such grants, assistance and payments to be accounted for distinct 

from any other funds of the Government of the 

Republic of the Marshall Islands. 

(3) STATUS OF COMPTROLLER GENERAL REPRESENTATIVES.—The Comptroller General and his duly authorized representatives shall be immune from civil and 

criminal process relating to words spoken or written 

and all acts performed by them in their official capacity and falling within their functions, except insofar as 

such immunity may be expressly waived by the Government of the United States. The Comptroller General and his duly authorized representatives shall not 

be liable to arrest or detention pending trial, except in 

the case of a grave crime and pursuant to a decision 

by a competent judicial authority, and such persons 

shall enjoy immunity from seizure of personal property, immigration restrictions, and laws relating to 

alien registration, fingerprinting, and the registration 

of foreign agents. Such persons shall enjoy the same 

taxation exemptions as are set forth in Article 34 of 

the Vienna Convention on Diplomatic Relations. The 

privileges, exemptions and immunities accorded under 

this paragraph are not for the personal benefit of the 

individuals concerned but are to safeguard the independent exercise of their official functions. Without 

prejudice to those privileges, exemptions and immunities, it is the duty of all such persons to respect the 

laws and regulations of the Government of the Republic of the Marshall Islands.

20

(4) AUDITS DEFINED.—As used in this subsection, the 

term ‘‘audits’’ includes financial, program, and management audits, including determining— (A) whether the Government of the Republic of 

the Marshall Islands has met the requirements 

set forth in the U.S.-RMI Compact, or any related 

agreement entered into under the U.S.-RMI Compact, regarding the purposes for which such 

grants and other assistance are to be used; and 

(B) the propriety of the financial transactions of 

the Government of the Republic of the Marshall 

Islands pursuant to such grants or assistance. 

(5) COOPERATION BY THE REPUBLIC OF THE MAR- SHALL ISLANDS.—The Government of the Republic of 

the Marshall Islands will cooperate fully with the 

Comptroller General of the United States in the conduct of such audits as the Comptroller General determines necessary to enable the Comptroller General to 

fully discharge his responsibilities under this joint resolution. 

(l) KWAJALEIN.— (1) STATEMENT OF POLICY.—It is the policy of the 

United States that payment of funds by the Government of the Marshall Islands to the landowners of 

Kwajalein Atoll in accordance with the land use agreement dated October 19, 1982, or as amended or superseded, and any related allocation agreements, is required in order to ensure that the Government of the 

United States will be able to fulfill its obligation and 

responsibilities under Title Three of the Compact and 

the subsidiary agreements concluded pursuant to the 

Compact. 

(2) FAILURE TO PAY.— (A) IN GENERAL.—If the Government of the Marshall Islands fails to make payments in accordance with paragraph (1), the Government of the 

United States shall initiate procedures under section 313 of the Compact and consult with the Government of the Marshall Islands with respect to 

the basis for the nonpayment of funds. 

(B) RESOLUTION.—The United States shall expeditiously resolve the matter of any nonpayment of 

funds required under paragraph (1) pursuant to 

section 313 of the Compact and the authority and 

responsibility of the Government of the United 

States for security and defense matters in or relating to the Marshall Islands. This paragraph shall 

be enforced, as may be necessary, in accordance 

with section 105(f). 

(3) DISPOSITION OF INCREASED PAYMENTS PENDING

NEW LAND USE AGREEMENT.—Until such time as the 

Government of the Marshall Islands and the landowners of Kwajalein Atoll have concluded an agreement amending or superseding the land use agreement dated October 19, 1982, any amounts paid by the 

21

United States to the Government of the Marshall Islands in excess of the amounts required to be paid 

pursuant to the land use agreement dated October 19, 

1982, shall be paid into, and held in, an interest bearing escrow account in a United States financial institution by the Government of the Republic of the Marshall Islands. At such time, the funds and interest 

held in escrow shall be paid to the landowners of 

Kwajalein in accordance with the new land use agreement. If no such agreement is concluded by the date 

which is five years after the date of enactment of this 

resolution, then such funds shall, unless otherwise 

mutually agreed between the Government of the 

United States of America and the Government of the 

Republic of the Marshall Islands, be returned to the 

U.S. Treasury. 

(4) NOTIFICATIONS AND REPORT.— (A) The Government of the Republic of the Marshall Islands shall notify the Government of the 

United States of America when an agreement 

amending or superseding the land use agreement 

dated October 19, 1982, is concluded. 

(B) If no agreement amending or superseding 

the land use agreement dated October 19, 1982 is 

concluded by the date five years after the date of 

enactment of this resolution, then the President 

shall report to Congress on the intentions of the 

United States with respect to the use of Kwajalein 

Atoll after 2016, on any plans to relocate activities 

carried out on Kwajalein Atoll, and on the disposition of the funds and interest held in escrow 

under to paragraph (3).

(5) ASSISTANCE.—The President is authorized to 

make loans and grants to the Government of the Marshall Islands to address the special needs of the community at Ebeye, Kwajalein Atoll, and other 

Marshallese communities within the Kwajalein Atoll, 

pursuant to development plans adopted in accordance 

with applicable laws of the Marshall Islands. The 

loans and grants shall be subject to such other terms 

and conditions as the President, in the discretion of 

the President, may determine are appropriate.

SEC. 104. INTERPRETATION OF AND UNITED STATES POLICY 

REGARDING U.S.-FSM COMPACT AND U.S.-RMI 

COMPACT. 

(a) HUMAN RIGHTS.—In approving the U.S.-FSM Compact and the U.S.-RMI Compact, Congress notes the conclusion in the Statement of Intent of the Report of The Future Political Status Commission of the Congress of Micronesia in July, 1969, that ‘‘our recommendation of a free associated state is indissolubly linked to our desire for such 

a democratic, representative, constitutional government’’ and notes that such desire and intention are reaffirmed 

and embodied in the Constitutions of the Federated States 

of Micronesia and the Republic of the Marshall Islands. 

22

Congress also notes and specifically endorses the preamble 

to the U.S.-FSM Compact and the U.S.-RMI Compact, 

which affirms that the governments of the parties to the 

U.S.-FSM Compact and the U.S.-RMI Compact are founded upon respect for human rights and fundamental freedoms for all. The Secretary of State shall include in the 

annual reports on the status of internationally recognized 

human rights in foreign countries, which are submitted to 

Congress pursuant to sections 116 and 502B of the Foreign 

Assistance Act of 1961, ‘‘22 U.S.C. 2151n, 2304’’ a full and 

complete report regarding the status of internationally recognized human rights in the Federated States of Micronesia and the Republic of the Marshall Islands. 

(b) IMMIGRATION AND PASSPORT SECURITY.—

(1) NATURALIZED CITIZENS.—The rights of a bona 

fide naturalized citizen of the Federated States of Micronesia or the Republic of the Marshall Islands to 

enter the United States, to lawfully engage therein in 

occupations, and to establish residence therein as a 

nonimmigrant, to the extent such rights are provided 

under section 141 of the U.S.-FSM Compact and U.S.-

RMI Compact, shall not be deemed to extend to any 

such naturalized citizen with respect to whom circumstances associated with the acquisition of the status of a naturalized citizen are such as to allow a reasonable inference, on the part of appropriate officials 

of the United States and subject to United States procedural requirements, that such naturalized status 

was acquired primarily in order to obtain such rights. 

(2) PASSPORTS.—It is the sense of Congress that up 

to $250,000 of the grant assistance provided to the 

Federated States of Micronesia pursuant to section 

211(a)(4) of the U.S.-FSM Compact, and up to 

$250,000 of the grant assistance provided to the Republic of the Marshall Islands pursuant to section 

211(a)(4) of the U.S.-RMI Compact (or a greater 

amount of the section 211(a)(4) grant, if mutually 

agreed between the Government of the United States 

and the government of the Federated States of Micronesia or the government of the Republic of the Marshall Islands), be used for the purpose of increasing 

the machine-readability and security of passports 

issued by such jurisdictions. It is further the sense of 

Congress that such funds be obligated by September 

30, 2004 and in the amount and manner specified by 

the Secretary of State in consultation with the Secretary of Homeland Security and, respectively, with 

the government of the Federated States of Micronesia 

and the government of the Republic of the Marshall 

Islands. The United States Government is authorized 

to require that passports used for the purpose of seeking admission under section 141 of the U.S.-FSM Compact and the U.S.-RMI Compact contain the security 

enhancements funded by such assistance. 

23

(3) INFORMATION-SHARING.—It is the sense of Congress that the governments of the Federated States of 

Micronesia and the Republic of the Marshall Islands 

develop, prior to October 1, 2004, the capability to provide reliable and timely information as may reasonably be required by the Government of the United 

States in enforcing criminal and security-related 

grounds of inadmissibility and deportability under the 

Immigration and Nationality Act, as amended, and 

shall provide such information to the Government of 

the United States. 

(4) TRANSITION; CONSTRUCTION OF SECTIONS 141(A)(3)

AND 141(A)(4) OF THE U.S.-FSM COMPACT AND U.S.-RMI

COMPACT.—The words ‘‘the effective date of this Compact, as amended’’ in sections 141(a)(3) and 141(a)(4) 

of the U.S.-FSM Compact and the U.S.-RMI Compact 

shall be construed to read, ‘‘on the day prior to the enactment by the United States Congress of the Amended Compact Act.’’. (c) NONALIENATION OF LANDS.—Congress endorses and 

encourages the maintenance of the policies of the Government of the Federated States of Micronesia and the Government of the Republic of the Marshall Islands to regulate, in accordance with their Constitutions and laws, the 

alienation of permanent interests in real property so as to 

restrict the acquisition of such interests to persons of Federated States of Micronesia citizenship and the Republic of 

the Marshall Islands citizenship, respectively. 

(d) NUCLEAR WASTE DISPOSAL.—In approving the U.S.-

FSM Compact and the U.S.-RMI Compact, Congress understands that the Government of the Federated States of 

Micronesia and the Government of the Republic of the 

Marshall Islands will not permit any other government or 

any nongovernmental party to conduct, in the Republic of 

the Marshall Islands or in the Federated States of Micronesia, any of the activities specified in subsection (a) of 

section 314 of the U.S.-FSM Compact and the U.S.-RMI 

Compact. 

(e) IMPACT OF COMPACTS ON THE STATE OF HAWAII, GUAM, THE COMMONWEALTH OF THE NORTHERN MARIANA

ISLANDS AND AMERICAN SAMOA; RELATED AUTHORIZATION

AND CONTINUING APPROPRIATION.—

(1) STATEMENT OF CONGRESSIONAL INTENT.—In reauthorizing the Compacts, it is not the intent of Congress to cause any adverse consequences for an affected jurisdiction. 

(2) DEFINITIONS.—For the purposes of this subsection—

(A) the term ‘‘affected jurisdiction’’ means American Samoa, Guam, the Commonwealth of the 

Northern Mariana Islands, or the State of Hawaii; 

and 

(B) the term ‘‘qualified nonimmigrant’’ means a 

person, or their children under the age of 18, admitted or resident pursuant to section 141 of the 

24

U.S.-RMI or U.S.-FSM Compact, or section 141 of 

the Palau Compact who, as of a date referenced in 

the most recently published enumeration is a resident of an affected jurisdiction. As used in this 

subsection, the term ‘‘resident’’ shall be a person 

who has a ‘‘residence,’’ as that term is defined in 

section 101(a)(33) of the Immigration and Nationality Act, as amended. 

(3) AUTHORIZATION AND CONTINUING APPROPRIA- TION.—There is hereby authorized and appropriated to 

the Secretary of the Interior, out of any funds in the 

Treasury not otherwise appropriated, to remain available until expended, for each fiscal year from 2004 

through 2023, $30,000,000 for grants to affected jurisdictions to aid in defraying costs incurred by affected 

jurisdictions as a result of increased demands placed 

on health, educational, social, or public safety services 

or infrastructure related to such services due to the 

residence in affected jurisdictions of qualified nonimmigrants from the Republic of the Marshall Islands, 

the Federated States of Micronesia, or the Republic of 

Palau. The grants shall be— (A) awarded and administered by the Department of the Interior, Office of Insular Affairs, or 

any successor thereto, in accordance with regulations, policies and procedures applicable to grants 

so awarded and administered, and 

(B) used only for health, educational, social, or 

public safety services, or infrastructure related to 

such services, specifically affected by qualified 

nonimmigrants. 

(4) ENUMERATION.—The Secretary of the Interior 

shall conduct periodic enumerations of qualified nonimmigrants in each affected jurisdiction. The enumerations— (A) shall be conducted at such intervals as the 

Secretary of the Interior shall determine, but no 

less frequently than every five years, beginning in 

fiscal year 2003; 

(B) shall be supervised by the United States Bureau of the Census or such other organization as 

the Secretary of the Interior may select; and 

(C) after fiscal year 2003, shall be funded by the 

Secretary of the Interior by deducting such sums 

as are necessary, but not to exceed $300,000 as 

adjusted for inflation pursuant to section 217 of 

the U.S.-FSM Compact with fiscal year 2003 as 

the base year, per enumeration, from funds appropriated pursuant to the authorization contained in 

paragraph (2) of this subsection.

(5) ALLOCATION.—The Secretary of the Interior shall 

allocate to the government of each affected jurisdiction, on the basis of the results of the most recent enumeration, grants in an aggregate amount equal to the 

total amount of funds appropriated under paragraph 

25

(3) of this subsection, as reduced by any deductions 

authorized by subparagraph (C) of paragraph (4) of 

this subsection, multiplied by a ratio derived by dividing the number of qualified nonimmigrants in such affected jurisdiction by the total number of qualified 

nonimmigrants in all affected jurisdictions. 

(6) AUTHORIZATION FOR HEALTH CARE REIMBURSEMENT.—There are hereby authorized to be appropriated to the Secretary of the Interior such sums as 

may be necessary to reimburse health care institutions 

in the affected jurisdictions for costs resulting from 

the migration of citizens of the Republic of the Marshall Islands, the Federated States of Micronesia and 

the Republic of Palau to the affected jurisdictions as a 

result of the implementation of the Compact of Free 

Association, approved by Public Law 99–239, or the 

approval of the Compacts of Free Association by this 

resolution. 

(7) USE OF DOD MEDICAL FACILITIES AND NATIONAL

HEALTH SERVICE CORPS.—

(A) DOD MEDICAL FACILITIES.—The Secretary of 

Defense shall make available, on a space available 

and reimbursable basis, the medical facilities of 

the Department of Defense for use by citizens of 

the Federated States of Micronesia, the Republic 

of the Marshall Islands, and the Republic of Palau 

who are properly referred to the facilities by government authorities responsible for provision of 

medical services in the Federated States of Micronesia, the Republic of the Marshall Islands, the 

Republic of Palau and the affected jurisdictions. 

(B) NATIONAL HEALTH SERVICE CORPS.—The Secretary of Health and Human Services shall continue to make the services of the National Health 

Service Corps available to the residents of the 

Federated States of Micronesia and the Republic 

of the Marshall Islands to the same extent and for 

so long as such services are authorized to be provided to persons residing in any other areas within or outside the United States. 

(C) AUTHORIZATION OF APPROPRIATIONS.—There 

are authorized to be appropriated to carry out this 

paragraph such sums as are necessary for each 

fiscal year. 

(8) REPORTING REQUIREMENT.—The Governor of an 

affected jurisdiction may report to the Secretary of the 

Interior by February 1 of each year with respect to the 

adverse consequences from implementation of the 

Compacts on the Governor’s respective jurisdiction. If 

any such reports are received, the Secretary of the Interior shall review and forward them, by April 1 of 

that year, to Congress with the views of the Administration on the issues raised and on any recommendations made in such reports. 

26

(9) RECONCILIATION OF UNREIMBURSED IMPACT EX- PENSES.—

(A) IN GENERAL.—Notwithstanding any other 

provision of law, the President, to address previously accrued and unreimbursed impact expenses, may at the request of the Governor of 

Guam or the Governor of the Commonwealth of 

the Northern Mariana Islands, reduce, release, or 

waive all or part of any amounts owed by the Government of Guam or the Government of the Commonwealth of the Northern Mariana Islands (or 

either government’s autonomous agencies or instrumentalities), respectively, to any department, 

agency, independent agency, office, or instrumentality of the United States. 

(B) TERMS AND CONDITIONS.— (i) SUBSTANTIATION OF IMPACT COSTS.—Not 

later than 120 days after the date of the enactment of this resolution, the Governor of 

Guam and the Governor of the Commonwealth of the Northern Mariana Islands shall 

each submit to the Secretary of the Interior a 

report, prepared in consultation with an independent accounting firm, substantiating unreimbursed impact expenses claimed for the period from January 14, 1986, through September 30, 2003. Upon request of the Secretary of the Interior, the Governor of Guam 

and the Governor of the Commonwealth of the 

Northern Mariana Islands shall submit to the 

Secretary of the Interior copies of all documents upon which the report submitted by 

that Governor under this clause was based.

(ii) CONGRESSIONAL NOTIFICATION.—The 

President shall notify Congress of his intent 

to exercise the authority granted in subparagraph (A). 

(iii) CONGRESSIONAL REVIEW AND COM- MENT.—Any reduction, release, or waiver 

under this Act shall not take effect until 60 

days after the President notifies Congress of 

his intent to approve a request of the Governor of Guam or the Governor of the Commonwealth of the Northern Mariana Islands. 

In exercising his authority under this section 

and in determining whether to give final approval to a request, the President shall take 

into consideration comments he may receive 

after Congressional review. 

(iv) EXPIRATION.—The authority granted in 

subparagraph (A) shall expire on February 28, 

2005. 

(f) FOREIGN LOANS.—Congress hereby reaffirms the 

United States position that the United States Government 

is not responsible for foreign loans or debt obtained by the 

27

Governments of the Federated States of Micronesia and 

the Republic of the Marshall Islands. 

(g) SENSE OF CONGRESS CONCERNING FUNDING OF PUB- LIC INFRASTRUCTURE.—It is the sense of Congress that not 

less than 30 percent of the United States annual grant assistance provided under section 211 of the Compact of Free 

Association, as amended, between the Government of the 

United States of America and the Government of the Federated States of Micronesia, and not less than 30 percent 

of the total amount of section 211 funds allocated to each 

of the States of the Federated States of Micronesia, shall 

be invested in infrastructure improvements and maintenance in accordance with section 211(a)(6). It is further the 

sense of Congress that not less than 30 percent of the 

United States annual grant assistance provided under section 211 of the Compact of Free Association, as amended, 

between the Government of the United States of America 

and the Government of the Republic of the Marshall Islands, shall be invested in infrastructure improvements 

and maintenance in accordance with section 211(d). 

(h) REPORTS AND REVIEWS.— (1) REPORT BY THE PRESIDENT.—Not later than the 

end of the first full calendar year following enactment 

of this resolution, and not later than December 31 of 

each year thereafter, the President shall report to 

Congress regarding the Federated States of Micronesia 

and the Republic of the Marshall Islands, including 

but not limited to— (A) general social, political, and economic conditions, including estimates of economic growth, per 

capita income, and migration rates; 

(B) the use and effectiveness of United States financial, program, and technical assistance; 

(C) the status of economic policy reforms including but not limited to progress toward establishing self-sufficient tax rates; 

(D) the status of the efforts to increase investment including: the rate of infrastructure investment of U.S. financial assistance under the Compacts; non-U.S. contributions to the trust funds, 

and the level of private investment; and 

(E) recommendations on ways to increase the effectiveness of United States assistance and to 

meet overall economic performance objectives, including, if appropriate, recommendations to Congress to adjust the inflation rate or to adjust the 

contributions to the Trust Funds based on nonU.S. contributions. 

(2) REVIEW.—During the year of the fifth, tenth, and 

fifteenth anniversaries of the date of enactment of this 

resolution, the Government of the United States of 

America and the Government of the Federated States 

of Micronesia; and the Government of the United 

States of America and the Government of the Republic 

of the Marshall Islands, shall formally review the 

28

overall political, economic, and security aspects of 

their relationship, the topics set forth in paragraphs 

(1)(A) through (1)(E) above, and progress in meeting 

the development objectives set forth in their respective 

development plans. The governments may agree to 

commit themselves to take specific actions in response 

to the findings resulting from the reviews, such as 

changes to the inflation adjustment, or adjustments to 

the U.S. contribution to the trust funds based on substantial non-U.S. contributions to the Trust Funds. 

The President shall include the findings resulting from 

these reviews, and any recommendations for actions to 

respond to such findings, in the annual reports to Congress made under this section, in the years following 

the reviews. 

(3) BY THE COMPTROLLER GENERAL.—Not later than 

the date that is three years after the date of enactment of this joint resolution, and every 5 years thereafter, the Comptroller General of the United States 

shall submit to Congress a report on the Federated 

States of Micronesia and the Republic of the Marshall 

Islands including the topics set forth in paragraphs 

(1)(A) through (E) above, and on the effectiveness of 

administrative oversight by the United States.

(i) CONSTRUCTION OF SECTION 141(f).—Section 141(f)(2) 

of the Compact of Free Association, as amended, between 

the Government of the United States of America and the 

Government of the Federated States of Micronesia and of 

the Compact of Free Association, as amended, between the 

Government of the United States of America and the Government of the Republic of the Marshall Islands, shall be 

construed as though, after ‘‘may by regulations prescribe’’, there were included the following: ‘‘, except that any such 

regulations that would have a significant effect on the admission, stay and employment privileges provided under 

this section shall not become effective until 90 days after 

the date of transmission of the regulations to the Committee on Energy and Natural Resources and the Committee on the Judiciary of the Senate and the Committee 

on Resources, the Committee on International Relations, 

and the Committee on the Judiciary of the House of Representatives’’. 

(j) CONSTRUCTION OF SECTION 216 of the U.S.-FSM Compact.—The table under section 216 of the Compact between the Government of the United States of America 

and the Government of the Federated States of Micronesia 

shall be construed as though $16,810,000 is added to the 

amount for each year in column two, ‘‘Annual Grants Section 211’’, and to the amount for each year in column five, ‘‘Total’’. (k) CONSTRUCTION OF SECTION 217 OF THE U.S.-RMI 

COMPACT.—The table under section 217 of the Compact between the Government of the United States of America 

and the Government of the Republic of the Marshall Islands shall be construed as though: $6,350,000 is added to 

29

the amount for each year in column two, ‘‘Annual Grants 

Section 211’’; and to the amount for each year in column 

six, ‘‘ Total’’. 

(l) INFLATION ADJUSTMENT.—As of Fiscal Year 2015, if 

the United States Gross Domestic Product Implicit Price 

Deflator average for Fiscal Years 2009 through 2014 is 

greater than United States Gross Domestic Product Implicit Price Deflator average for Fiscal Years 2004 through 

2008 (as reported in the Survey of Current Business or 

subsequent publication and compiled by the Department of 

Interior), then section 217 of the U.S.-FSM Compact and 

paragraph 5 of Article II of the U.S.-FSM Fiscal Procedures Agreement and section 218 of the U.S.-RMI Compact 

and paragraph 5 of Article II of the U.S.-RMI Fiscal Procedures Agreement shall be construed as if ‘‘the full’’ appeared in place of ‘‘two-thirds of the’’ each place those 

words appear. 

(m) PROMOTION OF TELECOMMUNICATIONS.—

(1) REQUIREMENT FOR COOPERATION.—In accordance 

with the FSM Federal Programs and Services Agreements and the RMI Federal Programs and Services 

Agreement, the Government of the United States, the 

Government of the Federated States of Micronesia, 

and the Government of the Republic of the Marshall 

Islands shall cooperate with each other in the development of telecommunications infrastructure that is mutually beneficial and improves the telecommunications 

connectivity and interoperability among the United 

States, Micronesia, and the Marshall Islands. 

(2) EXECUTIVE AGENT.—For the purpose of carrying 

out this Agreement and the Federal Programs and 

Services Agreements, the United States Department of 

the Army shall serve as the Executive Agent for the 

Department of Defense in promoting and coordinating 

such telecommunication initiatives with the Governments of the Republic of the Marshall Islands and the 

Federated States of Micronesia. 

(3) DEFINITIONS.—In this subsection: 

(A) FEDERAL PROGRAMS AND SERVICES AGREEMENTS.—The term ‘‘Federal Programs and Services Agreements’’ means—

(i) the FSM Federal Programs and Services 

Agreement; and 

(ii) the RMI Federal Programs and Services 

Agreement. 

(B) FSM FEDERAL PROGRAMS AND SERVICES

AGREEMENT.—The term ‘‘FSM Federal Programs 

and Services Agreement’’ means the Federal Programs and Services Agreement Between the Government of the United States of America and the 

Government of the Federated States of Micronesia 

Concluded Pursuant to Article III of Title One, Article II of Title Two (including Section 222), and 

Section 231 of the U.S.-FSM Compact. 

30

(C) RMI FEDERAL PROGRAMS AND SERVICES

AGREEMENT.—The term ‘‘RMI Federal Programs 

and Services Agreement’’ means the Federal Programs and Services Agreement Between the Government of the United States of America and the 

Government of the Republic of the Marshall Islands Concluded Pursuant to Article III of Title 

One, Article II of Title Two (including Section 

222), and Section 231 of the U.S.-RMI Compact.

(n) PARTICIPATION BY SECONDARY SCHOOLS IN THE

ARMED SERVICES VOCATIONAL APTITUDE BATTERY (ASVAB)

STUDENT TESTING PROGRAM.—In furtherance of the provisions of Title Three, Article IV, Section 341 of the U.S.-

FSM and the U.S.-RMI Compacts, the purpose of which is 

to establish the privilege to volunteer for service in the 

U.S. Armed Forces, it is the sense of Congress that, to facilitate eligibility of FSM and RMI secondary school students to qualify for such service, the Department of Defense may extend the Armed Services Vocational Aptitude 

Battery (ASVAB) Student Testing Program (STP) and the 

ASVAB Career Exploration Program to selected secondary 

Schools in the FSM and the RMI to the extent such programs are available to Department of Defense Dependent 

Schools located in foreign jurisdictions. 

SEC. 105. SUPPLEMENTAL PROVISIONS. 

(a) DOMESTIC PROGRAM REQUIREMENTS.—Except as may 

otherwise be provided in this joint resolution, all United 

States Federal programs and services extended to or operated in the Federated States of Micronesia or the Republic 

of the Marshall Islands are and shall remain subject to all 

applicable criteria, standards, reporting requirements, auditing procedures, and other rules and regulations applicable to such programs when operating in the United States 

(including its territories and commonwealths). 

(b) RELATIONS WITH THE FEDERATED STATES OF MICRO- NESIA AND THE REPUBLIC OF THE MARSHALL ISLANDS.— (1) Appropriations made pursuant to Article I of 

Title Two and subsection (a)(2) of section 221 of article 

II of Title Two of the U.S.-FSM Compact and the U.S.-

RMI Compact shall be made to the Secretary of the Interior, who shall have the authority necessary to fulfill 

his responsibilities for monitoring and managing the 

funds so appropriated consistent with the U.S.-FSM 

Compact and the U.S.-RMI Compact, including the 

agreements referred to in section 462(b)(4) of the U.S.-

FSM Compact and U.S.-RMI Compact (relating to Fiscal Procedures) and the agreements referred to in section 462(b)(5) of the U.S.-FSM Compact and the U.S.-

RMI Compact (regarding the Trust Fund). 

(2) Appropriations made pursuant to subsections 

(a)(1) and (a)(3) through (6) of section 221 of Article II 

of Title Two of the U.S.-FSM Compact and subsection 

(a)(1) and (a)(3) through (5) of the U.S.-RMI Compact 

shall be made directly to the agencies named in those 

subsections. 

31

(3) Appropriations for services and programs referred to in subsection (b) of section 221 of Article II 

of Title Two of the U.S.-FSM Compact or U.S.-RMI 

Compact and appropriations for services and programs 

referred to in sections 105(f) and 108(a) of this joint 

resolution shall be made to the relevant agencies in 

accordance with the terms of the appropriations for 

such services and programs. 

(4) Federal agencies providing programs and services to the Federated States of Micronesia and the Republic of the Marshall Islands shall coordinate with 

the Secretaries of the Interior and State regarding 

provision of such programs and services. The Secretaries of the Interior and State shall consult with appropriate officials of the Asian Development Bank and 

with the Secretary of the Treasury regarding overall 

economic conditions in the Federated States of Micronesia and the Republic of the Marshall Islands and regarding the activities of other donors of assistance to 

the Federated States of Micronesia and the Republic 

of the Marshall Islands. 

(5) United States Government employees in either 

the Federated States of Micronesia or the Republic of 

the Marshall Islands are subject to the authority of 

the United States Chief of Mission, including as elaborated in section 207 of the Foreign Service Act and the 

President’s Letter of Instruction to the United States 

Chief of Mission and any order or directive of the 

President in effect from time to time. 

(6) INTERAGENCY GROUP ON FREELY ASSOCIATED

STATES’ AFFAIRS.—

(A) IN GENERAL.—The President is hereby authorized to appoint an Interagency Group on Freely Associated States’ Affairs to provide policy guidance and recommendations on implementation of 

the U.S.-FSM Compact and the U.S.-RMI Compact to Federal departments and agencies. 

(B) SECRETARIES.—It is the sense of Congress 

that the Secretary of State and the Secretary of 

the Interior shall be represented on the Interagency Group.

(7) UNITED STATES APPOINTEES TO JOINT COMMITTEES.—

(A) JOINT ECONOMIC MANAGEMENT COMMITTEE.—

(i) IN GENERAL.—The three United States 

appointees (United States chair plus two 

members) to the Joint Economic Management 

Committee provided for in section 213 of the 

U.S.—FSM Compact and Article III of the 

U.S.-FSM Fiscal Procedures Agreement referred to in section 462(b)(4) of the U.S.-FSM 

Compact shall be United States Government 

officers or employees. 

32

(ii) DEPARTMENTS.—It is the sense of Congress that the appointees should be designated from the Department of State and the 

Department of the Interior, and that U.S. officials of the Asian Development Bank shall be 

consulted in order to properly coordinate U.S. 

and Asian Development Bank financial, program, and technical assistance. 

(iii) ADDITIONAL SCOPE.—Section 213 of the 

U.S.-FSM Compact shall be construed to read 

as though the phrase, ‘‘the implementation of 

economic policy reforms to encourage investment and to achieve self-sufficient tax rates,’’ were inserted after ‘‘with particular focus on 

those parts of the plan dealing with the sectors identified in subsection (a) of section 

211’’. (B) JOINT ECONOMIC MANAGEMENT AND FINAN- CIAL ACCOUNTABILITY COMMITTEE.— (i) IN GENERAL.—The three United States 

appointees (United States chair plus two 

members) to the Joint Economic Management 

and Financial Accountability Committee provided for in section 214 of the U.S.-RMI Compact and Article III of the U.S.-RMI Fiscal 

Procedures Agreement referred to in section 

462(b)(4) of the U.S.-RMI Compact shall be 

United States Government officers or employees. 

(ii) DEPARTMENTS.—It is the sense of Congress that the appointees should be designated from the Department of State and the 

Department of the Interior, and that U.S. officials of the Asian Development Bank shall be 

consulted in order to properly coordinate U.S. 

and Asian Development Bank financial, program, and technical assistance. 

(iii) ADDITIONAL SCOPE.—Section 214 of the 

U.S.-RMI Compact shall be construed to read 

as though the phrase, ‘‘the implementation of 

economic policy reforms to encourage investment and to achieve self-sufficient tax rates,’’ were inserted after ‘‘with particular focus on 

those parts of the framework dealing with the 

sectors and areas identified in subsection (a) 

of section 211’’. (8) OVERSIGHT AND COORDINATION.—It is the sense 

of Congress that the Secretary of State and the Secretary of the Interior shall ensure that there are personnel resources committed in the appropriate numbers and locations to ensure effective oversight of 

United States assistance, and effective coordination of 

assistance among United States agencies and with 

other international donors such as the Asian Development Bank.

33

(9) The United States voting members (United 

States chair plus two or more members) of the Trust 

Fund Committee appointed by the Government of the 

United States pursuant to Article 7 of the Trust Fund 

Agreement implementing section 215 of the U.S.-FSM 

Compact and referred to in section 462(b)(5) of the 

U.S.-FSM Compact and any alternates designated by 

the Government of the United States shall be United 

States Government officers or employees. The United 

States voting members (United States chair plus two 

or more members) of the Trust Fund Committee appointed by the Government of the United States pursuant to Article 7 of the Trust Fund Agreement implementing section 216 of the U.S.-RMI Compact and referred to in section 462(b)(5) of the U.S.-RMI Compact 

and any alternates designated by the Government of 

the United States shall be United States Government 

officers or employees. It is the sense of Congress that 

the appointees should be designated from the Department of State, the Department of the Interior, and the 

Department of the Treasury. 

(10) The Trust Fund Committee provided for in Article 7 of the U.S.-FSM Trust Fund Agreement implementing section 215 of the U.S.-FSM Compact shall be 

a nonprofit corporation incorporated under the laws of 

the District of Columbia. To the extent that any law, 

rule, regulation or ordinance of the District of Columbia, or of any State or political subdivision thereof in 

which the Trust Fund Committee is incorporated or 

doing business, impedes or otherwise interferes with 

the performance of the functions of the Trust Fund 

Committee pursuant to this joint resolution, such law, 

rule, regulation, or ordinance shall be deemed to be 

preempted by this joint resolution. The Trust Fund 

Committee provided for in Article 7 of the U.S.-RMI 

Trust Fund Agreement implementing section 216 of 

the U.S.-RMI Compact shall be a non-profit corporation incorporated under the laws of the District of Columbia. To the extent that any law, rule, regulation or 

ordinance of the District of Columbia, or of any State 

or political subdivision thereof in which the Trust 

Fund Committee is incorporated or doing business, impedes or otherwise interferes with the performance of 

the functions of the Trust Fund Committee pursuant 

to this joint resolution, such law, rule, regulation, or 

ordinance shall be deemed to be preempted by this 

joint resolution. 

(c) CONTINUING TRUST TERRITORY AUTHORIZATION.—The 

authorization provided by the Act of June 30, 1954, as 

amended (68 Stat. 330) shall remain available after the effective date of the Compact with respect to the Federated 

States of Micronesia and the Republic of the Marshall Islands for the following purposes: 

34

(1) Prior to October 1, 1986, for any purpose authorized by the Compact or the joint resolution of January 

14, 1986 (Public Law 99–239). 

(2) Transition purposes, including but not limited to, 

completion of projects and fulfillment of commitments 

or obligations; termination of the Trust Territory Government and termination of the High Court; health 

and education as a result of exceptional circumstances; 

ex gratia contributions for the populations of Bikini, 

Enewetak, Rongelap, and Utrik; and technical assistance and training in financial management, program 

administration, and maintenance of infrastructure. 

(d) SURVIVABILITY.—In furtherance of the provisions of 

Title Four, Article V, sections 452 and 453 of the U.S.-FSM 

Compact and the U.S.-RMI Compact, any provisions of the 

U.S.-FSM Compact or the U.S.-RMI Compact which remain effective after the termination of the U.S.-FSM Compact or U.S.-RMI Compact by the act of any party thereto 

and which are affected in any manner by provisions of this 

title shall remain subject to such provisions.

(e) NONCOMPLIANCE SANCTIONS; ACTIONS INCOMPATIBLE

WITH UNITED STATES AUTHORITY.—Congress expresses its 

understanding that the Governments of the Federated 

States of Micronesia and the Republic of the Marshall Islands will not act in a manner incompatible with the authority and responsibility of the United States for security 

and defense matters in or related to the Federated States 

of Micronesia or the Republic of the Marshall Islands pursuant to the U.S.-FSM Compact or the U.S.-RMI Compact, 

including the agreements referred to in sections 462(a)(2) 

of the U.S.-FSM Compact and 462(a)(5) of the U.S.-RMI 

Compact. Congress further expresses its intention that any 

such act on the part of either such Government will be 

viewed by the United States as a material breach of the 

U.S.-FSM Compact or U.S.-RMI Compact. The Government of the United States reserves the right in the event 

of such a material breach of the U.S.-FSM Compact by the 

Government of the Federated States of Micronesia or the 

U.S.-RMI Compact by the Government of the Republic of 

the Marshall Islands to take action, including (but not limited to) the suspension in whole or in part of the obligations of the Government of the United States to that Government. 

(f) CONTINUING PROGRAMS AND LAWS.—

(1) FEDERATED STATES OF MICRONESIA AND REPUBLIC

OF THE MARSHALL ISLANDS.—In addition to the programs and services set forth in section 221 of the 

Compact, and pursuant to section 222 of the Compact, 

the programs and services of the following agencies 

shall be made available to the Federated States of Micronesia and to the Republic of the Marshall Islands: 

(A) CONTINUATION OF THE PROGRAMS AND SERV- ICES OF THE FEDERAL EMERGENCY MANAGEMENT

AGENCY.—Except as provided in clause (ii) below, 

the programs and services of the Department of 

35

Homeland Security, Federal Emergency Management Agency shall continue to be available to the 

Federated States of Micronesia and the Republic 

of the Marshall Islands to the same extent as such 

programs and services were available in fiscal 

year 2003. 

(i) Paragraph (a)(6) of section 221 of the 

U.S.-FSM Compact and paragraph (a)(5) of 

the U.S-RMI Compact shall each be construed 

as though the paragraph reads as follows: 

‘‘the Department of Homeland Security, 

United States Federal Emergency Management Agency.’’ (ii) Subsection (d) of section 211 of the U.SFSM Compact and subsection (e) of section 

211 of the U.S-RMI Compact shall each be 

construed as though the subsection reads as 

follows: ‘‘Of the total amount of assistance 

made available under subsection (a) of this 

section, $200,000 shall be made available to 

the Department of Homeland Security, Federal Emergency Management Agency to facilitate the activities of the Federal Emergency 

Management Agency in accordance with and 

to the extent provided in the Federal Programs and Services Agreement.’’ (B) TREATMENT OF EDUCATION AND LABOR PRO- GRAMS.—

(i) IDEA AND PELL GRANTS.—The Government of the United States shall continue to 

make available to the Federated States of Micronesia and the Republic of the Marshall Islands for fiscal years 2004 through 2023, the 

services to individuals eligible for such services under the Individuals with Disabilities 

Education Act (20 U.S.C. 1400 et seq.) to the 

extent that such services continue to be available to individuals in the United States; and 

shall continue to make available to eligible institutions in the Federated States of Micronesia and the Republic of the Marshall Islands, and to students enrolled in such institutions, and in institutions in the United 

States and its territories, for fiscal years 2004 

through 2023, grants under subpart 1 of part 

A of title IV of the Higher Education Act of 

1965 (20 U.S.C. 1070a et seq.) to the extent 

that such grants continue to be available to 

institutions and students in the United 

States, and in accordance with and to the extent provided in the Federal Programs and 

Services Agreement. 

(ii) OTHER FORMULA-GRANT PROGRAMS.—For 

fiscal years 2006 through 2023, except as provided in clause (i), the Governments of the 

36

Federated States of Micronesia and the Republic of the Marshall Islands shall not receive grants under the Head Start Act (42 

U.S.C. 9801 et seq.) or any formula grant program administered by the Secretary of Education. In place of such grants, the Government of the Federated States of Micronesia 

shall receive, as a supplement to the education sector grant under section 211(a)(1), 

$16,810,000 annually; and the Government of 

the Republic of the Marshall Islands shall receive, as a supplement to the education sector 

grant under section 211(a)(1), $6,350,000 annually. Both of these supplemental amounts 

are to be adjusted for inflation pursuant to 

section 217 of the U.S.-FSM Compact and section 218 of the U.S.-RMI Compact.

(iii) TRANSITION.—For fiscal years 2004 and 

2005 the Governments of the Federated 

States of Micronesia and the Republic of the 

Marshall Islands shall continue to receive 

grants under any formula grant programs administered by the Secretary of Education or 

under the Head Start Act (42 U.S.C. 9801 et 

seq.) in the same amounts as in fiscal year 

2003, except that such grants shall be modified to provide for a smooth transition from 

the formula grant programs being terminated 

to local programs designed to meet local education needs and with performance standards 

and technical assistance as necessary to meet 

those needs, and in accordance with the Federal Programs and Services Agreement. 

(iv) TECHNICAL ASSISTANCE.—The Federated 

States of Micronesia and the Republic of the 

Marshall Islands may request technical assistance from the Secretary of Education or 

the Secretary of Health and Human Services, 

the terms of which, including reimbursement, 

shall be negotiated with the participation of 

the appropriate cabinet officer for inclusion in 

the Federal Programs and Services Agreement. 

(v) CONTINUED ELIGIBILITY FOR COMPETITIVE GRANTS.—The Governments of the Federated States of Micronesia and the Republic 

of the Marshall Islands shall continue to be 

eligible for competitive grants administered 

by the Secretary of Education to the extent 

that such grants continue to be available to 

State and local governments in the United 

States. 

(C) The Legal Services Corporation. 

(D) The Public Health Service. 

37

(E) The Rural Housing Service (formerly, the 

Farmers Home Administration) in the Marshall 

Islands and each of the four States of the Federated States of Micronesia: Provided, That in lieu 

of continuation of the program in the Federated 

States of Micronesia, the President may agree to 

transfer to the Government of the Federated 

States of Micronesia without cost, the portfolio of 

the Rural Housing Service applicable to the Federated States of Micronesia and provide such technical assistance in management of the portfolio as 

may be requested by the Federated States of Micronesia). 

(2) TORT CLAIMS.—The provisions of section 178 of 

the U.S.-FSM Compact and the U.S.-RMI Compact regarding settlement and payment of tort claims shall 

apply to employees of any Federal agency of the Government of the United States (and to any other person 

employed on behalf of any Federal agency of the Government of the United States on the basis of a contractual, cooperative, or similar agreement) which provides any service or carries out any other function pursuant to or in furtherance of any provisions of the 

U.S.-FSM Compact or the U.S.-RMI Compact or this 

joint resolution, except for provisions of Title Three of 

the Compact and of the subsidiary agreements related 

to such Title, in such area to which such Agreement 

formerly applied. 

(3) PCB CLEANUP.—The programs and services of 

the Environmental Protection Agency regarding PCBs 

shall, to the extent applicable, as appropriate, and in 

accordance with applicable law, be construed to be 

made available to such islands for the cleanup of PCBs 

imported prior to 1987. The Secretary of the Interior 

and the Secretary of Defense shall cooperate and assist in any such cleanup activities. 

(g) COLLEGE OF MICRONESIA.—Until otherwise provided 

by Act of Congress, or until termination of the U.S.-FSM 

Compact and the U.S.-RMI Compact, the College of Micronesia shall retain its status as a land-grant institution and 

its eligibility for all benefits and programs available to 

such land-grant institutions.

(h) TRUST TERRITORY DEBTS TO U.S. FEDERAL AGENCIES.—Neither the Government of the Federated States of 

Micronesia nor the Government of the Marshall Islands 

shall be required to pay to any department, agency, independent agency, office, or instrumentality of the United 

States any amounts owed to such department, agency, 

independent agency, office, or instrumentality by the Government of the Trust Territory of the Pacific Islands as of 

the effective date of the Compact. There is authorized to 

be appropriated such sums as may be necessary to carry 

out the purposes of this subsection. 

(i) JUDICIAL TRAINING.—

38

(1) IN GENERAL.—In addition to amounts provided 

under section 211(a)(4) of the U.S.-FSM Compact and 

the U.S.-RMI Compact, the Secretary of the Interior 

shall annually provide $300,000 for the training of 

judges and officials of the judiciary in the Federated 

States of Micronesia and the Republic of the Marshall 

Islands in cooperation with the Pacific Islands Committee of the Ninth Circuit Judicial Council and in accordance with and to the extent provided in the Federal Programs and Services Agreement. 

(2) AUTHORIZATION AND CONTINUING APPROPRIA- TION.—There is hereby authorized and appropriated to 

the Secretary of the Interior, out of any funds in the 

Treasury not otherwise appropriated, to remain available until expended, for each fiscal year from 2004 

through 2023, $300,000, as adjusted for inflation 

under section 218 of the U.S.-FSM Compact and the 

U.S.-RMI Compact, to carry out the purposes of this 

section. 

(j) TECHNICAL ASSISTANCE.—Technical assistance may be 

provided pursuant to section 224 of the U.S.-FSM Compact 

or the U.S.-RMI Compact by Federal agencies and institutions of the Government of the United States to the extent 

such assistance may be provided to States, territories, or 

units of local government. Such assistance by the Forest 

Service, the Natural Resources Conservation Service (acting through the Resource Conservation and Development 

Program), the Fish and Wildlife Service, the National Marine Fisheries Service, the United States Coast Guard, and 

the Advisory Council on Historic Preservation, the Department of the Interior, and other agencies providing assistance under the National Historic Preservation Act (80 

Stat. 915; 16 U.S.C. 470–470t), shall be on a nonreimbursable basis. During the period the U.S.-FSM Compact and 

the U.S.-RMI Compact are in effect, the grant programs 

under the National Historic Preservation Act shall continue to apply to the Federated States of Micronesia and 

the Republic of the Marshall Islands in the same manner 

and to the same extent as prior to the approval of the 

Compact. Any funds provided pursuant to sections 102(a), 

103(a), 103(b), 103(f), 103(g), 103(h), 103(j), 105(c), 105(g), 

105(h), 105(i), 105(j), 105(k), 105(l), and 105(m) of this 

joint resolution shall be in addition to and not charged 

against any amounts to be paid to either the Federated 

States of Micronesia or the Republic of the Marshall Islands pursuant to the U.S.-FSM Compact, the U.S.-RMI 

Compact, or their related subsidiary agreements. 

(k) PRIOR SERVICE BENEFITS PROGRAM.—Notwithstanding any other provision of law, persons who on January 1, 1985, were eligible to receive payment under the 

Prior Service Benefits Program established within the Social Security System of the Trust Territory of the Pacific 

Islands because of their services performed for the United 

States Navy or the Government of the Trust Territory of 

the Pacific Islands prior to July 1, 1968, shall continue to 

39

receive such payments on and after the effective date of 

the Compact. 

(l) INDEFINITE LAND USE PAYMENTS.—There are authorized to be appropriated such sums as may be necessary to 

complete repayment by the United States of any debts 

owed for the use of various lands in the Federated States 

of Micronesia and the Marshall Islands prior to January 1, 

1985. 

(m) COMMUNICABLE DISEASE CONTROL PROGRAM.—There 

are authorized to be appropriated for grants to the Government of the Federated States of Micronesia, the Government of the Republic of the Marshall Islands, and the governments of the affected jurisdictions, such sums as may 

be necessary for purposes of establishing or continuing 

programs for the control and prevention of communicable 

diseases, including (but not limited to) cholera, tuberculosis, and Hansen’s Disease. The Secretary of the Interior shall assist the Government of the Federated States of 

Micronesia, the Government of the Republic of the Marshall Islands and the governments of the affected jurisdictions in designing and implementing such a program. 

(n) USER FEES.—Any person in the Federated States of 

Micronesia or the Republic of the Marshall Islands shall be 

liable for user fees, if any, for services provided in the Federated States of Micronesia or the Republic of the Marshall 

Islands by the Government of the United States to the 

same extent as any person in the United States would be 

liable for fees, if any, for such services in the United 

States.

(o) TREATMENT OF JUDGMENTS OF COURTS OF THE FEDERATED STATES OF MICRONESIA, THE REPUBLIC OF THE

MARSHALL ISLANDS, AND THE REPUBLIC OF PALAU.—No 

judgment, whenever issued, of a court of the Federated 

States of Micronesia, the Republic of the Marshall Islands, 

or the Republic of Palau, against the United States, its departments and agencies, or officials of the United States or 

any other individuals acting on behalf of the United States 

within the scope of their official duty, shall be honored by 

the United States, or be subject to recognition or enforcement in a court in the United States, unless the judgment 

is consistent with the interpretation by the United States 

of international agreements relevant to the judgment. In 

determining the consistency of a judgment with an international agreement, due regard shall be given to assurances made by the Executive Branch to Congress of the 

United States regarding the proper interpretation of the 

international agreement. 

(p) ESTABLISHMENT OF TRUST FUNDS; EXPEDITION OF

PROCESS.—

(1) IN GENERAL.—The Trust Fund Agreement executed pursuant to the U.S.-FSM Compact and the 

Trust Fund Agreement executed pursuant to the U.S.-

RMI Compact each provides for the establishment of a 

trust fund. 

40

(2) METHOD OF ESTABLISHMENT.—The trust fund 

may be established by— (A) creating a new legal entity to constitute the 

trust fund; or 

(B) assuming control of an existing legal entity 

including, without limitation, a trust fund or other 

legal entity that was established by or at the direction of the Government of the United States, 

the Government of the Federated States of Micronesia, the Government of the Republic of the Marshall Islands, or otherwise for the purpose of facilitating or expediting the establishment of the 

trust fund pursuant to the applicable Trust Fund 

Agreement. 

(3) OBLIGATIONS.—For the purpose of expediting the 

commencement of operations of a trust fund under either Trust Fund Agreement, the trust fund may, but 

shall not be obligated to, assume any obligations of an 

existing legal entity and take assignment of any contract or other agreement to which the existing legal 

entity is party. 

(4) ASSISTANCE.—Without limiting the authority 

that the United States Government may otherwise 

have under applicable law, the United States Government may, but shall not be obligated to, provide financial, technical, or other assistance directly or indirectly 

to the Government of the Federated States of Micronesia or the Government of the Republic of the Marshall Islands for the purpose of establishing and operating a trust fund or other legal entity that will solicit 

bids from, and enter into contracts with, parties willing to serve in such capacities as trustee, depositary, 

money manager, or investment advisor, with the intention that the contracts will ultimately be assumed 

by and assigned to a trust fund established pursuant 

to a Trust Fund Agreement. 

SEC. 106. CONSTRUCTION CONTRACT ASSISTANCE. 

(a) ASSISTANCE TO U.S. FIRMS.—In order to assist the 

Governments of the Federated States of Micronesia and of 

the Republic of the Marshall Islands through private sector firms which may be awarded contracts for construction 

or major repair of capital infrastructure within the Federated States of Micronesia or the Republic of the Marshall 

Islands, the United States shall consult with the Governments of the Federated States of Micronesia and the Republic of the Marshall Islands with respect to any such 

contracts, and the United States shall enter into agreements with such firms whereby such firms will, consistent 

with applicable requirements of such Governments—

(1) to the maximum extent possible, employ citizens 

of the Federated States of Micronesia and the Republic of the Marshall Islands; 

(2) to the extent that necessary skills are not possessed by citizens of the Federated States of Micronesia and the Republic of the Marshall Islands, proVerDate Jan 31 2003 22:27 Oct 06, 2003 Jkt 029010 PO 00000 Frm 00040 Fmt 6659 Sfmt 6969 E:\HR\OC\SR159.XXX SR159
41

vide on the job training, with particular emphasis on 

the development of skills relating to operation of machinery and routine and preventative maintenance of 

machinery and other facilities; and 

(3) provide specific training or other assistance in 

order to enable the Government to engage in longterm maintenance of infrastructure. 

Assistance by such firms pursuant to this section may not 

exceed 20 percent of the amount of the contract and shall 

be made available only to such firms which meet the definition of United States firm under the nationality rule for 

suppliers of services of the Agency for International Development (hereafter in this section referred to as ‘‘United 

States firms’’). There are authorized to be appropriated 

such sums as may be necessary for the purposes of this 

subsection. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as may be necessary to cover any additional costs incurred by the Government of the Federated States of Micronesia or the Republic of the Marshall Islands if such Governments, pursuant to an agreement entered into with the United States, 

apply a preference on the award of contracts to United 

States firms, provided that the amount of such preference 

does not exceed 10 percent of the amount of the lowest 

qualified bid from a non-United States firm for such contract. 

SEC. 107. PROHIBITION. 

The provisions of chapter 11 of title 18, United States 

Code, shall apply in full to any individual who has served 

as the United States negotiator of amendments to the 

Compact or its subsidiary agreements or of related agreements or who is or was an officer or employee of the Office 

in the Department of State responsible for negotiating 

amendments to the Compact or its subsidiary agreements 

or who is or was assigned or detailed to that Office or who 

served on the interagency group coordinating United 

States policy on the Compact negotiations. 

SEC. 108. COMPENSATORY ADJUSTMENTS. 

(a) ADDITIONAL PROGRAMS AND SERVICES.—In addition 

to the programs and services set forth in section 221 of the 

U.S.-FSM Compact and the U.S.-RMI Compact, and pursuant to section 222 of the U.S.-FSM Compact and the U.S.-

RMI Compact, the services and programs of the following 

United States agencies shall be made available to the Federated States of Micronesia and the Republic of the Marshall Islands: the Small Business Administration, Economic Development Administration, the Rural Utilities 

Services (formerly Rural Electrification Administration); 

the programs and services of the Department of Labor 

under the Workforce Investment Act of 1998; and the programs and services of the Department of Commerce relating to tourism and to marine resource development. 

(b) FURTHER AMOUNTS.—

42

(1) The joint resolution of January 14, 1986 (Public 

Law 99–239) provided that the governments of the 

Federated States of Micronesia and the Marshall Islands may submit to Congress reports concerning the 

overall financial and economic impacts on such areas 

resulting from the effect of title IV of that joint resolution upon Title Two of the Compact. There were authorized to be appropriated for fiscal years beginning 

after September 30, 1990, such amounts as necessary, 

but not to exceed $40,000,000 for the Federated States 

of Micronesia and $20,000,000 for the Marshall Islands, as provided in appropriation acts, to further 

compensate the governments of such islands (in addition to the compensation provided in subsections (a) 

and (b) of section 111 of the joint resolution of January 

14, 1986 (Public Law 99–239) for adverse impacts, if 

any, on the finances and economies of such areas resulting from the effect of title IV of that joint resolution upon Title Two of the Compact. The joint resolution of January 14, 1986 (Public Law 99–239) further 

provided that at the end of the initial fifteen-year term 

of the Compact, should any portion of the total amount 

of funds authorized in section 111 of that resolution 

not have been appropriated, such amount not yet appropriated may be appropriated, without regard to divisions between amounts authorized in section 111 for 

the Federated States of Micronesia and for the Marshall Islands, based on either or both such government’s showing of such adverse impact, if any, as provided in that subsection.

(2) The governments of the Federated States of Micronesia and the Republic of the Marshall Islands may 

each submit no more than one report or request for 

further compensation under section 111 of the joint 

resolution of January 14, 1986 (Public Law 99–239) 

and any such report or request must be submitted by 

September 30, 2009. Only adverse economic effects occurring during the initial 15-year term of the Compact 

may be considered for compensation under section 111 

of the joint resolution of January 14, 1986 (Public Law 

99–239). 

SEC. 109. AUTHORIZATION AND CONTINUING APPROPRIATION. 

(a) There are authorized and appropriated to the Department of the Interior, out of any funds in the Treasury not 

otherwise appropriated, to remain available until expended, such sums as are necessary to carry out the purposes of sections 211, 212(b), 215, and 217 of the U.S.-FSM 

Compact and sections 211, 212, 213(b), 216, and 218 of the 

U.S.-RMI Compact, in this and subsequent years. 

(b) There are authorized to be appropriated to the Departments, agencies, and instrumentalities named in paragraphs (1) and (3) through (6) of section 221(a) of the U.S.-

FSM Compact and paragraphs (1) and (3) through (5) of 

section 221(a) of the U.S.-RMI Compact, such sums as are 

43

necessary to carry out the purposes of sections 221(a) of 

the U.S.-FSM Compact and the U.S.-RMI Compact, to remain available until expended. 

SEC. 110. PAYMENT OF CITIZENS OF THE FEDERATED STATES 

OF MICRONESIA, THE REPUBLIC OF THE MARSHALL ISLANDS, AND THE REPUBLIC OF PALAU 

EMPLOYED BY THE GOVERNMENT OF THE 

UNITED STATES IN THE CONTINENTAL UNITED 

STATES. 

Section 605 of Public Law 107–67 (the Treasury and 

General Government Appropriations Act, 2002) is amended 

by striking ‘‘or the Republic of the Philippines,’’ in the last 

sentence and inserting the following: ‘‘the Republic of the 

Philippines, the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau,’’.

3. On page 102, line 4, strike ‘‘(Palau)’’ and insert ‘‘Palau’’. 4. On page 113, line 19, strike the word ‘‘section’’ the first time 

it appears on the line. 

5. On page 118, lines 1 and 2, strike ‘‘Federal Emergency Management Agency,’’ and insert ‘‘Department of Homeland Security,’’. 6. On page 155, line 5, strike ‘‘(2)’’ and insert ‘‘(b)’’. 7. On page 172, line 21, strike ‘‘to,’’ and insert ‘‘to’’. 8. On page 180, line 5, strike ‘‘to,’’ and insert ‘‘to’’. 9. On page 201, line 7, strike ‘‘the’’ and insert ‘‘this amended’’. 10. On page 208, line 16, strike ‘‘(i)’’ and insert ‘‘(1)’’.

PURPOSE

The purpose of S.J. Res. 16 is to approve the Compact of Free 

Association, as amended, between the Government of the United 

States of America and the Government of the Federated States of 

Micronesia, and the Compact of Free Association, as amended, between the Government of the United States of America and the 

Government of the Republic of the Marshall Islands, and to appropriate funds to carry out the amended Compacts. 

SUMMARY OF MAJOR PROVISIONS

S.J. Res. 16 consists of a preamble and two titles. The preamble 

recites the purposes of the original Compact of Free Association between the United States and the Federated States of Micronesia 

(FSM), and the Republic of the Marshall Islands (RMI), and the 

purposes of the amended Compacts approved by this resolution. 

Title I approves the amended Compacts with the FSM and the 

RMI, and various subsidiary agreements and understandings. Title 

II sets forth the text of the two Compacts. 

BACKGROUND AND NEED

In 1947, the United States became Administrator of the United 

Nation’s Trust Territory of the Pacific Islands, composed of the 

Marshall, Caroline, Palau and Mariana (except Guam) islands. All 

of these islands had been captured from Japan in World War II 

and included those that now comprise the FSM and the RMI. U.S. 

obligations under the Trusteeship included promoting economic development and the self-government or independence of the inhabitants. Prior to 1962, administrative authority resided with the 

44

U.S. Navy, and Cold War realities focused attention on security 

issues. During this period, the U.S. conducted nuclear weapons 

tests in the Northern Marshall Islands and maintained a military 

base at Kwajalein Atoll that is now used for missile testing. In 

1962, administrative jurisdiction was transferred to the Department of the Interior and the process of promoting self-government 

was initiated. In the case of the FSM and RMI, political status negotiations culminated in the signing of the Compact of Free Association, which was approved by Congress in Public Law 99–239 in 

1986, and which ultimately ended the Trusteeship and resulted in 

international recognition of these two new nations. 

The FSM has a population of about 105,000 and a land area of 

roughly 270 square miles. The RMI has a population of about 

50,000 and a land area of some 70 square miles. Per capita incomes 

are about $2,000 per year. 

COMPACT I (1986–2003)

The Compact relationship had three goals: (1) to end the U.N. 

Trusteeship by securing full self-government for the islands; (2) to 

continue a close defense relationship; and (3) to assist the FSM and 

RMI in their efforts to advance economic self-sufficiency. The first 

goal was met when the FSM and RMI became independent nations 

and full members of the United Nations. The second goal was 

achieved through the Compact’s obligation that the U.S. defend the 

FSM and RMI as if they are a part of the U.S. The Compact also 

grants the U.S. the right to deny access to the islands by the military forces of other nations, known as ‘‘strategic denial,’’ as well as 

the right to veto local actions that the U.S. determines are incompatible with its defense responsibilities, known as the ‘‘defense 

veto.’’ Finally, the Compact provides that the FSM and RMI will ‘‘sympathetically consider’’ U.S. requests for base rights, and a 

Compact-related agreement specifically secures U.S. access to the 

missile test site at Kwajalein until 2016. 

The third goal of advancing economic development and self-sufficiency has not been as successfully achieved. This goal was to be 

accomplished through the payment of financial assistance by the 

Department of the Interior, and through the continued availability 

of a range of U.S. domestic programs from other departments. 

While significant development occurred from 1986 to 2003, the remote and resource poor island economies continue to be based on 

the government sector and are heavily dependent on U.S. assistance. In addition, the Compact had weak accountability mechanisms which failed to ensure that funds would be spent effectively. 

Finally, weak local institutions and technical capabilities resulted 

in poor planning and management in the use of U.S. assistance. 

The Compact also granted FSM and RMI citizens the opportunity 

to live, work, and study in the U.S. as resident aliens. This privilege provided a critical outlet for the islands’ high population 

growth rates, but has also resulted in significant migration to Hawaii, Guam, and the Commonwealth of the Northern Mariana Islands (CNMI). Due to relatively poor health and education conditions, these migrants pose a disproportionate impact on the affected jurisdictions. Finally, the Compact included a full and final 

settlement of all claims resulting from the U.S. nuclear testing program that was conducted in the RMI from 1947 to 1958. The settleVerDate Jan 31 2003 22:27 Oct 06, 2003 Jkt 029010 PO 00000 Frm 00044 Fmt 6659 Sfmt 6602 E:\HR\OC\SR159.XXX SR159
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ment included a provision that additional compensation could be 

sought based on a showing that changed circumstances rendered 

the original settlement ‘‘manifestly inadequate.’’

In 1999, negotiations began to extend those provisions of the 

Compact that were scheduled to expire on September 30, 2003, 

such as the financial assistance and the defense veto. Two new 

agreements, with the FSM and RMI respectively, were signed in 

the Spring of 2003. On June 27, 2003 the Secretary of State transmitted the proposed amended Compacts and draft legislation to approve and implement the agreements. On July 14, 2003, Senator 

Domenici (for himself and Senators Bingaman, Craig, and Akaka) 

introduced the administration’s proposed legislation, by request, as 

S.J. Res. 16. 

COMPACT II (2004–2023)

Under the proposed amended Compacts, as transmitted by the 

administration, the United States would provide about $3.5 billion 

in funding over the 20-year period from fiscal years 2004 to 2023 

for grants, contributions to trust funds, payments to extend the 

lease at Kwajalein, and the cost of certain domestic services and 

programs. The package also would continue the availability of several domestic programs, and includes $15 million per year in ‘‘Compact impact’’ funding to be allocated among Hawaii, Guam, the 

Northern Mariana Islands, and American Samoa to mitigate the 

impact of migration from the FSM and RMI.

The amended Compacts have strengthened accountability mechanisms that could improve the effectiveness of U.S. assistance if diligently implemented. Instead of direct cash payments, funds would 

be disbursed as sector grants targeted to priority areas such as 

health and education. A new Agreement Concerning Procedures for 

the Implementation of United States Economic Assistance, known 

as the ‘‘Fiscal Procedures Agreement,’’ would increase reporting 

and planning requirements, including the establishment of joint 

economic management committees with U.S. majority membership 

and the power to impose grant conditions and to withhold funds. 

Finally, the Compacts would end annual U.S. financial assistance 

by contributing to two trust funds that would provide an alternative source of funding after 2023. Although not set to expire, the 

amended Compacts would revise the existing immigration privileges. 

Although U.S. military access to Kwajalein does not expire until 

2016, these negotiations were used as an opportunity to extend 

U.S. access until 2066, with an option to extend for an additional 

20 years to 2086. This agreement was made with the Marshall Islands national government and certain of the affected Kwajalein 

Atoll landowners have objected to its terms. Consequently, a new 

land use agreement has not been signed between the Kwajalein 

landowners and the Government of the RMI. 

This legislation is needed to approve the new agreements, extend 

the expiring provisions of the Compact, appropriate funding for the 

next term of financial assistance, and update other provisions 

which govern the relationship between the U.S. and the FSM and 

RMI, respectively. 

46

LEGISLATIVE HISTORY

S.J. Res. 16 was introduced by Senator Domenici (for himself and 

Senators Bingaman, Akaka, and Craig), by request, on July 14, 

2003. The full Committee on Energy and Natural Resources held 

a hearing on S.J. Res 16 on July 15, 2003. At the business meeting 

on September 17, 2003, the Committee on Energy and Natural Resources ordered S.J. Res. 16, as amended, favorably reported. 

H.J. Res. 63, the companion measure to S.J. Res. 16, was introduced by Representative Leach, by request, on July 8, 2003. The 

House International Relations Committee reported the measure on 

July 23, 2003. The House Resources Committee held a hearing on 

H.J. Res. 63 on July 10, 2003 and reported the bill on September 

4, 2003. The House Judiciary Committee reported the bill on September 10, 2003. 

COMMITTEE RECOMMENDATION

The Committee on Energy and Natural Resources, in open business session on September 17, 2003, by a unanimous vote of a 

quorum present, recommends that the Senate pass S.J. Res. 16, if 

amended as described herein. 

COMMITTEE AMENDMENTS

The Committee adopted ten amendments. The first substitutes a 

new preamble for the original one. The new substitute recites the 

purposes of the original Compact and the amended Compacts, and 

states that the U.S. has fulfilled its obligations under the United 

Nations Trusteeship Agreement. The second amendment substitutes a new Title I for the original one. The principal changes 

in Title I include: 

• Section 103(f), regarding the planting and agricultural 

maintenance program at Enewetak Atoll, a site of U.S. nuclear 

weapons testing, is amended to provide funding of $1,300,000 

annually for fiscal years 2004 through 2023. 

• Section 103(g), regarding the resettlement of Rongelap Island, one of the downwind communities affected by the nuclear 

weapons testing program, is amended to provide $5,300,000 as 

the final contribution to the Rongelap Resettlement Trust 

Fund. 

• A new section 103(1) is added that provides for the disposition of increased payments by the U.S. for land use at Kwajalein Atoll pending the conclusion of a new land use agreement, 

and for necessary reports and notifications. 

• Section 104(e), regarding the impact of the Compacts on 

Hawaii, Guam, the CNMI, and American Samoa is amended to 

increase the level of annual compensation to these areas from 

$15 million to $30 million, to authorize reimbursement to 

health care institutions in the affected areas, and to establish 

a procedure under which the Governors of Guam and the 

CNMI may request a reduction of debts owed to U.S. Government agencies as a means to further reimbursed impact expenses. 

• A new, section 104(i) is added that limits the authority of 

the United States to change, by regulation, the immigration 

47

privileges granted to FSM and RMI citizens under the Compacts. 

• A new section 104(l) is added which provides that the inflation adjustment for annual grants under the Compacts 

would be increased from two-thirds of inflation to full inflation 

if the inflation rate from 2009 to 2014 is higher than the inflation rate from 2004 to 2008. 

• Section 105(f) is amended to provide for the continuation 

of FEMA (FEMA) programs; the continuation of the Pell Grant 

program and the programs of the Individuals with Disabilities 

Education Act; and to phase-out all other formula-grant programs administered by the Secretary of Education, and the 

Head Start program, and replace them with supplemental financial assistance. 

• New text for section 105(i) provides $300,000 annually for 

the training of judges. Section 108(a) is amended to require 

that the programs made available section 111 of Public Law 

99–239, ‘‘shall’’ continue to be made available under this resolution, instead of ‘‘are authorized’’ to be available, as proposed 

in the resolution as introduced. 

The changes made by this second amendment are explained in 

detail in the section-by-section analysis. 

Amendments 3 through 10 make technical amendments in Title 

II. 

SECTION-BY-SECTION ANALYSIS

The preamble notes that the United States, in accordance with 

the Trusteeship Agreement for the Trust Territory of the Pacific Islands, fulfilled its obligations to promote the development of the 

people of the Trust Territory and entered into the Compact of Free 

Association with the FSM and RMI to create and maintain close 

and mutually beneficial relationships. The preamble further notes 

that the United States has negotiated agreements amending the 

terms of the Compact of Free Association that govern relations between the United States and the Federated States of Micronesia 

and the Republic of the Marshall Islands. 

Section 1 gives the short title of the Joint Resolution and sets 

forth the table of contents. 

TITLE I

Section 101 approves separate, amended compacts between the 

U.S. and FSM and between the U.S. and RMI. 

Subsection (a) approves the amended Compact between the 

United States and the Federated States of Micronesia (the ‘‘U.S.-

FSM Compact’’) and the accompanying subsidiary agreements. It 

further authorizes the President to agree to an effective date and 

to implement such Compact. 

Subsection (b) approves the amended Compact between the 

United States and the Republic of the Marshall Islands (the ‘‘U.S.-

RMI Compact’’) and the accompanying subsidiary agreements. It 

further authorizes the President to agree to an effective date and 

to implement such Compact. 

Subsection (c) defines and updates terms of reference to reflect 

the existence of the two separate Compacts and provides definiVerDate Jan 31 2003 22:27 Oct 06, 2003 Jkt 029010 PO 00000 Frm 00047 Fmt 6659 Sfmt 6602 E:\HR\OC\SR159.XXX SR159
48

tions for the terms ‘‘subsidiary agreement’’ and ‘‘separate agreements.’’ Subsection (d) provides that Congress must approve, by legislation, any amendments or changes to the U.S.-FSM Compact, the 

U.S.-RMI Compact, or to the accompanying subsidiary agreements 

or portions thereof. 

Subsection (e) provides that the one trilateral subsidiary agreement that is not being amended, relating to the transfer of title of 

U.S. Government property situated in the former Trust Territory 

of the Pacific Islands, shall be deemed bilateral. This change reflects the newly separate Compacts with the FSM and the RMI, respectively. 

Subsection (f) provides that, with the exception for those agreements identified in section 101(d), which require congressional action prior to modification, no changes to any subsidiary agreement 

accompanying the respective Compacts may be made absent prior 

notification and explanation to both the Senate and the House of 

Representatives.

Section 102 authorizes certain actions pursuant to the U.S.-FSM 

Compact. 

Subsection (a) provides for non-reimbursable U.S. law enforcement technical and training assistance to the FSM. 

Subsection (b) provides the Comptroller General with authority 

to audit any assistance provided by the United States to the FSM 

under the amended Compacts and to review any audit conducted 

by or on behalf of the U.S. It further requires the FSM to provide 

access to all relevant information and to cooperate with the Comptroller General in conducting such audits. All relevant audit documentation must be preserved for at least five years after the date 

the grant or assistance was provided. Subsection (b) further provides that the Comptroller General, and his authorized representatives, in performing their official functions, shall be immune from 

civil and criminal liability. 

Section 103 authorizes certain actions pursuant to the U.S.-RMI 

Compact. 

Subsection (a) provides for non-reimbursable U.S. law enforcement technical and training assistance to the RMI. 

Subsection (b) repeats the language from the Compact of Free 

Association Act of 1985 (Public Law 99–239) regarding assurances 

that Bikini residents will have access to lands on Ejit Island or acceptable alternative lands until Bikini, the former site of U.S. nuclear tests, is restored and habitable. The Committee notes that the 

U.S. and the RMI entered into an agreement in furtherance of 

paragraphs (1) through (3) of this section on July 21, 1986. For this 

subsection, and all that follow through subsection (j), the Committee concurs in the understanding and policy of the administration that nothing in these subsections creates any rights or obligations beyond those provided for in the original enacted version of 

Public Law 99–239. 

Subsection (c) repeats the language from Public Law 99–239 regarding U.S. payment of nuclear claims compensation. The Committee notes that the United States has made the payment called 

for under paragraph (1) of this section. The Committee further 

notes that the RMI currently has a ‘‘changed circumstance’’ petition 

pending with the United States. 

49

Subsection (d) repeats the language from Public Law 99–239 regarding compensation to Bikini, Enewetak, Rongelap, and Utrik for 

nuclear test effects. 

Subsection (e) sets forth congressional intent that section 177 of 

the original Compact, and the separate agreement entered into 

thereunder, constitute a full and final settlement of all nuclear 

compensation claims as described in articles X and XI of that separate agreement. The Committee notes that the U.S. has paid the 

specified compensation amounts, and that such payment constitutes a full and final settlement of all claims described in articles X and XI of the section 177 Agreement. Except as provided in 

the section 177 Agreement, any such claims pursuant to section 

177 of the original Compact are terminated and barred. 

Subsection (f) repeats and updates the language from Public Law 

99–239 regarding health care and agricultural programs for certain 

populations affected by U.S. nuclear tests. The administration has 

informed the Committee that, as of April 30, 2003, there were 118 

remaining members of the population of Rongelap and Utrik who 

were exposed to radiation resulting from the 1954 United States 

thermo-nuclear ‘‘Bravo’’ test. This subsection also provides mandatory funding pursuant to the U.S.-RMI Compact of no less than 

$1.3 million per year, as adjusted for inflation in accordance with 

the amended Compact, for the Enewetak planting and agricultural 

maintenance program. The Committee notes that Congress has 

typically provided this amount annually in discretionary funding in 

the past. 

Subsection (g) repeats the language from Public Law 99–239 regarding restoring the habitability of Rongelap. It provides 

$5,300,000 in mandatory funding, to be appropriated in fiscal year 

2005, as the final contribution of the United States to the Rongelap 

Resettlement Trust Fund as established pursuant to Public Law 

102–154 (105 Stat. 1009). The purpose of this final contribution is 

to establish a food importation program as a part of the overall resettlement program of Rongelap Island. The Committee notes that 

these funds are to be sequestered by the Fund Managers and the 

proceeds are to be used for food imports. 

Subsection (h) repeats the language from Public Law 99–239 regarding the Four Atoll Health Care Program and the administration of certain health care funds for the people of Bikini, Enewetak, 

Rongelap, and Utrik and their descendants. 

Subsection (i) repeats the language from Public Law 99–239 regarding the creation and administration of the Enjebi Community 

Trust Fund. The Committee notes that the ex gratia payment to 

the Fund provided for in this subsection has been made. 

Subsection (j) repeats the language from Public Law 99–239 regarding the cleanup of Bikini Atoll. The Committee notes that the 

ex gratia payment provided for in this subsection has been made. 

Subsection (k) provides the Comptroller General with authority 

to audit any assistance provided by the United States to the RMI 

under the amended Compacts and to review any audit conducted 

by or on behalf of the U.S. It further requires the RMI to provide 

access to all relevant information and to cooperate with the Comptroller General in conducting such audits. All relevant audit documentation must be preserved for at least five years after the date 

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vides that the Comptroller General, and his authorized representatives, in performing pursuant to their official functions, shall be immune from civil and criminal liability. 

Subsection (l) repeats the language from Public Law 99–239 regarding the payment of funds by the United States to the Government of the Marshall Islands which are then to be paid to the landowners of Kwajalein Atoll pursuant to the land use agreement 

dated October 19, 1982. The Committee notes that the current land 

use agreement is set to expire in 2016 and that the Kwajalein landowners have not yet signed a revised land use agreement. Until 

such time as a new land use agreement is concluded, any amounts 

paid by the United States in excess of the amounts required to be 

paid pursuant to the October 19, 1982 land use agreement shall be 

paid into, and held in, an interest bearing escrow account in a U.S. 

financial institution by the Government of the Marshall Islands. 

The Government of the Marshall Islands is to notify the U.S. when 

a new land use agreement is concluded. If a revised land use agreement is not concluded between the Government of the Marshall Islands and the Kwajalein landowners within five years from the 

date of enactment of this Joint Resolution, then, unless mutually 

agreed, such funds shall be returned to the U.S. Treasury, and the 

President shall report to Congress on the administration’s intentions regarding the use of the Kwajalein Atoll after 2016, on plans 

to relocate any activities from Kwajalein, and on the future use of 

the funds and interest held in escrow. Finally, this subsection authorizes the President to make loans and grants to the RMI to address the special needs of the community at Ebeye, Kwajalein 

Atoll, and other communities within Kwajalein Atoll. Projects such 

as the causeway project, that would reduce over-crowding on 

Ebeye, should be given full consideration for such loans and grants. 

Section 104 states U.S. policies regarding the amended Compacts. 

Subsection (a) notes and affirms the commitment of the U.S., the 

FSM, and the RMI, to democratic government, respect for human 

rights and fundamental freedoms for all. The subsection further requires the Secretary of State to report on the status of human 

rights in the FSM and RMI as a part of the annual report to Congress under the Foreign Assistance Act of 1961. 

Subsection (b)(1) limits the admission of certain naturalized citizens of the FSM and the RMI into the United States under the 

Compact. 

Subsection (b)(2) states the sense of Congress that up to 

$250,000 of the Compact grant funds be used for the development 

of machine-readable and secure FSM and RMI passports. 

Subsection (b)(3) states the sense of Congress that the FSM and 

the RMI shall develop, prior to October 1, 2004, the capability to 

share information the United States Government deems necessary 

to enforce the criminal and security-related provisions of the Immigration and Nationality Act, as amended. 

Subsection (b)(4) clarifies the appropriate implementation of sections 141(a)(3) and (4) of the amended Compacts regarding the 

grandfathering of certain naturalized citizens into the special immigration status granted to FSM and RMI citizens. 

51

Subsection (c) generally repeats the language from Public Law 

99–239 regarding the FSM and RMI restrictions on the permanent 

sale of land to non-citizens of those countries. 

Subsection (d) generally repeats the language from Public Law 

99–239 regarding the FSM and RMI prohibitions on certain forms 

of nuclear and toxic waste disposal in those countries. 

Subsection (e) deals with adverse impacts of migration of qualified nonimmigrants from the RMI, FSM, and Palau on the ‘‘affected 

jurisdictions’’ of the State of Hawaii, Guam, the CNMI, and America Samoa. Paragraph (1) incorporates the statement of congressional intent regarding the impact of the Compact as set forth in 

section 104(e)(1) of Public Law 99–239. Paragraph (2) increases the level of annual compensation to these areas from $15 million to $30 

million, and it provides definitions and procedures for the enumeration of migrants from the FSM and RMI to the affected areas and 

the allocation of the compensation among the affected areas. Paragraph (6) authorizes reimbursement to health care institutions in 

the affected areas and it incorporates modified language from Public Law 99–239 regarding the use of DOD medical facilities by patients referred from the FSM, RMI and the affected areas on a 

space available and reimbursable basis. Paragraph (8) provides for 

annual reports from the Governor of an affected jurisdiction on any 

adverse consequences resulting from the Compacts’ implementation.

Paragraph (9) authorizes the Governor of Guam or the Governor 

of the Commonwealth of the Northern Mariana Islands to seek a 

waiver, in whole or in part, from the President of the United States 

of any amounts owed by Guam, the Northern Mariana Islands (or 

either government’s autonomous agencies or instrumentalities) to 

the United States as a result of unreimbursed impact expenses. 

The Committee is aware that any funding made available pursuant 

to this paragraph could aid in efforts to privatize the Guam Telephone Authority, the last government-owned telephone authority in 

the nation. The Committee also recognizes that Guam has requested assistance in regard to the Super Typhoon Chat’an in June 

2002; the Super Typhoon Pongsona in December 2002; and Typhoon Paka in December 1997. 

Subsection (f) repeats the language from Public Law 99–239, reaffirming that the U.S. is not responsible for foreign debt contracted by the FSM or the RMI. 

Subsection (g) states the sense of the Congress that at least 30 

percent of the U.S. grant assistance provided pursuant to section 

211 of the amended Compacts shall be provided for infrastructure 

improvement and maintenance. 

Subsection (h)(1) directs the President to report annually to Congress and sets forth several topics to be included in the report including the general social, political, and economic conditions in the 

FSM and RMI, the use of U.S. assistance, and recommendations on 

ways to increase the effectiveness of U.S. assistance. 

Subsection (h)(2) directs the Governments of the United States, 

the FSM and the RMI to formally review the overall political, economic and security aspects of their relationship and the topics covered in the President’s annual report to Congress. The governments may agree to commit themselves to take specific actions in 

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ducted during the fifth, tenth, and fifteenth anniversaries of the 

date of enactment of legislation approving the amended Compacts. 

The President shall include the findings, and any recommendations 

for action, in the next annual report to Congress. 

Subsection (h)(3) directs the U.S. Comptroller General to report 

to Congress on the issues set forth in sections 104(h)(1)(A)–(E), and 

on the effectiveness of the U.S. administrative oversight. The reports are to be transmitted on the third anniversary of the date of 

enactment of legislation approving the amended Compacts and 

every five years thereafter. 

Subsection (i) provides for 90-day consideration by the relevant, 

congressional committees of any regulation proposed by the administration that would have a significant effect on the admission, 

stay, or employment privileges provided under section 141 prior to 

such regulation going into effect. 

Subsection (j) makes a conforming amendment to the Annual 

Grants table set forth in section 211 of the U.S.-FSM Compact. 

Subsection (k) makes a conforming amendment to the Annual 

Grants table set forth in section 211 of the U.S.-RMI Compact. 

Subsection (l) provides for an increase from two-thirds inflation 

adjustment to full inflation adjustment, beginning in fiscal year 

2015, if the U.S. Gross Domestic Product Implicit Price Deflator average for fiscal years 2009 through 2014 is greater than the average for fiscal years 2004 through 2008. 

Subsection (m) directs the Governments of the United States, the 

FSM, and the RMI to cooperate in the development of telecommunication infrastructure and assigns the U.S. Department of 

the Army to serve as the Executive Agent for the Defense Department in such efforts. 

Subsection (n) authorizes the Department of Defense to extend 

the Armed Services Vocational Aptitude Battery (ASVAB) Student 

Testing Program (STP) and the ASVAB Career Exploration Program to certain secondary schools in the FSM and RMI. The Committee notes that these programs assist the U.S. Armed Services’

recruiting efforts in the FSM and RMI. 

Section 105 sets forth supplemental provisions to the Compacts. 

Subsection (a) generally repeats the language from Public Law 

99–239 that all U.S. Federal programs and services extended to the 

FSM and RMI are to remain subject to the same criteria, standards, audits, and rules as in the United States. 

Subsection (b)(1) specifies that appropriations made pursuant to 

article I of title two, including the major financial sector grants, 

and section 221(a)(2) of the amended Compacts, are to be made to 

the Secretary of the Interior. 

Subsection (b)(2) specifies that certain appropriations made for 

services and programs provided to the FSM and RMI by the U.S. 

Weather Service; Federal Aviation Administration; Department of 

Transportation; and the Department of Homeland Security, FEMA 

shall be made directly to those agencies. 

Subsection (b)(3) specifies that appropriations made for certain 

other Federal services and programs, including the Legal Services 

Corporation, Public Health Service, and Rural Housing Service, 

shall be made to the relevant agencies in accordance with the 

terms of any appropriations for such services and programs. 

53

Subsection (b)(4) requires all Federal agencies providing program 

and service assistance to the FSM or the RMI to coordinate with 

the Secretaries of State and the Interior regarding the provision of 

any such assistance. It further requires the Secretaries of the Interior and State to consult with officials of the Asian Development 

Bank regarding overall economic conditions in the FSM and the 

RMI, and the activities of other donors of assistance to the FSM 

and RMI. 

Subsection (b)(5) specifies that U.S. Government employees in either the FSM or the RMI are subject to the authority of the United 

States Chief of Mission. 

Subsection (b)(6) authorizes the appointment of an Interagency 

Group on Freely Associated States’ Affairs to provide policy guidance to the U.S. Government. Further provides a sense of Congress 

that the Secretaries of State and Interior shall be represented on 

the Interagency Group. 

Subsection (b)(7) specifies that the three U.S. appointees to the 

Joint Economic Management Committees provided for in each of 

the amended Compacts and Fiscal Procedures Agreements shall be 

U.S. Government officers or employees. Provides a sense of Congress that the Secretaries of State and Interior shall be represented 

on the Joint Economic Management Committees and that officials 

of the Asian Development Bank should be consulted in order to 

properly coordinate assistance. The paragraph further notes that 

the implementation of economic policy reforms to encourage investment and to achieve self-sufficient tax rates shall be considered by 

the Joint Economic Management Committees. 

Subsection (b)(8) states the sense of Congress that the Secretaries of State and Interior are to ensure the appropriate number 

and location of personnel to provide effective oversight and coordination with regard to economic assistance. The Committee notes 

that the, administration has informed the Committee that the Department of the Interior intends to have nine personnel on their 

Compact implementation team including one in Washington, D.C., 

six in Hawaii, and one each in the RMI and FSM. It is necessary, 

and the Committee expects, that the State Department will have 

at least three personnel assigned to Compact implementation and 

oversight, one each in Washington, D.C., the FSM and the RMI. 

Subsection (b)(9) specifies that the U.S. voting members of the 

Trust Fund Committees appointed by the U.S. Government shall 

be U.S. Government officers or employees. It further provides a 

sense of Congress that the Secretaries of State, the Interior, and 

Treasury shall be represented on the Trust Fund Committees. 

Subsection (b)(10) specifies that the Trust Fund Committees provided for in the amended Compacts and accompanying Trust Fund 

Agreements shall be established as non-profit corporations incorporated under the laws of the District of Columbia. 

Subsection (c) repeats the language from Public Law 99–239 regarding any continuing authorizations from the Trust Territory period. 

Subsection (d) provides for the survivability of certain provisions 

of the joint resolution passed by Congress implementing the 

amended Compacts, such as those regarding audits, notwithstanding the termination of the amended Compacts. 

54

Subsection (e) states that actions by the FSM or RMI that are 

incompatible with U.S. authorities and responsibilities in security 

and defense matters toward the FSM and RMI will constitute a 

material breach of the respective Compact. 

Subsection (f) makes available to the FSM and the RMI, pursuant to section 222 of the amended Compacts, certain programs and 

services, including— Paragraph (1)(A) The programs and services of the Depart- ment of Homeland Security, FEMA, and provides $400,000 in 

mandatory annual funding to FEMA to facilitate the Agency’s 

activities in the islands. 

Paragraph (1)(B), clause (i) continues for eligible individuals, 

the services available pursuant to the Individuals with Disabilities Education Act; and grants, for eligible students and institutions, pursuant to subpart 1 of part A of title IV of the Higher Education Act of 1965, commonly known as the ‘‘Pell 

Grants’’ program. Clause (ii) eliminates eligibility for the FSM 

and the RMI for the remaining Education Department formula-grant programs, as well as grants made pursuant to the 

Head Start Act. As a replacement for these formula-grant programs, the FSM and RMI Governments shall each receive a 

supplemental amount to their annual education sectoral grant 

as provided pursuant to section 211 of the amended Compacts. 

Clause (iii) provides for a two year (FY2004 and FY2005) transition period from the termination of the formula grant programs to local programs designed to meet local needs. Clause 

(iv) provides that the U.S. may provide technical assistance to 

the RMI and FSM in implementing education programs, the 

terms of which, including reimbursement, shall be incorporated 

in the Federal Programs and Services Agreement. Clause (v) 

continues the eligibility of the RMI and FSM for competitive 

federal education grants. 

Subparagraphs (C), (D), and (E) state that the programs and 

services of the Legal Services Corporation, the Public Health 

Service, and Rural Housing Service shall be made available to 

the FSM and the RMI, pursuant to section 222 of the amended 

Compacts. 

Subsection (f)(2) applies the tort claims provisions of the amended Compacts to U.S. Government employees and contractors. 

Subsection (f)(3) continues eligibility for the FSM and the RMI 

for EPA programs for PCB cleanup and directs the Secretaries of 

the Interior and Defense to cooperate and assist in any cleanup activities. 

The Committee notes that the relevant terms and conditions of 

the Federal Programs and Services Agreements must be updated 

in accordance with subsection (f) and that the new agreements 

must be submitted to Congress for approval. 

Subsection (g) provides that the College of Micronesia shall retain its status as a land-grant institution until otherwise provided 

by Congress or until termination of the amended Compact. 

Subsection (h) absolves the Governments of the FSM and the 

RMI from payment of certain debts of the former Trust Territory 

Government to U.S. Federal agencies. 

Subsection (i) directs the Secretary of the Interior to provide 

$300,000 annually to train members of the judiciary in the FSM 

55

and the RMI. Such training shall be done in cooperation with the 

Pacific Islands Committee of the Ninth Circuit Judicial Council. 

The Committee notes that the Federal Programs and Services 

Agreements must be negotiated and updated in accordance with 

this subsection and that the new agreements must be transmitted 

to Congress. 

Subsection (j) continues the authorization for certain U.S. Federal agencies to provide technical assistance at the request of the 

FSM and RMI. The Committee notes that such technical assistance 

shall be provided on a nonreimbursable basis. 

Subsection (k) continues the authorization for payments to persons, with pre-1968 service for the U.S. Navy or Trust Territory 

Government, who were eligible to receive payment under the Prior 

Service Benefits Program established during the Trust Territory 

period. 

Subsection (l) repeats the language from Public Law 99–239 regarding the authorization of sums necessary to complete repayment 

by the United States of debts owed for use of various lands in the 

FSM and the RMI prior to January 1, 1985. 

Subsection (m) continues the authorization for grants for the purposes of dealing with communicable diseases in the FSM and RMI 

and expands the authorization to the governments of the affected 

jurisdictions of Hawaii, Guam, the CNMI and American Samoa. 

Subsection (m) also directs the Secretary of the Interior to assist 

the Governments of the FSM and the RMI to design and implement programs aimed at dealing with communicable diseases. 

Subsection (n) continues the requirement for the payment of 

standard user fees for services provided by the United States to 

persons in the FSM and the RMI. 

Subsection (o) provides that no judgment of an FSM, RMI, or 

Palau court against the United States or its instrumentalities shall 

be honored by the U.S., unless the judgment is consistent with the 

U.S. interpretation of international agreements relevant to the 

judgment. In making such a determination, due regard as to the 

proper interpretation of any such international agreement shall be 

given to assurances made by the Executive Branch to the Congress. 

Subsection (p) provides a method for establishing the new trust 

funds pursuant to the amended Compacts. It further provides that 

the U.S. Government may assist the governments of the FSM and 

the RMI in establishing and operating a trust fund or similar legal 

entity. 

Section 106 authorizes assistance to U.S. firms who may be 

awarded construction contracts within the FSM or RMI to help 

them employ and train citizens of the FSM and RMI to the maximum extent possible. Such assistance to eligible U.S. firms shall 

be limited to 20 percent of the contract amount. 

Section 107 states that the portions of the U.S. Code dealing with 

criminal bribery and conflict of interest apply to U.S. employees 

closely involved in the Compact negotiations. 

Section 108(a) directs that the following Federal programs and 

services be made available to the FSM and the RMI: the Small 

Business Administration; Economic Development Administration; 

Rural Utilities Services; Department of Labor’s Workforce Investment Act; and the Department of Commerce’s tourism and marine 

resource programs. 

56

Subsection (b) authorizes the payment, upon an adequate showing, of certain sums to the FSM and the RMI as compensation for 

any effects, during the term of the original Compact, of certain 

Congressional clarifications regarding trade and taxation enacted 

by the Congress in Public Law 99–239. The countries must submit 

any such funding request by September 30, 2009. 

Section 109 authorizes and appropriates the sums required for 

grant, trust fund, and Kwajalein payments pursuant to the amended Compacts. 

Section 110 exempts citizens of the FSM, RMI, Palau, and the 

Philippines from the general rule of section 605 of Public Law 107–

67 that U.S. Government employees posted within the continental 

U.S. should be U.S., citizens or someone who either owes allegiance 

to the U.S. or falls within other defined groups. 

TITLE TWO

Section 201(a) sets forth the text of the Compact of Free Association, as amended, between the Government of the United States of 

America and the Government of the Federated States of Micronesia. 

The Preamble affirms that: the relationship between the 

U.S. and FSM is founded upon respect for human rights; the 

people of the FSM have a right to enjoy self-government; the 

common interests of the U.S. and the FSM are in creating and 

maintaining their close and mutually beneficial relationship; 

and the interest of the U.S. in promoting the economic advancement and budgetary self-reliance of the FSM. The Preamble also recognizes that: the U.S.-FSM Compact relationship 

entered into force in 1986; it was based on the United Nations 

Charter; the people of the FSM have progressively developed 

their institutions of self-government and have exercised that 

right of self-government to adopt a Constitution and to establish a government-to-government relationship based on the 

freely expressed wishes of the people. The Preamble further 

recognizes that: the people of the FSM retain their sovereignty 

and their right to self-determination and the right to amend 

their Constitution; approval of the Compact constituted an exercise of their right to self-determination and the common desire of the U.S. and FSM to maintain their close governmentto-government relationship. Finally, under the Preamble, the 

U.S. and the FSM agree to continue and strengthen their relationship of free association and that the respective rights and 

responsibilities of the U.S. and FSM derive from and are set 

forth in this Compact, as amended. 

TITLE ONE—GOVERNMENTAL RELATIONS

Article I—Self Government 

Section 111 states that the people of the FSM are self-governing. 

Article II—Foreign Affairs 

Section 121 affirms the capacity of the Government of the FSM 

to conduct foreign affairs in its own name and right, except as otherwise provided in this Compact.

57

Section 122 states that the U.S. will support FSM membership 

in international organizations. 

Section 123 states that the U.S. and FSM will consult with each 

other regarding foreign affairs. 

Section 124 states that the U.S. may assist the FSM with foreign 

affairs when requested and mutually agreed, but the U.S. shall not 

be responsible to third parties for the actions of the FSM undertaken with assistance from the U.S. 

Section 125 states that the U.S. will not be responsible for actions taken by the FSM in the area of foreign affairs, except as expressly agreed to. 

Section 126 makes available U.S. consular services to FSM citizens traveling outside the FSM. 

Section 127 recognizes that, except as agreed in the amended 

Compact and its related agreements, the rights and obligations of 

the U.S. as Administering Authority of the Trust Territory of the 

Pacific Islands ended on November 2, 1986. 

Article III—Communications 

Section 131 states that the FSM has full authority and responsibility to regulate its communications and notes that the FSM elected in 1993 to assume telecommunications functions previously performed by the U.S. 

Section 132 grants the U.S. rights to operate telecommunications 

services within the FSM to the extent necessary to fulfill its obligations under this amended Compact. 

Article IV—Immigration 

Section 141 governs the admission of FSM citizens into the U.S. 

Subsection (a) provides that otherwise admissible FSM citizens 

will be eligible for: visa-free admission to the U.S. (including its 

territories and possessions); to establish residence as nonimmigrants; and to lawfully engage in occupations without a labor 

certification. However, the Compact, as amended, now requires 

that such FSM citizens possess a valid passport. Paragraphs (3) 

and (4) restrict the class of naturalized FSM citizens eligible for 

this special status in order to address concerns about potential 

abuse of this special Compact status by non-FSM natives. Paragraph (5) extends this status to bona fide immediate relatives of 

FSM citizens serving on active duty with the U.S. Armed Forces. 

Subsection (b) provides that FSM children traveling to the U.S. 

for the purpose of being adopted are not eligible for visa-free admission under the Compact. This new language is intended to prevent attempted use of Compact privileges to circumvent U.S. immigration requirements that help ensure the legitimacy of international adoptions, protect the children involved, and provide the 

adoptees with lawful permanent immigration status. 

Subsection (c) declares that no person who has purchased FSM 

citizenship or an FSM passport shall be eligible for admission to 

the U.S. under the amended Compact. This is intended to remove 

incentives for passport sales or other abuse of these migration 

privileges. 

Subsection (d) confirms the existing privilege to work in the U.S. 

and expands the types of documents that FSM citizens can use to 

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migration law. This subsection further provides that the U.S. and 

the FSM will take steps to publicize this provision. 

Subsection (e) defines certain immigration terms used in the 

Compact. 

Subsection (f) provides that, except as specified in section 141(a), 

that the U.S. Immigration and Nationality Act (INA) applies fully 

to any person admitted to the U.S., or is seeking admission to the 

U.S., under the Compact; and that, except as provided by section 

104(i), the U.S. has full authority under the INA to regulate the 

terms and conditions of persons seeking admission under the Compact. 

Subsection (g) provides that the governments of U.S. territories 

or possessions not subject to the INA, such as American Samoa and 

the CNMI, have the same authorities as the U.S. enjoys under the 

INA to exercise immigration authority under the amended Compact and to the extent authorized by the laws of the U.S. 

Subsection (h) notes that this section does not confer on a FSM 

citizen the right to establish residence necessary for U.S. naturalization under the INA, or give FSM admittees to the U.S. the 

right to petition for benefits for alien relatives under the INA. 

However, this subsection also notes that subsection (a) does not 

prevent a FSM citizen from otherwise acquiring such rights or lawful permanent resident alien status in the U.S. 

Section 142 governs the rights of U.S. citizens in the FSM. 

Subsection (a) recognizes the right of U.S. citizens to enter and 

work in the FSM, subject to the FSM’s reasonable authority to deport and deny entry, and the right of U.S. citizen spouses of FSM 

citizens to reside in the FSM, even after the death of the FSM citizen spouse. 

Subsection (b) requires that the FSM accord U.S. citizens and nationals immigration status no less favorable than that accorded to 

citizens of other countries. 

Subsection (c) provides that the FSM will adopt immigration procedures towards U.S. citizens and nationals seeking employment or 

investment in the FSM that are no less favorable than those adopted by the U.S. toward FSM citizens. 

Section 143 states that FSM citizens and U.S. citizens or nationals who lose their citizenship or nationality shall be ineligible to receive immigration privileges under the Compact. 

Article V—Representation 

Section 151 provides that relations between the U.S. and the 

FSM shall be conducted in accordance with the Vienna Convention 

on Diplomatic Relations, and that the governments may establish 

offices and representatives as mutually agreed. 

Section 152 provides that U.S. citizens and nationals who act as 

agents of FSM without authority of the U.S. are subject to the Foreign Agents Registration Act, except for U.S. citizen/national employees of the FSM whom the FSM certifies are not principally engaged in activities specified in that Act. 

Article VI—Environmental Protection 

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tivities in accord with certain environmental standards similar to 

those in effect in the U.S. 

Section 161(b) commits the FSM to continuing to develop, implement, and enforce environmental standards similar to those required of the U.S. in the previous subsection. 

Section 161(c) states that the parties may modify the environmental obligations of the previous two subsections by mutual 

agreement. 

Section 161(d) states that the obligations of section 161(a) will 

continue to require Environmental Impact Statements until the 

parties mutually agree otherwise. 

Section 161(e) states that the President of the U.S. may exempt 

any United States Government (USG) activities from the environmental standards of section 161(a)(3)–(4) if it is in the ‘‘paramount 

interest’’ of the USG to do so, after considering the views of the 

FSM and reporting the reasons for the exemption, to the extent 

practicable. 

Section 161(f) states that the laws of the U.S. referred to in section 161(a)(3) apply to U.S. activities under the Compact only to 

the extent provided in section 161. 

Section 162 states that the FSM may bring an action for judicial 

review of USG environmental activities pursuant to section 161(a) 

only in the U.S. District Court for Hawaii or the U.S. District 

Court for the District of Columbia, and subject to certain conditions. 

Section 163 states that the U.S. and the FSM shall have access 

to each other’s facilities to the extent necessary to gather information to carry out article VI, so long as it does not unreasonably 

interfere with the other’s exercise of its authorities and responsibilities.

Article VII—General Legal Provisions 

Section 171 recognizes that, except as provided in the amended 

Compact or related agreements, the application of the laws of the 

U.S. to the Trust Territory of the Pacific Islands ceased on November 3, 1986. 

Section 172 declares that FSM citizens who are not U.S. residents shall have the same rights and remedies under U.S. law enjoyed by any non-resident alien. Subsection (b) affirms that the 

government and citizens of the FSM are ‘‘persons’’ for purposes of 

making Freedom of Information Act (FOIA) requests and seeking 

judicial review of FOIA determinations, but states that only the 

FSM government, and not its citizens, have standing to seek judicial review relating to U.S. Government environmental activities 

governed by sections 161 and 162. 

Section 173 states that the U.S. and the FSM agree to adopt and 

enforce measures necessary to protect U.S. assets maintained in 

the FSM pursuant to the Compact and related agreements. 

Section 174 states that, except as otherwise provided in the Compact and related agreements: (a) the FSM and U.S. Governments, 

agencies, and officials shall be immune from the jurisdiction of the 

other’s courts; (b) the U.S. shall pay unpaid judgments and claim 

settlements of the Trust Territory of the Pacific Islands; (c) claims 

against the Trust Territory or U.S. Government arising before the 

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cording to certain conditions and procedures; and (d) the FSM and 

U.S. Governments shall not be immune from the jurisdiction of the 

other’s courts in civil cases that fall within exceptions to foreign 

state immunity in the Foreign Sovereign Immunities Act. 

Section 175(a) declares that a separate, simultaneously effective 

agreement between the parties shall govern mutual law enforcement assistance and cooperation, including pursuit and extradition 

of fugitives and prisoner transfers. 

Section 175(b) declares that a separate, simultaneously effective 

agreement between the parties shall govern labor recruitment practices for employment in the U.S. and enforcement for violations. 

This new section has been added to protect FSM citizens from abusive labor recruitment practices that have been recently alleged. 

Section 176 confirms that final judgments in civil cases by courts 

of the Trust Territory of the Pacific Islands shall continue in full 

force and effect, subject to the power of FSM courts to grant relief 

in appropriate cases. 

Section 177 quotes the language of section 177 of the original 

Compact which constituted a full and final settlement of all claims 

related to the U.S. nuclear testing program in the region, and notes 

that the amended Compacts make no changes to, and have no effect upon, that settlement. 

Section 178 authorizes U.S. Federal agencies that provide services in the FSM to settle and pay tort claims arising in the FSM. 

Claims that cannot be settled administratively shall be disposed of 

exclusively according to the arbitration procedure outlined in article II of title IV of the Compact. The U.S. and FSM shall provide 

for, in a separate agreement under section 231, the administrative 

settlement of claims. Except as explicitly provided in U.S. law, neither the U.S. nor any federal agency may be named as a party in 

any action arising out of U.S. grant assistance activities. 

Section 179 states that the courts of the FSM shall not exercise 

criminal jurisdiction over the U.S. Government, agencies, or employees acting on behalf of the U.S. in providing assistance to the 

FSM. 

TITLE TWO—ECONOMIC RELATIONS

Article I—Grant Assistance 

Section 211(a) states that the U.S. shall provide 20 years of annual sectoral grant assistance to the FSM in the priority sectors of 

education and health care, as well as in private sector development, the environment, public sector capacity building, public infrastructure, and other sectors as mutually agreed. The sector 

grants will be made available in accordance with mutually agreed 

sector development plans, and will be subject to monitoring according to the Fiscal Procedures Agreement between the parties. Section 211(a) of the Compact must be read in light of section 104(g) 

of S.J. Res. 16, which states the sense of Congress that not less 

than 30 percent of the annual U.S. grant assistance provided under 

section 211, and not less than 30 percent of the total amount of section 211 funds allocated to each of the four states of the FSM, shall 

be invested in infrastructure improvements and maintenance in accordance with section 211(a)(6). 

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Subsection (b) makes available a ‘‘Humanitarian Assistance— FSM’’ (HAFSM) program at the request of the FSM, designed to extend targeted health, education, and infrastructure assistance. 

HAFSM costs will be deducted from the annual grant provided 

under section 211(a), and the terms of the program will be governed by the separate Agreement Regarding the Military Use and 

Operating Rights of the U.S. 

Subsection (c) requires the FSM to prepare, maintain, and update a strategic development plan on a multi-year rolling basis that 

specifically addresses the sectors identified in Section 211 (a) and 

requires the concurrence of the U.S. insofar as U.S. grant funds are 

involved. 

Subsection (d) requires funds to be made available for disaster 

assistance in accordance with section 105(f)(1)(A)(ii), the language 

of this subsection is effectively deleted and is now construed to provide that $200,000 per year shall be made available to FEMA by 

the Secretary of the Interior to facilitate its activities in the FSM. 

This change is made because continuation of FEMA, as in prior 

years, is essential to achieving the Compact’s overall economic development objectives. However, because of the FSM’s relative lack 

of institutional development and capacity in disaster preparedness 

and response, it is recognized that operating there presents special 

challenges for FEMA. In order to respond to these challenges, 

$200,000 per year shall be provided to FEMA to supplement their 

capacity to operate in the FSM. These funds may be used for providing technical assistance in disaster planning, preparedness, and 

response; for retaining and training personnel in the region or 

stateside; and for other purposes. Further conditions regarding 

these funds are to be negotiated between FEMA and the FSM for 

inclusion in the Federal Program and Services Agreement referred 

to in Section 231. 

Section 212 states that, as reflected in the Fiscal Procedures 

Agreement, sector grants and U.S. programs and services shall be 

subject to regulations and policies normally applicable to U.S. assistance to State and local governments. The U.S. may condition 

such assistance on performance indicators, and may seek remedies 

for noncompliance, including withholding assistance. Section 212(b) 

states that the U.S., as part of its grant assistance, grant the FSM 

either one half of the cost of the annual audit, or $500,000, whichever is less. 

Section 213 requires the U.S. and FSM to establish a Joint Economic Management Committee (JEMCO), composed of a U.S. chairman, two U.S. members, and two FSM members, which shall review audits and reports, evaluate progress toward the objectives of 

the Development Plan under section 211(c), and identify problems 

encountered and recommend ways to increase the effectiveness of 

U.S. assistance under this Title. The duties and operation of the 

JEMCO are set forth further as described in the Fiscal Procedures 

Agreement. 

The composition and scope of the JEMCO is further specified by 

section 105(b)(7) of S.J. Res. 16 which states the sense of Congress 

that two of the three U.S. members should be designated from the 

Department of State and the Department of the Interior, and that 

U.S. officials of the Asian Development Bank (ADB) shall be consulted in order to properly coordinate U.S. and ADB financial, proVerDate Jan 31 2003 22:27 Oct 06, 2003 Jkt 029010 PO 00000 Frm 00061 Fmt 6659 Sfmt 6602 E:\HR\OC\SR159.XXX SR159
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gram, and technical assistance. Section 105(b)(7) further provides 

that the scope of the JEMCO’s evaluation of development shall be 

expanded to include an evaluation of the implementation of economic policy reforms that are needed to encourage investment, and 

an evaluation of local progress toward self-sufficient tax rates. This 

scope is added to ensure that the JEMCO does not focus entirely 

on U.S. assistance and its effectiveness, but also on promoting local 

economic policies which are also necessary conditions for economic 

growth. Examples of other policy reforms which the JEMCO should 

examine include land reform and reform of business regulations. 

Section 214 requires the FSM to report annually to the U.S. on 

its use of U.S. grant assistance and progress toward economic 

goals. The report shall also include an evaluation of progress on 

economic policy reforms necessary for economic development including progress toward self-sufficient tax rates. The JEMCO shall 

review and comment on these reports and make appropriate recommendations that are expected to be reflected in the President’s 

annual report to Congress pursuant to, section 104(h).

Section 215 states that the U.S. shall provide annual contributions to a trust fund for 20 years in amounts set forth in section 

216. The proceeds of the fund are to be used at the end of those 

20 years for the purposes described in section 211, or as mutually 

agreed. The U.S. contribution is conditioned on the FSM contributing at least $30 million to the fund prior to September 30, 2004. 

The terms regarding investment and management of the fund, use 

of the income, and other requirements of the fund are set forth in 

a separate Trust Fund Agreement. 

Section 216 sets forth the amounts of U.S. sector grants and 

trust fund contributions for each of the 20 years of assistance. The 

combined amount for each year is $92.7 million. 

Section 217 states that the grant and trust fund contributions for 

each fiscal year shall be adjusted by two-thirds the amount of the 

U.S. GDP Implicit Price Deflator or five percent, whichever is less. 

However, this section is effectively deleted and replaced by section 

104(l) which provides for a possible increase in the inflation adjustment from two-thirds to full inflation after the tenth year of the 

Compact based on certain conditions. 

Section 218 states that unobligated balances from any year shall 

remain available to the FSM in future years. 

Article II—Services and Program Assistance 

Section 221(a) states that the U.S. shall make available to the 

FSM, in accordance with and to the extent provided in the Federal 

Programs and Services Agreement, the services and related programs of: (1) U.S. Weather Service; (2) U.S. Postal Service; (3) Federal Aviation Administration; (4) U.S. Department of Transportation; (5) Federal Deposit Insurance Corporation; and (6) FEMA 

and U.S. Agency for International Development/Office of Foreign 

Disaster Assistance (USAID/OFDA). However, section 105(f)(1)(A) 

of S.J. Res. 16 modifies this section by effectively deleting OFDA 

and by requiring the continuation of FEMA to the same extent as 

its services and programs were available to the FSM in 2003. Section 105(f)(1)(A) also modifies section 211(d) of the Compact to provide $200,000 annually to FEMA to facilitate operations in the 

FSM. 

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Section 221(b) states that, with the exception of those services 

and programs covered by section 221(a) and unless Congress provides otherwise, the U.S. shall make available to the FSM the services and programs that were available to the FSM on the effective 

date of the amended Compact to the extent that such services are 

available to U.S. State and local governments. The subsection notes 

that the Fiscal Procedures Agreement provides that funds provided 

under section 211 will be considered local revenues of the FSM 

when used as the local matching share for obtaining Federal programs and services. Finally, the subsection states that, unless 

other wise provided, these programs and services shall be extended 

in accordance with the terms of the Federal Programs and Services 

Agreement. However, section 105(f)(1)(B) of S.J. Res. 16 modifies 

section 221(b) of the Compact by extending the services of the Individuals with Disabilities Education Act and grants under subpart 

1 of Part A of title IV of the Higher Education Act of 1965. Section 

105(f)(1)(B) also provides for a supplemental education grant, a 

transition period for the phase-out of other formula grant programs 

administered by the Secretary of Education, as well as the Head 

Start program, an authorization for continued technical assistance, 

and continued eligibility for competitive grants administered by the 

Secretary of Education. 

Section 221(c) states that the U.S. has the authority to monitor 

and administer all service and program assistance to the FSM and 

that the Federal Programs and Services Agreement shall also set 

forth the extent to which services and programs shall be provided 

to the FSM. Because of the changes effectively made to this section, 

the Federal Programs and Services Agreement will need to be renegotiated accordingly, and resubmitted to Congress for approval. 

Section 221(d) states that, except as otherwise provided, federal 

programs and services extended to the FSM shall be subject to the 

same standards and rules applicable to such programs in the U.S. 

Section 221(e) states that the U.S. shall make available to the 

FSM, to the extent provided in U.S. law, alternate energy development projects and conservation measures. 

Section 222 states that the U.S. and the FSM may agree from 

time to time to extend additional U.S. grant assistance to the FSM, 

which shall be governed by the Federal Programs and Services 

Agreement. 

Section 223 requires the FSM to make available to the U.S., at 

no cost, such land as may be necessary for the operations of the 

services and programs provided pursuant to article II, and whatever facilities are currently provided at no cost to the U.S., or may 

be mutually agreed to in the future. 

Section 224 states that the FSM may from time to time request 

technical assistance from U.S. Federal agencies that, if provided, 

would give priority consideration to the FSM over other non-U.S. 

recipients. 

Article III—Administrative Provisions 

Section 231 notes that the extent of U.S. program assistance, the 

status of U.S. agencies and employees, and other program and 

service-related arrangements are set forth in a separate Federal 

Programs and Services Agreement. 

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Section 232 states that the U.S. shall determine and implement 

procedures for audits of all grant and program assistance in accordance with the Fiscal Procedures Agreement described in section 

211(a), and authorizes the U.S. Comptroller General to conduct audits in the FSM. 

Section 233 pledges the U.S. to provide the grant assistance specified in section 211 for the 20 year term specified, subject to the 

terms and conditions of, title II and related subsidiary agreements. 

Section 234 pledges the FSM to cooperate in U.S. investigations 

of misuse of Compact funds and that it will not unreasonably withhold U.S.-requested subpoena assistance in the FSM. The FSM acknowledges that its receipt of Compact funding is conditioned on 

its fulfillment of these obligations and the U.S. agrees to pay any 

reasonable costs of the FSM in carrying out this section. 

Article IV—Trade 

Section 241 states that the FSM is not within the customs territory of the U.S. 

Section 242 directs the President to proclaim tariff treatment for 

articles imported from the FSM. Subsection (a) states that, unless 

otherwise excluded, articles imported from the FSM shall be exempt from duty. 

Subsection (b) states that imports of ‘‘tuna in airtight containers’’ from the FSM shall be exempt from duty, in an amount not to exceed, when aggregated with the amount imported from the RMI, 10 

percent of the previous year’s U.S. consumption of ‘‘tuna in airtight 

containers.’’ Subsection (c) states that duty-free treatment shall not be extended to certain classes of watches, clocks, buttons, textiles, apparel, footwear, luggage. 

Subsection (d) provides that the value of U.S. inputs into products imported from the FSM, up to 15 percent of the article’s total 

appraised value, may be applied for duty assessment purposes toward determining the percentage referred to in section 503(a)(2) of 

title V of the Trade Act of 1974. 

Section 243 states that articles imported from the FSM and not 

exempt from duty under section 242 are subject to the duty rates 

in column 1-general of the Harmonized Tariff Schedule of the U.S. 

Section 244 ensures that all U.S. products imported into the 

FSM receive customs treatment no less favorable than that accorded like products of any foreign country, except for advantages 

accorded by the FSM to other governments listed in Article 26 of 

the Pacific Island Countries Trade Agreement (PICTA). The FSM 

commits to consult with the U.S. before concluding a free trade 

agreement with any government not listed in PICTA. 

Article V—Finance and Taxation 

Section 251 notes that U.S. currency is the legal tender of the 

FSM, and states that the FSM will agree on a transitional period 

with the U.S. before switching to any other currency.

Section 252 allows the FSM to tax U.S. persons on income 

earned and property located within the FSM. 

Section 253 exempts FSM citizens domiciled in the FSM from 

U.S. estate, gift, and generation-skipping transfer taxes, provided 

that they are neither citizens nor residents of the U.S. 

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Section 254 states that the FSM shall have authority to tax FSM 

residents for income earned outside the FSM to the same extent 

that it taxes income earned in the FSM. If the FSM imposes such 

taxes, any FSM resident who is subject to U.S. taxes on the same 

income shall be relieved of such tax liability to the U.S. in the form 

of a foreign tax credit or exclusion under section 911 of the Internal 

Revenue Code. 

Section 255 grants U.S. tax benefits for conventions held in the 

FSM. 

TITLE THREE—SECURITY AND DEFENSE RELATIONS

Article I—Authority and Responsibility 

Section 311 grants the U.S. full authority and responsibility for 

defense matters in or relating to the FSM, including: the obligation 

to defend the FSM as the U.S. is defended; strategic denial; and 

the option to establish and use military facilities in the FSM. Subsection (c) confirms that the U.S. will act in accordance with the 

Charter of the United Nations in the exercise of this authority and 

responsibility. 

Section 312 permits the U.S. to conduct necessary military operations in FSM lands, waters, and airspace, subject to the terms of 

agreements negotiated in accordance with sections 321 and 323. 

Section 313 requires the FSM to refrain from actions that the 

U.S., after consultation, deems incompatible with U.S. defense authorities and responsibilities, known as the ‘‘defense veto.’’ Such 

consultations shall be conducted expeditiously at senior levels and 

the FSM shall be afforded an opportunity to raise its concerns with 

the U.S. Secretary of State and Secretary of Defense personally regarding any determination made in accordance with this section. 

Section 314 prohibits the U.S. from testing, disposing of, or storing any nuclear, chemical, or biological weapon in the FSM, unless 

otherwise agreed, other than for transit or during times of national 

emergency or state of war or impending attack. Such materials 

shall not be stored except in a manner which would not be hazardous to public health and safety, and such materials not intended 

for weapons shall not be affected by this section. 

Section 315 allows the U.S. to invite other countries’ armed 

forces, under the control of U.S. forces, to use military facilities in 

the FSM. Such use is subject to consultation with, and in the case 

of major units, approval of the FSM. 

Section 316 prohibits the U.S. from transferring or assigning its 

authority or responsibility under Title II of the Compact. 

Article II—Defense Facilities and Operating Rights 

Section 321 notes that specific arrangements for establishment of 

U.S. military facilities in the FSM are set forth in a separate agreement. The U.S. may request to lease additional areas within FSM 

for such purposes and the FSM will consider such requests sympathetically. In making such requests, the U.S. will respect the scarcity and special importance of land in the FSM and will request 

only the minimum necessary. 

Section 322 notes that the U.S. will provide and maintain fixed 

and floating navigational aids in the FSM at least to the extent 

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necessary for the exercise of its authority and responsibility under 

this Title. 

Section 323 notes that the U.S. military operating rights and the 

status of U.S. forces in the FSM are set forth in separate agreements. 

Article III—Defense Treaties and International Security Agreements 

Section 331 states that the U.S. has assumed and enjoys all 

rights and obligations of pre-Compact treaties and international security agreements applied by the U.S. as Administering Authority 

of the Trust Territory of the Pacific Islands, and any treaty or 

international security agreement to which the U.S. is a party and 

deems applicable in the FSM. 

Article IV—Service in Armed Forces of the United States 

Section 341 states that persons entitled to the Compact migration benefits pursuant to section 141 are eligible to volunteer for 

service in the U.S. Armed Forces. 

Section 342 states that the U.S. will have at any given time at 

least one qualified FSM student enrolled in its Coast Guard Academy and Merchant Marine Academy. 

Article V—General Provisions 

Section 351 states that the U.S. and the FSM will continue to 

maintain a Joint Committee of senior officials to consider disputes 

arising under this title of the Compact, which will meet annually 

or upon request of either country. Unresolved issued of the Joint 

Committee shall be referred to the governments for resolution and 

the FSM shall be afforded an opportunity to raise its concerns with 

the U.S. Secretary of Defense personally regarding any unresolved 

issue that threatens its continued association with the U.S. 

Section 352 states that in exercising its authority under title 

three, the U.S. shall accord due respect to the authority and responsibility of the FSM to assure the well-being of its people. 

Section 353 states that the U.S. will not name the FSM as a 

party to a declaration of war without the FSM’s consent. Without 

such consent, the Compact will not prejudice any FSM petitions for 

redress from the U.S. or claims against third countries arising out 

of armed conflict. 

Section 354(a) states that the security provisions of title three 

shall remain binding for the duration of the Compact, and thereafter as mutually agreed. If either the U.S. or the FSM unilaterally 

terminates this Title, it will be considered a termination of the entire Compact and in which case the provisions of either sections 

442 and 452, or sections 443 and 453, as appropriate, shall apply. 

Subsection (b) states that even if title three should terminate, 

any attack on the FSM during the period in which the separate 

Military Use and Operating Rights agreement is in effect will result in the U.S. taking action to meet the danger to the U.S. and 

the FSM. 

Subsection (c) states that even if title three should terminate, the 

FSM shall refrain from acts which the U.S. determines to be incompatible with its authority and responsibility for security and defense matters relating to the FSM and RMI. This provides for continuation of the defense veto. 

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TITLE FOUR—GENERAL PROVISIONS

Article I—Approval and Effective Date 

Section 411 provides that the amended Compact shall come into 

effect upon mutual agreement between the U.S. and the FSM after 

approval by their respective governments. 

Article II—Conference and Dispute Resolution 

Section 421 states that both governments shall confer promptly 

upon the request of the other on Compact-related matters. 

Section 422 states that if, after conferring, one government determines that there is a dispute and notifies the other in writing, both 

governments shall make a good faith effort to resolve it between 

themselves. 

Section 423 states that if the governments cannot resolve a dispute within 90 days of the written notice, either party may refer 

it to arbitration according to section 424. 

Section 424 states that disputes will be referred to a binding Arbitration Board comprised of one Chairman (jointly selected by the 

parties) and two other members (one each selected by the U.S. and 

FSM). Unless otherwise provided, the decision of the Board shall 

be binding, and the Board shall have jurisdiction over disputes 

arising exclusively under the Compact and related agreements. The 

Board shall conduct its proceedings as it deems appropriate and 

reach its decision by majority vote, preferably within 30 days after 

the conclusion of arguments. Except as otherwise decided by the 

Board, the U.S. and the FSM shall split the costs of the arbitration.

ARTICLE III—AMENDMENT

Section 431 provides that the amended Compact may be further 

amended by mutual agreement of the parties, according to their respective constitutional processes. 

ARTICLE IV—TERMINATION

Section 441 provides that the amended Compact may be terminated by mutual agreement of the parties, in which case section 

451 will apply. 

Section 442 provides that the amended Compact may be terminated by the U.S., in which case section 452 will apply. Such termination shall be effective not earlier than six months following delivery of the notice of termination. 

Section 443 provides that the amended Compact may be terminated by the FSM if the FSM people vote for termination in a plebiscite, or by some other mutually agreed process, in which case section 453 will apply. The FSM shall notify the U.S. of its intentions 

and the plebiscite or other process shall take place not earlier than 

three months after delivery of such notice. If approved, termination 

shall be effective not earlier than three months following notice to 

the U.S. of the results of the plebiscite vote for termination. 

Article V—Survivability 

Section 451(a) provides that if the parties mutually terminate the 

Compact pursuant to section 441, U.S. economic and other assistance to the FSM shall continue only by mutual agreement. 

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Subsection (b) provides that if the parties mutually terminate the 

Compact prior to the 20th anniversary of the amended Compact, 

the U.S. will continue to make its contributions to the FSM Trust 

Fund so long as the U.S. continues to enjoy the right of strategic 

denial and defense veto. 

Subsection (c) provides that if the parties mutually terminate the 

Compact after the 20th anniversary of the amended Compact, the 

FSM will be entitled to receive proceeds from the Trust Fund as 

described in section 215 and the Trust Fund Agreement. 

Section 452(a) provides that if the U.S. terminates the amended 

Compact before its 20th anniversary pursuant to section 442, certain provisions shall continue including those regarding: environmental protection, grant audits and fund misuse investigations, security and defense relations, and dispute resolution. Those provisions shall remain in effect until the 20th anniversary, and thereafter as mutually agreed. 

Subsection (b) provides that if the U.S. terminates the amended 

Compact before its 20th anniversary, economic and other assistance will continue only by mutual agreement, except that the U.S. 

will continue to make its contributions to the FSM Trust Fund so 

long as the U.S. continues to enjoy the right of strategic denial and 

defense veto under section 354(c) and the separate mutual security 

agreement. 

Subsection (c) provides that if the U.S. terminates the amended 

Compact after its 20th anniversary, the FSM shall continue to be 

eligible to receive proceeds from the Trust Fund as described in 

section 215 and in the manner described in the Trust Fund Agreement. 

Section 453(a) provides that if the FSM terminates the amended 

Compact before the 20th anniversary pursuant to section 443, certain provisions shall continue including those regarding: environmental protection, grant audits and fund misuse investigations, security and defense relations, and dispute resolution. Those provisions remain in effect until the 20th anniversary, and thereafter as 

mutually agreed. 

Subsection (b) provides that if the FSM terminates the Compact, 

there shall be prompt consultations between the countries regarding their future relationship to determine the level of future U.S. 

assistance, if any, other than what is provided in subsections (c) 

and (d) of this section. 

Subsection (c) provides that if the FSM terminates the amended 

Compact before its 20th anniversary, the U.S. will continue to 

make its contributions to the FSM Trust Fund in view of the special relationship reflected in subsections (b) and (c) of section 354 

and the Trust Fund Agreement. 

Subsection (d) provides that if the FSM terminates the amended 

Compact after its 20th anniversary, the FSM will be eligible to receive proceeds from the Trust Fund as described in section 215 and 

in a manner described in the Trust Fund Agreement. 

Section 454 reaffirms the U.S. interest in promoting the economic 

advancement and budgetary self-reliance of the FSM, and the separate Military Use and Operating Rights Agreement and Status of 

Forces Agreement shall remain in effect in accordance with their 

terms. 

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Article VI—Definition of Terms 

Section 461 sets forth definitions for numerous terms used in the 

amended Compact. 

Section 462(a) lists the separate agreements that will remain in 

effect under the amended Compact, including: (1) the trilateral 

agreement concluded pursuant to section 234 on transfer of Trust 

Territory property; (2) the Friendship, Cooperation, and Mutual Security Agreement; and (3) the Maritime Sovereignty and Jurisdiction Agreement. 

Subsection (b) lists the separate agreements that will go into effect under the amended Compact, including: (1) the Federal Programs and Services Agreement; (2) the Extradition, Mutual Assistance in Law Enforcement, and Penal Sanctions Agreement; (3) the 

Labor Recruitment Agreement implementing section 175(b); (4) the 

Agreement Concerning Procedures for the Implementation of 

United States Economic Assistance, the ‘‘Fiscal Procedures Agreement’’; (5) the Trust Fund Agreement; (6) the Military Use and Operating Rights Agreement; and (7) the Status of Forces Agreement. 

The Committee notes that certain agreements including the Federal Programs and Services Agreement and the Fiscal Procedures 

Agreement will need to be modified to reflect changes made during 

Congressional consideration and enactment of this resolution. Following those modifications, the new agreements will need to be resubmitted for Congressional approval. 

Section 463 clarifies that certain references in the amended Compact to various U.S. laws constitutes the incorporation of the applicable language of those laws into the amended Compact. 

Article VII—Concluding Provisions 

Section 471 requires both the U.S. and the FSM to take all necessary steps to ensure the conformity of their respective laws and 

regulations with the provisions of the amended Compact. 

Section 472 provides that the amended Compact may be accepted 

by the U.S. and the FSM by signature or otherwise. 

Section 201(b) sets forth the text of the Compact of Free Association, as amended, between the Government of the United States of 

America and the Government of the Republic of the Marshall Islands. 

The Preamble affirms that: the relationship between the 

U.S. and RMI is founded upon respect for human rights; the 

common interests of the U.S. and the RMI are in creating and 

maintaining their close and mutually beneficial relationship 

through free and voluntary association; and the interest of the 

U.S. in promoting the economic advancement and budgetary 

self-reliance of the RMI. The Preamble also recognizes that: 

the U.S.-RMI Compact relationship entered into force in 1986; 

it was based on the United Nations Charter; the people of the 

RMI have progressively developed their institutions of self-government and have exercised that right of self-government to 

adopt a Constitution and to establish a government-to-government relationship based on the freely expressed wishes of the 

people. The Preamble further recognizes that: the people of the 

RMI retain their sovereignty and their right to self-determination and the right to amend their Constitution; approval of the 

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mination and the common desire of the U.S. and RMI to maintain their close government-to-government relationship. Finally, under the Preamble, the U.S. and the RMI agree to continue and strengthen their relationship of free association and 

that the respective rights and responsibilities of the U.S. and 

FSM derive from and are set forth in this Compact, as amended.

TITLE ONE—GOVERNMENTAL RELATIONS

Article I—Self Government 

Section 111 states that the people of the RMI are self-governing. 

Article II—Foreign Affairs 

Section 121 affirms the capacity of the Government of the RMI 

to conduct foreign affairs in its own name and right, except as otherwise provided in this Compact. 

Section 122 states that the U.S. will support RMI membership in 

international organizations. 

Section 123 states that the U.S. and RMI will consult with each 

other regarding foreign affairs. 

Section 124 states that the U.S. may assist the RMI with foreign 

affairs when requested and mutually agreed but the U.S. shall not 

be responsible to third parties for the actions of the RMI undertaken with assistance from the U.S. 

Section 125 states that the U.S. will not be responsible for actions taken by the RMI in the area of foreign affairs, except as expressly agreed to. 

Section 126 makes available U.S. consular services to RMI citizens traveling outside the RMI. 

Section 127 recognizes that, except as agreed in the amended 

Compact and related agreements, the rights and obligations of the 

U.S. as Administering Authority of the Trust Territory of the Pacific Islands ended on October 20, 1986. 

Article III—Communications 

Section 131 states that the RMI has full authority and responsibility to regulate its communications, and notes that the RMI assumed telecommunications functions previously performed by the 

U.S., except for those functions set forth in a separate agreement 

entered into pursuant to this section. 

Section 132 grants the U.S. rights to operate telecommunications 

services within the RMI to the extent necessary to fulfill its obligations under this amended Compact and in accordance with the 

terms of separate agreements entered into pursuant to this section. 

Aricle IV—Immigration 

Section 141(a) governs the admission of RMI citizens into the 

U.S. Subsection (a) provides that otherwise admissible RMI citizens 

will continue to be eligible for visa-free admission to the U.S. (including territories and possessions) to lawfully engage in occupations and establish residence as nonimmigrants, but now requires 

that they possess valid passports. Paragraphs (3) and (4) restrict 

the class of naturalized RMI citizens eligible for this special status 

to address concerns about potential abuse of the special status by 

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non-RMI natives. Paragraph (5) extends this status to bona fide 

immediate relatives of RMI citizens serving on active duty with the 

U.S. Armed Forces. 

Subsection (b) provides that RMI children traveling to the U.S. 

for the purpose of being adopted are not eligible for visa-free admission under the Compact. This new language is intended to prevent attempted use of Compact privileges to circumvent U.S. immigration requirements that help ensure the legitimacy of international adoptions, protect the children involved, and provide the 

adoptees with lawful permanent immigration status. 

Subsection (c) declares that no person who has purchased RMI 

citizenship or an RMI passport shall be eligible for admission to 

the U.S. under the amended Compact, is intended to remove incentives for passport sales or other abuse of these migration privileges. 

Subsection (d) confirms the existing privilege to work in the U.S. 

and expands the types of documents that RMI citizens can use to 

demonstrate identity and employment authorization under U.S. immigration law. This subsection further provides that the U.S. and 

the FSM will take steps to publicize this provision. 

Subsection (e) defines certain terms used in this immigration 

title. 

Subsection (f) provides, except as specified in section 141(a), that 

the U.S. INA applies fully to any person admitted to the U.S., or 

seeking admission to the U.S. under the Compact; and that, except 

as provided in section 104(i), the U.S. has full authority under the 

INA to regulate the terms and conditions of persons seeking admission under the Compact. 

Subsection (g) provides that the governments of U.S. territories 

or possessions not subject to the INA, such as American Samoa and 

the CNMI, have the same authorities as the U.S. enjoys under the 

INA to exercise immigration authority under the amended Compact and to the extent authorized by the laws of the U.S. 

Subsection (h) notes that this section does not confer on a RMI 

citizen the right to establish residence necessary for U.S. naturalization under the INA, or give RMI admittees to the U.S. the 

right to petition for benefits for alien relatives under the INA. 

However, this subsection also notes that subsection (a) does not 

prevent a RMI citizen from otherwise acquiring such rights or lawful permanent resident alien status in the U.S. 

Subsection 142 governs the rights of U.S. citizens in the FSM. 

Subsection (a) recognizes the right of U.S. citizens to enter and 

work in the RMI, subject to the RMI’s reasonable authority to deport and deny entry, and the right of U.S. citizen spouses of RMI 

citizens to reside in the RMI, even after the death of the RMI citizen spouse. 

Subsection (b) requires that the RMI accords U.S. citizens and 

nationals immigration status no less favorable than that accorded 

to citizens of other countries. 

Subsection (c) provides that the RMI will adopt immigration procedures towards U.S. citizens and nationals seeking employment or 

investment in the RMI that are no less favorable than those adopted by the U.S. toward RMI citizens. 

Section 143 states that RMI citizens and U.S. citizens or nationals who lose their citizenship or nationality shall be ineligible to receive immigration privileges under the Compact. 

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Article V—Representation 

Section 151 provides that relations between the U.S. and the 

RMI shall be conducted in accordance with the Vienna Convention 

on Diplomatic Relations, and that the governments may establish 

offices and representatives as mutually agreed. 

Section 152 provides that U.S. citizens and nationals who act as 

agents of RMI without authority of the U.S. are subject to the Foreign Agents Registration Act, except for U.S. citizen/national employees of the RMI whom the RMI certifies are not principally engaged in activities specified in that Act. 

Article VI—Environmental Protection 

Subsection 161(a) declares the policy of the parties to prevent 

damage to the environment, and commits the U.S. to conducting its 

activities in accord with certain environmental standards similar to 

those in effect in the U.S. 

Subsection (b) commits the RMI to continuing to develop, implement, and enforce environmental standards similar to those required of the U.S. in the previous subsection. 

Subsection (c) states that the parties may modify the environmental obligations of the previous two subsections by mutual 

agreement. 

Subsection (d) states that the obligations of section 161(a) will 

continue to require Environmental Impact Statements until the 

parties mutually agree otherwise. 

Subsection (e) states that the President of the U.S. may exempt 

any USG activities from the environmental standards of section 

161(a)(3)–(4) if it is in the ‘‘paramount interest’’ of the USG to do 

so, after considering the views of the RMI and explaining the reasons for the exemption, to the extent practicable.

Subsection (f) states that the laws of the U.S. referred to in section 161(a)(3) apply to U.S. activities under the Compact only to 

the extent provided in section 161. 

Section 162 states that the RMI may bring an action for judicial 

review of USG environmental activities pursuant to section 161(a) 

only in the U.S. District Court for Hawaii or the U.S. District 

Court for the District of Columbia, and subject to certain conditions. 

Section 163 states that the U.S. and the RMI shall have access 

to each other’s facilities to the extent necessary to gather information to carry out article VI, so long as it does not unreasonably 

interfere with the other’s exercise of its authorities and responsibilities. 

Article VII—General Legal Provisions 

Section 171 recognizes that, except as provided in the amended 

Compact or related agreements, the application of the laws of the 

U.S. to the Trust Territory of the Pacific Islands ceased on November 3, 1986. 

Section 172 declares that RMI citizens who are not U.S. residents shall have the same rights and remedies under U.S. law enjoyed by any non-resident alien. Subsection (b) affirms that the 

government and citizens of the RMI are ‘‘persons’’ for purposes of 

making FOIA requests and seeking judicial review of FOIA determinations, but states that only the RMI government, and not its 

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citizens, have standing to seek judicial review relating to U.S. environmental activities governed by sections 161 and 162. 

Section 173 states that the U.S. and the RMI agree to adopt and 

enforce measures necessary to protect U.S. assets maintained in 

the RMI pursuant to the Compact and related agreements. 

Section 174 states that, except as otherwise provided in the Compact and related agreements: (a) the RMI and U.S. governments, 

agencies, and officials shall be immune from the jurisdiction of the 

other’s courts; (b) the U.S. shall pay unpaid judgments and claim 

settlements of the Trust Territory of the Pacific Islands; (c) claims 

against the Trust Territory or U.S. Governments arising before the 

original Compact may be pursued against the U.S. Government according to certain conditions and procedures; and (d) the RMI and 

U.S. Governments shall not be immune from the jurisdiction of the 

other’s courts in civil cases that fall within exceptions to foreign 

state immunity in the Foreign Sovereign Immunities Act. 

Section 175(a) declares that a separate, simultaneously effective 

agreement between the parties shall govern mutual law enforcement assistance and cooperation, including pursuit and extradition 

of fugitives and prisoner transfers. 

Subsection (b)—Declares that a separate, simultaneously effective agreement between the parties shall govern labor recruitment 

practices for employment in the U.S. and enforcement for violations. This new section has been added to protect RMI citizens 

from abusive labor recruitment practices that have been recently 

alleged. 

Section 176 confirms that final judgments in civil cases by courts 

of the Trust Territory of the Pacific Islands shall continue in full 

force and effect subject to the power of FSM courts to grant relief 

in appropriate cases. 

Section 177 quotes the language of section 177 of the original 

Compact which constituted a full and final settlement of all claims 

related to the U.S. nuclear testing program in the region, and notes 

that the amended Compacts make no changes to, and have no effect upon, that settlement. 

Section 178 authorizes U.S. Federal agencies that provide services in the RMI to settle and pay tort claims arising in the RMI. 

Claims that cannot be settled administratively, shall be disposed of 

exclusively according to the arbitration procedure outlined in article II of title IV of the Compact. The U.S. and RMI shall provide 

for, in a separate agreement under section 231, the administrative 

settlement of claims. Except as explicitly provided in U.S. law, neither the U.S. nor any Federal agency may be named as a party in 

any action arising out of U.S. grant assistance activities. 

Section 179 states that the courts of the RMI shall not exercise 

criminal jurisdiction over the U.S. Government, agencies, or employees acting on behalf of the U.S. in providing assistance to the 

RMI. 

TITLE TWO—ECONOMIC RELATIONS

Article I—Grant Assistance 

Section 211(a) states that the U.S. shall provide 20 years of annual grant assistance to the RMI in the priority sectors of education and health care, as well as in private sector development, 

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the environment, public sector capacity building, public infrastructure, and other sectors as mutually agreed. The sector grants shall 

be used consistent with the budget and investment framework described in subsection (f), and will be subject to mutual agreement 

and monitoring through the Joint Economic Management and Financial Accountabilty Committee. The U.S. shall disburse and 

monitor such grant assistance in accordance with the Fiscal Procedures Agreement between the parties. 

Section 211(b)(1) provides that of the total grant assistance made 

available to the RMI, a specified amount shall be allocated to advance the objectives and specific priorities set forth in subsections 

(a) and (d) of this section and the Fiscal Procedures Agreement to 

address the special needs of the community at Ebeye and other 

Marshallese communities within Kwajalein Atoll. Such assistance 

shall be made available in accordance with the budget and investment framework described in subsection (f) to support and improve 

the infrastructure and delivery of services. This annual amount 

shall be $3.1 million (with an inflation adjustment) through 

FY2013, and shall be increased by an additional $2 million (with 

an inflation adjustment) for FY2014 through FY2023, and thereafter in accordance with the Military Use and Operating Rights 

Agreement. 

Paragraph (2) provides that in addition to the 211(a) funding earmarked for Kwajalein in the paragraph above, the U.S. will provide 

$1.9 million annually (with an inflation adjustment and subject to 

the Fiscal Procedures Agreement) to further address those special 

needs, from FY2004 through FY2023 and thereafter in accordance 

with the Military Use and Operating Rights Agreement. 

Paragraph (3) provides that of the total 211(a) annual grant as- sistance, $200,000 (with an inflation adjustment) shall be allocated 

for increasing the RMI’s participation in and ability to analyze the 

annual U.S. Army Kwajalein Atoll Environmental Standards Survey. 

Subsection (c) makes available a ‘‘Humanitarian Assistance—

RMI’’ (HARMI) program at the request of the RMI, designed to extend targeted health, education, and infrastructure assistance. 

HARMI costs will be deducted from the annual grant provided 

under section 211(a), and the terms of the program will be governed by the separate Military Use and Operating Rights agreement. 

Subsection (d) provides that unless otherwise agreed, between 30 

and 50 percent of U.S. annual grant assistance shall be made available for infrastructure improvement and maintenance. Consistent 

with this subsection, section 104(g) states that it is the sense of 

Congress that not less than 30 percent of the annual U.S. grant assistance provided under section 211 shall be invested in infrastructure improvements and maintenance. Five percent of the total 

amount shall be set aside, with an equal RMI contribution, for an 

infrastructure maintenance fund. 

Subsection (e) requires funds to be made available for disaster 

assistance in accordance with section 105(t)(1)(A)(ii), the language 

of this subsection is effectively deleted and is now construed to provide that $200,000 per year shall be made available to FEMA by 

the Secretary of the Interior to facilitate its activities in the RMI. 

This change is made because continuation of FEMA, as in prior 

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years, is essential to achieving the Compact’s overall economic development objectives. However, because of the RMI’s relative lack 

of institutional development and capacity in disaster preparedness 

and response, it is recognized that operating there presents special 

challenges for FEMA. In order to respond to these challenges, 

$200,000 per year shall be provided to FEMA to supplement their 

capacity to operate in the RMI. These funds may be used for providing technical assistance in disaster planning, preparedness, and 

response; for retaining and training personnel in the region or 

stateside, and for other purposes. Further conditions regarding 

these funds are to be negotiated between FEMA and the RMI for 

inclusion in the Federal Program and Services Agreement referred 

to in section 231. 

Subsection (f) requires the RMI to prepare, maintain, and update 

a strategic, medium-term budget and investment framework that 

specifically addresses the sectors identified in section 211(a), is 

strategic in nature, shall be continuously reviewed and updated, 

makes projections on a multi-year basis, and requires the concurrence of the U.S. insofar as U.S. grant funds are involved.

Section 212 provides that in conjunction with section 321 (a) and 

military use of Kwajalein Atoll, the U.S. shall provide to the RMI 

an annual payment of $15 million (with an inflation adjustment) 

from FY2004 through FY2013. From FY2014 through FY2023 the 

annual payment will be either the FY2013 amount or $18 million, 

whichever is greater (also with an annual inflation adjustment). 

Section 213 states that, as reflected in the Fiscal Procedures 

Agreement, sector grants and U.S. programs and services shall be 

subject to regulations and policies normally applicable to U.S. assistance to State and local governments. The U.S. may condition 

such assistance on performance indicators, and may seek remedies 

for noncompliance, including withholding assistance. Section 212(b) 

states that the U.S., as part of its grant assistance, will grant the 

RMI either one half of the cost of the annual audit, or $500,000, 

whichever is less. 

Section 214 requires the U.S. and the RMI to establish a Joint 

Economic Management and Financial Accountability Committee, 

composed of a U.S. chairman, two U.S. members, and two RMI 

members, which shall review audits and reports, evaluate progress 

toward objectives identified in the Budget and Investment Framework under section 211(f), identify problems encountered and recommend ways to increase the effectiveness of U.S. assistance under 

this, title. The establishment and operations of the Committee 

shall be governed by the Fiscal Procedures Agreement. 

The composition and scope of the Committee is further specified 

by section 105(b)(7) of S.J. Res. 16 which states the sense of Congress that two of the three U.S. members should be designated 

from the Department of State and the Department of the Interior, 

and that U.S. officials of the Asian Development Bank (ADB) shall 

be consulted in order to properly coordinate U.S. and ADB financial, program, and technical assistance. Section 105(b)(7) further 

provides that the scope of the Committee’s evaluation of development shall be expanded to include an evaluation of the implementation of economic policy reforms that are needed to encourage investment, and an evaluation of local progress toward self-sufficient 

tax rates. This scope is added to ensure that the Committee does 

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not focus entirely on U.S. assistance and its effectiveness, but also 

on promoting local economic policies which are also necessary conditions for economic growth. Examples of other policy reforms 

which the Committee should examine include land reform and reform of business regulations. 

Section 215 requires the RMI to report annually to the U.S. on 

its use of U.S. grant assistance and progress toward economic 

goals. The report shall also include an evaluation of progress on 

economic policy reforms necessary for economic development including progress toward self-sufficient tax rates. The Committee established under section 214 shall review and comment on these reports and make appropriate recommendations which are expected 

to be reflected in the President’s annual report to Congress pursuant to section 104(h). 

Section 216 states that the U.S. shall provide annual contributions to a trust fund for 20 years in amounts set forth in section 

217. The proceeds of the fund are to be used at the end of those 

20 years for the purposes set forth in section 211, or as mutually 

agreed. The U.S. contribution is conditioned on the RMI contributing at least $30 million to the fund prior to October 1, 2005. The 

terms regarding investment and management of the fund, use of 

the income, and other requirements of the fund are set forth in a 

separate Trust Fund Agreement. 

Section 217 sets forth the amounts of U.S. sector grants and 

trust fund contributions for each of the 20 years of assistance. The 

combined amount for each year until 2013 is $57.7 million, and 

from 2014 to 2023, $62.7 million. 

Section 218 states that the grant and trust fund contributions for 

each fiscal year shall be adjusted by two-thirds the amount of the 

U.S. GDP Implicit Price Deflator, or five percent, whichever is less. 

However, this section is effectively deleted and replaced by Section 

104(1) which provides for a possible increase in the inflation adjustment from two-thirds to full inflation after the tenth year of the 

Compact based on certain conditions. 

Section 219 states that unobligated balances from any year shall 

remain available to the RMI in future years. 

Article II—Services and Program Assistance 

Section 221(a) states that the U.S. shall make available to the 

RMI, in accordance with and to the extent provided in the Federal 

Programs and Services Agreement, the services and related programs of (1) U.S. Weather Service; (2) U.S. Postal Service; (3) Federal Aviation Administration; (4) U.S. Department of Transportation; and (5) the Department of Homeland Security, FEMA and 

USAID/OFDA. However, section 105(f)(1)(A) of S.J. Res. 16 modifies this section by effectively deleting OFDA and by requiring the 

continuation of FEMA to the same extent as its services and programs were available to the RMI in 2003. Section 105(f)(1)(A) also 

modifies section 211(e) of the Compact to provide $200,000 annually to FEMA to facilitate operations in the RMI. 

Subsection (b) states that, with the exception of those services 

and programs covered by section 221(a) and unless Congress provides otherwise, the U.S. shall make available to the RMI the services and programs that were available to the RMI on the effective 

date of the amended Compact to the extent that such services are 

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available to U.S. State and local governments. The subsection notes 

that the Fiscal Procedures Agreement provides that funds provided 

under section 211 will be considered local revenues of the RMI 

when used as the local matching share for obtaining Federal programs and services. Finally, the subsection states that, unless otherwise provided, these programs and services shall be extended in 

accordance with the terms of the Federal Programs and Services 

Agreement. However, section 105(f)(1)(B) of S.J. Res. 16 modifies 

section 221(b) of the Compact by extending the services of the Individual with Disabilities Education Act and grants under subpart 1 

of Part A of title IV of the Higher Education Act of 1965. Section 

105(f)(1)(B) also provides for a supplemental education grant, a 

transition period for the phase-out of other formula grant programs 

administered by the Secretary of Education, as well as the Head 

Start program, an authorization for continued technical assistance, 

and continued eligibility for competitive grants administered by the 

Secretary of Education. 

Subsection (c) states that the U.S. has the authority to monitor 

and administer all service and program assistance to the RMI and 

that the Federal Programs and Services Agreement shall also set 

forth the extent to which services and programs shall be provided 

to the RMI. Because of the changes effectively made to this section, 

the Federal Programs and Services Agreement will need to be renegotiated accordingly, and resubmitted to Congress for approval. 

Subsection (d) states that, except as otherwise provided, Federal 

programs and services extended to the RMI shall be subject to the 

same standards and rules applicable to such programs in the U.S. 

Subsection (e) states that the U.S. shall make available to the 

RMI, to the extent provided in U.S. law, alternate energy development projects and conservation measures. 

Section 222 states that the U.S. and the RMI may agree from 

time to time to extend additional U.S. grant assistance to the RMI, 

which shall be governed by the Federal Programs and Services 

Agreement. 

Section 223 requires the RMI to make available, at no cost, such 

land as may be necessary for the operations of the services and 

programs provided pursuant to this article II of the Compact, and 

whatever facilities are currently provided at no cost to the U.S., or 

may be mutually agreed to in the future. 

Section 224 states that the RMI may from time to time request 

technical assistance from U.S. Federal agencies that, if provided, 

would give priority consideration to the RMI over other non-U.S. 

recipients. 

Article III—Administrative Provisions 

Section 231 notes that the extent of U.S. program assistance, the 

status of U.S. agencies and employees, and other program and 

service-related arrangements are set forth in a separate Federal 

Programs and Services Agreement. 

Section 232 states that the U.S. shall determine and implement 

procedures for audits of all grant and program assistance in accordance with the Fiscal Procedures Agreement described in. section 

211(a), and authorizes the U.S. Comptroller General to conduct audits in the RMI. 

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Section 233 pledges the U.S. to provide the grant assistance specified in section 211 for the 20-year term specified, subject to the 

terms and conditions of title II and related subsidiary agreements. 

Section 234 pledges the RMI to cooperate in U.S. investigations 

of misuse of Compact funds and that it will not unreasonably withhold U.S.-requested subpoena assistance in the RMI. The RMI acknowledges that its receipt of Compact funding is conditioned on 

its fulfillment of these obligations and the U.S. agrees to pay any 

reasonable costs of the FSM in carrying out this section.

Article IV—Trade 

Section 241 states that the RMI is not within the customs territory of the U.S. 

Section 242 directs the President to proclaim tariff treatment for 

articles imported from the RMI. Subsection (a) states that unless 

otherwise excluded, articles imported from the RMI shall be exempt from duty. 

Subsection (b) states that imports of ‘‘tuna in airtight containers’’ from the RMI shall be exempt from duty, in an amount not to exceed, when aggregated with the amount imported from the FSM, 

10 percent of the previous year’s U.S. consumption of ‘‘tuna in airtight containers.’’ Subsection (c) states that duty-free treatment shall not be extended to certain classes of watches, clocks, buttons, textiles, apparel, footwear, luggage. 

Subsection (d) provides that the value of U.S. inputs into products imported from the RMI (up to 15 percent of the article’s total 

appraised value) may be applied for duty assessment purposes toward determining the percentage referred to in section 503(a)(2) of 

title V of the Trade Act of 1974. 

Section 243 states that articles imported from the RMI and not 

exempt from duty under section 242 are subject to the duty rates 

in column 1—general of the Harmonized Tariff Schedule of the 

U.S. 

Section 244 ensures that all U.S. products imported into the RMI 

receive customs treatment no less favorable than that accorded like 

products of any foreign country, except for advantages accorded by 

the RMI to other governments listed in article 26 of the Pacific Island Countries Trade Agreement (PICTA). The RMI commits to 

consult with the U.S. before concluding a free trade agreement 

with any government not listed in PICTA. 

Article V—Finance and Taxation 

Section 251 notes that U.S. currency is the legal tender of the 

RMI, and states that the RMI will agree on a transitional period 

with the U.S. before switching to any other currency. 

Section 252 allows the RMI to tax U.S. persons on income earned 

and property located within the RMI. 

Section 253 exempts RMI citizens domiciled in the RMI from 

U.S. estate, gift, and generation-skipping transfer taxes, provided 

that they are neither citizens nor residents of the U.S. 

Section 254 states that the RMI shall have authority to tax RMI 

residents for income earned outside the RMI to the same extent 

that it taxes income earned in the RMI. If the RMI imposes such 

taxes, any RMI resident who is subject to U.S. taxes on the same 

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income shall be relieved of such tax liability to the U.S. in the form 

of a foreign tax credit or exclusion under section 911 of the Internal 

Revenue Code. 

Section 255 grants U.S. tax benefits for conventions held in the 

RMI. 

TITLE THREE—SECURITY AND DEFENSE RELATIONS

Article I—Authority and Responsibility 

Section 311 grants the U.S. full authority and responsibility for 

defense matters in or relating to the RMI, including: the obligation 

to defend the RMI as the U.S. is defended; strategic denial; and the 

option to establish and use military facilities in the FSM. Subsection (c) confirms that the U.S. will act in accordance with the 

Charter of the United Nations in exercise of this authority and responsibility. 

Section 312 permits the U.S. to conduct necessary military operations in RMI lands, waters, and airspace, subject to the terms of 

agreements negotiated in accordance with sections 321 and 323. 

Section 313 requires the RMI to refrain from actions that the 

U.S., after consultation, deems incompatible with U.S. defense authorities and responsibilities, the ‘‘defense veto.’’ Such consultations 

shall be conducted expeditiously at senior levels and the RMI shall 

be afforded an opportunity to raise its concerns with the U.S. Secretary of State and Secretary of Defense personally regarding any 

determination made in accordance with this section. 

Section 314 prohibits the U.S. from testing, disposing of, or storing any nuclear, chemical, or biological weapon in the RMI, unless 

otherwise agreed, other than for transit or during times of national 

emergency or state of war or impending attack. Such materials 

shall not be stored except in a manner which would not be hazardous to public health and safety, and such materials not intended 

for weapons shall not be affected by this section. 

Section 315 allows the U.S. to invite other countries’ armed 

forces, under the control of U.S. forces, to use military facilities in 

the RMI. Such use is subject to consultation with, and in the case 

of major units, approval of the RMI. 

Section 316 prohibits the U.S. from transferring or assigning its 

authority or responsibility under title 11 of the Compact. 

Article II—Defense Facilities and Operating Rights 

Section 321 notes that specific arrangements for establishment of 

U.S. military facilities in the RMI are set forth in a separate agreement. The U.S. may request to lease additional areas within RMI 

for such purposes and the RMI will consider such requests sympathetically. In making such requests, the U.S. will respect the scarcity and special importance of land in the RMI and will request 

only the minimum necessary. 

Section 322 notes that the U.S. will provide and maintain certain 

fixed and floating navigational aids in the RMI at least to the extent necessary for the exercise of its authority and responsibility 

under this title. 

Section 323 notes that U.S. military operating rights and the status of U.S. forces in the RMI are set forth in separate agreements. 

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Article III—Defense Treaties and International Security Agreements 

Section 331 states that the U.S. has assumed and enjoys all 

rights and obligations of pre-Compact treaties and international security agreements applied by the U.S. as Administering Authority 

of the Trust Territory of the Pacific Islands, and any treaty or 

international security agreement to which the U.S. is a party and 

deems applicable in the RMI. 

Article IV—Service in Armed Forces of the United States 

Section 341 states that persons entitled to the Compact immigration benefits pursuant to section 141 are eligible to volunteer for 

service in the U.S. Armed Forces. 

Section 342 states that the U.S. will have at any given time at 

least one qualified RMI student enrolled in its Coast Guard Academy and Merchant Marine Academy. 

Article V—General Provisions 

Section 351 states that the U.S. and the RMI will continue to 

maintain a Joint Committee of senior officials to consider disputes 

arising under the Security title of the Compact, which will meet 

annually or upon request of either country. Unresolved issues of 

the Joint Committee shall be referred to the governments for resolution and the RMI shall be afforded an opportunity to raise its 

concerns with the U.S. Secretary of Defense personally regarding 

any unresolved issue that threatens its continued association with 

the U.S. 

Section 352 states that in exercising its authority under title 

three, the U.S. shall accord due respect to the authority and responsibility of the RMI to assure the well-being of its people. 

Section 353 states that the U.S. will not name the RMI as a 

party to a declaration of war without the RMI’s consent. Without 

such consent, the Compact will not prejudice any RMI petitions for 

redress from the U.S. or claims against third countries arising out 

of armed conflict.

Section 354(a) states that the security provisions of title three 

shall remain binding for the duration of the Compact, and thereafter as mutually agreed. If either the U.S. or the RMI unilaterally 

terminates this title, it will be considered a termination of the entire Compact and in which case the provisions of either sections 

442 and 452, or sections 443 and 453, as appropriate, shall apply. 

Subsection (b) states that even if title three should terminate, 

any attack on the RMI during the period in which the separate 

Military Use and Operating Rights agreement is in effect will result in the U.S. taking action to meet the danger to the U.S. and 

the RMI. 

Subsection (c) states that even if title three should terminate, the 

RMI shall refrain from acts which the U.S. determines to be incompatible with its authority and responsibility for security and defense matters relating to the RMI and FSM. This provides for continuation of the defense veto. 

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TITLE FOUR—GENERAL PROVISIONS

Article I—Approval and Effective Date 

Section 411 provides that the amended Compact shall come into 

effect upon mutual agreement between the U.S. and the RMI after 

approval by their respective governments. 

Article II—Conference and Dispute Resolution 

Section 421 states that both governments shall confer promptly 

upon the request of the other on Compact-related matters. 

Section 422 states that if, after conferring, one government determines that there is a dispute and notifies the other in writing, both 

governments shall make a good faith effort to resolve it between 

themselves. 

Section 423 states that if the governments cannot resolve a dispute within 90 days of the written notice, either party may refer 

it to arbitration according to section 424. 

Section 424 states that disputes will be referred to a binding Arbitration Board comprised of one Chairman (jointly selected by the 

parties) and two other members (one each selected by the U.S. and 

RMI). Unless otherwise provided, the decision of the Board shall be 

binding, and the Board shall have jurisdiction over disputes arising 

exclusively under the Compact and related agreements. The Board 

shall conduct its proceedings as it deems appropriate and reach its 

decision by majority vote, preferably within 30 days after the conclusion of arguments. Except as otherwise decided by the board, 

the U.S. and the RMI shall split the costs of the arbitration. 

Article III—Amendment 

Section 431 provides that the amended Compact may be further 

amended by mutual agreement of the parties, according to their respective constitutional processes. 

Article IV—Termination 

Section 441 provides that the amended Compact may be terminated by mutual agreement of the parties, in which case section 

451 will apply. 

Section 442 provides that the amended Compact may be terminated by the U.S., in which case section 452 will apply. Such termination shall be effective not earlier than six months following delivery of the notice of termination. 

Section 443 provides that the amended Compact may be terminated by the RMI if the RMI people vote for termination in a plebiscite, or by some other mutually agreed process, in which case section 453 will apply. The RMI shall notify the U.S. of its intentions 

and the plebiscite or other process shall take place not earlier than 

three months after delivery of such notice. If approved, termination 

shall be effective not earlier than three months following notice to 

the U.S. of the results of the plebiscite vote for termination. 

Article V—Survivability 

Section 451(a) provides that if the parties mutually terminate the 

Compact pursuant to section 441, U.S. economic and other assistance to the RMI shall continue only by mutual agreement. 

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Subsection (b) provides that if the parties mutually terminate the 

Compact prior to the 20th anniversary of the amended Compact, 

the U.S. will continue to make its contributions to the RMI Trust 

Fund so long as the U.S. continues to enjoy the right of strategic 

denial and the defense veto. 

Subsection (c) provides that if the parties mutually terminate the 

Compact after the 20’ anniversary of the amended Compact, the 

RMI will be entitled to receive proceeds from the Trust Fund as described in section 215 and the Trust Fund Agreement. 

Section 452(a) provides that if the U.S. terminates the amended 

Compact before its 20th anniversary pursuant to section 442, certain provisions shall continue including those regarding: environmental protection, grant audits and fund misuse investigations, security and defense relations, and dispute resolution. Those provisions shall remain in effect until the 20th anniversary, and thereafter as mutually agreed. 

Subsection (b) provides that if the U.S. terminates the amended 

Compact before its 20th anniversary, economic and other assistance will continue only by mutual agreement, except that the U.S. 

will continue to make its contributions to the RMI Trust Fund so 

long as the U.S. continues to enjoy the right of strategic denial and 

defense veto under section 354(c) and the separate mutual security 

agreement. 

Subsection (c) provides that if the U.S. terminates the amended 

Compact after its 20th anniversary, the RMI shall continue to be 

eligible to receive proceeds from the Trust Fund as described in 

section 215 and in the manner described in the Trust Fund Agreement. 

Section 453(a) provides that if the RMI terminates the amended 

Compact before the 20th anniversary pursuant to section 443, certain provisions shall continue including those regarding: environmental protection, grant audits and fund misuse investigations, security and defense relations, and dispute resolution. Those provisions remain in effect until the 20th anniversary, and thereafter as 

mutually agreed. 

Subsection (b) provides that if the RMI terminates the Compact, 

there shall be prompt consultations between the countries regarding their future relationship to determine the level of future U.S. 

assistance, if any, other than what is provided in subsections (c) 

and (d) of this section. 

Subsection (c) provides that if the RMI terminates the amended 

Compact before its 20th anniversary, the U.S. will continue to 

make its contributions to the RMI Trust Fund in view of the special relationship reflected in subsections (b) and (c) of section 354 

and the Trust Fund Agreement. 

Subsection (d) provides that if the RMI terminates the amended 

Compact after its 20th anniversary, the RMI will be eligible to receive proceeds from the Trust Fund as described in section 215 and 

in a manner described in the Trust Fund Agreement. 

Section 454 reaffirms the U.S. interest in promoting the economic 

advancement of the RMI, and the separate Military Use and Operating Rights Agreement and Status of Forces Agreement shall remain in effect in accordance with their terms. 

83

Article VI—Definition of Terms 

Section 461 sets forth definitions for numerous terms used in the 

amended Compact. 

Section 462(a) lists the separate agreements that will remain in 

effect under the amended Compact, including: (1) the Agreement 

for the Implementation of section 177; (2) the Agreement on Persons Displaced as a Result of the U.S. Nuclear Testing Program; 

(3) the Agreement on the Settlement of Enjebi Island: (4) the 

Agreement on section 234; and (5) the Agreement Regarding Mutual Security Agreement. 

Subsection (b) lists the separate agreements that will go into effect under the amended Compact, including: (1) the Federal Programs and Services Agreement; (2) the Extradition, Mutual Assistance in Law Enforcement, and Penal Sanctions Agreement; (3) the 

Labor Recruitment Agreement implementing section 175(b); (4) the 

Agreement Concerning Procedures for the Implementation of 

United States Economic Assistance, the ‘‘Fiscal Procedures Agreement’’; (5) the Trust Fund Agreement; (6) the Military Use and Operating Rights Agreement; and (7) the Status of Forces Agreement. 

The Committee notes that certain agreements including the Federal Programs and Services Agreement and the Fiscal Procedures 

Agreement will need to be modified to reflect changes made during 

Congressional consideration and enactment of this resolution. Following those modifications, the new agreements will need to be resubmitted for Congressional approval.

Section 463 clarifies that certain references in the amended Compact to various U.S. laws constitutes the incorporation of the applicable language of those laws into the amended Compact. 

Article VII—Concluding Provisions 

Section 471 requires both the U.S. and the RMI to take all necessary steps to ensure the conformity of their respective laws and 

regulations with the provisions of the amended Compact. 

Section 472 provides that the amended Compact may be accepted 

by the U.S. and the RMI by signature or otherwise. 

COST AND BUDGETARY CONSIDERATIONS

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

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, September 25, 2003. 

Hon. PETE V. DOMENICI, 

Chairman, Committee on Energy and Natural Resources, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget office has prepared the enclosed estimate for S.J. Res. 16, the Compact of Free 

Association Amendments Act of 2003. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, Director. 

84

Enclosure. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S.J. Res. 16—Compact of Free Association Amendments Act of 2003 

Summary: S.J. Res. 16 would amend the Compact of Free Association Act of 1988 and subsidiary agreements between the United 

States and the Republic of the Marshall Islands (RMI) and the 

Federated States of Micronesia (FSM). The compacts with RMI and 

FSM, together with the subsidiary agreements, govern the political, 

economic, and military relationship between the United States and 

these two freely associated states. Although the compact does not 

expire, certain provisions that authorized federal funding for RMI 

and FSM expired in 2001. The compact provides that expired provisions be extended until 2003 if negotiations to renew the compact 

had not concluded by 2001. 

S.J. Res. 16 would provide financial assistance for RMI and FSM 

for the next 20 years. The legislation would make several changes 

to the compact to increase monitoring of financial assistance, create 

a joint oversight committee, and establish trust funds to provide 

funds to RMI and FSM beyond 2023. S.J. Res. 16 also would provide $30 million a year for costs related to the migration of RMI 

and FSM nationals to other jurisdictions and about $25 million annually for additional education grants for RMI and FSM. 

Consistent with the baseline construction rules in the Balanced 

Budget and Emergency Deficit Control Act, CBO’s baseline assumes that direct spending for grants to RMI and FSM will continue over the 2004–2013 period-beyond—the scheduled expiration 

date—at an average annual cost of $157 million a year. We estimate that enacting this legislation would increase direct spending 

by $622 million above the amounts assumed in our baseline projections over the 2004–2013 period. 

In addition, the legislation would extend the authority to appropriate funds for certain federal services for RMI and FSM for the 

next 20 years. The legislation also would authorize appropriations 

for grants to reimburse certain healthcare institutions for costs related to the migration of RMI and FSM nationals to other jurisdictions. Assuming appropriation of the necessary amounts, CBO estimates that implementing those provisions of S.J. Res. 16 would 

cost $631 million over the 2004–2013 period.

S.J. Res 16 contains an intergovernmental mandate as defined in 

the Unfunded Mandates Reform Act (UMRA). CBO estimates that 

this mandate would impose no cost on state and local governments; 

thus, it would not exceed the threshold established in UMRA ($59 

million in 2003, adjusted for inflation). The resolution contains no 

private-sector mandates as defined in UMRA. 

Estimated cost to the Federal Government: The estimated budgetary impact of S.J. Res. 16 is shown in the following table. The 

costs of this legislation fall within budget function 800 (general 

government).

85

By fiscal year, in millions of dollars— 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 

DIRECT SPENDING 

Baseline Spending for Compact 

of Free Association Under Current Law: 

Estimated Budget Authority 156 156 156 156 156 156 158 158 158 158 

Estimated Outlays .............. 156 156 156 156 156 156 158 158 158 158 

Proposed Changes: 

Estimated Budget Authority 51 58 56 58 61 64 64 67 70 73 

Estimated Outlays .............. 51 58 56 58 61 64 64 67 70 73 

Spending for Compact of Free 

Association Under S.J. Res. 

16: 

Estimated Budget Authority 207 214 212 214 217 220 222 225 228 231 

Estimated Outlays .............. 207 214 212 214 217 220 222 225 228 231 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Federal Program Services for RMI 

and FSM: 

Estimated Authorization 

Level ............................... 60 61 62 64 65 66 68 69 70 72 

Estimated Outlays .............. 45 61 62 63 65 66 67 69 70 71 

Head Start and Education programs: 

Estimated Authorization 

Level ............................... 0 0 ¥21 ¥21 ¥22 ¥22 ¥23 ¥23 ¥24 ¥24 

Estimated Outlays .............. 0 0 ¥5 ¥17 ¥21 ¥22 ¥22 ¥23 ¥23 ¥24 

Health Care Reimbursement: 

Estimated Authorization 

Level ............................... 29 12 12 13 13 13 14 14 14 14 

Estimated Outlays .............. 16 12 12 13 13 13 14 14 14 14 

Total Changes: 

Estimated Authorization 

Level ............................... 89 73 54 55 56 57 58 60 61 62 

Estimated Outlays .............. 74 73 70 59 57 57 58 60 61 62 

Basis of estimate 

For this estimate, CBO assumes that the legislation will be enacted near the start of fiscal year 2004, that the necessary amounts 

will be appropriated for each fiscal year, and that outlays will occur 

at the historical rate for grants to RMI and FSM and other programs. 

Direct spending 

S.J. Res. 16 would authorize and appropriate federal funds for 

economic assistance to RMI and FSM over the 2004–2023 period. 

Grant assistance would be aimed at needs for education, health, infrastructure, private-sector development, and the environment. In 

addition, the resolution would establish trust funds for RMI and 

FSM involving annual contributions for 20 years by RMI, FSM, 

and the federal government. Those trust funds are aimed at providing funds to RMI and FSM after federal grant assistance expires 

under the bill in 2023. 

CBO estimates that direct spending authorized by this legislation 

would total $2.2 billion over the 2004–2013 period. However, consistent with the Balanced Budget and Emergency Deficit Control 

Act, which specifies that certain expiring provisions should be assumed to continue for budget projection purposes, CBO’s baseline 

includes budget authority and outlays for payments to RMI and 

FSM totaling $1.6 billion over the 2004–2013 period. Thus, we estiVerDate Jan 31 2003 22:27 Oct 06, 2003 Jkt 029010 PO 00000 Frm 00085 Fmt 6659 Sfmt 6602 E:\HR\OC\SR159.XXX SR159
86

mate that S.J. Res. 16 would provide an increase in direct spending 

of $622 million above the baseline over the 10-year period. The following paragraphs discuss the financial assistance that would be 

provided by this legislation. 

Republic of the Marshall Islands. Over the 2004–2013 period, S.J. Res. 16 would provide RMI with grants of $356 million, $99 

million in trust fund contributions, $160 million for U.S. defense 

operations on the Kwajalein Atoll, $20 million to compensate the 

Kwajalein landholders and RMI for the use of its territory by the 

U.S. military, and $14 million for agricultural programs. In addition, the legislation would provide for $5.3 million in fiscal year 

2005 as the final contribution of the United States to the Rongelap 

Resettlement Trust Fund for a food importation program. 

Federated States of Micronesia. Over the 2004–2013 period, S.J. Res. 16 would provide FSM with grants of $793 million and $195 

million in trust fund contributions. 

General Assistance. The legislation would provide $30 million a 

year for health, education, social, public safety, and infrastructure 

costs associated with the migration of RMI and FSM nationals to 

Hawaii, Guam, American Samoa, and the Commonwealth of the 

Northern Mariana Islands (CNMI). This general assistance would 

cost $300 million over the 2004–2013 period. 

Head Start and Education Programs. Beginning in fiscal year 

2006, S.J. Res. 16 would make RMI and FSM ineligible to receive 

grants appropriated under the Head Start Act or any formula grant 

programs administered by the Secretary of Education. In place of 

those grants, the legislation would appropriate $23 million a year 

over the 2004–2023 period, and would adjust that amount annually for inflation. We estimate this provision would cost a total of $247 

million over the 2004–2013 period. 

Debt Forgiveness. Section 104 would allow the President—at the 

request of the Governors of Guam and the CNMI-to reduce, waive, 

or release all or part of any amounts owed by the respective governments to the United States. This authority would expire in February 2005. Based on information from the Office of Insular Affairs, Guam, and the CNMI, CBO estimates that the amount of 

outstanding debt owed to the United States by Guam and the 

CNMI is approximately $160 million. This amount consists of debts 

owed by Guam for telephone infrastructure improvements, disaster 

assistance, water consumption, and the construction of student 

housing. Based on information from the Office of Insular Affairs 

and the Office of Management and Budget, CBO has no expectation 

that this debt forgiveness authority would be exercised. If any 

changes were made to a federal loan using this authority, such as 

the $105 million loan to the Guam Telephone Authority from the 

Department of Agriculture for telephone infrastructure improvements, the cost would be recorded in the year that the change was 

effective, pursuant to the Federal Credit Reform Act, and could exceed $100 million. No costs for debt forgiveness are included in this 

cost estimate.

Other Programs and Services. S.J. Res. 16 also would continue 

to make available services currently provided by the U.S. Postal 

Service (USPS) and Federal Deposit Insurance Corporation (FDIC). 

Spending by these agencies is generally not subject to the annual 

appropriations process. Based on information from the Office of InVerDate Jan 31 2003 22:27 Oct 06, 2003 Jkt 029010 PO 00000 Frm 00086 Fmt 6659 Sfmt 6602 E:\HR\OC\SR159.XXX SR159
87

sular Affairs, CBO expects that mail service to RMI and FSM costs 

USPS approximately $1 million annually; this cost is reimbursed 

by the Department of the Interior, subject to the availability of appropriations. In addition, CBO expects costs to the FDIC for continuing to insure deposits in the Bank of the Federated States of 

Micronesia would be offset by fees assessed on the industry, resulting in no net cost to the federal government. 

Spending subject to appropriation 

Federal Programs and Services for RMI and FSM. S.J. Res. 16 

would specifically extend the authority to continue services to RMI 

and FSM provided by the National Weather Service, the Federal 

Aviation Administration, the Departments of Transportation and 

Homeland Security, and the Agency for International Development. 

Based on information from the Departments of State and the Interior, and the General Accounting Office (GAO), CBO estimates that 

continuing those programs for RMI and FSM would cost approximately $10 million annually, assuming appropriation of the necessary amounts. 

Other federal agencies currently providing programs and services 

to RMI and FSM include the Departments of Labor, Education, Agriculture, and Health and Human Services. Most of this assistance 

is provided through those agencies’ annual appropriations. Based 

on information from GAO and the Departments of State, the Interior, and Education, CBO estimates that these other programs and 

services for RMI and FSM currently cost about $50 million a year. 

Section 109 authorizes appropriations to continue federal services 

and programs to RMI and FSM, so these costs are included in this 

estimate. 

Head Start and Education Programs. Beginning in fiscal year 

2006, S.J. Res. 16 would make RMI and FSM ineligible to receive 

grants appropriated under the Head Start Act or any formula grant 

programs administered by the Secretary of Education. Based on information from the Departments of Education and Health and 

Human Services, CBO estimates that RMI and FSM received about 

$13 million through discretionary formula grant programs for education and about $8 million under the Head Start Act in 2003. Assuming future appropriation acts would be consistent with S.J. 

Res. 16 and end such funding for RMI and FSM, this provision 

could reduce discretionary costs by an estimated $157 million over 

the next 10 years, including adjustments for anticipated inflation. 

Health Care Reimbursement. Some RMI, FSM, and Republic of 

Palau (Palau) nationals receive medical care in other affected jurisdictions, particularly Hawaii, Guam, American Samoa, and CNMI. 

In Some cases, individuals may be referred to those jurisdictions 

because they cannot be treated at their local hospitals. In other 

cases, incentives to migrate result in RMI, FSM, and Palau nationals seeking medical treatment while residing outside of their home 

jurisdictions. 

FMS and RMI nationals are sometimes diagnosed with health 

conditions that cannot be treated at their local hospitals. In such 

cases, patients may be referred to hospitals in Hawaii, Guam, 

CNMI, or American Samoa for treatment. The cost of treatment at 

health care institutions in other jurisdictions can exceed the insurance payment from RMI and FSM nationals. S.J. Res. 16 would auVerDate Jan 31 2003 22:27 Oct 06, 2003 Jkt 029010 PO 00000 Frm 00087 Fmt 6659 Sfmt 6602 E:\HR\OC\SR159.XXX SR159
88

thorize the appropriation of such sums as are necessary to compensate health care institutions outside RMI and FSM for the cost 

of services provided to referred RMI and FSM nationals that have 

not been reimbursed prior to October 1, 2003. Based on information 

from the embassies of RMI and FSM, CBO estimates that implementing this provision would cost $4 million in fiscal year 2004, 

subject to the appropriation of the necessary amounts. 

Because of incentives for migration, FMS, RMI, and Palau nationals are sometimes treated at hospitals in Hawaii, Guam, American Samoa, and CNMI. S.J. Res. 16 would authorize the appropriation on such sums as are necessary to compensate health care 

institutions outside RMI, FSM, and Palau for the cost of services 

provided to RMI, FSM, and Palau nationals that have not been reimbursed prior to October 1, 2003. Based on information from Hawaii, CBO estimates that reimbursing Hawaiian institutions for 

unpaid expenses resulting from the migration of RMI, FSM, and 

Palau nationals would cost $13 million in fiscal year 2004, subject 

to the appropriation of the necessary amounts. 

In addition, S.J. Res. 16 would authorize the appropriation of 

necessary sums for grants to Hawaii, Guam, American Samoa, and 

CNMI to help defray the anticipated future cost of responding to 

increased demands for health care services for RMI, FSM, and 

Palau nationals who migrate to those areas. Based on information 

from GAO, Hawaii, Guam, American Samoa, and CNMI, CBO estimates that the increased demands on health, education, social, and 

infrastructure services associated with the migration of RMI, FSM, 

and Palau nationals cost these areas approximately $30 million annually above the $30 million in annual general assistance payments provided by S.J. Res. 16. Based on information from GAO 

and CNMI, CBO estimates that of the $30 million, approximately 

40 percent of the increased demand for services is related to health 

care. Hence, CBO estimates that implementing this provision 

would cost an average of $13 million annually, or $131 million over 

the 2004–2013 period, assuming appropriation of the necessary 

amounts. 

Estimated impact on state, local, and tribal governments: S.J. 

Res. 16 contains an intergovernmental mandate as defined in 

UMRA because it would explicitly prohibit states from taxing revenue generated by the trust funds established in the bill and from 

treating the fund as anything other than a nonprofit corporation, 

incorporated under the laws of the District of Columbia. Since the 

trust funds do not currently exist, this provision would not affect 

state budgets relative to current law and the threshold established 

in UMRA ($59 million in 2003, adjusted for inflation) would not be 

exceeded. 

If S.J. Res. 16 were enacted, affected jurisdictions, including Hawaii, Guam, American Samoa, and the Commonwealth of the 

Northern Mariana Islands, would continue to incur costs for services to migrants; however, such costs would not be the result of enforceable duties imposed by the federal government. The joint resolution would appropriate $30 million per year for each year over 

the 2004–2023 period to offset the impacts of migrants to affected 

jurisdictions plus such sums as may be necessary to reimburse 

health care institutions in the affected jurisdictions for costs incurred for treating migrants. 

89

Estimated impact on the private sector: S.J. Res. 16 contains no 

private-sector mandates as defined in UMRA. 

Previous CBO estimates: On September 15, 2003, CBO transmitted a revised cost estimate for H.J. Res. 63, the Compact of Free 

Association Amendments Act of 2003, as reported by the House 

Committee on International Relations on September 4, 2003; an estimate for H.J. Res. 63 as ordered reported by the House Committee on the Judiciary on September 10, 2003; and an estimate for 

H.J. Res. 63 as ordered reported by the House Committee on Resources on September 4, 2003. H.J. Res. 63 also would amend the 

Compact of Free Association in a manner similar to S.J. Res. 16. 

Different versions of the legislation provide different levels of funding, and our estimates reflect those differences. 

Estimate prepared by: Federal costs: Matthew Pickford and 

Donna Wong impact on state, local, and tribal governments: Sarah 

Puro; impact on the private sector: Paige Piper/Bach. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

REGULATORY IMPACT EVALUATION

In compliance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following evaluation 

of the regulatory impact which would be incurred in carrying out 

S.J. Res. 16. 

It is the Committee’s expressed opinion that the bill is not a regulatory measure in the sense of imposing Government-established 

standards of significant responsibilities on private individuals or 

businesses. 

S.J. Res. 16 includes several provisions that are designed to enhance accountability with respect to the assistance to be made 

available under the Compacts. These provisions include new reporting requirements under sections 104(e) and 104(h), and new 

planning requirements under sections 211(c), 212, 213, and 214 of 

the U.S.-FSM Compact, and sections 211(f), 213, 214, and 215 of 

the U.S.-RMI Compact. While these new requirements will result 

in additional paperwork, it is the Committee’s opinion that these 

enhanced accountability mechanisms are needed to increase accountability and the effectiveness of U.S. assistance under the 

Compacts. 

EXECUTIVE COMMUNICATIONS

Following is a copy of the letter transmitting the text of legislation that was introduced as S.J. Res 16, and a copy of the testimony presented by the Administration’s lead witness at the Committee’s hearing on S.J. Res 16. The Administration also transmitted copies of the subsidiary agreements which are retained in 

the Committee files. 

THE SECRETARY OF STATE, Washington, DC, June 27, 2003. 

Hon. RICHARD B. CHENEY, President of the Senate. 

DEAR MR. PRESIDENT: The Secretary of the Interior joins me in 

transmitting the enclosed draft bill to approve the ‘‘Compact of 

90

Free Association, as amended between the Government of the 

United States of America and the Government of the Federated 

States of Micronesia,’’ and the ‘‘Compact of Free Association,’’ as 

amended between the Government of the United States of America 

and the Government of the Republic of the Marshall Islands,’’ and 

otherwise to amend PL 99–239, and to appropriate for the purposes 

of the amended PL 99–239 for fiscal years ending on or before September 30, 2023, and for other purposes. 

We strongly urge that the draft bill be introduced, referred appropriately and enacted. The draft bill could be referred to as the 

‘‘Compact of Free Association Amendments Act of 2003.’’ Section 231 of the current Compact of Free Association required 

that the Governments of the United States, the Republic of the 

Marshall Islands (RMI) and the Federated States of Micronesia 

(FSM) commence negotiations in 1999, regarding the expiring provisions of the compact. The negotiations regarding those and other 

provisions were concluded with the signing of the compact of Free 

Association; as amended between the United States and the RMI 

on April 30, 2003, and as amended between the United States and 

the FSM on May 14, 2003. 

In addition to the revisions to the financial assistance provisions 

discussed in the next paragraph, revisions to Title One of the Compact address issues that arose during the first 16 years of the Compact relationship. Thus, the amendments would improve the provisions regarding non-immigrant migration to the United States 

under the Compact, including by requiring a passport. Amendments to Title Three of the Compact and subsidiary agreements 

would extend the defense relationship with the FSM and RMI indefinitely, and secure United States access to the important Ronald 

Reagan Ballistic Missile Defense Test Site at Kwajalein Atoll, a 

key component of our space and ballistic missile defense programs, 

potentially through 2086. In addition to approving the amendments 

to the Compact, the draft bill would provide compensation for the 

impact on several United States jurisdictions that have welcomed 

migrants from the freely associated states. 

For fiscal years 2004 through 2023, the newly negotiated compact amendments would provide $92.7 million a year for the FSM 

in sector grants and contributions to a trust fund, plus partial adjustment for inflation, and from $57.7 to $62.7 million a year for 

the RMI in sector grants, payments related to U.S use of Kwajalein, and contributions to a trust fund, plus partial adjustment for 

inflation. The income from the trust funds would be used for sector 

grants in the same sectors after 2023 when U.S. annual financial 

assistance is terminated. The draft bill funds grants in the six 

areas of greatest need, with priority given to the education and 

health sectors. Funding for the financial assistance provided by the 

negotiated agreements is in the President’s fiscal year 2004 budget 

for the Department of the Interior. The Compact, as amended, features accountability provisions that are substantially strengthened 

over those of the existing Compact. In sum, approval of the amended Compact and of the rest of the draft bill would protect United 

States interests and promote the continued mutual well-being of 

our three countries. 

Current Compact financial assistance is scheduled to sunset after 

September 30, 2003. To ensure continuity of financial assistance for 

91

the two freely associated states, we are eager to provide the Congress whatever information and assistance is necessary to secure 

early passage of the Compact of Free Association Amendments Act 

of 2003. 

The Office of Management and Budget has advised that enactment of the draft bill would be in accord with the program of the 

President. 

Sincerely, 

COLIN L. POWELL. 

STATEMENT OF ALBERT V. SHORT, NEGOTIATOR FOR THE COMPACT

OF FREE ASSOCIATION

Mr. Chairmen and Members of the Committees, 

Thank you for this opportunity to testify on the Administration’s 

recently submitted act to amend the Compact of Free Association 

with the Federated States of Micronesia (FSM) and the Republic of 

the Marshall Islands (RMI). 

THE ORIGINAL COMPACT

Original Compact funding authorization for the FSM and RMI 

ended in Fiscal Year 2001, with an extension for up to two years 

authorized through September 30, 2003, as the Compact negotiations progressed. The original Compact successfully met its main 

goal of providing for a stable transition from United Nations Trusteeship to sovereign self-government for the FSM and RMI. At the 

same time, the Compact protected U.S. security, maritime, and 

commercial interests in the Pacific by assuming defense responsibilities for the vast sea and air space of the Freely Associated 

States (FAS) including Palau—and by ensuring access to important 

defense sites operated by the Department of Defense on Kwajalein 

Atoll in the Marshall Islands. 

The original Compact was successful in transforming the relationship between these islands and the United States to one of our 

closest bilateral relationships. We now number the FSM and RMI 

among our staunchest friends in the United Nations. These 

achievements are solid and lasting, and the American and FAS 

peoples can be justly proud of them. 

CURRENT COMPACT ASSISTANCE

The U.S. currently provides about $150 million annually in financial assistance to the FSM and RMI, 80 percent from the Compact and 20 percent from other federal agencies such as the Departments of Education and Health and Human Services. 

The past seventeen years have witnessed recurring problems 

stemming from the lack of accountability and the sometimes ineffective use of U.S. economic assistance. Therefore, a principal task 

of the recently signed agreements to amend the Compact is to improve the effectiveness and accountability of U.S. assistance. Moreover, we have agreed to put an increasing percentage of the annual 

U.S. assistance into a trust fund that will provide an ongoing 

source of revenue to the two countries when annual payments by 

the United States end in 2023. 

92

REASONS TO CONTINUE COMPACT ASSISTANCE

The United States has strong interests in these countries that 

justify continued economic assistance through FY 2023 and the 

contributions to the trust fund, provided this assistance is structured and managed as proposed. These interests include: 

• Advancing economic self-reliance. (In this regard, the 

United States will continue its commitment to the economic 

strategies that the RMI and FSM have developed with the support of the United States, the Asian Development Bank (ADB), 

the International Monetary Fund, and our partners in the 

ADB Consultative Group, including Japan and Australia); 

• Improving the health, education, and social conditions of 

the people of the RMI and FSM. 

• Sustaining the political stability and close ties which we 

have developed with these two emerging democracies; 

• Assuring that our strategic interests continue to be secured, including access to our important defense sites on the 

Kwajalein Atoll; 

• Putting in place and contributing to a trust fund that will 

provide an ongoing source of revenue when annual payments 

by the United States end in 2023. 

• Strengthening immigration provisions in the wake of the 

September 11th attacks and addressing various problems that 

have arisen since the Compact was first approved by the U.S. 

Congress; and 

• Mitigating the impact of immigration under the Compact 

on Hawaii, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa. 

ECONOMIC ASSISTANCE

The Administration recognizes that too sharp a reduction in U.S. 

assistance at this stage of economic development of the RMI and 

the FSM could result in economic instability and other disruptions, 

and could encourage an increase in the level of immigration under 

the Compact to the United States by citizens of those countries. We 

continue to believe that providing substantial financial and other 

assistance will help to assure economic stability while the RMI and 

FSM continue to implement economic development and reform 

strategies. 

The Compact, as amended, continues economic assistance from 

Fiscal Year 2004 through Fiscal Year 2023. Furthermore, the economic package includes annual contributions to a trust fund that 

will provide an ongoing source of revenue, to be used for the same 

purposes as the previous grant assistance when the annual grant 

assistance ends in Fiscal Year 2023. Federal service and program 

assistance also continues, unless otherwise provided by Congress. 

COMPACT FUNDING

Compact funding will ensure economic and social stability and a 

smooth transition to Fiscal Year 2024 when annual payments from 

the U.S. will have terminated and the trust fund becomes a source 

of revenue. 

93

• The FSM will receive $76.7 million in sectoral grants and $16 million for its trust fund annually beginning in Fiscal Year 

2004. • Beginning in Fiscal Year 2007, the FSM base grant de- creases by $800,000 per year through Fiscal Year 2023, with 

this decrement added to the trust fund. • The RMI will receive $30.5 million in sectoral grants, $5.2 million for Kwajalein impact, and $7 million for its trust fund 

annually beginning in Fiscal Year 2004. • Beginning in Fiscal Year 2005, the RMI base grant de- creases by $500,000 per year through Fiscal Year 2023, with 

this decrement added to the trust fund. • These amounts are partially adjusted for inflation: twothirds of the implicit price deflator will be applied as in the 

original Compact period. • Under the Compact, as amended, the U.S. contributions to 

the trust funds are conditioned on the FSM contributing at 

least $30 million to the FSM trust fund prior to September 30, 

2004 and the RMI contributing at least $25 million to the RMI 

trust fund on the effective date of the Trust Fund Agreement 

or October 1, 2003, whichever is later, and $2.5 million prior 

to October 1, 2004 and $2.5 million prior to October 1, 2005. 

• Under the Compact, grant assistance will be used for six 

sectors, with priorities in the education and health sectors and 

tied to specific outcomes and purposes and monitored by the 

Department of the Interior. 

• Misuse of Compact funds can lead to withholding of funds 

until the problem is resolved. The FSM and the RMI have 

agreed to cooperate with the United States on criminal investigations regarding misuse of funds, if necessary. 

The Administration is putting in place an effective accountability 

mechanism with respect to future U.S. economic assistance to the 

FSM and the RMI. Economic assistance will no longer be made 

available through transfers that co-mingle U.S. funds with local 

funds, thereby rendering it difficult to track and monitor their use. 

Instead, future funds will be provided through targeted, sectoral 

assistance, each with clearly defined scope and objectives. 

In the amended Compacts, the FSM, RMI and U.S. have agreed 

that future grant assistance shall be used in six sectors: health, 

education, infrastructure, private sector development, public sector 

capacity building, and the environment. 

Built into each sectoral grant will be regular planning, monitoring, and reporting requirements. The amended Compacts also 

provide the necessary authority and resources to assure effective 

oversight and reasonable progress toward the agreed objectives. 

TRUST FUND

A major element of the new Compact provisions is the termination of annual mandatory payments to the FSM and the RMI at 

the end of Fiscal Year 2023—and the establishment of a trust fund 

to provide an ongoing source of revenue starting in Fiscal Year 

2024. In its earlier proposals to the U.S., both the FSM and RMI 

anticipated the U.S. interest in the termination of mandatory annual financial assistance by proposing that the U.S. capitalize a 

trust fund over the next term of Compact assistance. Under the 

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amended Compact, the Administration has agreed annual U.S. financial assistance will be terminated at the end of Fiscal Year 

2024, and thereafter the trust fund will provide an ongoing source 

of revenue. Congress has previously authorized and funded the use 

of similar trust funds, including one established under the Compact 

with the Republic of Palau, and several established in the Marshall 

Islands as compensation for the U.S. nuclear weapons testing program. 

FEDERAL SERVICES AND PROGRAM ASSISTANCE

With a few notable exceptions, Federal program coordination and 

oversight under the existing Compact has been ineffective. We are 

committed to putting in place a more effective system of coordinating and monitoring such assistance during the amended Compact period. 

KWAJALEIN MUORA EXTENSION

As part of the amended Compact, the United States and the Republic of the Marshall Islands have agreed to a long-term extension 

of the Military Use and Operating Rights Agreement (MUORA) for 

the Ronald Reagan Ballistic Missile Defense Test Site on Kwajalein 

Atoll. The Reagan Test Site (RTS) serves a key role in research, development, test and evaluation for the Administration’s high-priority missile defense and space programs. 

Although the current Military Use and Operating Rights Agreement covering U.S. use of these defense sites runs through 2016, 

in November 2001, RMI President Note reaffirmed the RMI’s willingness to consider a long-term extension of U.S. use of Kwajalein 

Atoll for our defense needs. Subsequently, the RMI Government 

proposed that the ongoing negotiations to amend the Compact of 

Free Association provided a convenient forum to consider amendments extending the Military Use and Operating Rights Agreement. Following consultations with the Department of Defense, the 

Administration decided to pursue such an extension, if agreement 

could be concluded on acceptable terms, and negotiations on this 

issue would not delay our efforts to obtain agreement on amendments to the Compact. 

Sections 211 and 212 of Title Two of the Compact, as amended, 

and the MUORA, as amended, provide for the following: 

The parties agree to extend the MUORA for a period of fifty 

years from 2016 (the current expiration date) to 2066, with a U.S. 

option to extend it for an additional twenty years to Fiscal Year 

2086. 

To achieve the flexibility necessary to permit the long-term extension of the agreement, both sides agreed to a schedule of early 

termination payments in the event the United States needs to 

leave Kwajalein before the end of the agreement. This outcome 

could be exercised anytime after 2023, on advance notice of at least 

seven years. 

As Compensation: 

These agreements establish a new series of Kwajalein payments beginning in Fiscal Year 2004 (October 1, 2003) at a level of $15 

million per year (increased from the current $11.3 million) with a 

further increase to a new base of $18 million in 2014. The United 

States Government is obligated in any case to make payments 

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through Fiscal Year 2023, and thereafter, depending on whether it 

chooses to continue its use of Kwajalein Atoll. The RMI has assured us that it will endeavor to ensure that payments to landowners are distributed more equitably than they have been in the 

past in a manner consistent with Marshallese custom and tradition.

The U.S. will continue paying the $1.9 million per year in Kwajalein impact money established in the current agreement. However, 

beginning in 2004, this payment, which has not previously been adjusted for inflation, will be subject to the provisions of the new 

Compact Fiscal Procedures Agreement, will be indexed for inflation 

based on the formula established in the Compact, as amended, and 

emphasis will be on addressing the special needs of the Kwajalein 

landowners most impacted by the United States presence on Kwajalein. 

Pursuant to the Compact, U.S. Army Kwajalein Atoll (USAKA) 

has developed, in cooperation with the RMI Environmental Protection Authority, a strong set of environmental standards and a formal process to review these standards annually and report to both 

governments. To promote a greater RMI capability for independent 

analysis of the Survey’s findings and conclusions, the U.S. will provide an annual grant of $200,000.00 to support increased participation of the GRMI EPA in the Survey. 

For some years now overcrowding on the Kwajalein island of 

Ebeye where most of the Marshallese work force supporting the defense sites lives, has created an unmet series of special infrastructure needs for the Marshallese Communities on Ebeye and some 

other islands of the Kwajalein Atoll. This agreement will address 

these needs in the following way: 

First, the U.S. and the RMI have agreed that $3.1 million per 

year of the RMI grant funding will go towards meeting the special 

infrastructure and development needs of the Marshallese communities on Kwajalein Atoll. In 2014, this funding will increase to 

$5.1 million per year. These funds are indexed according to the 

Compact Title Two formula. Second, considering the $1.9 million impact funding mentioned 

above, which is specified by the Compact to offset the impact of 

U.S. defense activities on Kwajalein Atoll, together with the Ebeye 

special needs funding, $5 million per year (increasing to $7 million 

in 2014), all of which will be focused on improving the quality of 

life of the Marshallese communities on Kwajalein, starting 1 October 2004. 

In sum, the Administration feels that extending the MUORA, in 

concert with the provisions of the amended Compact, will promote 

the economic stability and opportunity of the RMI for the indefinite 

future. 

IMMIGRATION

Based on our mixed experience since the Compact entered into 

effect, as well as in the wake of the September 11th attack, we 

have reexamined the immigration provisions of the existing Compact. These sections provide that citizens of the RMI and FSM 

‘‘may enter into, lawfully engage in occupations, and establish residence as a nonimmigrant in the United States.’’ Our examination 

concluded the new provisions would be amended to: 

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• Require FAS citizens to use passports. • Institute child adoption visa procedures. • Implement visa entry procedures for naturalized citizens. • Preclude passport sales and similar ‘‘legal’’ programs that 

afford persons from countries other than the FSM and the RMI 

country visa-free admission privileges under the Compact. • Make explicit the inherent authority of the Government of 

the United States to regulate the terms and conditions of an 

FSM or RMI citizens’ admission and stay in the United States, 

including its territories and possessions, • Make explicit that the Immigration and Nationality Act, 

as amended, applies in full to persons seeking admission to, or 

the right to remain in, the United States pursuant to the Compact. 

Under the Compact, as amended, the United States will now require passports for FSM and RMI citizens seeking admission as 

nonimmigrants to the United States. Further, naturalized citizens 

of the FSM and RMI will now, with certain limited exceptions, be 

ineligible for visa-free admission to the United States. In addition, 

the Compact, as amended, provides other safeguards to prevent the 

admission of inadmissible persons who might seek to exploit the 

visa-free immigration privileges provided under the Compact. It addresses explicitly the problem of passport sales and other ‘‘legal’’

naturalization schemes designed to provide visa-free admission 

privileges to persons from countries other than the FSM and the 

RMI under the Compact. The Compact, as amended, also provides 

express safeguards for FSM and RMI children who are coming to 

the United States permanently pursuant to an adoption, or for the 

purpose of adoption, by requiring that such children to be in possession of an immigrant visa. This codifies existing law and brings 

the Freely Associated States into harmony with other countries 

concerning child adoptions and protections available to adopted 

children. 

IMPACT

Section 104(e) of the existing and amended Compact requires the 

President to report annually to Congress on the impact of the Compact. Past annual reports and a recent GAO study document the 

substantial impact of FAS migration to the State of Hawaii, Guam, 

and the Commonwealth of the Northern Mariana Islands (CNMI). 

The amended Compact and other proposed amendments to the 

Compact Act address the migratory impact issue in three ways: 

• First, we propose to provide $15 million per year of direct 

compensation to Hawaii, Guam, American Samoa, and the 

CNMI for the negative impacts of migration. 

• Second, our amended Compacts strengthen immigration 

provisions to improve our ability to regulate RMI and FSM migrants who are eligible for admission. 

• Third, our amended Compacts commit a substantial portion of U.S. economic assistance through Fiscal Year 2023 and 

thereafter of the proceeds of the Trust Fund to improve the 

health and education of potential migrants from the FSM and 

RMI, thereby reducing the impact of migration under the Compact.

The annual impact funding of $15 million will be: 

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• a mandatory appropriation for twenty years. • allocated based on a pro rata formula reflecting a periodic 

census of Micronesians living in Hawaii, Guam, American 

Samoa, and the Commonwealth of the Northern Mariana Islands. 

Conclusion 

Thank you for this opportunity to present the Administration’s 

views on the Compact Act, including the Compacts we signed with 

the FSM and RMI. Let me assure you that we welcome any and 

every opportunity to keep the Committee informed as your deliberations proceed on the Compact Act. 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the Resolution S.J. Res. 16, as ordered reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new 

matter is printed in italic, existing law in which no change is proposed is shown in roman): 

PUBLIC LAW 107–67 

* * * * * * * 

SEC. 605. Unless otherwise specified during the current fiscal 

year, no part of any appropriation contained in this or any other 

Act shall be used to pay the compensation of any officer or employee of the Government of the United States (including any agency the majority of the stock of which is owned by the Government 

of the United States) whose post of duty is in the continental 

United States unless such person: (1) is a citizen of the United 

States, (2) is a person in the service of the United States on the 

date of the enactment of this Act who, being eligible for citizenship, 

has filed a declaration of intention to become a citizen of the 

United States prior to such date and is actually residing in the 

United States; (3) is a person who owes allegiance to the United 

States; (4) is an alien from Cuba, Poland, South Vietnam, the countries of the former Soviet Union, or the Baltic countries lawfully 

admitted to the United States for permanent residence; (5) is a 

South Vietnamese, Cambodian, or Laotian refugee paroled in the 

United States after January 1, 1975; or (6) is a national of the People’s Republic of China who qualifies for adjustment of status pursuant to the Chinese Student Protection Act of 1992: Provided, 

That for the purpose of this section, an affidavit signed by any such 

person shall be considered prima facie evidence that the requirements of this section with respect to his or her status have been 

complied with: Provided further, That any person making a false 

affidavit shall be guilty of a felony, and, upon conviction, shall be 

fined no more than $4,000 or imprisoned for not more than 1 year, 

or both: Provided further, That the above penal clause shall be in 

addition to, and not in substitution for, any other provisions of existing law: Provided further, That any payment made to any officer 

or employee contrary to the provisions of this section shall be recoverable in action by the Federal Government. This section shall 

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not apply to citizens of Ireland, Israel, øor the Republic of the Philippines,¿ the Republic of the Phippines, Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of 

Palau, or to nationals of those countries allied with the United 

States in a current defense effort, or to international broadcasters 

employed by the United States Information Agency, or to temporary employment of translators, or to temporary employment in 

the field service (not to exceed 60 days) as a result of emergencies. 

* * * * * * *

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