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[House Report 108-262]
[From the U.S. Government Publishing Office]

                                                                 H.L.C.
                                                                       
108th Congress                                            Rept. 108-262
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1
======================================================================
 
           COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF 2003

                                _______
                                

               September 3, 2003.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                      [To accompany H.J. Res. 63]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on International Relations, to whom was 
referred the joint resolution (H.J. Res. 63) 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 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 an amendment and recommends that the 
joint resolution as amended do pass.

                           TABLE OF CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................    72
Background and Need for the Legislation..........................    73
Hearings.........................................................    75
Committee Consideration..........................................    76
Committee Oversight Findings.....................................    76
New Budget Authority and Tax Expenditures........................    76
Congressional Budget Office Cost Estimate........................    76
Performance Goals and Objectives.................................    80
Constitutional Authority Statement...............................    80
Section-by-Section Analysis......................................    80
Section-by-Section Summary of the Amended Compact of Free 
  Association with the Federated States of Micronesia [Sec. 
  201(a) of H.J. Res. 63]........................................    86
Section-by-Section Summary of the Amended Compact of Free 
  Association with the Republic of the Marshall Islands [Sec. 
  201(b) of H.J. Res. 63]........................................    97
New Advisory Committees..........................................   108
Congressional Accountability Act.................................   108
Federal Mandates.................................................   108
Changes in Existing Law Made by the Bill, as Reported............   108
Additional Views of Representative Nick Smith....................   110

                             The Amendment

    The amendment is as follows:
    Strike all after the resolving clause 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 UNITED STATES 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.
        (d) Amendment, Change, or Termination in the U.S.-
            FSM Compact, the U.S.-RMI Compact and Certain 
            Agreements.
        (e) Subsidiary Agreement 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.
        (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.
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) Effect of U.S.-FSM Compact and U.S.-RMI Compact 
            on U.S. Areas; Related Authorization and 
            Continuing Appropriation.
        (f) Foreign Loans.
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.
        (f) Continuing Programs and Laws.
        (g) College of Micronesia.
        (h) Trust Territory Debts to U.S. Federal Agencies.
        (i) Use of DOD Medical Facilities.
        (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.
Sec. 106. Construction Contract Assistance.
        (a) Assistance to U.S. Firms.
        (b) Authorization of Appropriations.
Sec. 107. Limitations.
        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.

  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.
        (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

        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 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.--
            (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 Association 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: Articles III, IV and X of the 
                agreement referred to in section 462(b)(6) of the U.S.-
                RMI Compact:
                            (i) Article III and IV of the agreement 
                        referred to in section 462(b)(6) of the U.S.-
                        FSM Compact.
                            (ii) 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 is 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.

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 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 three 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 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 shallenjoy 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 micronesia.--The 
        Government of the Federated States of Micronesia 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.

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.
            (4) The United States and the Republic of the Marshall 
        Islands entered into an agreement in furtherance of paragraphs 
        (1) through (3) of this subsection on July 21, 1986. Nothing in 
        this subsection creates any rights or obligations beyond those 
        provided for in the original enacted version of Public Law 99-
        239.
    (c) Section 177 Agreement.--
            (1) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that in furtherance of the purposes 
        of Article I of the Subsidiary Agreement for Implementation of 
        Section 177 of the Compact, the payment of the amount specified 
        therein shall be made by the United States under Article I of 
        the Agreement between the Government of the United States and 
        the Government of the Marshall Islands for the Implementation 
        of section 177 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 bythe United 
States pursuant to Article I of the Section 177 Agreement into an 
interest-bearing 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.
            (5) The United States made the payment called for under 
        paragraph (1) of this subsection in November 1986. Nothing in 
        this subsection creates any rights or obligations beyond those 
        provided for in the original enacted version of Public Law 99-
        239.
    (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 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.
            (3) The amounts specified in paragraph (1) of this 
        subsection were paid as specified. Nothing in this subsection 
        creates any rights or obligations beyond those provided for in 
        the original enacted version of Public Law 99-239. The 
        provisions of section 177 of the Compact, section 177 of the 
        U.S.-FSM Compact, section 177 of the U.S.-RMI Compact, and 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 any such claims are terminated and barred.
    (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 118 (as of April 30, 2003) 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.
            (2) Agricultural and food programs.--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--
                    (A) without reimbursement, to continue the planting 
                and agricultural maintenance program on Enewetak;
                    (B) 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.
        The President shall ensure the assistance provided under these 
        programs reflects the changes in the population since the 
        inception of such programs.
            (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 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. 
        Nothing in this subsection creates any rights or obligations 
        beyond those provided for in the original enacted version of 
        Public Law 99-239.
    (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 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. 
        Nothing in this subsection creates any rights or obligations 
        beyond those provided for in the original enacted version of 
        Public Law 99-239.
    (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.
            (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. Nothing in 
        this subsection creates any rights or obligations beyond those 
        provided for in the original enacted version of Public Law 99-
        239.
    (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 million dollars.
            (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 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 
UnitedStates be liable for any loss or damage to person or property in 
respect to the resettlement of Enjebi by the people of Enjebi, pursuant 
to the provision of this subsection or otherwise.
            (7) Status of payment.--The ex gratia payment provided for 
        in this subsection was made. Nothing in this subsection creates 
        any rights or obligations beyond those provided for in the 
        original enacted version of Public Law 99-239.
    (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 paragraph (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. Nothing in this subsection creates any rights 
        or obligations beyond those provided for in the original 
        enacted version of Public Law 99-239.
    (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 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 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.
                    (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 three 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 torespect 
the laws and regulations of the Government of the Republic of the 
Marshall Islands.
            (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 marshall 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.

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, the 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. The 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 the 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.--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), shall be 
        used for the purpose of increasing the machine-readability and 
        security of passports issued by such jurisdictions. Such funds 
        must 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.
            (3) Information-sharing.--As a condition of assistance 
        under the U.S.-FSM Compact and the U.S.-RMI Compact, the 
        governments of the Federated States of Micronesia and the 
        Republic of the Marshall Islands shall 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.--The 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, the 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) Effect of U.S.-FSM Compact and U.S.-RMI Compact on Certain U.S. 
Areas; Related Authorization and Continuing Appropriation.--
            (1) 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 
                person admitted pursuant to section 141 of the 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 (i) is a resident of an 
                affected jurisdiction, and (ii) has had periods of 
                residence in American Samoa, Guam, the Commonwealth of 
                the Northern Mariana Islands, or a State of the United 
                States with a duration, in the aggregate, of less than 
                10 years; and their children under the age of 18 who 
                were admitted as nonimmigrants under the U.S.-RMI 
                Compact, the U.S.-FSM Compact, or the Palau Compact. 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.
            (2) Authorization and continuing appropriation.--There is 
        hereby authorized and appropriated to the Secretary of the 
        Interior, out of any money in the Treasury not otherwise 
        appropriated, to remain available until expended, for each 
        fiscal year from 2004 through 2023, $15,000,000 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.
            (3) 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 from funds appropriated pursuant to the 
                authorization contained in paragraph (2) of this 
                subsection.
            (4) 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 (2) of this subsection, as reduced 
        by any deductions authorized by subparagraph (C) of paragraph 
        (3) 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.
    (f) Foreign Loans.--The Congress hereby reaffirms the United States 
position that the United States Government is not responsible for 
foreign loans or debt obtained by the Governments of the Federated 
States of Micronesia and the Republic of the Marshall Islands.

SEC. 105. SUPPLEMENTAL PROVISIONS.

    (a) Domestic Program Requirements.--Except as may otherwise be 
provided in this joint resolution, all United States Federal programs 
and services extended to or operated in the Federated States of 
Micronesia or the Republic of the Marshall Islands are and shall remain 
subject to all applicable criteria, standards, reporting requirements, 
auditing procedures, and other rules and regulations applicable to such 
programs when operating in the United States (including its territories 
and commonwealths).
    (b) Relations With the Federated States of Micronesia and the 
Republic of the Marshall Islands.--
            (1) Appropriations made pursuant to Article I of Title Two 
        and subsection (a)(2) of section 221 of Article II of Title Two 
        of the U.S.-FSM Compact and the U.S.-RMI Compact shall be made 
        to the Secretary of the Interior, who shall have the authority 
        necessary to fulfill his responsibilities for monitoring and 
        managing the funds so appropriated consistent with the U.S.-FSM 
        Compact and the U.S.-RMI Compact, including the agreements 
        referred to in section 462(b)(4) of the U.S.-FSM Compact and 
        U.S.-RMI Compact (relating to Fiscal Procedures) and the 
        agreements referred to in section 462(b)(5) of the U.S.-FSM 
        Compact and the U.S.-RMI Compact (regarding the Trust Fund).
            (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.
            (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 
        the Secretary of the Treasury regarding overall economic 
        conditions in 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) 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.
            (7) 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. 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.
            (8) 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.
            (9) 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 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. 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:
            (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, 
        except that, for purposes of an orderly reduction of United 
        States programs and services in the Federated States of 
        Micronesia, the Marshall Islands, and Palau, United States 
        programs or services not specifically authorized by the Compact 
        of Free Association or by other provisions of law may continue 
        but, unless reimbursed by the respective freely associated 
        state, not in excess of the following amounts:
                    (A) For fiscal year 1987, an amount not to exceed 
                75 per centum of the total amount appropriated for such 
                programs for fiscal year 1986.
                    (B) For fiscal year 1988, an amount not to exceed 
                50 per centum of the total amount appropriated for such 
                programs for fiscal year 1986.
                    (C) For fiscal year 1989, an amount not to exceed 
                25 per centum of the total amount appropriated for such 
                programs for fiscal year 1986.
    (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.--The 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. The 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) The Legal Services Corporation.
                    (B) The Public Health Service.
                    (C) 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.
    (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) Use of DOD Medical Facilities.--The Secretary of Defense is 
hereby authorized to cooperate with government authorities responsible 
for provision of medical services in the Federated States of Micronesia 
and the Republic of the Marshall Islands in order to permit use of 
medical facilities of the Department of Defense for persons properly 
referred by such authorities in accordance with Article XVII of the 
agreements referred to in section 462(b)(7) of the U.S.-FSM Compact and 
the U.S.-RMI Compact. The Secretary of Health and Human Services is 
hereby authorized and directed to 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.
    (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, the USDA 
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 Actshall 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 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 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 and Hansen's Disease. 
The Secretary of the Interior shall assist the Government of the 
Federated States of Micronesia and the Government of the Republic of 
the Marshall Islands 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 the 
Congress of the United States regarding the proper interpretation of 
the international 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, provide 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 long-term 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 are authorized to be made available to the 
Federated States of Micronesia and the Republic of the Marshall 
Islands: the Small Business Administration, Economic Development 
Administration, and the Rural Utilities Services (formerly Rural 
Electrification Administration); and 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.--
            (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 million for the Federated States of Micronesia and 
        $20 million 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 subsection 111 of that 
        resolution not have been appropriated, such amount not yet 
        appropriated may be appropriated, without regard to divisions 
        between amounts authorized in subsection 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, 2004. Only adverse economic effect occurring 
        during the initial fifteen-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 money 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 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; 5 U.S.C. 3101 note) 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,''.

  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.--

                                PREAMBLE

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

    Affirming that their Governments and their relationship as 
Governments are founded upon respect for human rights and fundamental 
freedoms for all, and that the people of the Federated States of 
Micronesia have the right to enjoy self-government; and
    Affirming the common interests of the United States of America and 
the Federated States of Micronesia in creating and maintaining their 
close and mutually beneficial relationship through the free and 
voluntary association of their respective Governments; and
    Affirming the interest of the Government of the United States in 
promoting the economic advancement and budgetary self-reliance of the 
Federated States of Micronesia; and
    Recognizing that their relationship until the entry into force on 
November 3, 1986 of the Compact was based upon the International 
Trusteeship System of the United Nations Charter, and in particular 
Article 76 of the Charter; and that pursuant to Article 76 of the 
Charter, the people of the Federated States of Micronesia have 
progressively developed their institutions of self-government, and that 
in the exercise of their sovereign right to self-determination they, 
through their freely-expressed wishes, have adopted a Constitution 
appropriate to their particular circumstances; and
    Recognizing that the Compact reflected their common desire to 
terminate the Trusteeship and establish a government-to-government 
relationship which was in accordance with the new political status 
based on the freely expressed wishes of the people of the Federated 
States of Micronesia and appropriate to their particular circumstances; 
and
    Recognizing that the people of the Federated States of Micronesia 
have and retain their sovereignty and their sovereign right to self-
determination and the inherent right to adopt and amend their own 
Constitution and form of government and that the approval of the entry 
of the Government of the Federated States of Micronesia into the 
Compact by the people of the Federated States of Micronesia constituted 
an exercise of their sovereign right to self-determination; and
    Recognizing the common desire of the people of the United States 
and the people of the Federated States of Micronesia to maintain their 
close government-to-government relationship, the United States and the 
Federated States of Micronesia:
    NOW, THEREFORE, MUTUALLY AGREE to continue and strengthen their 
relationship of free association by amending the Compact, which 
continues to provide a full measure of self-government for the people 
of the Federated States of Micronesia; and
    FURTHER AGREE that the relationship of free association derives 
from and is as set forth in this Compact, as amended, by the 
Governments of the United States and the Federated States of 
Micronesia; and that, during such relationship of free association, the 
respective rights and responsibilities of the Government of the United 
States and the Government of the Federated States of Micronesia in 
regard to this relationship of free association derive from and are as 
set forth in this Compact, as amended.

                               TITLE ONE

                         GOVERNMENTAL RELATIONS

                               Article I

                            Self-Government

Section 111
    The people of the Federated States of Micronesia, acting through 
the Government established under their Constitution, are self-
governing.

                               Article II

                            Foreign Affairs

Section 121
    (a) The Government of the Federated States of Micronesia has the 
capacity to conduct foreign affairs and shall do so in its own name and 
right, except as otherwise provided in this Compact, as amended.
    (b) The foreign affairs capacity of the Government of the Federated 
States of Micronesia includes:
            (1) the conduct of foreign affairs relating to law of the 
        sea and marine resources matters, including the harvesting, 
        conservation, exploration or exploitation of living and non-
        living resources from the sea, seabed or subsoil to the full 
        extent recognized under international law;
            (2) the conduct of its commercial, diplomatic, consular, 
        economic, trade, banking, postal, civil aviation, 
        communications, and cultural relations, including negotiations 
        for the receipt of developmental loans and grants and the 
        conclusion of arrangements with other governments and 
        international and intergovernmental organizations, including 
        any matters specially benefiting its individual citizens.
    (c) The Government of the United States recognizes that the 
Government of the Federated States of Micronesia has the capacity to 
enter into, in its own name and right, treaties and other international 
agreements with governments and regional and international 
organizations.
    (d) In the conduct of its foreign affairs, the Government of the 
Federated States of Micronesia confirms that it shall act in accordance 
with principles of international law and shall settle its international 
disputes by peaceful means.
Section 122
    The Government of the United States shall support applications by 
the Government of the Federated States of Micronesia for membership or 
other participation in regional or international organizations as may 
be mutually agreed.
Section 123
    (a) In recognition of the authority and responsibility of the 
Government of the United States under Title Three, the Government of 
the Federated States of Micronesia shall consult, in the conduct of its 
foreign affairs, with the Government of the United States.
    (b) In recognition of the foreign affairs capacity of the 
Government of the Federated States of Micronesia, the Government of the 
United States, in the conduct of its foreign affairs, shall consult 
with the Government of the Federated States of Micronesia on matters 
that the Government of the United States regards as relating to or 
affecting the Government of the Federated States of Micronesia.
Section 124
    The Government of the United States may assist or act on behalf of 
the Government of the Federated States of Micronesia in the area of 
foreign affairs as may be requested and mutually agreed from time to 
time.The Government of the United States shall not be responsible to 
third parties for the actions of the Government of the Federated States 
of Micronesia undertaken with the assistance or through the agency of 
the Government of the United States pursuant to this section unless 
expressly agreed.
Section 125
    The Government of the United States shall not be responsible for 
nor obligated by any actions taken by the Government of the Federated 
States of Micronesia in the area of foreign affairs, except as may from 
time to time be expressly agreed.
Section 126
    At the request of the Government of the Federated States of 
Micronesia and subject to the consent of the receiving state, the 
Government of the United States shall extend consular assistance on the 
same basis as for citizens of the United States to citizens of the 
Federated States of Micronesia for travel outside the Federated States 
of Micronesia, the United States and its territories and possessions.
Section 127
    Except as otherwise provided in this Compact, as amended, or its 
related agreements, all obligations, responsibilities, rights and 
benefits of the Government of the United States as Administering 
Authority which resulted from the application pursuant to the 
Trusteeship Agreement of any treaty or other international agreement to 
the Trust Territory of the Pacific Islands on November 2, 1986, are, as 
of that date, no longer assumed and enjoyed by the Government of the 
United States.

                              Article III

                             Communications

Section 131
    (a) The Government of the Federated States of Micronesia has full 
authority and responsibility to regulate its domestic and foreign 
communications, and the Government of the United States shall provide 
communications assistance as mutually agreed.
    (b) On May 24, 1993, the Government of the Federated States of 
Micronesia elected to undertake all functions previously performed by 
the Government of the United States with respect to domestic and 
foreign communications, except for those functions set forth in a 
separate agreement entered into pursuant to this section of the 
Compact, as amended.
Section 132
    The Government of the Federated States of Micronesia shall permit 
the Government of the United States to operate telecommunications 
services in the Federated States of Micronesia to the extent necessary 
to fulfill the obligations of the Government of the United States under 
this Compact, as amended, in accordance with the terms of separate 
agreements entered into pursuant to this section of the Compact, as 
amended.

                               Article IV

                              Immigration

Section 141
    (a) In furtherance of the special and unique relationship that 
exists between the United States and the Federated States of 
Micronesia, under the Compact, as amended, any person in the following 
categories may be admitted to lawfully engage in occupations, and 
establish residence as a nonimmigrant in the United States and its 
territories and possessions (the ``United States'') without regard to 
paragraph (5) or (7)(B)(i)(II) of section 212(a) of the Immigration and 
Nationality Act, as amended, 8 U.S.C. 1182(a)(5) or (7)(B)(i)(II):
            (1) a person who, on November 2, 1986, was a citizen of the 
        Trust Territory of the Pacific Islands, as defined in Title 53 
        of the Trust Territory Code in force on January 1, 1979, and 
        has become and remains a citizen of the Federated States of 
        Micronesia;
            (2) a person who acquires the citizenship of the Federated 
        States of Micronesia at birth, on or after the effective date 
        of the Constitution of the Federated States of Micronesia;
            (3) an immediate relative of a person referred to in 
        paragraphs (1) or (2) of this section, provided that such 
        immediate relative is a naturalized citizen of the Federated 
        States of Micronesia who has been an actual resident there for 
        not less than five years after attaining such naturalization 
        and who holds a certificate of actual residence, and further 
        provided, that, in the case of a spouse, such spouse has been 
        married to the person referred to in paragraph (1) or (2) of 
        this section for at least five years, and further provided, 
        that the Government of the United States is satisfied that such 
        naturalized citizen meets the requirement of subsection (b) of 
        section 104 of Public Law 99-239 as it was in effect on the day 
        prior to the effective date of this Compact, as amended;
            (4) a naturalized citizen of the Federated States of 
        Micronesia who was an actual resident there for not less than 
        five years after attaining such naturalization and who 
        satisfied these requirements as of April 30, 2003, who 
        continues to be an actual resident and holds a certificate of 
        actual residence, and whose name is included in a list 
        furnished bythe Government of the Federated States of 
Micronesia to the Government of the United States no later than the 
effective date of the Compact, as amended, in form and content 
acceptable to the Government of the United States, provided, that the 
Government of the United States is satisfied that such naturalized 
citizen meets the requirement of subsection (b) of section 104 of 
Public Law 99-239 as it was in effect on the day prior to the effective 
date of this Compact, as amended; or
            (5) an immediate relative of a citizen of the Federated 
        States of Micronesia, regardless of the immediate relative's 
        country of citizenship or period of residence in the Federated 
        States of Micronesia, if the citizen of the Federated States of 
        Micronesia is serving on active duty in any branch of the 
        United States Armed Forces, or in the active reserves.
    (b) Notwithstanding subsection (a) of this section, a person who is 
coming to the United States pursuant to an adoption outside the United 
States, or for the purpose of adoption in the United States, is 
ineligible for admission under the Compact and the Compact, as amended. 
This subsection shall apply to any person who is or was an applicant 
for admission to the United States on or after March 1, 2003, including 
any applicant for admission in removal proceedings (including appellate 
proceedings) on or after March 1, 2003, regardless of the date such 
proceedings were commenced. This subsection shall have no effect on the 
ability of the Government of the United States or any United States 
State or local government to commence or otherwise take any action 
against any person or entity who has violated any law relating to the 
adoption of any person.
    (c) Notwithstanding subsection (a) of this section, no person who 
has been or is granted citizenship in the Federated States of 
Micronesia, or has been or is issued a Federated States of Micronesia 
passport pursuant to any investment, passport sale, or similar program 
has been or shall be eligible for admission to the United States under 
the Compact or the Compact, as amended.
    (d) A person admitted to the United States under the Compact, or 
the Compact, as amended, shall be considered to have the permission of 
the Government of the United States to accept employment in the United 
States. An unexpired Federated States of Micronesia passport with 
unexpired documentation issued by the Government of the United States 
evidencing admission under the Compact or the Compact, as amended, 
shall be considered to be documentation establishing identity and 
employment authorization under section 274A(b)(1)(B) of the Immigration 
and Nationality Act, as amended, 8 U.S.C. 1324a(b)(1)(B). The 
Government of the United States will take reasonable and appropriate 
steps to implement and publicize this provision, and the Government of 
the Federated States of Micronesia will also take reasonable and 
appropriate steps to publicize this provision.
    (e) For purposes of the Compact and the Compact, as amended:
            (1) the term ``residence'' with respect to a person means 
        the person's principal, actual dwelling place in fact, without 
        regard to intent, as provided in section 101(a)(33) of the 
        Immigration and Nationality Act, as amended, 8 U.S.C. 
        1101(a)(33), and variations of the term ``residence,'' 
        including ``resident'' and ``reside,'' shall be similarly 
        construed;
            (2) the term ``actual residence'' means physical presence 
        in the Federated States of Micronesia during eighty-five 
        percent of the five-year period of residency required by 
        section 141(a)(3) and (4);
            (3) the term ``certificate of actual residence'' means a 
        certificate issued to a naturalized citizen by the Government 
        of the Federated States of Micronesia stating that the citizen 
        has complied with the actual residence requirement of section 
        141(a)(3) or (4);
            (4) the term ``nonimmigrant'' means an alien who is not an 
        ``immigrant'' as defined in section 101(a)(15) of such Act, 8 
        U.S.C. 1101(a)(15); and
            (5) the term ``immediate relative'' means a spouse, or 
        unmarried son or unmarried daughter less than 21 years of age.
    (f) The Immigration and Nationality Act, as amended, shall apply to 
any person admitted or seeking admission to the United States (other 
than a United States possession or territory where such Act does not 
apply) under the Compact or the Compact, as amended, and nothing in the 
Compact or the Compact, as amended, shall be construed to limit, 
preclude, or modify the applicability of, with respect to such person:
            (1) any ground of inadmissibility or deportability under 
        such Act (except sections 212(a)(5) and 212(a)(7)(B)(i)(II) of 
        such Act, as provided in subsection (a) of this section), and 
        any defense thereto, provided that, section 237(a)(5) of such 
        Act shall be construed and applied as if it reads as follows: 
        ``any alien who has been admitted under the Compact, or the 
        Compact, as amended, who cannotshow that he or she has 
sufficient means of support in the United States, is deportable'';
            (2) the authority of the Government of the United States 
        under section 214(a)(1) of such Act to provide that admission 
        as a nonimmigrant shall be for such time and under such 
        conditions as the Government of the United States may by 
        regulations prescribe;
            (3) Except for the treatment of certain documentation for 
        purposes of section 274A(b)(1)(B) of such Act as provided by 
        subsection (d) of this section of the Compact, as amended, any 
        requirement under section 274A, including but not limited to 
        section 274A(b)(1)(E);
            (4) Section 643 of the Illegal Immigration Reform and 
        Immigrant Responsibility Act of 1996, Public Law 104-208, and 
        actions taken pursuant to section 643; and
            (5) the authority of the Government of the United States 
        otherwise to administer and enforce the Immigration and 
        Nationality Act, as amended, or other United States law.
    (g) Any authority possessed by the Government of the United States 
under this section of the Compact or the Compact, as amended, may also 
be exercised by the Government of a territory or possession of the 
United States where the Immigration and Nationality Act, as amended, 
does not apply, to the extent such exercise of authority is lawful 
under a statute or regulation of such territory or possession that is 
authorized by the laws of the United States.
    (h) Subsection (a) of this section does not confer on a citizen of 
the Federated States of Micronesia the right to establish the residence 
necessary for naturalization under the Immigration and Nationality Act, 
as amended, or to petition for benefits for alien relatives under that 
Act. Subsection (a) of this section, however, shall not prevent a 
citizen of the Federated States of Micronesia from otherwise acquiring 
such rights or lawful permanent resident alien status in the United 
States.
Section 142
    (a) Any citizen or national of the United States may be admitted, 
to lawfully engage in occupations, and reside in the Federated States 
of Micronesia, subject to the rights of the Government of the Federated 
States of Micronesia to deny entry to or deport any such citizen or 
national as an undesirable alien. Any determination of inadmissibility 
or deportability shall be based on reasonable statutory grounds and 
shall be subject to appropriate administrative and judicial review 
within the Federated States of Micronesia. If a citizen or national of 
the United States is a spouse of a citizen of the Federated States of 
Micronesia, the Government of the Federated States of Micronesia shall 
allow the United States citizen spouse to establish residence. Should 
the Federated States of Micronesia citizen spouse predecease the United 
States citizen spouse during the marriage, the Government of the 
Federated States of Micronesia shall allow the United States citizen 
spouse to continue to reside in the Federated States of Micronesia.
    (b) In enacting any laws or imposing any requirements with respect 
to citizens and nationals of the United States entering the Federated 
States of Micronesia under subsection (a) of this section, including 
any grounds of inadmissibility or deportability, the Government of the 
Federated States of Micronesia shall accord to such citizens and 
nationals of the United States treatment no less favorable than that 
accorded to citizens of other countries.
    (c) Consistent with subsection (a) of this section, with respect to 
citizens and nationals of the United States seeking to engage in 
employment or invest in the Federated States of Micronesia, the 
Government of the Federated States of Micronesia shall adopt 
immigration-related procedures no less favorable than those adopted by 
the Government of the United States with respect to citizens of the 
Federated States of Micronesia seeking employment in the United States.
Section 143
    Any person who relinquishes, or otherwise loses, his United States 
nationality or citizenship, or his Federated States of Micronesia 
citizenship, shall be ineligible to receive the privileges set forth in 
sections 141 and 142. Any such person may apply for admission to the 
United States or the Federated States of Micronesia, as the case may 
be, in accordance with any other applicable laws of the United States 
or the Federated States of Micronesia relating to immigration of aliens 
from other countries. The laws of the Federated States of Micronesia or 
the United States, as the case may be, shall dictate the terms and 
conditions of any such person's stay.

                               Article V

                             Representation

Section 151
    Relations between the Government of the United States and the 
Government of the Federated States of Micronesia shall be conducted in 
accordance with the Vienna Convention on Diplomatic Relations. In 
addition to diplomatic missions and representation, the Governments may 
establish and maintain other offices and designate otherrepresentatives 
on terms and in locations as may be mutually agreed.
Section 152
    (a) Any citizen or national of the United States who, without 
authority of the United States, acts as the agent of the Government of 
the Federated States of Micronesia with regard to matters specified in 
the provisions of the Foreign Agents Registration Act of 1938, as 
amended (22 U.S.C. 611 et seq.), that apply with respect to an agent of 
a foreign principal shall be subject to the requirements of such Act. 
Failure to comply with such requirements shall subject such citizen or 
national to the same penalties and provisions of law as apply in the 
case of the failure of such an agent of a foreign principal to comply 
with such requirements. For purposes of the Foreign Agents Registration 
Act of 1938, the Federated States of Micronesia shall be considered to 
be a foreign country.
    (b) Subsection (a) of this section shall not apply to a citizen or 
national of the United States employed by the Government of the 
Federated States of Micronesia with respect to whom the Government of 
the Federated States of Micronesia from time to time certifies to the 
Government of the United States that such citizen or national is an 
employee of the Federated States of Micronesia whose principal duties 
are other than those matters specified in the Foreign Agents 
Registration Act of 1938, as amended, that apply with respect to an 
agent of a foreign principal. The agency or officer of the United 
States receiving such certifications shall cause them to be filed with 
the Attorney General, who shall maintain a publicly available list of 
the persons so certified.

                               Article VI

                        Environmental Protection

Section 161
    The Governments of the United States and the Federated States of 
Micronesia declare that it is their policy to promote efforts to 
prevent or eliminate damage to the environment and biosphere and to 
enrich understanding of the natural resources of the Federated States 
of Micronesia. In order to carry out this policy, the Government of the 
United States and the Government of the Federated States of Micronesia 
agree to the following mutual and reciprocal undertakings.
    (a) The Government of the United States:
            (1) shall continue to apply the environmental controls in 
        effect on November 2, 1986 to those of its continuing 
        activities subject to section 161(a)(2), unless and until those 
        controls are modified under sections 161(a)(3) and 161(a)(4);
            (2) shall apply the National Environmental Policy Act of 
        1969, 83 Stat. 852, 42 U.S.C. 4321 et seq., to its activities 
        under the Compact, as amended, and its related agreements as if 
        the Federated States of Micronesia were the United States;
            (3) shall comply also, in the conduct of any activity 
        requiring the preparation of an Environmental Impact Statement 
        under section 161(a)(2), with standards substantively similar 
        to those required by the following laws of the United States, 
        taking into account the particular environment of the Federated 
        States of Micronesia: the Endangered Species Act of 1973, as 
        amended, 87 Stat. 884, 16 U.S.C. 1531 et seq.; the Clean Air 
        Act, as amended, 77 Stat. 392, 42 U.S.C. Supp. 7401 et seq.; 
        the Clean Water Act (Federal Water Pollution Control Act), as 
        amended, 86 Stat. 896, 33 U.S.C. 1251 et seq.; Title I of the 
        Marine Protection, Research and Sanctuaries Act of 1972 (the 
        Ocean Dumping Act), 33 U.S.C. 1411 et seq.; the Toxic 
        Substances Control Act, as amended, 15 U.S.C. 2601 et seq.; the 
        Solid Waste Disposal Act, as amended, 42 U.S.C. 6901 et seq.; 
        and such other environmental protection laws of the United 
        States and of the Federated States of Micronesia, as may be 
        mutually agreed from time to time with the Government of the 
        Federated States of Micronesia; and
            (4) shall develop, prior to conducting any activity 
        requiring the preparation of an Environmental Impact Statement 
        under section 161(a)(2), written standards and procedures, as 
        agreed with the Government of the Federated States of 
        Micronesia, to implement the substantive provisions of the laws 
        made applicable to U.S. Government activities in the Federated 
        States of Micronesia, pursuant to section 161(a)(3).
    (b) The Government of the Federated States of Micronesia shall 
continue to develop and implement standards and procedures to protect 
its environment. As a reciprocal obligation to the undertakings of the 
Government of the United States under this Article, the Federated 
States of Micronesia, taking into account its particular environment, 
shall continue to develop and implement standards for environmental 
protection substantively similar to those required of the Government of 
the United States by section 161(a)(3) prior to its conducting 
activities in the Federated States of Micronesia, substantively 
equivalent to activities conducted there by the Government of the 
United States and, as a further reciprocal obligation, shall enforce 
those standards.
    (c) Section 161(a), including any standard or procedure applicable 
thereunder, and section 161(b) may be modified or superseded in whole 
or in part by agreement of the Government of the United States and the 
Government of the Federated States of Micronesia.
    (d) In the event that an Environmental Impact Statement is no 
longer required under the laws of the United States for major Federal 
actions significantly affecting the quality of the human environment, 
the regulatory regime established under sections 161(a)(3) and 
161(a)(4) shall continue to apply to such activities of the Government 
of the United States until amended by mutual agreement.
    (e) The President of the United States may exempt any of the 
activities of the Government of the United States under this Compact, 
as amended, and its related agreements from any environmental standard 
or procedure which may be applicable under sections 161(a)(3) and 
161(a)(4) if the President determines it to be in the paramount 
interest of the Government of the United States to do so, consistent 
with Title Three of this Compact, as amended, and the obligations of 
the Government of the United States under international law. Prior to 
any decision pursuant to this subsection, the views of the Government 
of the Federated States of Micronesia shall be sought and considered to 
the extent practicable. If thePresident grants such an exemption, to 
the extent practicable, a report with his reasons for granting such 
exemption shall be given promptly to the Government of the Federated 
States of Micronesia.
    (f) The laws of the United States referred to in section 161(a)(3) 
shall apply to the activities of the Government of the United States 
under this Compact, as amended, and its related agreements only to the 
extent provided for in this section.
Section 162
    The Government of the Federated States of Micronesia may bring an 
action for judicial review of any administrative agency action or any 
activity of the Government of the United States pursuant to section 
161(a) for enforcement of the obligations of the Government of the 
United States arising thereunder. The United States District Court for 
the District of Hawaii and the United States District Court for the 
District of Columbia shall have jurisdiction over such action or 
activity, and over actions brought under section 172(b) which relate to 
the activities of the Government of the United States and its officers 
and employees, governed by section 161, provided that:
            (a) Such actions may only be civil actions for any 
        appropriate civil relief other than punitive damages against 
        the Government of the United States or, where required by law, 
        its officers in their official capacity; no criminal actions 
        may arise under this section.
            (b) Actions brought pursuant to this section may be 
        initiated only by the Government of the Federated States of 
        Micronesia.
            (c) Administrative agency actions arising under section 161 
        shall be reviewed pursuant to the standard of judicial review 
        set forth in 5 U.S.C. 706.
            (d) The United States District Court for the District of 
        Hawaii and the United States District Court for the District of 
        Columbia shall have jurisdiction to issue all necessary 
        processes, and the Government of the United States agrees to 
        submit itself to the jurisdiction of the court; decisions of 
        the United States District Court shall be reviewable in the 
        United States Court of Appeals for the Ninth Circuit or the 
        United States Court of Appeals for the District of Columbia, 
        respectively, or in the United States Supreme Court as provided 
        by the laws of the United States.
            (e) The judicial remedy provided for in this section shall 
        be the exclusive remedy for the judicial review or enforcement 
        of the obligations of the Government of the United States under 
        this Article and actions brought under section 172(b) which 
        relate to the activities of the Government of the United States 
        and its officers and employees governed by section 161.
            (f) In actions pursuant to this section, the Government of 
        the Federated States of Micronesia shall be treated as if it 
        were a United States citizen.
Section 163
    (a) For the purpose of gathering data necessary to study the 
environmental effects of activities of the Government of the United 
States subject to the requirements of this Article, the Government of 
the Federated States of Micronesia shall be granted access to 
facilities operated by the Government of the United States in the 
Federated States of Micronesia, to the extent necessary for this 
purpose, except to the extent such access would unreasonably interfere 
with the exercise of the authority and responsibility of the Government 
of the United States under Title Three.
    (b) The Government of the United States, in turn, shall be granted 
access to the Federated States of Micronesia for the purpose of 
gathering data necessary to discharge its obligations under this 
Article, except to the extent such access would unreasonably interfere 
with the exercise of the authority and responsibility of the Government 
of the Federated States of Micronesia under Title One, and to the 
extent necessary for this purpose shall be granted access to documents 
and other information to the same extent similar access is provided the 
Government of the Federated States of Micronesia under the Freedom of 
Information Act, 5 U.S.C. 552.
    (c) The Government of the Federated States of Micronesia shall not 
impede efforts by the Government of the United States to comply with 
applicable standards and procedures.

                              Article VII

                        General Legal Provisions

Section 171
    Except as provided in this Compact, as amended, or its related 
agreements, the application of the laws of the United States to the 
Trust Territory of the Pacific Islands by virtue of the Trusteeship 
Agreement ceased with respect to the Federated States of Micronesia on 
November 3, 1986, the date the Compact went into effect.
Section 172
    (a) Every citizen of the Federated States of Micronesia who is not 
a resident of the United States shall enjoy the rights and remedies 
under the laws of the United States enjoyed by any non-resident alien.
    (b) The Government of the Federated States of Micronesia and every 
citizen of the Federated States of Micronesia shall be considered to be 
a ``person'' within the meaning of the Freedom of Information Act, 5 
U.S.C. 552, and of the judicial review provisions of the Administrative 
Procedure Act, 5 U.S.C. 701-706, except that only the Government of the 
Federated States of Micronesia may seek judicial review under the 
Administrative Procedure Act or judicial enforcement under the Freedom 
of Information Act when such judicial review or enforcement relates to 
the activities of the Government of the United States governed by 
sections 161 and 162.
Section 173
    The Governments of the United States and the Federated States of 
Micronesia agree to adopt and enforce such measures, consistent with 
this Compact, as amended, and its related agreements, as may be 
necessary to protect the personnel, property, installations, services, 
programs and official archives and documents maintained by the 
Government of the United States in the Federated States of Micronesia 
pursuant to this Compact, as amended, and its related agreements and by 
the Government of the Federated States of Micronesia in the United 
States pursuant to this Compact, as amended, and its related 
agreements.
Section 174
    Except as otherwise provided in this Compact, as amended, and its 
related agreements:
            (a) The Government of the Federated States of Micronesia, 
        and its agencies and officials, shall be immune from the 
        jurisdiction of the court of the United States, and the 
        Government of the United States, and its agencies and 
        officials, shall be immune from the jurisdiction of the courts 
        of the Federated States of Micronesia.
            (b) The Government of the United States accepts 
        responsibility for and shall pay:
                    (1) any unpaid money judgment rendered by the High 
                Court of the Trust Territory of the Pacific Islands 
                against the Government of the United States with regard 
                to any cause of action arising as a result of acts or 
                omissions of the Government of the Trust Territory of 
                the Pacific Islands or the Government of the United 
                States prior to November 3, 1986;
                    (2) any claim settled by the claimant and the 
                Government of the Trust Territory of the Pacific 
                Islands but not paid as of the November 3, 1986; and
                    (3) settlement of any administrative claim or of 
                any action before a court of the Trust Territory of the 
                Pacific Islands or the Government of the United States, 
                arising as a result of acts or omissions of the 
                Government of the Trust Territory of the Pacific 
                Islands or the Government of the United States.
            (c) Any claim not referred to in section 174(b) and arising 
        from an act or omission of the Government of the Trust 
        Territory of the Pacific Islands or the Government of the 
        United States prior to the effective date of the Compact shall 
        be adjudicated in the same manner as a claim adjudicated 
        according to section 174(d). In any claim against the 
        Government of the Trust Territory of the Pacific Islands, the 
        Government of the United States shall stand in the place of the 
        Government of the Trust Territory of the Pacific Islands. A 
        judgment on any claim referred to in section 174(b) or this 
        subsection, not otherwise satisfied by the Government of the 
        United States, may be presented for certification to the United 
        States Court of Appeals for the Federal Circuit, or its 
        successor courts, which shall have jurisdiction therefore, 
        notwithstanding the provisions of 28 U.S.C. 1502, and which 
        court's decisions shall be reviewable as provided by the laws 
        of the United States. The United States Court of Appeals for 
        the Federal Circuit shall certify such judgment, and order 
        payment thereof, unless it finds, after a hearing, that such 
        judgment is manifestly erroneous as to law or fact, or 
        manifestly excessive. In either of such cases the United States 
        Court of Appeals for the Federal Circuit shall have 
        jurisdiction to modify such judgment.
            (d) The Government of the Federated States of Micronesia 
        shall not be immune from the jurisdiction of the courts of the 
        United States, and the Government of the United States shall 
        not be immune from the jurisdiction of the courts of the 
        Federated States of Micronesia in any civil case in which an 
        exception to foreign state immunity is set forth in the Foreign 
        Sovereign Immunities Act (28 U.S.C. 1602 et seq.) or its 
        successor statutes.
Section 175
    (a) A separate agreement, which shall come into effect 
simultaneously with this Compact, as amended, and shall have the force 
of law, shall govern mutual assistance and cooperation in law 
enforcement matters, including the pursuit, capture, imprisonment and 
extradition of fugitives from justice and the transfer of prisoners, as 
well as other law enforcement matters. In the United States, the laws 
of the United States governing international extradition, including 18 
U.S.C. 3184, 3186 and 3188-95, shall be applicable to the extradition 
of fugitives under the separate agreement, and the laws of the United 
States governing the transfer of prisoners, including 18 U.S.C. 4100-
15, shall be applicable to the transfer of prisoners under the separate 
agreement; and
    (b) A separate agreement, which shall come into effect 
simultaneously with this Compact, as amended, and shall have the force 
of law, shall govern requirements relating to labor recruitment 
practices, including registration, reporting, suspension or revocation 
of authorization to recruit persons for employment in the United 
States, and enforcement for violations of such requirements.
Section 176
    The Government of the Federated States of Micronesia confirms that 
final judgments in civil cases rendered by any court of the Trust 
Territory of the Pacific Islands shall continue in full force and 
effect, subject to the constitutional power of the courts of the 
Federated States of Micronesia to grant relief from judgments in 
appropriate cases.
Section 177
    Section 177 of the Compact entered into force with respect to the 
Federated States of Micronesia on November 3, 1986 as follows:
            ``(a) The Government of the United States accepts the 
        responsibility for compensation owing to citizens of the 
        Marshall Islands, or the Federated States of Micronesia, or 
        Palau for loss or damage to property and person of the citizens 
        of the Marshall Islands, or the Federated States of Micronesia, 
        resulting from the nuclear testing program which the Government 
        of the United States conducted in the Northern Marshall Islands 
        between June 30, 1946, and August 18, 1958.
            ``(b) The Government of the United States and the 
        Government of the Marshall Islands shall set forth in a 
        separate agreement provisions for the just and adequate 
        settlement of all such claims which have arisen in regard to 
        the Marshall Islands and its citizens and which have not as yet 
        been compensated or which in the future may arise, for the 
        continued administration by the Government of the United States 
        of direct radiation related medical surveillance and treatment 
        programs and radiological monitoring activities and for such 
        additional programs and activities as may be mutually agreed, 
        and forthe assumption by the Government of the Marshall Islands 
of responsibility for enforcement of limitations on the utilization of 
affected areas developed in cooperation with the Government of the 
United States and for the assistance by the Government of the United 
States in the exercise of such responsibility as may be mutually 
agreed. This separate agreement shall come into effect simultaneously 
with this Compact and shall remain in effect in accordance with its own 
terms.
            ``(c) The Government of the United States shall provide to 
        the Government of the Marshall Islands, on a grant basis, the 
        amount of $150 million to be paid and distributed in accordance 
        with the separate agreement referred to in this Section, and 
        shall provide the services and programs set forth in this 
        separate agreement, the language of which is incorporated into 
        this Compact.''
    The Compact, as amended, makes no changes to, and has no effect 
upon, Section 177 of the Compact, nor does the Compact, as amended, 
change or affect the separate agreement referred to in Section 177 of 
the Compact including Articles IX and X of that separate agreement, and 
measures taken by the parties thereunder.
Section 178
    (a) The Federal agencies of the Government of the United States 
that provide the services and related programs in the Federated States 
of Micronesia pursuant to Title Two are authorized to settle and pay 
tort claims arising in the Federated States of Micronesia from the 
activities of such agencies or from the acts or omissions of the 
employees of such agencies. Except as provided in section 178(b), the 
provisions of 28 U.S.C. 2672 and 31 U.S.C. 1304 shall apply exclusively 
to such administrative settlements and payments.
    (b) Claims under section 178(a) that cannot be settled under 
section 178(a) shall be disposed of exclusively in accordance with 
Article II of Title Four. Arbitration awards rendered pursuant to this 
subsection shall be paid out of funds under 31 U.S.C. 1304.
    (c) The Government of the United States and the Government of the 
Federated States of Micronesia shall, in the separate agreement 
referred to in section 231, provide for:
            (1) the administrative settlement of claims referred to in 
        section 178(a), including designation of local agents in each 
        State of the Federated States of Micronesia; such agents to be 
        empowered to accept, investigate and settle such claims, in a 
        timely manner, as provided in such separate agreements; and
            (2) arbitration, referred to in section 178(b), in a timely 
        manner, at a site convenient to the claimant, in the event a 
        claim is not otherwise settled pursuant to section 178(a).
    (d) The provisions of section 174(d) shall not apply to claims 
covered by this section.
    (e) Except as otherwise explicitly provided by law of the United 
States, neither the Government of the United States, its 
instrumentalities, nor any person acting on behalf of the Government of 
the United States, shall be named a party in any action based on, or 
arising out of, the activity or activities of a recipient of any grant 
or other assistance provided by the Government of the United States (or 
the activity or activities of the recipient's agency or any other 
person or entity acting on behalf of the recipient).
Section 179
    (a) The courts of the Federated States of Micronesia shall not 
exercise criminal jurisdiction over the Government of the United 
States, or its instrumentalities.
    (b) The courts of the Federated States of Micronesia shall not 
exercise criminal jurisdiction over any person if the Government of the 
United States provides notification to the Government of the Federated 
States of Micronesia that such person was acting on behalf of the 
Government of the United States, for actions taken in furtherance of 
section 221 or 224 of this amended Compact, or any other provision of 
law authorizing financial, program, or service assistance to the 
Federated States of Micronesia.

                               TITLE TWO

                           ECONOMIC RELATIONS

                               Article I

                            Grant Assistance

Section 211 - Sector Grants
    (a) In order to assist the Government of the Federated States of 
Micronesia in its efforts to promote the economic advancement, 
budgetary self-reliance, and economic self-sufficiency of its people, 
and in recognition of the special relationship that exists between the 
Federated States of Micronesia and the United States, the Government of 
the United States shall provide assistance on a sector grant basis for 
a period of twenty years in the amounts set forth in section 216, 
commencing on the effective date of this Compact, as amended. Such 
grants shall be used for assistance in the sectors of education, health 
care, private sector development, the environment, public sector 
capacity building, and public infrastructure, or for other sectors as 
mutually agreed, with priorities in the education and health care 
sectors. For each year such sector grant assistance is made available, 
the proposed division of this amount among these sectors shall be 
certified to the Government of the United States by the Government of 
the Federated States of Micronesia and shall be subject to the 
concurrence of the Government of the United States. In such case, the 
Government of the United States shall disburse the agreed upon amounts 
and monitor the use of such sector grants in accordance with the 
provisions of this Article and the Agreement Concerning Procedures for 
the Implementation of United States Economic Assistance Provided in the 
Compact, as Amended, of Free Association Between the Government of the 
United States of America and the Government of the Federated States of 
Micronesia (``Fiscal Procedures Agreement'') which shall come into 
effect simultaneously with this Compact, as amended. The provision of 
any United States assistance under the Compact, as amended, the Fiscal 
Procedures Agreement, the Trust Fund Agreement, or any other subsidiary 
agreement to the Compact, as amended, shall constitute ``a particular 
distribution . . . required by the terms or special nature of the 
assistance'' for purposes of Article XII, section 1(b) of the 
Constitution of the Federated States of Micronesia.
            (1) Education.--United States grant assistance shall be 
        made available in accordance with the plan described in 
        subsection (c) of this section to support and improve the 
        educational system of the Federated States of Micronesia and 
        develop the human, financial, and material resources necessary 
        for the Government of the Federated States of Micronesia to 
        perform these services. Emphasis should be placed on advancing 
        a quality basic education system.
            (2) Health.--United States grant assistance shall be made 
        available in accordance with the plan described in subsection 
        (c) of this section to support and improve the delivery of 
        preventive, curative and environmental care and develop the 
        human, financial, and material resources necessary for the 
        Government of the Federated States of Micronesia to perform 
        these services.
            (3) Private sector development.--United States grant 
        assistance shall be made available in accordance with the plan 
        described in subsection (c) of this section to support the 
        efforts of the Government of the Federated States of Micronesia 
        to attract foreign investment and increase indigenous business 
        activity by vitalizing the commercial environment, ensuring 
        fair and equitable application of the law, promoting adherence 
        to core labor standards, and maintaining progress toward 
        privatization of state-owned and partially state-owned 
        enterprises, and engaging in other reforms.
            (4) Capacity building in the public sector.--United States 
        grant assistance shall be made available in accordance with the 
        plan described in subsection (c) of this section to support the 
        efforts of the Government of the Federated States of Micronesia 
        to build effective, accountable and transparent national, 
        state, and local government and other public sector 
        institutions and systems.
            (5) Environment.--United States grant assistance shall be 
        made available in accordance with the plan described in 
        subsection (c) of this section to increase environmental 
        protection; conserve and achieve sustainable use of natural 
        resources; and engage in environmental infrastructure planning, 
        design construction and operation.
            (6) Public infrastructure.--
                    (i) U.S. annual grant assistance shall be made 
                available in accordance with a list of specific 
                projects included in the plan described in subsection 
                (c) of this section to assist the Government of the 
                Federated States of Micronesia in its efforts to 
                provide adequate public infrastructure.
                    (ii) Infrastructure and maintenance Fund.--Five 
                percent of the annual public infrastructure grant made 
                available under paragraph (i) of this subsection shall 
                be set aside, with an equal contribution from the 
                Government of the Federated States of Micronesia, as a 
                contribution to an Infrastructure Maintenance Fund 
                (IMF). Administration of the Infrastructure Maintenance 
                Fund shall be governed by the Fiscal Procedures 
                Agreement.
    (b) Humanitarian Assistance.--Federated States of Micronesia 
Program. In recognition of the special development needs of the 
Federated States of Micronesia, the Government of the United States 
shall make available to the Government of the Federated States of 
Micronesia, on its request and to be deducted from the grant amount 
made available under subsection (a) of this section, a Humanitarian 
Assistance - Federated States of Micronesia (``HAFSM'') Program with 
emphasis on health, education, and infrastructure (including 
transportation), projects. The terms and conditions of the HAFSM shall 
be set forth in the Agreement Regarding the Military Use and Operating 
Rights of the Government of the United States in the Government of the 
Federated States of Micronesia Concluded Pursuant to Sections 321 and 
323 of the Compact of Free Association, as Amended which shall come 
into effect simultaneously with the amendments to this Compact.
    (c) Development Plan.--The Government of the Federated States of 
Micronesia shall prepare and maintain an official overall development 
plan. The plan shall be strategic in nature, shall be continuously 
reviewed and updated through the annual budget process, and shall make 
projections on a multi-year rolling basis. Each of the sectors named in 
subsection (a) of this section, or other sectors as mutually agreed, 
shall be accorded specific treatment in the plan. Insofar as grants 
funds are involved, the plan shall be subject to the concurrence of the 
Government of the United States.
    (d) Disaster Assistance Emergency Fund.--An amount of two hundred 
thousand dollars ($200,000) shall be provided annually, with an equal 
contribution from the Government of the Federated States of Micronesia, 
as a contribution to a ``Disaster Assistance Emergency Fund (DAEF).'' 
Any funds from the DAEF may be used only for assistance and 
rehabilitation resulting from disasters and emergencies. The funds will 
be accessed upon declaration by the Government of the Federated States 
of Micronesia, with the concurrence of the United States Chief of 
Mission to the Federated States of Micronesia. The Administration of 
the DAEF shall be governed by the Fiscal Procedures Agreement.
Section 212 - Accountability.
    (a) Regulations and policies normally applicable to United States 
financial assistance to its state and local governments, as reflected 
in the Fiscal Procedures Agreement, shall apply to each sector grant 
described in section 211, and to grants administered under section 221 
below, except as modified in the separate agreements referred to in 
section 231 of this Compact, as amended, or by United States law. The 
Government of the United States, after annual consultations with the 
Federated States of Micronesia, may attach reasonable terms and 
conditions, including annual performance indicators that are necessary 
to ensure effective use of United States assistance and reasonable 
progress toward achieving program objectives. The Government of the 
United States may seek appropriate remedies for noncompliance with the 
terms and conditions attached to the assistance, or for failure to 
comply with section 234, including withholding assistance.
    (b) The Government of the United States shall, for each fiscal year 
of the twenty years during which assistance is to be provided on a 
sector grant basis under section 211, grant the Government of the 
Federated States of Micronesia an amount equal to the lesser of (i) one 
half of the reasonable, properly documented cost incurred during each 
fiscal year to conduct the annual audit required under Article VIII (2) 
of the Fiscal Procedures Agreement or (ii) $500,000. Such amount will 
not be adjusted for inflation under section 217 or otherwise.
Section 213 - Joint Economic Management Committee
    The Governments of the United States and the Federated States of 
Micronesia shall establish a Joint Economic Management Committee, 
composed of a U.S. chair, two other members from the Government of the 
United States and two members from the Government of the Federated 
States of Micronesia. The Joint Economic Management Committee shall 
meet at least once each year to review the audits and reports required 
under this Title, evaluate the progress made by the Federated States of 
Micronesia in meeting the objectives identified in its plan described 
in subsection (c) of section 211, with particular focus on those parts 
of the plan dealing with the sectors identified in subsection (a) of 
section 211, identify problems encountered, and recommend ways to 
increase the effectiveness of U.S. assistance made available under this 
Title. The establishment and operations of the JointEconomic Management 
Committee shall be governed by the Fiscal Procedures Agreement.
Section 214 - Annual Report
    The Government of the Federated States of Micronesia shall report 
annually to the President of the United States on the use of United 
States sector grant assistance and other assistance and progress in 
meeting mutually agreed program and economic goals. The Joint Economic 
Management Committee shall review and comment on the report and make 
appropriate recommendations based thereon.
Section 215 - Trust Fund
    (a) The United States shall contribute annually for twenty years 
from the effective date of this Compact, as amended, in the amounts set 
forth in section 216 into a Trust Fund established in accordance with 
the Agreement Between the Government of the United States of America 
and the Government of the Federated States of Micronesia Implementing 
Section 215 and Section 216 of the Compact, as Amended, Regarding a 
Trust Fund (``Trust Fund Agreement''). Upon termination of the annual 
financial assistance under section 211, the proceeds of the fund shall 
thereafter be used for the purposes described in section 211 or as 
otherwise mutually agreed.
    (b) The United States contribution into the Trust Fund described in 
subsection(a) of this section is conditioned on the Government of the 
Federated States of Micronesia contributing to the Trust Fund at least 
$30 million, prior to September 30, 2004. Any funds received by the 
Federated States of Micronesia under section 111 (d) of Public Law 99-
239 (January 14, 1986), or successor provisions, would be contributed 
to the Trust Fund as a Federated States of Micronesia contribution.
    (c) The terms regarding the investment and management of funds and 
use of the income of the Trust Fund shall be set forth in the separate 
Trust Fund Agreement described in subsection (a) of this section. Funds 
derived from United States investment shall not be subject to Federal 
or state taxes in the United States or the Federated States of 
Micronesia. The Trust Fund Agreement shall also provide for annual 
reports to the Government of the United States and to the Government of 
the Federated States of Micronesia. The Trust Fund Agreement shall 
provide for appropriate distributions of trust fund proceeds to the 
Federated States of Micronesia and for appropriate remedies for the 
failure of the Federated States of Micronesia to use income of the 
Trust Fund for the annual grant purposes set forth in section 211. 
These remedies may include the return to the United States of the 
present market value of its contributions to the Trust Fund and the 
present market value of any undistributed income on the contributions 
of the United States. If this Compact, as amended, is terminated, the 
provisions of sections 451 through 453 of this Compact, as amended, 
shall govern treatment of any U.S. contributions to the Trust Fund or 
accrued interest thereon.
Section 216 - Sector Grant Funding and Trust Fund Contributions
    The funds described in sections 211, 212(b) and 215 shall be made 
available as follows:

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                         Audit Grant
                     Fiscal year                       Annual Grants   Section 212(b)     Trust Fund      Total
                                                        Section 211    (amount up to)    Section 215
----------------------------------------------------------------------------------------------------------------
2004................................................       76.2              .5               16          92.7
2005................................................       76.2              .5               16          92.7
2006................................................       76.2              .5               16          92.7
2007................................................       75.4              .5              16.8         92.7
2008................................................       74.6              .5              17.6         92.7
2009................................................       73.8              .5              18.4         92.7
2010................................................        73               .5              19.2         92.7
2011................................................       72.2              .5               20          92.7
2012................................................       71.4              .5              20.8         92.7
2013................................................       70.6              .5              21.6         92.7
2014................................................       69.8              .5              22.4         92.7
2015................................................        69               .5              23.2         92.7
2016................................................       68.2              .5               24          92.7
2017................................................       67.4              .5              24.8         92.7
2018................................................       66.6              .5              25.6         92.7
2019................................................       65.8              .5              26.4         92.7
2020................................................        65               .5              27.2         92.7
2021................................................       64.2              .5               28          92.7
2022................................................       63.4              .5              28.8         92.7
2023................................................       62.6              .5              29.6         92.7
----------------------------------------------------------------------------------------------------------------

Section 217 - Inflation Adjustment
    Except for the amounts provided for audits under section 212(b), 
the amounts stated in this Title shall be adjusted for each United 
States Fiscal Year by the percent that equals two-thirds of the percent 
change in the United States Gross Domestic Product Implicit Price 
Deflator, or 5 percent, whichever is less in any one year, using the 
beginning of Fiscal Year 2004 as a base.
Section 218 - Carry-Over of Unused Funds
    If in any year the funds made available by the Government of the 
United States for that year pursuant to this Article are not completely 
obligated by the Government of the Federated States of Micronesia, the 
unobligated balances shall remain available in addition to the funds to 
be provided in subsequent years.
    Article II
    Services and Program Assistance
Section 221
    (a) Services.--The Government of the United States shall make 
available to the Federated States of Micronesia, in accordance with and 
to the extent provided in the Federal Programs and Services Agreement 
referred to in section 231, the services and related programs of:
            (1) the United States Weather Service;
            (2) the United States Postal Service;
            (3) the United States Federal Aviation Administration;
            (4) the United States Department of Transportation;
            (5) the Federal Deposit Insurance Corporation (for the 
        benefit only of the Bank of the Federated States of 
        Micronesia), and
            (6) the Department of Homeland Security, and the United 
        States Agency for International Development, Office of Foreign 
        Disaster Assistance.
Upon the effective date of this Compact, as amended, the United States 
Departments and Agencies named or having responsibility to provide 
these services and related programs shall have the authority to 
implement the relevant provisions of the Federal Programs and Services 
Agreement referred to in section 231.
    (b) Programs.--
            (1) With the exception of the services and programs covered 
        by subsection (a) of this section, and unless the Congress of 
        the United States provides otherwise, the Government of the 
        United States shall make available to the Federated States of 
        Micronesia the services and programs that were available to the 
        Federated States of Micronesia on the effective date of this 
        Compact, as amended, to the extent that such services and 
        programs continue to be available to State and local 
        governments of the United States. As set forth in the Fiscal 
        Procedures Agreement, funds provided under subsection (a) 
ofsection 211 will be considered to be local revenues of the Government 
of the Federated States of Micronesia when used as the local share 
required to obtain Federal programs and services.
            (2) Unless provided otherwise by U.S. law, the services and 
        programs described in paragraph (1) of this subsection shall be 
        extended in accordance with the terms of the Federal Programs 
        and Services Agreement referred to in section 231.
    (c) The Government of the United States shall have and exercise 
such authority as is necessary to carry out its responsibilities under 
this Title and the separate agreements referred to in amended section 
231, including the authority to monitor and administer all service and 
program assistance provided by the United States to the Federated 
States of Micronesia. The Federal Programs and Services Agreement 
referred to in amended section 231 shall also set forth the extent to 
which services and programs shall be provided to the Federated States 
of Micronesia.
    (d) Except as provided elsewhere in this Compact, as amended, under 
any separate agreement entered into under this Compact, as amended, or 
otherwise under U.S. law, all Federal domestic programs extended to or 
operating in the Federated States of Micronesia shall be subject to all 
applicable criteria, standards, reporting requirements, auditing 
procedures, and other rules and regulations applicable to such programs 
and services when operating in the United States.
    (e) The Government of the United States shall make available to the 
Federated States of Micronesia alternate energy development projects, 
studies, and conservation measures to the extent provided for the 
Freely Associated States in the laws of the United States.
Section 222
    The Government of the United States and the Government of the 
Federated States of Micronesia may agree from time to time to extend to 
the Federated States of Micronesia additional United States grant 
assistance, services and programs, as provided under the laws of the 
United States. Unless inconsistent with such laws, or otherwise 
specifically precluded by the Government of the United States at the 
time such additional grant assistance, services, or programs are 
extended, the Federal Programs and Services Agreement referred to 
section 231 shall apply to any such assistance, services or programs.
Section 223
    The Government of the Federated States of Micronesia shall make 
available to the Government of the United States at no cost such land 
as may be necessary for the operations of the services and programs 
provided pursuant to this Article, and such facilities as are provided 
by the Government of the Federated States of Micronesia at no cost to 
the Government of the United States as of the effective date of this 
Compact, as amended, or as may be mutually agreed thereafter.
Section 224
    The Government of the Federated States of Micronesia may request, 
from time to time, technical assistance from the Federal agencies and 
institutions of the Government of the United States, which are 
authorized to grant such technical assistance in accordance with its 
laws. If technical assistance is granted pursuant to such a request, 
the Government of the United States shall provide the technical 
assistance in a manner which gives priority consideration to the 
Federated States of Micronesia over other recipients not a part of the 
United States, its territories or possessions, and equivalent 
consideration to the Federated States of Micronesia with respect to 
other states in Free Association with the United States. Such 
assistance shall be made available on a reimbursable or non-
reimbursable basis to the extent provided by United States law.

                              Article III

                       Administrative Provisions

Section 231
    The specific nature, extent and contractual arrangements of the 
services and programs provided for in section 221 of this Compact, as 
amended, as well as the legal status of agencies of the Government of 
the United States, their civilian employees and contractors, and the 
dependents of such personnel while present in the Federated States of 
Micronesia, and other arrangements in connection with the assistance, 
services, or programs furnished by the Government of the United States, 
are set forth in a Federal Programs and Services Agreement which shall 
come into effect simultaneously with this Compact, as amended.
Section 232
    The Government of the United States, in consultation with the 
Government of the Federated States of Micronesia, shall determine and 
implement procedures for the periodic audit of all grants and other 
assistance made under Article I of this Title and of all funds expended 
for the services and programs provided under Article II of this Title. 
Further, in accordance with the Fiscal Procedures Agreement described 
in subsection (a) of section 211, the Comptroller General of the United 
States shall have such powers and authorities as described in sections 
102 (c) and 110 (c) of Public Law 99-239, 99 Stat. 1777-78, and 99 
Stat. 1799 (January 14, 1986).
Section 233
    Approval of this Compact, as amended, by the Government of the 
United States, in accordance with its constitutional processes, shall 
constitute a pledge by the United States that the sums and amounts 
specified as sector grants in section 211 of this Compact, as amended, 
shall be appropriated and paid to the Federated States of Micronesia 
for such period as those provisions of this Compact, as amended, remain 
in force, subject to the terms and conditions of this Title and related 
subsidiary agreements.
Section 234
    The Government of the Federated States of Micronesia pledges to 
cooperate with, permit, and assist if reasonably requested, designated 
and authorized representatives of the Government of the United States 
charged with investigating whether Compact funds, or any other 
assistance authorized under this Compact, as amended, have, or are 
being, used for purposes other than those set forth in this Compact, as 
amended, or its subsidiary agreements. In carrying out this 
investigative authority, such United States Government representatives 
may requestthat the Government of the Federated States of Micronesia 
subpoena documents and records and compel testimony in accordance with 
the laws and Constitution of the Federated States of Micronesia. Such 
assistance by the Government of the Federated States of Micronesia to 
the Government of the United States shall not be unreasonably withheld. 
The obligation of the Government of the Federated States of Micronesia 
to fulfill its pledge herein is a condition to its receiving payment of 
such funds or other assistance authorized under this Compact, as 
amended. The Government of the United States shall pay any reasonable 
costs for extraordinary services executed by the Government of the 
Federated States of Micronesia in carrying out the provisions of this 
section.

                               Article IV

                                 Trade

Section 241
    The Federated States of Micronesia is not included in the customs 
territory of the United States.
Section 242
    The President shall proclaim the following tariff treatment for 
articles imported from the Federated States of Micronesia which shall 
apply during the period of effectiveness of this title:
            (a) Unless otherwise excluded, articles imported from the 
        Federated States of Micronesia, subject to the limitations 
        imposed under section 503(b) of title V of the Trade Act of 
        1974 (19 U.S.C. 2463(b)), shall be exempt from duty.
            (b) Only tuna in airtight containers provided for in 
        heading 1604.14.22 of the Harmonized Tariff Schedule of the 
        United States that is imported from the Federated States of 
        Micronesia and the Republic of the Marshall Islands during any 
        calendar year not to exceed 10 percent of apparent United 
        States consumption of tuna in airtight containers during the 
        immediately preceding calendar year, as reported by the 
        National Marine Fisheries Service, shall be exempt from duty; 
        but the quantity of tuna given duty-free treatment under this 
        paragraph for any calendar year shall be counted against the 
        aggregated quantity of tuna in airtight containers that is 
        dutiable under rate column numbered 1 of such heading 
        1604.14.22 for that calendar year.
            (c) The duty-free treatment provided under subsection (a) 
        shall not apply to--
                    (1) watches, clocks, and timing apparatus provided 
                for in Chapter 91, excluding heading 9113, of the 
                Harmonized Tariff Schedule of the United States;
                    (2) buttons (whether finished or not finished) 
                provided for in items 9606.21.40 and 9606.29.20 of such 
                Schedule;
                    (3) textile and apparel articles which are subject 
                to textile agreements; and
                    (4) footwear, handbags, luggage, flat goods, work 
                gloves, and leather wearing apparel which were not 
                eligible articles for purposes of title V of the Trade 
                Act of 1974 (19 U.S.C. 2461, et seq.) on April 1, 1984.
            (d) If the cost or value of materials produced in the 
        customs territory of the United States is included with respect 
        to an eligible article which is a product of the Federated 
        States of Micronesia, an amount not to exceed 15 percent of the 
        appraised value of the article at the time it is entered that 
        is attributable to such United States cost or 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
    Articles imported from the Federated States of Micronesia which are 
not exempt from duty under subsections (a), (b), (c), and (d) of 
section 242 shall be subject to the rates of duty set forth in column 
numbered 1-general of the Harmonized Tariff Schedule of the United 
States (HTSUS).
Section 244
    (a) All products of the United States imported into the Federated 
States of Micronesia shall receive treatment no less favorable than 
that accorded like products of any foreign country with respect to 
customs duties or charges of a similar nature and with respect to laws 
and regulations relating to importation, exportation, taxation, sale, 
distribution, storage or use.
    (b) The provisions of subsection (a) shall not apply to advantages 
accorded by the Federated States of Micronesia by virtue of their full 
membership in the Pacific Island Countries Trade Agreement (PICTA), 
done on August 18, 2001, to those governments listed in Article 26 of 
PICTA, as of the date the Compact, as amended, is signed.
    (c) Prior to entering into consultations on, or concluding, a free 
trade agreement with governments not listed in Article 26 of PICTA, the 
Federated States of Micronesia shall consult with the United States 
regarding whether or how subsection (a) of section 244 shall be 
applied.

                               Article V

                          Finance and Taxation

Section 251
    The currency of the United States is the official circulating legal 
tender of the Federated States of Micronesia. Should the Government of 
the Federated States of Micronesia act to institute another currency, 
the terms of an appropriate currency transitional period shall be as 
agreed with the Government of the United States.
Section 252
    The Government of the Federated States of Micronesia may, with 
respect to United States persons, tax income derived from sources 
within its respective jurisdiction, property situated therein, 
including transfers of such property by gift or at death, and products 
consumed therein, in such manner as the Government of the Federated 
States of Micronesia deems appropriate. The determination of the source 
of any income, or the situs of any property, shall for purposes of this 
Compact be made according to the United States Internal Revenue Code.
Section 253
    A citizen of the Federated States of Micronesia, domiciled therein, 
shall be exempt from estate, gift, and generation-skipping transfer 
taxes imposed by the Government of the United States, provided that 
such citizen ofthe Federated States of Micronesia is neither a citizen 
nor a resident of the United States.
Section 254
    (a) In determining any income tax imposed by the Government of the 
Federated States of Micronesia, the Government of the Federated States 
of Micronesia shall have authority to impose tax upon income derived by 
a resident of the Federated States of Micronesia from sources without 
the Federated States of Micronesia, in the same manner and to the same 
extent as the Government of the Federated States of Micronesia imposes 
tax upon income derived from within its own jurisdiction. If the 
Government of the Federated States of Micronesia exercises such 
authority as provided in this subsection, any individual resident of 
the Federated States of Micronesia who is subject to tax by the 
Government of the United States on income which is also taxed by the 
Government of the Federated States of Micronesia shall be relieved of 
liability to the Government of the United States for the tax which, but 
for this subsection, would otherwise be imposed by the Government of 
the United States on such income. However, the relief from liability to 
the United States Government referred to in the preceding sentence 
means only relief in the form of the foreign tax credit (or deduction 
in lieu thereof) available with respect to the income taxes of a 
possession of the United States, and relief in the form of the 
exclusion under section 911 of the Internal Revenue Code of 1986. For 
purposes of this section, the term ``resident of the Federated States 
of Micronesia'' shall be deemed to include any person who was 
physically present in the Federated States of Micronesia for a period 
of 183 or more days during any taxable year.
    (b) If the Government of the Federated States of Micronesia 
subjects income to taxation substantially similar to that imposed by 
the Trust Territory Code in effect on January 1, 1980, such Government 
shall be deemed to have exercised the authority described in section 
254(a).
Section 255
    For purposes of section 274(h)(3)(A) of the United States Internal 
Revenue Code of 1986, the term ``North American Area'' shall include 
the Federated States of Micronesia.

                              TITLE THREE

                     SECURITY AND DEFENSE RELATIONS

                               Article I

                      Authority and Responsibility

Section 311
    (a) The Government of the United States has full authority and 
responsibility for security and defense matters in or relating to the 
Federated States of Micronesia.
    (b) This authority and responsibility includes:
            (1) the obligation to defend the Federated States of 
        Micronesia and its people from attack or threats thereof as the 
        United States and its citizens are defended;
            (2) the option to foreclose access to or use of the 
        Federated States of Micronesia by military personnel or for the 
        military purposes of any third country; and
            (3) the option to establish and use military areas and 
        facilities in the Federated States of Micronesia, subject to 
        the terms of the separate agreements referred to in sections 
        321 and 323.
    (c) The Government of the United States confirms that it shall act 
in accordance with the principles of international law and the Charter 
of the United Nations in the exercise of this authority and 
responsibility.
Section 312
    Subject to the terms of any agreements negotiated in accordance 
with sections 321 and 323, the Government of the United States may 
conduct within the lands, waters and airspace of the Federated States 
of Micronesia the activities and operations necessary for the exercise 
of its authority and responsibility under this Title.
Section 313
    (a) The Government of the Federated States of Micronesia shall 
refrain from actions that the Government of the United States 
determines, after appropriate consultation with that Government, to be 
incompatible with its authority and responsibility for security and 
defense matters in or relating to the Federated States of Micronesia.
    (b) The consultations referred to in this section shall be 
conducted expeditiously at senior levels of the two Governments, and 
the subsequent determination by the Government of the United States 
referred to in this section shall be made only at senior interagency 
levels of the Government of the United States.
    (c) The Government of the Federated States of Micronesia shall be 
afforded, on an expeditious basis, an opportunity to raise its concerns 
with the United States Secretary of State personally and the United 
States Secretary of Defense personally regarding any determination made 
in accordance with this section.
Section 314
    (a) Unless otherwise agreed, the Government of the United States 
shall not, in the Federated States of Micronesia:
            (1) test by detonation or dispose of any nuclear weapon, 
        nor test, dispose of, or discharge any toxic chemical or 
        biological weapon; or
            (2) test, dispose of, or discharge any other radioactive, 
        toxic chemical or biological materials in an amount or manner 
        which would be hazardous to public health or safety.
    (b) Unless otherwise agreed, other than for transit or overflight 
purposes or during time of a national emergency declared by the 
President of the United States, a state of war declared by the Congress 
of the United States or as necessary to defend against an actual or 
impending armed attack on the United States, the Federated States of 
Micronesia or the Republic of the Marshall Islands, the Government of 
the United States shall not store in the Federated States of Micronesia 
or the Republic of the Marshall Islands any toxic chemical weapon, nor 
any radioactive materials nor any toxic chemical materials intended for 
weapons use.
    (c) Radioactive, toxic chemical, or biological materials not 
intended for weapons use shall not be affected by section 314(b).
    (d) No material or substance referred to in this section shall be 
stored in the Federated States of Micronesia except in an amount and 
manner which would not be hazardous to public health or safety. In 
determining what shall be an amount or manner which would be hazardous 
to public health or safety under this section, the Government of the 
United States shall comply with any applicable mutual agreement, 
international guidelines accepted by the Government of the United 
States, and the laws of the United States and their implementing 
regulations.
    (e) Any exercise of the exemption authority set forth in section 
161(e) shall have no effect on the obligations of the Government of the 
United States under this section or on the application of this 
subsection.
    (f) The provisions of this section shall apply in the areas in 
which the Government of the Federated States of Micronesia exercises 
jurisdiction over the living resources of the seabed, subsoil or water 
column adjacent to its coasts.
Section 315
    The Government of the United States may invite members of the armed 
forces of other countries to use military areas and facilities in the 
Federated States of Micronesia, in conjunction with and under the 
control of United States Armed Forces. Use by units of the armed forces 
of other countries of such military areas and facilities, other than 
for transit and overflight purposes, shall be subject to consultation 
with and, in the case of major units, approval of the Government of the 
Federated States of Micronesia.
Section 316
    The authority and responsibility of the Government of the United 
States under this Title may not be transferred or otherwise assigned.

                               Article II

                Defense Facilities and Operating Rights

Section 321
    (a) Specific arrangements for the establishment and use by the 
Government of the United States of military areas and facilities in the 
Federated States of Micronesia are set forth in separate agreements, 
which shall remain in effect in accordance with the terms of such 
agreements.
    (b) If, in the exercise of its authority and responsibility under 
this Title, the Government of the United States requires the use of 
areas within the Federated States of Micronesia in addition to those 
for which specific arrangements are concluded pursuant to section 
321(a), it may request the Government of the Federated States of 
Micronesia to satisfy those requirements through leases or other 
arrangements. The Government of the Federated States of Micronesia 
shall sympathetically consider any such request and shall establish 
suitable procedures to discuss it with and provide a prompt response to 
the Government of the United States.
    (c) The Government of the United States recognizes and respects the 
scarcity and special importance of land in the Federated States of 
Micronesia. In making any requests pursuant to section 321(b), the 
Government of the United States shall follow the policy of requesting 
the minimum area necessary to accomplish the required security and 
defense purpose, of requesting only the minimum interest in real 
property necessary to support such purpose, and of requesting first to 
satisfy its requirement through public real property, where available, 
rather than through private real property.
Section 322
    The Government of the United States shall provide and maintain 
fixed and floating aids to navigation in the Federated States of 
Micronesia at least to the extent necessary for the exercise of its 
authority and responsibility under this Title.
Section 323
    The military operating rights of the Government of the United 
States and the legal status and contractual arrangements of the United 
States Armed Forces, their members, and associated civilians, while 
present in the Federated States of Micronesia are set forth in separate 
agreements, which shall remain in effect in accordance with the terms 
of such agreements.

                              Article III

         Defense Treaties and International Security Agreements

Section 331
    Subject to the terms of this Compact, as amended, and its related 
agreements, the Government of the United States, exclusively, has 
assumed and enjoys, as to the Federated States of Micronesia, all 
obligations, responsibilities, rights and benefits of:
    (a) Any defense treaty or other international security agreement 
applied by the Government of the United States as Administering 
Authority of the Trust Territory of the Pacific Islands as of November 
2, 1986.
    (b) Any defense treaty or other international security agreement to 
which the Government of the United States is or may become a party 
which it determines to be applicable in the Federated States of 
Micronesia. Such a determination by the Government of the United States 
shall be preceded by appropriate consultation with the Government of 
the Federated States of Micronesia.

                               Article IV

              Service in Armed Forces of the United States

Section 341
    Any person entitled to the privileges set forth in Section 141 
(with the exception of any person described in section 141(a)(5) who is 
not a citizen of the Federated States of Micronesia) shall be eligible 
to volunteer for service in the Armed Forces of the United States, but 
shall not be subject to involuntary induction into military service of 
the United States as long as such person has resided in the United 
States for a period of less than one year, provided that no time shall 
count towards this one year while a person admitted to the United 
States under the Compact, or the Compact, as amended, is engaged in 
full-time study in the United States. Any person described in section 
141(a)(5) who is not a citizen of the Federated States of Micronesia 
shall be subject to United States laws relating to selective service.
Section 342
    The Government of the United States shall have enrolled, at any one 
time, at least one qualified student from the Federated States of 
Micronesia, as may be nominated by the Government of the Federated 
States of Micronesia, in each of:
    (a) The United States Coast Guard Academy pursuant to 14 U.S.C. 
195.
    (b) The United States Merchant Marine Academy pursuant to 46 U.S.C. 
1295(b)(6), provided that the provisions of 46 U.S.C. 1295b(b)(6)(C) 
shall not apply to the enrollment of students pursuant to section 
342(b) of this Compact, as amended.

                               Article V

                           General Provisions

Section 351
    (a) The Government of the United States and the Government of the 
Federated States of Micronesia shall continue to maintain a Joint 
Committee empowered to consider disputes arising under the 
implementation of this Title and its related agreements.
    (b) The membership of the Joint Committee shall comprise selected 
senior officials of the two Governments. The senior United States 
military commander in the Pacific area shall be the senior United 
States member of the Joint Committee. For the meetings of the Joint 
Committee, each of the two Governments may designate additional or 
alternate representatives as appropriate for the subject matter under 
consideration.
    (c) Unless otherwise mutually agreed, the Joint Committee shall 
meet annually at a time and place to be designated, after appropriate 
consultation, by the Government of the United States. The Joint 
Committee also shall meet promptly upon request of either of its 
members. The Joint Committee shall follow such procedures, including 
the establishment of functional subcommittees, as the members may from 
time to time agree. Upon notification by the Government of the United 
States, the Joint Committee of the United States and the Federated 
States of Micronesia shall meet promptly in a combined session with the 
Joint Committee established and maintained by the Government of the 
United States and the Republic of the Marshall Islands to consider 
matters within the jurisdiction of the two Joint Committees.
    (d) Unresolved issues in the Joint Committee shall be referred to 
the Governments for resolution, and the Government of the Federated 
States of Micronesia shall be afforded, on an expeditious basis, an 
opportunity to raise its concerns with the United States Secretary of 
Defense personally regarding any unresolved issue which threatens its 
continued association with the Government of the United States.
Section 352
    In the exercise of its authority and responsibility under Title 
Three, the Government of the United States shall accord due respect to 
the authority and responsibility of the Government of the Federated 
States of Micronesia under Titles One, Two and Four and to the 
responsibility of the Government of the Federated States of Micronesia 
to assure the well-being of its people.
Section 353
    (a) The Government of the United States shall not include the 
Government of the Federated States of Micronesia as a named party to a 
formal declaration of war, without that Government's consent.
    (b) Absent such consent, this Compact, as amended, is without 
prejudice, on the ground of belligerence or the existence of a state of 
war, to any claims for damages which are advanced by the citizens, 
nationals or Government of the Federated States of Micronesia, which 
arise out of armed conflict subsequent to November 3, 1986, and which 
are:
            (1) petitions to the Government of the United States for 
        redress; or
            (2) claims in any manner against the government, citizens, 
        nationals or entities of any third country.
    (c) Petitions under section 353(b)(1) shall be treated as if they 
were made by citizens of the United States.
Section 354
    (a) The Government of the United States and the Government of the 
Federated States of Micronesia are jointly committed to continue their 
security and defense relations, as set forth in this Title. 
Accordingly, it is the intention of the two countries that the 
provisions of thisTitle shall remain binding as long as this Compact, 
as amended, remains in effect, and thereafter as mutually agreed, 
unless earlier terminated by mutual agreement pursuant to section 441, 
or amended pursuant to Article III of Title Four. If at any time the 
Government of the United States, or the Government of the Federated 
States of Micronesia, acting unilaterally, terminates this Title, such 
unilateral termination shall be considered to be termination of the 
entire Compact, in which case the provisions of section 442 and 452 (in 
the case of termination by the Government of the United States) or 
sections 443 and 453 (in the case of termination by the Government of 
the Federated States of Micronesia), with the exception of paragraph 
(3) of subsection (a) of section 452 or paragraph (3) of subsection (a) 
of section 453, as the case may be, shall apply.
    (b) The Government of the United States recognizes, in view of the 
special relationship between the Government of the United States and 
the Government of the Federated States of Micronesia, and in view of 
the existence of the separate agreement regarding mutual security 
concluded with the Government of the Federated States of Micronesia 
pursuant to sections 321 and 323, that, even if this Title should 
terminate, any attack on the Federated States of Micronesia during the 
period in which such separate agreement is in effect, would constitute 
a threat to the peace and security of the entire region and a danger to 
the United States. In the event of such an attack, the Government of 
the United States would take action to meet the danger to the United 
States and to the Federated States of Micronesia in accordance with its 
constitutional processes.
    (c) As reflected in Article 21(1)(b) of the Trust Fund Agreement, 
the Government of the United States and the Government of the Federated 
States of Micronesia further recognize, in view of the special 
relationship between their countries, that even if this Title should 
terminate, the Government of the Federated States of Micronesia shall 
refrain from actions which the Government of the United States 
determines, after appropriate consultation with that Government, to be 
incompatible with its authority and responsibility for security and 
defense matters in or relating to the Federated States of Micronesia or 
the Republic of the Marshall Islands.

                               TITLE FOUR

                           GENERAL PROVISIONS

                               Article I

                      Approval and Effective Date

Section 411
    Pursuant to section 432 of the Compact and subject to subsection 
(e) of section 461 of the Compact, as amended, the Compact, as amended, 
shall come into effect upon mutual agreement between the Government of 
the United States and the Government of the Federated States of 
Micronesia subsequent to completion of the following:
            (a) Approval by the Government of the Federated States of 
        Micronesia in accordance with its constitutional processes.
            (b) Approval by the Government of the United States in 
        accordance with its constitutional processes.

                               Article II

                   Conference and Dispute Resolution

Section 421
    The Government of the United States shall confer promptly at the 
request of the Government of the Federated States of Micronesia and 
that Government shall confer promptly at the request of the Government 
of the United States on matters relating to the provisions of this 
Compact, as amended, or of its related agreements.
Section 422
    In the event the Government of the United States or the Government 
of the Federated States of Micronesia, after conferring pursuant to 
section 421, determines that there is a dispute and gives written 
notice thereof, the two Governments shall make a good faith effort to 
resolve the dispute between themselves.
Section 423
    If a dispute between the Government of the United States and the 
Government of the Federated States of Micronesia cannot be resolved 
within 90 days of written notification in the manner provided in 
section 422, either party to the dispute may refer it to arbitration in 
accordance with section 424.
Section 424
    Should a dispute be referred to arbitration as provided for in 
section 423, an Arbitration Board shall be established for the purpose 
of hearing the dispute and rendering a decision which shall be binding 
upon the two parties to the dispute unless the two parties mutually 
agree that the decision shall be advisory. Arbitration shall occur 
according to the following terms:
            (a) An Arbitration Board shall consist of a Chairman and 
        two other members, each of whom shall be a citizen of a party 
        to the dispute. Each of the two Governments which is a party to 
        the dispute shall appoint one member to the Arbitration Board. 
        If either party to the dispute does not fulfill the appointment 
        requirements of this section within 30 days of referral of the 
        dispute to arbitration pursuant to section 423, its member on 
        the Arbitration Board shall be selected from its own standing 
        list by the other party to the dispute. Each Government shall 
        maintain a standing list of 10 candidates. The parties to the 
        dispute shall jointly appoint a Chairman within 15 days after 
        selection of the other members of the Arbitration Board. 
        Failing agreement on a Chairman, the Chairman shall be chosen 
        by lot from the standing lists of the parties to the dispute 
        within 5 days after such failure.
            (b) Unless otherwise provided in this Compact, as amended, 
        or its related agreements, the Arbitration Board shall have 
        jurisdiction to hear and render its final determination on all 
        disputes arising exclusively under Articles I, II, III, IV and 
        V of Title One, Title Two, Title Four, and their related 
        agreements.
            (c) Each member of the Arbitration Board shall have one 
        vote. Each decision of the Arbitration Board shall be reached 
        by majority vote.
    (d) In determining any legal issue, the Arbitration Board may have 
reference to international law and, in such reference, shall apply as 
guidelines the provisions setforth in Article 38 of the Statute of the 
International Court of Justice.
    (e) The Arbitration Board shall adopt such rules for its 
proceedings as it may deem appropriate and necessary, but such rules 
shall not contravene the provisions of this Compact, as amended. Unless 
the parties provide otherwise by mutual agreement, the Arbitration 
Board shall endeavor to render its decision within 30 days after the 
conclusion of arguments. The Arbitration Board shall make findings of 
fact and conclusions of law and its members may issue dissenting or 
individual opinions. Except as may be otherwise decided by the 
Arbitration Board, one-half of all costs of the arbitration shall be 
borne by the Government of the United States and the remainder shall be 
borne by the Government of the Federated States of Micronesia.

                              Article III

                               Amendment

Section 431
    The provisions of this Compact, as amended, may be further amended 
by mutual agreement of the Government of the United States and the 
Government of the Federated States of Micronesia, in accordance with 
their respective constitutional processes.

                               Article IV

                              Termination

Section 441
    This Compact, as amended, may be terminated by mutual agreement of 
the Government of the Federated States of Micronesia and the Government 
of the United States, in accordance with their respective 
constitutional processes. Such mutual termination of this Compact, as 
amended, shall be without prejudice to the continued application of 
section 451 of this Compact, as amended, and the provisions of the 
Compact, as amended, set forth therein.
Section 442
    Subject to section 452, this Compact, as amended, may be terminated 
by the Government of the United States in accordance with its 
constitutional processes. Such termination shall be effective on the 
date specified in the notice of termination by the Government of the 
United States but not earlier than six months following delivery of 
such notice. The time specified in the notice of termination may be 
extended. Such termination of this Compact, as amended, shall be 
without prejudice to the continued application of section 452 of this 
Compact, as amended, and the provisions of the Compact, as amended, set 
forth therein.
Section 443
    This Compact, as amended, shall be terminated by the Government of 
the Federated States of Micronesia, pursuant to its constitutional 
processes, subject to section 453 if the people represented by that 
Government vote in a plebiscite to terminate the Compact, as amended, 
or by another process permitted by the FSM constitution and mutually 
agreed between the Governments of the United States and the Federated 
States of Micronesia. The Government of the Federated States of 
Micronesia shall notify the Government of the United States of its 
intention to call such a plebiscite, or to pursue another mutually 
agreed and constitutional process, which plebiscite or process shall 
take place not earlier than three months after delivery of such notice. 
The plebiscite or other process shall be administered by the Government 
of the Federated States of Micronesia in accordance with its 
constitutional and legislative processes. If a majority of the valid 
ballots cast in the plebiscite or other process favors termination, the 
Government of the Federated States of Micronesia shall, upon 
certification of the results of the plebiscite or other process, give 
notice of termination to the Government of the United States, such 
termination to be effective on the date specified in such notice but 
not earlier than three months following the date of delivery of such 
notice. The time specified in the notice of termination may be 
extended.

                               Article V

                             Survivability

Section 451
    (a) Should termination occur pursuant to section 441, economic and 
other assistance by the Government of the United States shall continue 
only if and as mutually agreed by the Governments of the United States 
and the Federated States of Micronesia, and in accordance with the 
parties' respective constitutional processes.
    (b) In view of the special relationship of the United States and 
the Federated States of Micronesia, as reflected in subsections (b) and 
(c) of section 354 of this Compact, as amended, and the separate 
agreement entered into consistent with those subsections, if 
termination occurs pursuant to section 441 prior to the twentieth 
anniversary of the effective date of this Compact, as amended, the 
United States shall continue to make contributions to the Trust Fund 
described in section 215 of this Compact, as amended.
    (c) In view of the special relationship of the United States and 
the Federated States of Micronesia described in subsection (b) of this 
section, if termination occurs pursuant to section 441 following the 
twentieth anniversary of the effective date of this Compact, as 
amended, the Federated States of Micronesia shall be entitled to 
receive proceeds from the Trust Fund described in section 215 of this 
Compact, as amended, in the manner described in those provisions and 
the Trust Fund Agreement governing the distribution of such proceeds.
Section 452
    (a) Should termination occur pursuant to section 442 prior to the 
twentieth anniversary of the effective date of this Compact, as 
amended, the following provisions of this Compact, as amended, shall 
remain in full force and effect until the twentieth anniversary of the 
effective date of this Compact, as amended, and thereafter as mutually 
agreed:
            (1) Article VI and sections 172, 173, 176 and 177 of Title 
        One;
            (2) Sections 232 and 234 of Title Two;
            (3) Title Three; and
            (4) Articles II, III, V and VI of Title Four.
    (b) Should termination occur pursuant to section 442 before the 
twentieth anniversary of the effective date of the Compact, as amended:
            (1) Except as provided in paragraph (2) of this subsection 
        and subsection (c) of this section, economic and other 
        assistance by the United States shall continue only if and as 
        mutually agreed by theGovernments of the United States and the 
Federated States of Micronesia.
            (2) In view of the special relationship of the United 
        States and the Federated States of Micronesia, as reflected in 
        subsections (b) and (c) of section 354 of this Compact, as 
        amended, and the separate agreement regarding mutual security, 
        and the Trust Fund Agreement, the United States shall continue 
        to make contributions to the Trust Fund described in section 
        215 of this Compact, as amended, in the manner described in the 
        Trust Fund Agreement.
    (c) In view of the special relationship of the United States and 
the Federated States of Micronesia, as reflected in subsections 354(b) 
and (c) of this Compact, as amended, and the separate agreement 
regarding mutual security, and the Trust Fund Agreement, if termination 
occurs pursuant to section 442 following the twentieth anniversary of 
the effective date of this Compact, as amended, the Federated States of 
Micronesia shall continue to be eligible to receive proceeds from the 
Trust Fund described in section 215 of this Compact, as amended, in the 
manner described in those provisions and the Trust Fund Agreement.
Section 453
    (a) Should termination occur pursuant to section 443 prior to the 
twentieth anniversary of the effective date of this Compact, as 
amended, the following provisions of this Compact, as amended, shall 
remain in full force and effect until the twentieth anniversary of the 
effective date of this Compact, as amended, and thereafter as mutually 
agreed:
            (1) Article VI and sections 172, 173, 176 and 177 of Title 
        One;
            (2) Sections 232 and 234 of Title Two;
            (3) Title Three; and
            (4) Articles II, III, V and VI of Title Four.
    (b) Upon receipt of notice of termination pursuant to section 443, 
the Government of the United States and the Government of the Federated 
States of Micronesia shall promptly consult with regard to their future 
relationship. Except as provided in subsection (c) and (d) of this 
section, these consultations shall determine the level of economic and 
other assistance, if any, which the Government of the United States 
shall provide to the Government of the Federated States of Micronesia 
for the period ending on the twentieth anniversary of the effective 
date of this Compact, as amended, and for any period thereafter, if 
mutually agreed.
    (c) In view of the special relationship of the United States and 
the Federated States of Micronesia, as reflected in subsections 354(b) 
and (c) of this Compact, as amended, and the separate agreement 
regarding mutual security, and the Trust Fund Agreement, if termination 
occurs pursuant to section 443 prior to the twentieth anniversary of 
the effective date of this Compact, as amended, the United States shall 
continue to make contributions to the Trust Fund described in section 
215 of this Compact, as amended, in the manner described in the Trust 
Fund Agreement.
    (d) In view of the special relationship of the United States and 
the Federated States of Micronesia, as reflected in subsections 354(b) 
and (c) of this Compact, as amended, and the separate agreement 
regarding mutual security, and the Trust Fund Agreement, if termination 
occurs pursuant to section 443 following the twentieth anniversary of 
the effective date of this Compact, as amended, the Federated States of 
Micronesia shall continue to be eligible to receive proceeds from the 
Trust Fund described in section 215 of this Compact, as amended, in the 
manner described in those provisions and the Trust Fund Agreement.
Section 454
    Notwithstanding any other provision of this Compact, as amended:
            (a) The Government of the United States reaffirms its 
        continuing interest in promoting the economic advancement and 
        budgetary self-reliance of the people of the Federated States 
        of Micronesia.
            (b) The separate agreements referred to in Article II of 
        Title Three shall remain in effect in accordance with their 
        terms.

                               Article VI

                          Definition of Terms

Section 461
    For the purpose of this Compact, as amended, only, and without 
prejudice to the views of the Government of the United States or the 
Government of the Federated States of Micronesia as to the nature and 
extent of the jurisdiction of either of them under international law, 
the following terms shall have the following meanings:
            (a) ``Trust Territory of the Pacific Islands'' means the 
        area established in the Trusteeship Agreement consisting of the 
        former administrative districts of Kosrae, Yap, Ponape, the 
        Marshall Islands and Truk as described in Title One, Trust 
        Territory Code, section 1, in force on January 1, 1979. This 
        term does not include the area of Palau or the Northern Mariana 
        Islands.
            (b) ``Trusteeship Agreement'' means the agreement setting 
        forth the terms of trusteeship for the Trust Territory of the 
        Pacific Islands, approved by the Security Council of the United 
        Nations April 2, 1947, and by the United States July 18, 1947, 
        entered into force July 18, 1947, 61 Stat. 3301, T.I.A.S. 1665, 
        8 U.N.T.S. 189.
             (c) ``The Federated States of Micronesia'' and ``the 
        Republic of the Marshall Islands'' are used in a geographic 
        sense and include the land and water areas to the outer limits 
        of the territorial sea and the air space above such areas as 
        now or hereafter recognized by the Government of the United 
        States.
            (d) ``Compact'' means the Compact of Free Association 
        Between the United States and the Federated States of 
        Micronesia and the Marshall Islands, that was approved by the 
        United States Congress in section 201 of Public Law 99-239 
        (Jan. 14, 1986) and went into effect with respect to the 
        Federated States of Micronesia on November 3, 1986.
            (e) ``Compact, as amended'' means the Compact of Free 
        Association Between the United States and the Federated States 
        of Micronesia, as amended. The effective date of the Compact, 
        as amended, shall be on a date to be determined by the 
        Presidentof the United States, and agreed to by the Government 
of the Federated States of Micronesia, following formal approval of the 
Compact, as amended, in accordance with section 411 of this Compact, as 
amended.
            (f) ``Government of the Federated States of Micronesia'' 
        means the Government established and organized by the 
        Constitution of the Federated States of Micronesia including 
        all the political subdivisions and entities comprising that 
        Government.
            (g) ``Government of the Republic of the Marshall Islands'' 
        means the Government established and organized by the 
        Constitution of the Republic of the Marshall Islands including 
        all the political subdivisions and entities comprising that 
        Government.
            (h) The following terms shall be defined consistent with 
        the 1998 Edition of the Radio Regulations of the International 
        Telecommunications Union as follows:
                    (1) ``Radiocommunication'' means telecommunication 
                by means of radio waves.
                    (2) ``Station'' means one or more transmitters or 
                receivers or a combination of transmitters and 
                receivers, including the accessory equipment, necessary 
                at one location for carrying on a radiocommunication 
                service, or the radio astronomy service.
                    (3) ``Broadcasting Service'' means a 
                radiocommunication service in which the transmissions 
                are intended for direct reception by the general 
                public. This service may include sound transmissions, 
                television transmissions or other types of 
                transmission.
                    (4) ``Broadcasting Station'' means a station in the 
                broadcasting service.
                    (5) ``Assignment (of a radio frequency or radio 
                frequency channel)'' means an authorization given by an 
                administration for a radio station to use a radio 
                frequency or radio frequency channel under specified 
                conditions.
                    (6) ``Telecommunication'' means any transmission, 
                emission or reception of signs, signals, writings, 
                images and sounds or intelligence of any nature by 
                wire, radio, optical or other electromagnetic systems.
            (i) ``Military Areas and Facilities'' means those areas and 
        facilities in the Federated States of Micronesia reserved or 
        acquired by the Government of the Federated States of 
        Micronesia for use by the Government of the United States, as 
        set forth in the separate agreements referred to in section 
        321.
            (j) ``Tariff Schedules of the United States'' means the 
        Tariff Schedules of the United States as amended from time to 
        time and as promulgated pursuant to United States law and 
        includes the Tariff Schedules of the United States Annotated 
        (TSUSA), as amended.
            (k) ``Vienna Convention on Diplomatic Relations'' means the 
        Vienna Convention on Diplomatic Relations, done April 18, 1961, 
        23 U.S.T. 3227, T.I.A.S. 7502, 500 U.N.T.S. 95.
Section 462
    (a) The Government of the United States and the Government of the 
Federated States of Micronesia previously have concluded agreements 
pursuant to the Compact, which shall remain in effect and shall survive 
in accordance with their terms, as follows:
            (1) Agreement Concluded Pursuant to Section 234 of the 
        Compact;
            (2) 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; and
            (3) Agreement between the Government of the United States 
        of America and the Federated States of Micronesia Regarding 
        Aspects of the Marine Sovereignty and Jurisdiction of the 
        Federated States of Micronesia.
    (b) The Government of the United States and the Government of the 
Federated States of Micronesia shall conclude prior to the date of 
submission of this Compact, as amended, to the legislatures of the two 
countries, the following related agreements which shall come into 
effect on the effective date of this Compact, as amended, and shall 
survive in accordance with their terms, as follows:
            (1) 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 Compact of Free 
        Association, as amended which includes:
                    (i) Postal Services and Related Programs;
                    (ii) Weather Services and Related Programs;
                    (iii) Civil Aviation Safety Service and Related 
                Programs;
                    (iv) Civil Aviation Economic Services and Related 
                Programs;
                    (v) United States Disaster Preparedness and 
                Response Services and Related Programs;
                    (vi) Federal Deposit Insurance Corporation Services 
                and Related Programs; and
                    (vii) Telecommunications Services and Related 
                Programs.
            (2) Agreement Between the Government of the United States 
        of America and the Government of the Federated States of 
        Micronesia on Extradition, Mutual Assistance in Law Enforcement 
        Matters and Penal Sanctions Concluded Pursuant to Section 
        175(a) of the Compact of Free Association, as amended;
            (3) Agreement Between the Government of the United States 
        of America and the Government of the Federated States of 
        Micronesia on Labor Recruitment Concluded Pursuant to Section 
        175(b) of the Compact of Free Association, as amended;
            (4) Agreement Concerning Procedures for the Implementation 
        of United States Economic Assistance Provided in the Compact of 
        Free Association,as Amended, of Free Association Between the 
Government of the United States of America and Government of the 
Federated States of Micronesia;
            (5) Agreement Between the Government of the United States 
        of America and the Government of the Federated States of 
        Micronesia Implementing Section 215 and Section 216 of the 
        Compact, as Amended, Regarding a Trust Fund;
            (6) Agreement Regarding the Military Use and Operating 
        Rights of the Government of the United States in the Federated 
        States of Micronesia Concluded Pursuant to Sections 211(b), 321 
        and 323 of the Compact of Free Association, as Amended; and the
            (7) Status of Forces Agreement Between the Government of 
        the United States of America and the Government of the 
        Federated States of Micronesia Concluded Pursuant to Section 
        323 of the Compact of Free Association, as Amended.
Section 463
    (a) Except as set forth in subsection (b) of this section, any 
reference in this Compact, as amended, to a provision of the United 
States Code or the Statutes at Large of the United States constitutes 
the incorporation of the language of such provision into this Compact, 
as amended, as such provision was in force on the effective date of 
this Compact, as amended.
    (b) Any reference in Articles IV and Article VI of Title One and 
Sections 174, 175, 178 and 342 to a provision of the United States Code 
or the Statutes at Large of the United States or to the Privacy Act, 
the Freedom of Information Act, the Administrative Procedure Act or the 
Immigration and Nationality Act constitutes the incorporation of the 
language of such provision into this Compact, as amended, as such 
provision was in force on the effective date of this Compact, as 
amended, or as it may be amended thereafter on a non-discriminatory 
basis according to the constitutional processes of the United States.

                              Article VII

                         Concluding Provisions

Section 471
    Both the Government of the United States and the Government of the 
Federated States of Micronesia shall take all necessary steps, of a 
general or particular character, to ensure, no later than the entry 
into force date of this Compact, as amended, the conformity of its 
laws, regulations and administrative procedures with the provisions of 
this Compact, as amended, or in the case of subsection (d) of section 
141, as soon as reasonably possible thereafter.
Section 472
    This Compact, as amended, may be accepted, by signature or 
otherwise, by the Government of the United States and the Government of 
the Federated States of Micronesia.
    IN WITNESS WHEREOF, the undersigned, duly authorized, have signed 
this Compact of Free Association, as amended, which shall enter into 
force upon the exchange of diplomatic notes by which the Government of 
the United States of America and the Government of the Federated States 
of Micronesia inform each other about the fulfillment of their 
respective requirements for entry into force.
    DONE at Pohnpei, Federated States of Micronesia, in duplicate, this 
fourteenth (14) day of May, 2003, each text being equally authentic.

Signed (May 14, 2003)               Signed (May 14, 2003)
For the Government of the           For the Government of the
United States of America:           Federated States of
                                    Micronesia:

    (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

                                PREAMBLE

 THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF 
                  THE REPUBLIC OF THE MARSHALL ISLANDS

    Affirming that their Governments and their relationship as 
Governments are founded upon respect for human rights and fundamental 
freedoms for all, and that the people of the Republic of the Marshall 
Islands have the right to enjoy self-government; and
    Affirming the common interests of the United States of America and 
the Republic of the Marshall Islands in creating and maintaining their 
close and mutually beneficial relationship through the free and 
voluntary association of their respective Governments; and
    Affirming the interest of the Government of the United States in 
promoting the economic advancement and budgetary self-reliance of the 
Republic of the Marshall Islands; and
    Recognizing that their relationship until the entry into force on 
October 21, 1986 of the Compact was based upon the International 
Trusteeship System of the United Nations Charter, and in particular 
Article 76 of the Charter; and that pursuant to Article 76 of the 
Charter, the people of the Republic of the Marshall Islands have 
progressively developed their institutions of self-government, and that 
in the exercise of their sovereign right to self-determination they, 
through their freely-expressed wishes, have adopted a Constitution 
appropriate to their particular circumstances; and
    Recognizing that the Compact reflected their common desire to 
terminate the Trusteeship and establish a government-to-government 
relationship which was in accordance with the new political status 
based on the freely expressed wishes of the people of the Republic of 
the Marshall Islands and appropriate to their particular circumstances; 
and
    Recognizing that the people of the Republic of the Marshall Islands 
have and retain their sovereignty and their sovereign right to self-
determination and the inherent right to adopt and amend their own 
Constitution and form of government and that the approval of the entry 
of the Government of the Republic of the Marshall Islands into the 
Compact by the people of the Republic of the Marshall Islands 
constituted an exercise of their sovereign right to self-determination; 
and
    Recognizing the common desire of the people of the United States 
and the people of the Republic of the Marshall Islands to maintain 
their close government-to-government relationship, the United States 
and the Republic of the Marshall Islands:
    NOW, THEREFORE, MUTUALLY AGREE to continue and strengthen their 
relationship of free association by amending the Compact, which 
continues to provide a full measure of self-government for the people 
of the Republic of the Marshall Islands; and
    FURTHER AGREE that the relationship of free association derives 
from and is as set forth in this Compact, as amended, by the 
Governments of the United States and the Republic of the Marshall 
Islands; and that, during such relationship of free association, the 
respective rights and responsibilities of the Government of the United 
States and the Government of the Republic of the Marshall Islands in 
regard to this relationship of free association derive from and are as 
set forth in this Compact, as amended.

                               TITLE ONE

                         GOVERNMENTAL RELATIONS

                               Article I

                            Self-Government

Section 111
    The people of the Republic of the Marshall Islands, acting through 
the Government established under their Constitution, are self-
governing.

                               Article II

                            Foreign Affairs

Section 121
    (a) The Government of the Republic of the Marshall Islands has the 
capacity to conduct foreign affairs and shall do so in its own name and 
right, except as otherwise provided in this Compact, as amended.
    (b) The foreign affairs capacity of the Government of the Republic 
of the Marshall Islands includes:
            (1) the conduct of foreign affairs relating to law of the 
        sea and marine resources matters, including the harvesting, 
        conservation, exploration or exploitation of living and non-
        living resources from the sea, seabed or subsoil to the full 
        extent recognized under international law;
            (2) the conduct of its commercial, diplomatic, consular, 
        economic, trade, banking, postal, civil aviation, 
        communications, and cultural relations, including negotiations 
        for the receipt of developmental loans and grants and the 
        conclusion of arrangements with other governments and 
        international and intergovernmental organizations, including 
        any matters specially benefiting its individual citizens.
    (c) The Government of the United States recognizes that the 
Government of the Republic of the Marshall Islands has the capacity to 
enter into, in its own name and right, treaties and other international 
agreements with governments and regional and international 
organizations.
    (d) In the conduct of its foreign affairs, the Government of the 
Republic of the Marshall Islands confirms that it shall act in 
accordance with principles of international law and shall settle its 
international disputes by peaceful means.
Section 122
    The Government of the United States shall support applications by 
the Government of the Republic of the Marshall Islands for membership 
or other participation in regional or international organizations as 
may be mutually agreed.
Section 123
    (a) In recognition of the authority and responsibility of the 
Government of the United States under Title Three, the Government of 
the Republic of the Marshall Islands shall consult, in the conduct of 
its foreign affairs, with the Government of the United States.
    (b) In recognition of the foreign affairs capacity of the 
Government of the Republic of the Marshall Islands, the Government of 
the United States, in the conduct of its foreign affairs, shall consult 
with the Government of the Republic of the Marshall Islands on matters 
that the Government of the United States regards as relating to or 
affecting the Government of the Republic of the Marshall Islands.
Section 124
    The Government of the United States may assist or act on behalf of 
the Government of the Republic of the Marshall Islands in the area of 
foreign affairs as may be requested and mutually agreed from time to 
time. The Government of the United States shall not be responsible to 
third parties for the actions of the Government of the Republic of the 
Marshall Islands undertaken with the assistance or through the agency 
of the Government of the United States pursuant to this section unless 
expressly agreed.
Section 125
    The Government of the United States shall not be responsible for 
nor obligated by any actions taken by the Government of the Republic of 
the Marshall Islands in the area of foreign affairs, except as may from 
time to time be expressly agreed.
Section 126
    At the request of the Government of the Republic of the Marshall 
Islands and subject to the consent of the receiving state, the 
Government of the United States shall extend consular assistance on the 
same basis as for citizens of the United States to citizens of the 
Republic of the Marshall Islands for travel outside the Republic of the 
Marshall Islands, the United States and its territories and 
possessions.
Section 127
    Except as otherwise provided in this Compact, as amended, or its 
related agreements, all obligations, responsibilities, rights and 
benefits of the Government of the United States as Administering 
Authority which resulted from the application pursuant to the 
Trusteeship Agreement of any treaty or other international agreement to 
the Trust Territory of the Pacific Islands on October 20, 1986, are, as 
of that date, no longer assumed and enjoyed by the Government of the 
United States.

                              Article III

                             Communications

Section 131
    (a) The Government of the Republic of the Marshall Islands has full 
authority and responsibility to regulate its domestic and foreign 
communications, and the Government of the United States shall provide 
communications assistance as mutually agreed.
    (b) The Government of the Republic of the Marshall Islands has 
elected to undertake all functions previously performed by the 
Government of the United States withrespect to domestic and foreign 
communications, except for those functions set forth in a separate 
agreement entered into pursuant to this section of the Compact, as 
amended.
Section 132
    The Government of the Republic of the Marshall Islands shall permit 
the Government of the United States to operate telecommunications 
services in the Republic of the Marshall Islands to the extent 
necessary to fulfill the obligations of the Government of the United 
States under this Compact, as amended, in accordance with the terms of 
separate agreements entered into pursuant to this section of the 
Compact, as amended.

                               Article IV

                              Immigration

Section 141
    (a) In furtherance of the special and unique relationship that 
exists between the United States and the Republic of the Marshall 
Islands, under the Compact, as amended, any person in the following 
categories may be admitted to lawfully engage in occupations, and 
establish residence as a nonimmigrant in the United States and its 
territories and possessions (the ``United States'') without regard to 
paragraphs (5) or (7)(B)(i)(II) of section 212(a) of the Immigration 
and Nationality Act, as amended, 8 U.S.C. 1182(a)(5) or (7)(B)(i)(II):
            (1) a person who, on October 21, 1986, was a citizen of the 
        Trust Territory of the Pacific Islands, as defined in Title 53 
        of the Trust Territory Code in force on January 1, 1979, and 
        has become and remains a citizen of the Republic of the 
        Marshall Islands;
            (2) a person who acquires the citizenship of the Republic 
        of the Marshall Islands at birth, on or after the effective 
        date of the Constitution of the Republic of the Marshall 
        Islands;
            (3) an immediate relative of a person referred to in 
        paragraphs (1) or (2) of this section, provided that such 
        immediate relative is a naturalized citizen of the Republic of 
        the Marshall Islands who has been an actual resident there for 
        not less than five years after attaining such naturalization 
        and who holds a certificate of actual residence, and further 
        provided, that, in the case of a spouse, such spouse has been 
        married to the person referred to in paragraph (1) or (2) of 
        this section for at least five years, and further provided, 
        that the Government of the United States is satisfied that such 
        naturalized citizen meets the requirement of subsection (b) of 
        section 104 of Public Law 99-239 as it was in effect on the day 
        prior to the effective date of this Compact, as amended;
            (4) a naturalized citizen of the Republic of the Marshall 
        Islands who was an actual resident there for not less than five 
        years after attaining such naturalization and who satisfied 
        these requirements as of April 30, 2003, who continues to be an 
        actual resident and holds a certificate of actual residence, 
        and whose name is included in a list furnished by the 
        Government of the Republic of the Marshall Islands to the 
        Government of the United States no later than the effective 
        date of the Compact, as amended, in form and content acceptable 
        to the Government of the United States, provided, that the 
        Government of the United States is satisfied that such 
        naturalized citizen meets the requirement of subsection (b) of 
        section 104 of Public Law 99-239 as it was in effect on the day 
        prior to the effective date of this Compact, as amended; or
            (5) an immediate relative of a citizen of the Republic of 
        the Marshall Islands, regardless of the immediate relative's 
        country of citizenship or period of residence in the Republic 
        of the Marshall Islands, if the citizen of the Republic of the 
        Marshall Islands is serving on active duty in any branch of the 
        United States Armed Forces, or in the active reserves.
    (b) Notwithstanding subsection (a) of this section, a person who is 
coming to the United States pursuant to an adoption outside the United 
States, or for the purpose of adoption in the United States, is 
ineligible for admission under the Compact and the Compact, as amended. 
This subsection shall apply to any person who is or was an applicant 
for admission to the United States on or after March 1, 2003, including 
any applicant for admission in removal proceedings (including appellate 
proceedings) on or after March 1, 2003, regardless of the date such 
proceedings were commenced. This subsection shall have no effect on the 
ability of the Government of the United States or any United States 
State or local government to commence or otherwise take any action 
against any person or entity who has violated any law relating to the 
adoption of any person.
    (c) Notwithstanding subsection (a) of this section, no person who 
has been or is granted citizenship in the Republic of the Marshall 
Islands, or has been or is issued a Republic of the Marshall Islands 
passport pursuant to any investment, passport sale, or similar program 
has been or shall be eligible for admission to the United States under 
the Compact or the Compact, as amended.
    (d) A person admitted to the United States under the Compact, or 
the Compact, as amended, shall be considered to have the permission of 
the Government of the United States to accept employment in the United 
States. An unexpired Republic of the Marshall Islands passport with 
unexpired documentation issued by the Government of the United States 
evidencing admission under the Compact or the Compact, as amended, 
shall be considered to be documentation establishing identity and 
employment authorization under section 274A(b)(1)(B) of the Immigration 
and Nationality Act, as amended, 8 U.S.C. 1324a(b)(1)(B). The 
Government of the United States will take reasonable and appropriate 
steps to implement and publicize this provision, and the Government of 
the Republic of the Marshall Islands will also take reasonable and 
appropriate steps to publicize this provision.
    (e) For purposes of the Compact and the Compact, as amended,
            (1) the term ``residence'' with respect to a person means 
        the person's principal, actual dwelling place in fact, without 
        regard to intent, as provided in section 101(a)(33) of the 
        Immigration and Nationality Act, as amended, 8 U.S.C. 
        1101(a)(33), and variations of the term ``residence,'' 
        including``resident'' and ``reside,'' shall be similarly 
construed;
            (2) the term ``actual residence'' means physical presence 
        in the Republic of the Marshall Islands during eighty-five 
        percent of the five-year period of residency required by 
        section 141(a)(3) and (4);
            (3) the term ``certificate of actual residence'' means a 
        certificate issued to a naturalized citizen by the Government 
        of the Republic of the Marshall Islands stating that the 
        citizen has complied with the actual residence requirement of 
        section 141(a)(3) or (4);
            (4) the term ``nonimmigrant'' means an alien who is not an 
        ``immigrant'' as defined in section 101(a)(15) of such Act, 8 
        U.S.C. 1101(a)(15); and
            (5) the term ``immediate relative'' means a spouse, or 
        unmarried son or unmarried daughter less than 21 years of age.
    (f) The Immigration and Nationality Act, as amended, shall apply to 
any person admitted or seeking admission to the United States (other 
than a United States possession or territory where such Act does not 
apply) under the Compact or the Compact, as amended, and nothing in the 
Compact or the Compact, as amended, shall be construed to limit, 
preclude, or modify the applicability of, with respect to such person:
            (1) any ground of inadmissibility or deportability under 
        such Act (except sections 212(a)(5) and 212(a)(7)(B)(i)(II) of 
        such Act, as provided in subsection (a) of this section), and 
        any defense thereto, provided that, section 237(a)(5) of such 
        Act shall be construed and applied as if it reads as follows: 
        ``any alien who has been admitted under the Compact, or the 
        Compact, as amended, who cannot show that he or she has 
        sufficient means of support in the United States, is 
        deportable;''
            (2) the authority of the Government of the United States 
        under section 214(a)(1) of such Act to provide that admission 
        as a nonimmigrant shall be for such time and under such 
        conditions as the Government of the United States may by 
        regulations prescribe;
            (3) except for the treatment of certain documentation for 
        purposes of section 274A(b)(1)(B) of such Act as provided by 
        subsection (d) of this section of the Compact, as amended, any 
        requirement under section 274A, including but not limited to 
        section 274A(b)(1)(E);
            (4) section 643 of the Illegal Immigration Reform and 
        Immigrant Responsibility Act of 1996, Public Law 104-208, and 
        actions taken pursuant to section 643; and
            (5) the authority of the Government of the United States 
        otherwise to administer and enforce the Immigration and 
        Nationality Act, as amended, or other United States law.
    (g) Any authority possessed by the Government of the United States 
under this section of the Compact or the Compact, as amended, may also 
be exercised by the Government of a territory or possession of the 
United States where the Immigration and Nationality Act, as amended, 
does not apply, to the extent such exercise of authority is lawful 
under a statute or regulation of such territory or possession that is 
authorized by the laws of the United States.
    (h) Subsection (a) of this section does not confer on a citizen of 
the Republic of the Marshall Islands the right to establish the 
residence necessary for naturalization under the Immigration and 
Nationality Act, as amended, or to petition for benefits for alien 
relatives under that Act. Subsection (a) of this section, however, 
shall not prevent a citizen of the Republic of the Marshall Islands 
from otherwise acquiring such rights or lawful permanent resident alien 
status in the United States.
Section 142
    (a) Any citizen or national of the United States may be admitted to 
lawfully engage in occupations, and reside in the Republic of the 
Marshall Islands, subject to the rights of the Government of the 
Republic of the Marshall Islands to deny entry to or deport any such 
citizen or national as an undesirable alien. Any determination of 
inadmissibility or deportability shall be based on reasonable statutory 
grounds and shall be subject to appropriate administrative and judicial 
review within the Republic of the Marshall Islands. If a citizen or 
national of the United States is a spouse of a citizen of the Republic 
of the Marshall Islands, the Government of the Republic of the Marshall 
Islands shall allow the United States citizen spouse to establish 
residence. Should the Republic of the Marshall Islands citizen spouse 
predecease the United States citizen spouse during the marriage, the 
Government of the Republic of the Marshall Islands shall allow the 
United States citizen spouse to continue to reside in the Republic of 
the Marshall Islands.
    (b) In enacting any laws or imposing any requirements with respect 
to citizens and nationals of the United States entering the Republic of 
the Marshall Islands under subsection (a) of this section, including 
any grounds of inadmissibility or deportability, the Government of the 
Republic of the Marshall Islands shall accord to such citizens and 
nationals of the United States treatment no less favorable than that 
accorded to citizens of other countries.
    (c) Consistent with subsection (a) of this section, with respect to 
citizens and nationals of the United States seeking to engage in 
employment or invest in the Republic of the Marshall Islands, the 
Government of the Republic of the Marshall Islands shall adopt 
immigration-related procedures no less favorable than those adopted by 
the Government of the United States with respect to citizens of the 
Republic of the Marshall Islands seeking employment in the United 
States.
Section 143
    Any person who relinquishes, or otherwise loses, his United States 
nationality or citizenship, or his Republic of the Marshall Islands 
citizenship, shall be ineligible to receive the privileges set forth in 
sections 141 and 142. Any such person may apply for admission to the 
United States or the Republic of the Marshall Islands, as the case may 
be, in accordance with any other applicable laws of the United States 
or the Republic of the Marshall Islands relating to immigration of 
aliens from other countries. The laws of the Republic of the Marshall 
Islands or the UnitedStates, as the case may be, shall dictate the 
terms and conditions of any such person's stay.

                               Article V

                             Representation

Section 151
    Relations between the Government of the United States and the 
Government of the Republic of the Marshall Islands shall be conducted 
in accordance with the Vienna Convention on Diplomatic Relations. In 
addition to diplomatic missions and representation, the Governments may 
establish and maintain other offices and designate other 
representatives on terms and in locations as may be mutually agreed.
Section 152
    (a) Any citizen or national of the United States who, without 
authority of the United States, acts as the agent of the Government of 
the Republic of the Marshall Islands with regard to matters specified 
in the provisions of the Foreign Agents Registration Act of 1938, as 
amended (22 U.S.C. 611 et seq.), that apply with respect to an agent of 
a foreign principal shall be subject to the requirements of such Act. 
Failure to comply with such requirements shall subject such citizen or 
national to the same penalties and provisions of law as apply in the 
case of the failure of such an agent of a foreign principal to comply 
with such requirements. For purposes of the Foreign Agents Registration 
Act of 1938, the Republic of the Marshall Islands shall be considered 
to be a foreign country.
    (b) Subsection (a) of this section shall not apply to a citizen or 
national of the United States employed by the Government of the 
Republic of the Marshall Islands with respect to whom the Government of 
the Republic of the Marshall Islands from time to time certifies to the 
Government of the United States that such citizen or national is an 
employee of the Republic of the Marshall Islands whose principal duties 
are other than those matters specified in the Foreign Agents 
Registration Act of 1938, as amended, that apply with respect to an 
agent of a foreign principal. The agency or officer of the United 
States receiving such certifications shall cause them to be filed with 
the Attorney General, who shall maintain a publicly available list of 
the persons so certified.

                               Article VI

                        Environmental Protection

Section 161
    The Governments of the United States and the Republic of the 
Marshall Islands declare that it is their policy to promote efforts to 
prevent or eliminate damage to the environment and biosphere and to 
enrich understanding of the natural resources of the Republic of the 
Marshall Islands. In order to carry out this policy, the Government of 
the United States and the Government of the Republic of the Marshall 
Islands agree to the following mutual and reciprocal undertakings:
            (a) The Government of the United States:
                    (1) shall, for its activities controlled by the 
                U.S. Army at Kwajalein Atoll and in the Mid-Atoll 
                Corridor and for U.S. Army Kwajalein Atoll activities 
                in the Republic of the Marshall Islands, continue to 
                apply the Environmental Standards and Procedures for 
                United States Army Kwajalein Atoll Activities in the 
                Republic of the Marshall Islands, unless and until 
                those Standards or Procedures are modified by mutual 
                agreement of the Governments of the United States and 
                the Republic of the Marshall Islands;
                    (2) shall apply the National Environmental Policy 
                Act of 1969, 83 Stat. 852, 42 U.S.C. 4321 et seq., to 
                its activities under the Compact, as amended, and its 
                related agreements as if the Republic of the Marshall 
                Islands were the United States;
                    (3) in the conduct of any activity not described in 
                section 161(a)(1) requiring the preparation of an 
                Environmental Impact Statement under section 161(a)(2), 
                shall comply with standards substantively similar to 
                those required by the following laws of the United 
                States, taking into account the particular environment 
                of the Republic of the Marshall Islands; the Endangered 
                Species Act of 1973, as amended, 16 U.S.C. 1531 et 
                seq.; the Clean Air Act, as amended, 42 U.S.C. 7401 et 
                seq.; the Clean Water Act (Federal Water Pollution 
                Control Act), as amended, 33 U.S.C. 1251 et seq.; Title 
                I of the Marine Protection, Research and Sanctuaries 
                Act of 1972 (the Ocean Dumping Act), 33 U.S.C. 1411 et 
                seq.; the Toxic Substances Control Act, as amended, 15 
                U.S.C. 2601 et seq.; the Solid Waste Disposal Act, as 
                amended, 42 U.S.C. 6901 et seq.; and such other 
                environmental protection laws of the United States and 
                the Republic of the Marshall Islands as may be agreed 
                from time to time with the Government of the Republic 
                of the Marshall Islands;
                    (4) shall, prior to conducting any activity not 
                described in section 161(a)(1) requiring the 
                preparation of an Environmental Impact Statement under 
                section 161(a)(2), develop, as agreed with the 
                Government of the Republic of the Marshall Islands, 
                written environmental standards and procedures to 
                implement the substantive provisions of the laws made 
                applicable to U.S. Government activities in the 
                Republic of the Marshall Islands, pursuant to section 
                161(a)(3).
            (b) The Government of the Republic of the Marshall Islands 
        shall continue to develop and implement standards and 
        procedures to protect its environment. As a reciprocal 
        obligation to the undertakings of the Government of the United 
        States under this Article, the Republic of the Marshall 
        Islands, taking into account its particular environment, shall 
        continue to develop and implement standards for environmental 
        protection substantively similar to those required of the 
        Government of the United States by section 161(a)(3) prior to 
        its conducting activities in the Republic of the Marshall 
        Islands, substantively equivalent to activities conducted there 
        by the Government of the United States and, as a further 
        reciprocal obligation, shall enforce those standards.
            (c) Section 161(a), including any standard or procedure 
        applicable thereunder, and section 161(b) may be modified or 
        superseded in whole or in part by agreement of the Government 
        of the United States and the Government of the Republic of the 
        Marshall Islands.
            (d) In the event that an Environmental Impact Statement is 
        no longer required under the laws of the United States for 
        major Federal actions significantly affecting the quality of 
        the human environment, the regulatory regime established under 
        sections 161(a)(3) and 161(a)(4) shall continue to apply to 
        such activities of the Government of the United States until 
        amended by mutual agreement.
            (e) The President of the United States may exempt any of 
        the activities of the Government of the United States under 
        this Compact, as amended, and its related agreements from any 
        environmental standard or procedure which may be applicable 
        under sections 161(a)(3) and 161(a)(4) if the President 
        determines it to be in the paramount interest of the Government 
        of the United States to do so, consistent with Title Three of 
        this Compact, as amended, and the obligations of the Government 
        of the United States under international law. Prior to any 
        decision pursuant to this subsection, the views of the 
        Government of the Republic of the Marshall Islands shall be 
        sought and considered to the extent practicable. If the 
        President grants such an exemption, to the extent practicable, 
        a report with his reasons for granting such exemption shall be 
        given promptly to the Government of the Republic of the 
        Marshall Islands.
            (f) The laws of the United States referred to in section 
        161(a)(3) shall apply to the activities of the Government of 
        the United States under this Compact, as amended, and its 
        related agreements only to the extent provided for in this 
        section.
Section 162
    The Government of the Republic of the Marshall Islands may bring an 
action for judicial review of any administrative agency action or any 
activity of the Government of the United States pursuant to section 
161(a) for enforcement of the obligations of the Government of the 
United States arising thereunder. The United States District Court for 
the District of Hawaii and the United States District Court for the 
District of Columbia shall have jurisdiction over such action or 
activity, and over actions brought under section 172(b) which relate to 
the activities of the Government of the United States and its officers 
and employees, governed by section 161, provided that:
            (a) Such actions may only be civil actions for any 
        appropriate civil relief other than punitive damages against 
        the Government of the United States or, where required by law, 
        its officers in their official capacity; no criminal actions 
        may arise under this section.
            (b) Actions brought pursuant to this section may be 
        initiated only by the Government of the Republic of the 
        Marshall Islands.
            (c) Administrative agency actions arising under section 161 
        shall be reviewed pursuant to the standard of judicial review 
        set forth in 5 U.S.C. 706.
            (d) The United States District Court for the District of 
        Hawaii and the United States District Court for the District of 
        Columbia shall have jurisdiction to issue all necessary 
        processes, and the Government of the United States agrees to 
        submit itself to the jurisdiction of the court; decisions of 
        the United States District Court shall be reviewable in the 
        United States Court of Appeals for the Ninth Circuit or the 
        United States Court of Appeals for the District of Columbia, 
        respectively, or in the United States Supreme Court as provided 
        by the laws of the United States.
            (e) The judicial remedy provided for in this section shall 
        be the exclusive remedy for the judicial review or enforcement 
        of the obligations of the Government of the United States under 
        this Article and actions brought under section 172(b), which 
        relate to the activities of the Government of the United States 
        and its officers and employees governed by section 161.
            (f) In actions pursuant to this section, the Government of 
        the Republic of the Marshall Islands shall be treated as if it 
        were a United States citizen.
Section 163
    (a) For the purpose of gathering data necessary to study the 
environmental effects of activities of the Government of the United 
States subject to the requirements of this Article, the Government of 
the Republic of the Marshall Islands shall be granted access to 
facilities operated by the Government of the United States in the 
Republic of the Marshall Islands, to the extent necessary for this 
purpose, except to the extent such access would unreasonably interfere 
with the exercise of the authority and responsibility of the Government 
of the United States under Title Three.
    (b) The Government of the United States, in turn, shall be granted 
access to the Republic of the Marshall Islands for the purpose of 
gathering data necessary to discharge its obligations under this 
Article, except to the extent such access would unreasonably interfere 
with the exercise of the authority and responsibility of the Government 
of the Republic of the Marshall Islands under Title One, and to the 
extent necessary for this purpose shall be granted access to documents 
and other information to the same extent similar access is provided the 
Government of the Republic of the Marshall Islands under the Freedom of 
Information Act, 5 U.S.C. 552.
    (c) The Government of the Republic of the Marshall Islands shall 
not impede efforts by the Government of the United States to comply 
with applicable standards and procedures.

                              Article VII

                        General Legal Provisions

Section 171
    Except as provided in this Compact, as amended, or its related 
agreements, the application of the laws of the United States to the 
Trust Territory of the Pacific Islands by virtue of the Trusteeship 
Agreement ceased with respect to the Marshall Islands on October 21, 
1986, the date the Compact went into effect.
Section 172
    (a) Every citizen of the Republic of the Marshall Islands who is 
not a resident of the United States shall enjoy the rights and remedies 
under the laws of the United States enjoyed by any non-resident alien.
    (b) The Government of the Republic of the Marshall Islands and 
every citizen of the Republic of the Marshall Islands shall be 
considered to be a ``person'' within the meaning of the Freedom of 
Information Act, 5 U.S.C. 552, and of the judicial review provisions of 
the Administrative Procedure Act, 5 U.S.C. 701-706, except that only 
the Government of the Republic of the Marshall Islands may seek 
judicial review under the Administrative Procedure Act or judicial 
enforcement under the Freedom of Information Act when such judicial 
review or enforcement relates to the activities of the Government of 
the United States governed by sections 161 and 162.
Section 173
    The Governments of the United States and the Republic of the 
Marshall Islands agree to adopt and enforce such measures, consistent 
with this Compact, as amended, and its related agreements, as may be 
necessary to protect the personnel, property, installations, services, 
programs and official archives and documents maintained by the 
Government of the United States in the Republic of the Marshall Islands 
pursuant to this Compact, as amended, and its related agreements and by 
the Government of the Republic of the Marshall Islands in the United 
States pursuant to this Compact, Compact, as amended, and its related 
agreements.
Section 174
    Except as otherwise provided in this Compact, as amended, and its 
related agreements:
            (a) The Government of the Republic of the Marshall Islands, 
        and its agencies and officials, shall be immune from the 
        jurisdiction of the court of the United States, and the 
        Government of the United States, and its agencies and 
        officials, shall be immune from the jurisdiction of the courts 
        of the Republic of the Marshall Islands.
            (b) The Government of the United States accepts 
        responsibility for and shall pay:
                    (1) any unpaid money judgment rendered by the High 
                Court of the Trust Territory of the Pacific Islands 
                against the Government of the United States with regard 
                to any cause of action arising as a result of acts or 
                omissions of the Government of the Trust Territory of 
                the Pacific Islands or the Government of the United 
                States prior to October 21, 1986;
                    (2) any claim settled by the claimant and the 
                Government of the Trust Territory of the Pacific 
                Islands but not paid as of the October 21, 1986; and
                    (3) settlement of any administrative claim or of 
                any action before a court of the Trust Territory of the 
                Pacific Islands or the Government of the United States, 
                arising as a result of acts or omissions of the 
                Government of the Trust Territory of the Pacific 
                Islands or the Government of the United States.
            (c) Any claim not referred to in section 174(b) and arising 
        from an act or omission of the Government of the Trust 
        Territory of the Pacific Islands or the Government of the 
        United States prior to the effective date of the Compact shall 
        be adjudicated in the same manner as a claim adjudicated 
        according to section 174(d). In any claim against the 
        Government of the Trust Territory of the Pacific Islands, the 
        Government of the United States shall stand in the place of the 
        Government of the Trust Territory of the Pacific Islands. A 
        judgment on any claim referred to in section 174(b) or this 
        subsection, not otherwise satisfied by the Government of the 
        United States, may be presented for certification to the United 
        States Court of Appeals for the Federal Circuit, or its 
        successor courts, which shall have jurisdiction therefore, 
        notwithstanding the provisions of 28 U.S.C. 1502, and which 
        court's decisions shall be reviewable as provided by the laws 
        of the United States. The United States Court of Appeals for 
        the Federal Circuit shall certify such judgment, and order 
        payment thereof, unless it finds, after a hearing, that such 
        judgment is manifestly erroneous as to law or fact, or 
        manifestly excessive. In either of such cases the United States 
        Court of Appeals for the Federal Circuit shall have 
        jurisdiction to modify such judgment.
            (d) The Government of the Republic of the Marshall Islands 
        shall not be immune from the jurisdiction of the courts of the 
        United States, and the Government of the United States shall 
        not be immune from the jurisdiction of the courts of the 
        Republic of the Marshall Islands in any civil case in which an 
        exception to foreign state immunity is set forth in the Foreign 
        Sovereign Immunities Act (28 U.S.C. 1602 et seq.) or its 
        successor statutes.
Section 175
    (a) A separate agreement, which shall come into effect 
simultaneously with this Compact, as amended, andshall have the force 
of law, shall govern mutual assistance and cooperation in law 
enforcement matters, including the pursuit, capture, imprisonment and 
extradition of fugitives from justice and the transfer of prisoners, as 
well as other law enforcement matters. In the United States, the laws 
of the United States governing international extradition, including 18 
U.S.C. 3184, 3186, and 3188-95, shall be applicable to the extradition 
of fugitives under the separate agreement, and the laws of the United 
States governing the transfer of prisoners, including 18 U.S.C. 4100-
15, shall be applicable to the transfer of prisoners under the separate 
agreement; and
    (b) A separate agreement, which shall come into effect 
simultaneously with this Compact, as amended, and shall have the force 
of law, shall govern requirements relating to labor recruitment 
practices, including registration, reporting, suspension or revocation 
of authorization to recruit persons for employment in the United 
States, and enforcement for violations of such requirements.
Section 176
    The Government of the Republic of the Marshall Islands confirms 
that final judgments in civil cases rendered by any court of the Trust 
Territory of the Pacific Islands shall continue in full force and 
effect, subject to the constitutional power of the courts of the 
Republic of the Marshall Islands to grant relief from judgments in 
appropriate cases.
Section 177
    Section 177 of the Compact entered into force with respect to the 
Marshall Islands on October 21, 1986 as follows:
            ``(a) The Government of the United States accepts the 
        responsibility for compensation owing to citizens of the 
        Marshall Islands, or the Federated States of Micronesia, (or 
        Palau) for loss or damage to property and person of the 
        citizens of the Marshall Islands, or the Federated States of 
        Micronesia, resulting from the nuclear testing program which 
        the Government of the United States conducted in the Northern 
        Marshall Islands between June 30, 1946, and August 18, 1958.
            (b) The Government of the United States and the Government 
        of the Marshall Islands shall set forth in a separate agreement 
        provisions for the just and adequate settlement of all such 
        claims which have arisen in regard to the Marshall Islands and 
        its citizens and which have not as yet been compensated or 
        which in the future may arise, for the continued administration 
        by the Government of the United States of direct radiation 
        related medical surveillance and treatment programs and 
        radiological monitoring activities and for such additional 
        programs and activities as may be mutually agreed, and for the 
        assumption by the Government of the Marshall Islands of 
        responsibility for enforcement of limitations on the 
        utilization of affected areas developed in cooperation with the 
        Government of the United States and for the assistance by the 
        Government of the United States in the exercise of such 
        responsibility as may be mutually agreed. This separate 
        agreement shall come into effect simultaneously with this 
        Compact and shall remain in effect in accordance with its own 
        terms.
            (c) The Government of the United States shall provide to 
        the Government of the Marshall Islands, on a grant basis, the 
        amount of $150 million to be paid and distributed in accordance 
        with the separate agreement referred to in this Section, and 
        shall provide the services and programs set forth in this 
        separate agreement, the language of which is incorporated into 
        this Compact.''
The Compact, as amended, makes no changes to, and has no effect upon, 
Section 177 of the Compact, nor does the Compact, as amended, change or 
affect the separate agreement referred to in Section 177 of the Compact 
including Articles IX and X of that separate agreement, and measures 
taken by the parties thereunder.
Section 178
    (a) The Federal agencies of the Government of the United States 
that provide services and related programs in the Republic of the 
Marshall Islands pursuant to Title Two are authorized to settle and pay 
tort claims arising in the Republic of the Marshall Islands from the 
activities of such agencies or from the acts or omissions of the 
employees of such agencies. Except as provided in section 178(b), the 
provisions of 28 U.S.C. 2672 and 31 U.S.C. 1304 shall apply exclusively 
to such administrative settlements and payments.
    (b) Claims under section 178(a) that cannot be settled under 
section 178(a) shall be disposed of exclusively in accordance with 
Article II of Title Four. Arbitration awards rendered pursuant to this 
subsection shall be paid out of funds under 31 U.S.C. 1304.
    (c) The Government of the United States and the Government of the 
Republic of the Marshall Islands shall, in the separate agreement 
referred to in section 231, provide for:
            (1) the administrative settlement of claims referred to in 
        section 178(a), including designation of local agents in each 
        State of the Republic of the Marshall Islands; such agents to 
        be empowered to accept, investigate and settle such claims, in 
        a timely manner, as provided in such separate agreements; and
            (2) arbitration, referred to in section 178(b), in a timely 
        manner, at a site convenient to the claimant, in the event a 
        claim is not otherwise settled pursuant to section 178(a).
    (d) The provisions of section 174(d) shall not apply to claims 
covered by this section.
    (e) Except as otherwise explicitly provided by law of the United 
States, this Compact, as amended, or its related agreements, neither 
the Government of the United States, its instrumentalities, nor any 
person acting on behalf of the Government of the United States, shall 
be named a party in any action based on, or arising out of, the 
activity or activities of a recipient of any grant or other assistance 
provided by the Government of the United States (or the activity or 
activities of the recipient's agency or any other person or entity 
acting on behalf of the recipient).
Section 179
    (a) The courts of the Republic of the Marshall Islands shall not 
exercise criminal jurisdiction over the Government of the United 
States, or its instrumentalities.
    (b) The courts of the Republic of the Marshall Islands shall not 
exercise criminal jurisdiction over any person if the Government of the 
United States provides notification to the Government of the Republic 
of the Marshall Islands that such person was acting on behalf of the 
Government of the United States, for actions taken in furtherance of 
section 221 or 224 of this amended Compact, or any other provision of 
law authorizing financial, program, or service assistance to the 
Republic of the Marshall Islands.

                               TITLE TWO

                           ECONOMIC RELATIONS

                               Article I

                            Grant Assistance

Section 211 - Annual Grant Assistance
    (a) In order to assist the Government of the Republic of the 
Marshall Islands in its efforts to promote the economic advancement and 
budgetary self-reliance of its people, and in recognition of the 
special relationship that exists between the Republic of the Marshall 
Islands and the United States, the Government of the United States 
shall provide assistance on a grant basis for a period of twenty years 
in the amounts set forth in section 217, commencing on the effective 
date of this Compact, as amended. Such grants shall be used for 
assistance in education, health care, the environment, public sector 
capacity building, and private sector development, or for other areas 
as mutually agreed, with priorities in the education and health care 
sectors. Consistent with the medium-term budget and investment 
framework described in subsection (f) of this section, the proposed 
division of this amount among the identified areas shall require the 
concurrence of both the Government of the United States and the 
Government of the Republic of the Marshall Islands, through the Joint 
Economic Management and Financial Accountability Committee described in 
section 214. The Government of the United States shall disburse the 
grant assistance and monitor the use of such grant assistance in 
accordance with the provisions of this Article and an Agreement 
Concerning Procedures for the Implementation of United States Economic 
Assistance Provided in the Compact, as Amended, of Free Association 
Between the Government of the United States of America and the 
Government of the Republic of the Marshall Islands (``Fiscal Procedures 
Agreement'') which shall come into effect simultaneously with this 
Compact, as amended.
            (1) Education.--United States grant assistance shall be 
        made available in accordance with the strategic framework 
        described in subsection (f) of this section to support and 
        improve the educational system of the Republic of the Marshall 
        Islands and develop the human, financial, and material 
        resources necessary for the Republic of the Marshall Islands to 
        perform these services. Emphasis should be placed on advancing 
        a quality basic education system.
            (2) Health.--United States grant assistance shall be made 
        available in accordance with the strategic framework described 
        in subsection (f) of this section to support and improve the 
        delivery of preventive, curative and environmental care and 
        develop the human, financial, and material resources necessary 
        for the Republic of the Marshall Islands to perform these 
        services.
            (3) Private sector development.--United States grant 
        assistance shall be made available in accordance with the 
        strategic framework described in subsection (f) of this section 
        to support the efforts of the Republic of the Marshall Islands 
        to attract foreign investment and increase indigenous business 
        activity by vitalizing the commercial environment, ensuring 
        fair and equitable application of the law, promoting adherence 
        to core labor standards, maintaining progress toward 
        privatization of state-owned and partially state-owned 
        enterprises, and engaging in other reforms.
            (4) Capacity building in the public sector.--United States 
        grant assistance shall be made available in accordance with the 
        strategic framework described in subsection (f) of this section 
        to support the efforts of the Republic of the Marshall Islands 
        to build effective, accountable and transparent national and 
        local government and other public sector institutions and 
        systems.
            (5) Environment.--United States grant assistance shall be 
        made available in accordance with the strategic framework 
        described in subsection (f) of this section to increase 
        environmental protection; establish and manage conservation 
        areas; engage in environmental infrastructure planning, design 
        construction and operation; and to involve the citizens of the 
        Republic of the Marshall Islands in the process of conserving 
        their country's natural resources.
    (b) Kwajalein Atoll.--
            (1) Of the total grant assistance made available under 
        subsection (a) of this section, the amount specified herein 
        shall be allocated annually from fiscal year 2004 through 
        fiscal year 2023 (and thereafter in accordance with the 
        Agreement between the Government of the United States and the 
        Government of the Republic of the Marshall Islands Regarding 
        Military Use and Operating Rights) to advance the objectives 
        and specific priorities set forth in subsections (a) and (d) of 
        this section and the Fiscal Procedures Agreement, to address 
        the special needs of the community at Ebeye, Kwajalein Atoll 
        and other Marshallese communities within Kwajalein Atoll. This 
        United States grant assistance shall be made available, in 
        accordance with the medium-term budget and investment framework 
        described in subsection (f) of this section, to support and 
        improve the infrastructure and delivery of services and develop 
        the human and material resources necessary for the Republic of 
        the Marshall Islands to carry out its responsibility to 
        maintain such infrastructure and deliver such services. The 
        amount of this assistance shall be $3,100,000, with an 
        inflation adjustment as provided in section 218, from fiscal 
        year 2004 through fiscal year 2013 and the fiscal year 2013 
        level of funding, with an inflation adjustment as provided in 
        section 218, will be increased by $2 million for fiscal year 
        2014. The fiscal year 2014 level of funding, with an inflation 
        adjustment as provided in section 218, will be made available 
        from fiscal year2015 through fiscal year 2023 (and thereafter 
as noted above).
            (2) The Government of the United States shall also provide 
        to the Government of the Republic of the Marshall Islands, in 
        conjunction with section 321(a) of this Compact, as amended, an 
        annual payment from fiscal year 2004 through fiscal year 2023 
        (and thereafter in accordance with the Agreement between the 
        Government of the United States and the Government of the 
        Republic of the Marshall Islands Regarding Military Use and 
        Operating Rights) of $1.9 million. This grant assistance will 
        be subject to the Fiscal Procedures Agreement and will be 
        adjusted for inflation under section 218 and used to address 
        the special needs of the community at Ebeye, Kwajalein Atoll 
        and other Marshallese communities within Kwajalein Atoll with 
        emphasis on the Kwajalein landowners, as described in the 
        Fiscal Procedures Agreement.
            (3) Of the total grant assistance made available under 
        subsection (a) of this section, and in conjunction with section 
        321(a) of the Compact, as amended, $200,000, with an inflation 
        adjustment as provided in section 218, shall be allocated 
        annually from fiscal year 2004 through fiscal year 2023 (and 
        thereafter as provided in the Agreement between the Government 
        of the United States and the Government of the Republic of the 
        Marshall Islands Regarding Military Use and Operating Rights) 
        for a grant to support increased participation of the 
        Government of the Republic of the Marshall Islands 
        Environmental Protection Authority in the annual U.S. Army 
        Kwajalein Atoll Environmental Standards Survey and to promote a 
        greater Government of the Republic of the Marshall Islands 
        capacity for independent analysis of the Survey's findings and 
        conclusions.
    (c) Humanitarian Assistance-Republic of the Marshall Islands 
Program.--In recognition of the special development needs of the 
Republic of the Marshall Islands, the Government of the United States 
shall make available to the Government of the Republic of the Marshall 
Islands, on its request and to be deducted from the grant amount made 
available under subsection (a) of this section, a Humanitarian 
Assistance - Republic of the Marshall Islands (``HARMI'') Program with 
emphasis on health, education, and infrastructure (including 
transportation), projects and such other projects as mutually agreed. 
The terms and conditions of the HARMI shall be set forth in the 
Agreement Regarding the Military Use and Operating Rights of the 
Government of the United States in the Republic of the Marshall Islands 
Concluded Pursuant to Sections 321 and 323 of the Compact of Free 
Association, as Amended, which shall come into effect simultaneously 
with the amendments to this Compact.
    (d) Public Infrastructure.--
            (1) Unless otherwise agreed, not less than 30 percent and 
        not more than 50 percent of U.S. annual grant assistance 
        provided under this section shall be made available in 
        accordance with a list of specific projects included in the 
        infrastructure improvement and maintenance plan prepared by the 
        Government of the Republic of the Marshall Islands as part of 
        the strategic framework described in subsection (f) of this 
        section.
            (2) Infrastructure Maintenance Fund.--Five percent of the 
        annual public infrastructure grant made available under 
        paragraph (1) of this subsection shall be set aside, with an 
        equal contribution from the Government of the Republic of the 
        Marshall Islands, as a contribution to an Infrastructure 
        Maintenance Fund. Administration of the Infrastructure 
        Maintenance Fund shall be governed by the Fiscal Procedures 
        Agreement.
    (e) Disaster Assistance Emergency Fund.--Of the total grant 
assistance made available under subsection (a) of this section, an 
amount of two hundred thousand dollars ($200,000) shall be provided 
annually, with an equal contribution from the Government of the 
Republic of the Marshall Islands, as a contribution to a Disaster 
Assistance Emergency Fund (``DAEF''). Any funds from the DAEF may be 
used only for assistance and rehabilitation resulting from disasters 
and emergencies. The funds will be accessed upon declaration of a State 
of Emergency by the Government of the Republic of the Marshall Islands, 
with the concurrence of the United States Chief of Mission to the 
Republic of the Marshall Islands. Administration of the DAEF shall be 
governed by the Fiscal Procedures Agreement.
    (f) Budget and Investment Framework.--The Government of the 
Republic of the Marshall Islands shall prepare and maintain an official 
medium-term budget and investment framework. The framework shall be 
strategic in nature, shall be continuously reviewed and updated through 
the annual budget process, and shall make projections on a multi-year 
rolling basis. Each of the sectors and areas named in subsections (a), 
(b), and (d) of this section, or other sectors and areas as mutually 
agreed, shall be accorded specific treatment in the framework. Those 
portions of the framework that contemplate the use of United States 
grant funds shall require the concurrence of both the Government of the 
United States and the Government of the Republic of the Marshall 
Islands.
Section 212 - Kwajalein Impact and Use
    The Government of the United States shall provide to the Government 
of the Republic of the Marshall Islands in conjunction with section 
321(a) of the Compact, as amended, and the agreement between the 
Government of the United States and the Government of the Republic of 
the Marshall Islands regarding military use and operating rights, a 
payment in fiscal year 2004 of $15,000,000, with no adjustment for 
inflation. In fiscal year 2005 and through fiscal year 2013, the annual 
payment will be the fiscal year 2004 amount ($15,000,000) with an 
inflation adjustment as provided under section 218. In fiscal year 
2014, the annual payment will be $18,000,000 (with no adjustment for 
inflation) or the fiscal year 2013 amount with an inflation adjustment 
under section 218, whichever is greater. For fiscal year 2015 through 
fiscal year 2023 (and thereafter in accordance with the Agreement 
between the Government of the United States and the Government of the 
Republic of the Marshall Islands Regarding Military Use and Operating 
Rights) the annual payment will bethe fiscal year 2014 amount, with an 
inflation adjustment as provided under section 218.
Section 213 - Accountability
    (a) Regulations and policies normally applicable to United States 
financial assistance to its state and local governments, as set forth 
in the Fiscal Procedures Agreement, shall apply to each grant described 
in section 211, and to grants administered under section 221 below, 
except as modified in the separate agreements referred to in section 
231 of this Compact, as amended, or by U.S. law. As set forth in the 
Fiscal Procedures Agreement, reasonable terms and conditions, including 
annual performance indicators that are necessary to ensure effective 
use of United States assistance and reasonable progress toward 
achieving program objectives may be attached. In addition, the United 
States may seek appropriate remedies for noncompliance with the terms 
and conditions attached to the assistance, or for failure to comply 
with section 234, including withholding assistance.
    (b) The Government of the United States shall, for each fiscal year 
of the twenty years during which assistance is to be provided on a 
sector grant basis under section 211 (a), grant the Government of the 
Republic of the Marshall Islands an amount equal to the lesser of (i) 
one half of the reasonable, properly documented cost incurred during 
such fiscal year to conduct the annual audit required under Article 
VIII (2) of the Fiscal Procedures Agreement or (ii) $500,000. Such 
amount will not be adjusted for inflation under section 218 or 
otherwise.
Section 214 - Joint Economic Management and Financial Accountability 
Committee
    The Governments of the United States and the Republic of the 
Marshall Islands shall establish a Joint Economic Management and 
Financial Accountability Committee, composed of a U.S. chair, two other 
members from the Government of the United States and two members from 
the Government of the Republic of the Marshall Islands. The Joint 
Economic Management and Financial Accountability Committee shall meet 
at least once each year to review the audits and reports required under 
this Title and the Fiscal Procedures Agreement, evaluate the progress 
made by the Republic of the Marshall Islands in meeting the objectives 
identified in its framework described in subsection (f) of section 211, 
with particular focus on those parts of the framework dealing with the 
sectors and areas identified in subsection (a) of section 211, identify 
problems encountered, and recommend ways to increase the effectiveness 
of U.S. assistance made available under this Title. The establishment 
and operations of the Joint Economic Management and Financial 
Accountability Committee shall be governed by the Fiscal Procedures 
Agreement.
Section 215 - Annual Report
    The Government of the Republic of the Marshall Islands shall report 
annually to the President of the United States on the use of United 
States sector grant assistance and other assistance and progress in 
meeting mutually agreed program and economic goals. The Joint Economic 
Management and Financial Accountability Committee shall review and 
comment on the report and make appropriate recommendations based 
thereon.
Section 216 - Trust Fund
    (a) The United States shall contribute annually for twenty years 
from the effective date of the Compact, as amended, in the amounts set 
forth in section 217 into a trust fund established in accordance with 
the Agreement Between the Government of the United States of America 
and the Government of the Republic of the Marshall Islands Implementing 
Section 216 and Section 217 of the Compact, as Amended, Regarding a 
Trust Fund (``Trust Fund Agreement''), which shall come into effect 
simultaneously with this Compact, as amended. Upon termination of the 
annual grant assistance under section 211 (a), (d) and (e), the 
earnings of the fund shall thereafter be used for the purposes 
described in section 211 or as otherwise mutually agreed.
    (b) The United States contribution into the Trust Fund described in 
subsection (a) of this section is conditioned on the Government of the 
Republic of the Marshall Islands contributing to the Trust Fund at 
least $25,000,000, on the effective date of the Trust Fund Agreement or 
on October 1, 2003, whichever is later, $2,500,000 prior to October 1, 
2004, and $2,500,000 prior to October 1, 2005. Any funds received by 
the Republic of the Marshall Islands under section 111(d) of Public Law 
99-239 (January 14, 1986), or successor provisions, would be 
contributed to the Trust Fund as a Republic of the Marshall Islands' 
contribution.
    (c) The terms regarding the investment and management of funds and 
use of the income of the Trust Fund shall be governed by the Trust Fund 
Agreement. Funds derived from United States investment shall not be 
subject to Federal or state taxes in the United States or any taxes in 
the Republic of the Marshall Islands. The Trust Fund Agreement shall 
also provide for annual reports to the Government of the United States 
and to the Government of the Republic of the Marshall Islands. The 
Trust Fund Agreement shall provide for appropriate distributions of 
trust fund proceeds to the Republic of the Marshall Islands and for 
appropriate remedies for the failure of the Republic of the Marshall 
Islands to use income of the Trust Fund for the annual grant purposes 
set forth in section 211. These remedies may include the return to the 
United States of the present market value of its contributions to the 
Trust Fund and the present market value of any undistributed income on 
the contributions of the United States. If this Compact, as amended, is 
terminated, the provisions of sections 451-453 of the Compact, as 
amended, and the Trust Fund Agreement shall govern treatment of any 
U.S. contributions to the Trust Fund or accrued income thereon.
Section 217 - Annual Grant Funding and Trust Fund Contributions
    The funds described in sections 211, 212, 213(b), and 216 shall be 
made available as follows:

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                         Trust Fund       Kwajalein
             Fiscal year               Annual Grants    Audit Grant     Section 216     Impact Section    Total
                                        Section 211   Section 213(b)       (a&c)             212
----------------------------------------------------------------------------------------------------------------
2004................................       35.2             .5               7               15.0         57.7
2005................................       34.7             .5              7.5              15.0         57.7
2006................................       34.2             .5               8               15.0         57.7
2007................................       33.7             .5              8.5              15.0         57.7
2008................................       33.2             .5               9               15.0         57.7
2009................................       32.7             .5              9.5              15.0         57.7
2010................................       32.2             .5               10              15.0         57.7
2011................................       31.7             .5              10.5             15.0         57.7
2012................................       31.2             .5               11              15.0         57.7
2013................................       30.7             .5              11.5             15.0         57.7
2014................................       32.2             .5               12              18.0         62.7
2015................................       31.7             .5              12.5             18.0         62.7
2016................................       31.2             .5               13              18.0         62.7
2017................................       30.7             .5              13.5             18.0         62.7
2018................................       30.2             .5               14              18.0         62.7
2019................................       29.7             .5              14.5             18.0         62.7
2020................................       29.2             .5               15              18.0         62.7
2021................................       28.7             .5              15.5             18.0         62.7
2022................................       28.2             .5               16              18.0         62.7
2023................................       27.7             .5              16.5             18.0         62.7
----------------------------------------------------------------------------------------------------------------

Section 218 - Inflation Adjustment
    Except as otherwise provided, the amounts stated in this Title 
shall be adjusted for each United States Fiscal Year by the percent 
that equals two-thirds of the percent change in the United States Gross 
Domestic Product Implicit Price Deflator, or 5 percent, whichever is 
less in any one year, using the beginning of Fiscal Year 2004 as a 
base.
Section 219 - Carry-Over of Unused Funds
    If in any year the funds made available by the Government of the 
United States for that year pursuant to this Article are not completely 
obligated by the Government of the Republic of the Marshall Islands, 
the unobligated balances shall remain available in addition to the 
funds to be provided in subsequent years.

                               Article II

                    Services and Program Assistance

Section 221
    (a) Services.--The Government of the United States shall make 
available to the Republic of the Marshall Islands, in accordance with 
and to the extent provided in the Federal Programs and Services 
Agreement referred to in Section 231, the services and related programs 
of:
            (1) the United States Weather Service;
            (2) the United States Postal Service;
            (3) the United States Federal Aviation Administration;
            (4) the United States Department of Transportation; and
            (5) the Department of Homeland Security, and the United 
        States Agency for International Development, Office of Foreign 
        Disaster Assistance.
Upon the effective date of this Compact, as amended, the United States 
Departments and Agencies named or having responsibility to provide 
these services and related programs shall have the authority to 
implement the relevant provisions of the Federal Programs and Services 
Agreement referred to in section 231.
    (b) Programs.--
            (1) Other than the services and programs covered by 
        subsection (a) of this section, and to the extent authorized by 
        the Congress of the United States, the Government of the United 
        States shall make available to the Republic of the Marshall 
        Islands the services and programs that were available to the 
        Republic of the Marshall Islands on the effective date of this 
        Compact, as amended, to the extent that such services and 
        programs continue to be available to State and local 
        governments of the United States. As set forth in the Fiscal 
        Procedures Agreement, funds provided under subsection (a) of 
        section 211 shall be considered to be local revenues of the 
        Government of the Republic of the Marshall Islands when used as 
        the local share required to obtain Federal programs and 
        services.
            (2) Unless provided otherwise by U.S. law, the services and 
        programs described in paragraph (1) of this subsection shall be 
        extended in accordance with the terms of the Federal Programs 
        and Services Agreement.
    (c) The Government of the United States shall have and exercise 
such authority as is necessary to carry out its responsibilities under 
this Title and the Federal Programs and Services Agreement, including 
the authority to monitor and administer all service and program 
assistance provided by the United States to the Republic of the 
Marshall Islands. The Federal Programs and Services Agreement shall 
also set forth the extent to which services and programs shall be 
provided to the Republic of the Marshall Islands.
    (d) Except as provided elsewhere in this Compact, as amended, under 
any separate agreement entered into under this Compact, as amended, or 
otherwise under U.S. law, all Federal domestic programs extended to or 
operating in the Republic of the Marshall Islands shall be subject to 
all applicable criteria, standards, reporting requirements, auditing 
procedures, and other rules and regulations applicable to such programs 
and services when operating in the United States.
    (e) The Government of the United States shall make available to the 
Republic of the Marshall Islands alternate energy development projects, 
studies, and conservation measures to the extent provided for the 
Freely Associated States in the laws of the United States.
Section 222
    The Government of the United States and the Government of the 
Republic of the Marshall Islands may agree from time to time to extend 
to the Republic of the Marshall Islands additional United States grant 
assistance, services and programs, as provided under the laws of the 
United States. Unless inconsistent with such laws, or otherwise 
specifically precluded by the Government of the United States at the 
time such additional grant assistance, services, or programs are 
extended, the Federal Programs and Services Agreement shall apply to 
any such assistance, services or programs.
Section 223
    The Government of the Republic of the Marshall Islands shall make 
available to the Government of the United States at no cost such land 
as may be necessary for the operations of the services and programs 
provided pursuant to this Article, and such facilities as are provided 
by the Government of the Republic of the Marshall Islands at no cost to 
the Government of the United States as of the effective date of this 
Compact, as amended, or as may be mutually agreed thereafter.
Section 224
    The Government of the Republic of the Marshall Islands may request, 
from the time to time, technical assistance from the Federal agencies 
and institutions of the Government of the United States, which are 
authorized to grant such technical assistance in accordance with its 
laws. If technical assistance is granted pursuant to such a request, 
the Government of the United States shall provide the technical 
assistance in a manner which gives priority consideration to the 
Republic of the Marshall Islands over other recipients not a part of 
the United States, its territories or possessions, and equivalent 
consideration to the Republic of the Marshall Islands with respect to 
other states in Free Association with the United States. Such 
assistance shall be made available on a reimbursable or non-
reimbursable basis to the extent provided by United States law.

                              Article III

                       Administrative Provisions

Section 231
    The specific nature, extent and contractual arrangements of the 
services and programs provided for in section 221 of this Compact, as 
amended, as well as the legal status of agencies of the Government of 
the United States, their civilian employees and contractors, and the 
dependents of such personnel while present in the Republic of the 
Marshall Islands, and other arrangements in connection with the 
assistance, services, or programs furnished by the Government of the 
United States, are set forth in a Federal Programs and Services 
Agreement which shall come into effect simultaneously with this 
Compact, as amended.
Section 232
    The Government of the United States, in consultation with the 
Government of the Republic of the Marshall Islands, shall determine and 
implement procedures for the periodic audit of all grants and other 
assistance made under Article I of this Title and of all funds expended 
for the services and programs provided under Article II of this Title. 
Further, in accordance with the Fiscal Procedures Agreement described 
in subsection (a) of section 211, the Comptroller General of the United 
States shall have such powers and authorities as described in sections 
103(m) and 110(c) of Public Law 99-239, 99 Stat. 1777-78, and 99 Stat. 
1799 (January 14, 1986).
Section 233
    Approval of this Compact, as amended, by the Government of the 
United States, in accordance with its constitutional processes, shall 
constitute a pledge by the United States that the sums and amounts 
specified as grants in section 211 of this Compact, as amended, shall 
be appropriated and paid to the Republic of the Marshall Islands for 
such period as those provisions of this Compact, as amended, remain in 
force, provided that the Republic of the Marshall Islands complies with 
the terms and conditions of this Title and related subsidiary 
agreements.
Section 234
    The Government of the Republic of the Marshall Islands pledges to 
cooperate with, permit, and assist if reasonably requested, designated 
and authorized representatives of the Government of the United States 
charged with investigating whether Compact funds, or any other 
assistance authorized under this Compact, as amended, have, or are 
being, used for purposes other than those set forth in this Compact, as 
amended, or its subsidiary agreements. In carrying out this 
investigative authority, such United States Government representatives 
may request that the Government of the Republic of the Marshall Islands 
subpoena documents and records and compel testimony in accordance with 
the laws and Constitution of the Republic of the Marshall Islands. Such 
assistance by the Government of the Republic of the Marshall Islands to 
the Government of the United States shall not be unreasonably withheld. 
The obligation of the Government of the Marshall Islands to fulfill its 
pledge herein is a condition to its receiving payment of such funds or 
other assistance authorized under this Compact, as amended. The 
Government of the United States shall pay any reasonable costs for 
extraordinary services executed by the Government of the Marshall 
Islands in carrying out the provisions of this section.

                               Article IV

                                 Trade

Section 241
    The Republic of the Marshall Islands is not included in the customs 
territory of the United States.
Section 242
    The President shall proclaim the following tariff treatment for 
articles imported from the Republic of the Marshall Islands which shall 
apply during the period of effectiveness of this title:
            (a) Unless otherwise excluded, articles imported from the 
        Republic of the Marshall Islands, subject to the limitations 
        imposed under section 503(b) of title V of the Trade Act of 
        1974 (19 U.S.C. 2463(b)), shall be exempt from duty.
            (b) Only tuna in airtight containers provided for in 
        heading 1604.14.22 of the Harmonized Tariff Schedule of the 
        United States that is imported from the Republic of the 
        Marshall Islands and the Federated States of Micronesia during 
        any calendar year not to exceed 10 percent of apparent United 
        States consumption of tuna in airtight containers during the 
        immediately preceding calendar year, as reported by the 
        National Marine Fisheries Service, shall be exempt from duty; 
        but the quantity of tuna given duty-free treatment under this 
        paragraph for any calendar year shall be counted against the 
        aggregated quantity of tuna in airtight containers that is 
        dutiable under rate column numbered 1 of such heading 
        1604.14.22 for that calendar year.
            (c) The duty-free treatment provided under subsection (a) 
        shall not apply to:
                    (1) watches, clocks, and timing apparatus provided 
                for in Chapter 91, excluding heading 9113, of the 
                Harmonized Tariff Schedule of the United States;
                    (2) buttons (whether finished or not finished) 
                provided for in items 9606.21.40 and 9606.29.20 of such 
                Schedule;
                    (3) textile and apparel articles which are subject 
                to textile agreements; and
                    (4) footwear, handbags, luggage, flat goods, work 
                gloves, and leather wearing apparel which were not 
                eligible articles for purposes of title V of the Trade 
                Act of 1974 (19 U.S.C. 2461, et seq.) on April 1, 1984.
            (d) If the cost or value of materials produced in the 
        customs territory of the United States is included with respect 
        to an eligible article which is a product of the Republic of 
        the Marshall Islands, an amount not to exceed 15 percent of the 
        appraised value of the article at the time it is entered that 
        is attributable to such United States cost or 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
    Articles imported from the Republic of the Marshall Islands which 
are not exempt from duty under subsections (a), (b), (c), and
    (d) of section 242 shall be subject to the rates of duty set forth 
in column numbered 1-general of the Harmonized Tariff Schedule of the 
United States (HTSUS).
Section 244
    (a) All products of the United States imported into the Republic of 
the Marshall Islands shall receive treatment no less favorable than 
that accorded like products of any foreign country with respect to 
customs duties or charges of a similar nature and with respect to laws 
and regulations relating to importation, exportation, taxation, sale, 
distribution, storage or use.
    (b) The provisions of subsection (a) shall not apply to advantages 
accorded by the Republic of the Marshall Islands by virtue of their 
full membership in the Pacific Island Countries Trade Agreement 
(PICTA), done on August, 18, 2001, to those governments listed in 
Article 26 of PICTA, as of the date the Compact, as amended, is signed.
    (c) Prior to entering into consultations on, or concluding, a free 
trade agreement with governments not listed in Article 26 of PICTA, the 
Republic of the Marshall Islands shall consult with the United States 
regarding whether or how subsection (a) of section 244 shall be 
applied.

                               Article V

                          Finance and Taxation

Section 251
    The currency of the United States is the official circulating legal 
tender of the Republic of the Marshall Islands. Should the Government 
of the Republic of the Marshall Islands act to institute another 
currency, the terms of an appropriate currency transitional period 
shall be as agreed with the Government of the United States.
Section 252
    The Government of the Republic of the Marshall Islands may, with 
respect to United States persons, tax income derived from sources 
within its respective jurisdiction, property situated therein, 
including transfers of such property by gift or at death, and products 
consumed therein, in such manner as the Government of the Republic of 
the Marshall Islands deems appropriate. The determination of the source 
of any income, or the situs of any property, shall for purposes of this 
Compact, as amended, be made according to the United States Internal 
Revenue Code.
Section 253
    A citizen of the Republic of the Marshall Islands, domiciled 
therein, shall be exempt from estate, gift, and generation-skipping 
transfer taxes imposed by the Government of the United States, provided 
that such citizen of the Republic of the Marshall Islands is neither a 
citizen nor a resident of the United States.
Section 254
    (a) In determining any income tax imposed by the Government of the 
Republic of the Marshall Islands, the Government of the Republic of the 
Marshall Islands shall have authority to impose tax upon income derived 
by a resident of the Republic of the Marshall Islands from sources 
without the Republic of the Marshall Islands, in the same manner and to 
the same extent as the Government of the Republic of the Marshall 
Islands imposes tax upon income derived from within its own 
jurisdiction. If the Government of the Republic of the Marshall Islands 
exercises such authority as provided in this subsection, any individual 
resident of the Republic of the Marshall Islands who is subject to tax 
by the Government of the United States on income which is also taxed by 
the Government of the Republic of the Marshall Islands shall be 
relieved of liability to the Government of the United States for the 
tax which, but for this subsection, would otherwise be imposed by the 
Government of the United States on such income. However, the relief 
from liability to the United States Government referred to in the 
preceding sentence means only relief in the form of the foreign tax 
credit (or deduction in lieu thereof) available with respect to the 
income taxes of a possession of the United States, and relief in the 
form of the exclusion under section 911 of the Internal Revenue Code of 
1986. For purposes of this section, the term ``resident of the Republic 
of the Marshall Islands'' shall be deemed to include any person who was 
physically present in the Republic of the Marshall Islands for a period 
of 183 or more days during any taxable year.
    (b) If the Government of the Republic of the Marshall Islands 
subjects income to taxation substantially similar to that which was 
imposed by the Trust Territory Code in effect on January 1, 1980, such 
Government shall be deemed to have exercised the authority described in 
section 254(a).
Section 255
    For purposes of section 274(h)(3)(A) of the U.S. Internal Revenue 
Code of 1986, the term ``North American Area'' shall include the 
Republic of the Marshall Islands.

                              TITLE THREE

                     SECURITY AND DEFENSE RELATIONS

                               Article I

                      Authority and Responsibility

Section 311
    (a) The Government of the United States has full authority and 
responsibility for security and defense matters in or relating to the 
Republic of the Marshall Islands.
    (b) This authority and responsibility includes:
            (1) the obligation to defend the Republic of the Marshall 
        Islands and its people from attack or threats thereof as the 
        United States and its citizens are defended;
            (2) the option to foreclose access to or use of the 
        Republic of the Marshall Islands by military personnel or for 
        the military purposes of any third country; and
            (3) the option to establish and use military areas and 
        facilities in the Republic of the Marshall Islands, subject to 
        the terms of the separate agreements referred to in sections 
        321 and 323.
    (c) The Government of the United States confirms that it shall act 
in accordance with the principles of international law and the Charter 
of the United Nations in the exercise of this authority and 
responsibility.
Section 312
    Subject to the terms of any agreements negotiated in accordance 
with sections 321 and 323, the Government of the United States may 
conduct within the lands, waters and airspace of the Republic of the 
Marshall Islands the activities and operations necessary for the 
exercise of its authority and responsibility under this Title.
Section 313
    (a) The Government of the Republic of the Marshall Islands shall 
refrain from actions that the Government of the United States 
determines, after appropriate consultation with that Government, to be 
incompatible with its authority and responsibility for security and 
defense matters in or relating to the Republic of the Marshall Islands.
    (b) The consultations referred to in this section shall be 
conducted expeditiously at senior levels of the two Governments, and 
the subsequent determination by the Government of the United States 
referred to in this section shall be made only at senior interagency 
levels of the Government of the United States.
    (c) The Government of the Republic of the Marshall Islands shall be 
afforded, on an expeditious basis, an opportunity to raise its concerns 
with the United States Secretary of State personally and the United 
States Secretary of Defense personally regarding any determination made 
in accordance with this section.
Section 314
    (a) Unless otherwise agreed, the Government of the United States 
shall not, in the Republic of the Marshall Islands:
            (1) test by detonation or dispose of any nuclear weapon, 
        nor test, dispose of, or discharge any toxic chemical or 
        biological weapon; or
            (2) test, dispose of, or discharge any other radioactive, 
        toxic chemical or biological materials in an amount or manner 
        that would be hazardous to public health or safety.
    (b) Unless otherwise agreed, other than for transit or overflight 
purposes or during time of a national emergency declared by the 
President of the United States, a state of war declared by the Congress 
of the United States or as necessary to defend against an actual or 
impending armed attack on the United States, the Republic of the 
Marshall Islands or the Federated States of Micronesia, the Government 
of the United States shall not store in the Republic of the Marshall 
Islands or the Federated States of Micronesia any toxic chemical 
weapon, nor any radioactive materials nor any toxic chemical materials 
intended for weapons use.
    (c) Radioactive, toxic chemical, or biological materials not 
intended for weapons use shall not be affected by section 314(b).
    (d) No material or substance referred to in this section shall be 
stored in the Republic of the Marshall Islands except in an amount and 
manner which would not be hazardous to public health or safety. In 
determining what shall be an amount or manner which would be hazardous 
to public health or safety under this section, the Government of the 
United States shall comply with any applicable mutual agreement, 
international guidelines accepted by the Government of the United 
States, and the laws of the United States and their implementing 
regulations.
    (e) Any exercise of the exemption authority set forth in section 
161(e) shall have no effect on the obligations of the Government of the 
United States under this section or on the application of this 
subsection.
    (f) The provisions of this section shall apply in the areas in 
which the Government of the Republic of the Marshall Islands exercises 
jurisdiction over the living resources of the seabed, subsoil or water 
column adjacent to its coasts.
Section 315
    The Government of the United States may invite members of the armed 
forces of other countries to use military areas and facilities in the 
Republic of the Marshall Islands, in conjunction with and under the 
control of United States Armed Forces. Use by units of the armed forces 
of other countries of such military areas and facilities, other than 
for transit and overflight purposes, shall be subject to consultation 
with and, in the case of major units, approval of the Government of the 
Republic of the Marshall Islands.
Section 316
    The authority and responsibility of the Government of the United 
States under this Title may not be transferred or otherwise assigned.

                               Article II

                Defense Facilities and Operating Rights

Section 321
    (a) Specific arrangements for the establishment and use by the 
Government of the United States of military areas and facilities in the 
Republic of the Marshall Islands are set forth in separate agreements, 
which shall remain in effect in accordance with the terms of such 
agreements.
    (b) If, in the exercise of its authority and responsibility under 
this Title, the Government of the United States requires the use of 
areas within the Republic of the Marshall Islands in addition to those 
for which specific arrangements are concluded pursuant to section 
321(a), it may request the Government of the Republic of the Marshall 
Islands to satisfy those requirements through leases or other 
arrangements. The Government of the Republic of the Marshall Islands 
shall sympathetically consider any such request and shall establish 
suitable procedures to discuss it with and provide a prompt response to 
the Government of the United States.
    (c) The Government of the United States recognizes and respects the 
scarcity and special importance of land in the Republic of the Marshall 
Islands. In making any requests pursuant to section 321(b), the 
Government of the United States shall follow the policy of requesting 
the minimum area necessary to accomplish the required security and 
defense purpose, of requesting only the minimum interest in real 
property necessary to support such purpose, and of requesting first to 
satisfy its requirement through public real property, where available, 
rather than through private real property.
Section 322
    The Government of the United States shall provide and maintain 
fixed and floating aids to navigation in the Republic of the Marshall 
Islands at least to the extent necessary for the exercise of its 
authority and responsibility under this Title.
Section 323
    The military operating rights of the Government of the United 
States and the legal status and contractual arrangements of the United 
States Armed Forces, their members, and associated civilians, while 
present in the Republic of the Marshall Islands are set forth in 
separate agreements, which shall remain in effect in accordance with 
the terms of such agreements.

                              Article III

         Defense Treaties and International Security Agreements

Section 331
    Subject to the terms of this Compact, as amended, and its related 
agreements, the Government of the United States, exclusively, has 
assumed and enjoys, as to the Republic of the Marshall Islands, all 
obligations, responsibilities, rights and benefits of:
            (a) Any defense treaty or other international security 
        agreement applied by the Government of the United States as 
        Administering Authority of the Trust Territory of the Pacific 
        Islands as of October 20, 1986.
            (b) Any defense treaty or other international security 
        agreement to which the Government of the United States is or 
        may become a party which it determines to be applicable in the 
        Republic of the Marshall Islands. Such a determination by the 
        Government of the United States shall be preceded by 
        appropriate consultation with the Government of the Republic of 
        the Marshall Islands.

                               Article IV

              Service in Armed Forces of the United States

Section 341
    Any person entitled to the privileges set forth in Section 141 
(with the exception of any person described in section 141(a)(5) who is 
not a citizen of the Republic of the Marshall Islands) shall be 
eligible to volunteer for service in the Armed Forces of the United 
States, but shall not be subject to involuntary induction into military 
service of the United States as long as such person has resided in the 
United States for a period of less than one year, provided that no time 
shall count towards this one year while a person admitted to the United 
States under the Compact, or the Compact, as amended, is engaged in 
full-time study in the United States. Any person described in section 
141(a)(5) who is not a citizen of the Republic of the Marshall Islands 
shall be subject to United States laws relating to selective service.
Section 342
    The Government of the United States shall have enrolled, at any one 
time, at least one qualified student from the Republic of the Marshall 
Islands, as may be nominated by the Government of the Republic of the 
Marshall Islands, in each of:
            (a) The United States Coast Guard Academy pursuant to 14 
        U.S.C. 195.
            (b) The United States Merchant Marine Academy pursuant to 
        46 U.S.C. 1295(b)(6), provided that the provisions of 46 U.S.C. 
        1295b(b)(6)(C) shall not apply to the enrollment of students 
        pursuant to section 342(b) of this Compact, as amended.

                               Article V

                           General Provisions

Section 351
    (a) The Government of the United States and the Government of the 
Republic of the Marshall Islands shall continue to maintain a Joint 
Committee empowered to consider disputes arising under the 
implementation of this Title and its related agreements.
    (b) The membership of the Joint Committee shall comprise selected 
senior officials of the two Governments. The senior United States 
military commander in the Pacific area shall be the senior United 
States member of the Joint Committee. For the meetings of the Joint 
Committee, each of the two Governments may designate additional or 
alternate representatives as appropriate for the subject matter under 
consideration.
    (c) Unless otherwise mutually agreed, the Joint Committee shall 
meet annually at a time and place to be designated, after appropriate 
consultation, by the Government of the United States. The Joint 
Committee also shall meet promptly upon request of either of its 
members. The Joint Committee shall follow such procedures, including 
the establishment of functional subcommittees, as the members may from 
time to time agree. Upon notification by the Government of the United 
States, the Joint Committee of the United States and the Republic of 
the Marshall Islands shall meet promptly in a combined session with the 
Joint Committee established and maintained by the Government of the 
United States and the Government of the Federated States of Micronesia 
to consider matters within the jurisdiction of the two Joint 
Committees.
    (d) Unresolved issues in the Joint Committee shall be referred to 
the Governments for resolution, and the Government of the Republic of 
the Marshall Islands shall be afforded, on an expeditious basis, an 
opportunity to raise its concerns with the United States Secretary of 
Defense personally regarding any unresolved issue which threatens its 
continued association with the Government of the United States.
Section 352
    In the exercise of its authority and responsibility under Title 
Three, the Government of the United States shall accord due respect to 
the authority and responsibility of the Government of the Republic of 
the Marshall Islands under Titles One, Two and Four and to the 
responsibility of the Government of the Republic of the Marshall 
Islands to assure the well-being of its people.
Section 353
    (a) The Government of the United States shall not include the 
Government of the Republic of the Marshall Islands as a named party to 
a formal declaration of war, without that Government's consent.
    (b) Absent such consent, this Compact, as amended, is without 
prejudice, on the ground of belligerence or the existence of a state of 
war, to any claims for damages which are advanced by the citizens, 
nationals or Government of the Republic of the Marshall Islands, which 
arise out of armed conflict subsequent to October 21, 1986, and which 
are:
            (5) petitions to the Government of the United States for 
        redress; or
            (6) claims in any manner against the government, citizens, 
        nationals or entities of any third country.
    (c) Petitions under section 353(b)(1) shall be treated as if they 
were made by citizens of the United States.
Section 354
    (a) The Government of the United States and the Government of the 
Republic of the Marshall Islands are jointly committed to continue 
their security and defense relations, as set forth in this Title. 
Accordingly, it is the intention of the two countries that the 
provisions of this Title shall remain binding as long as this Compact, 
as amended, remains in effect, and thereafter as mutually agreed, 
unless earlier terminated by mutual agreement pursuant to section 441, 
or amended pursuant to Article III of Title Four. If at any time the 
Government of the United States, or the Government of the Republic of 
the Marshall Islands, acting unilaterally, terminates this Title, such 
unilateral termination shall be considered to be termination of the 
entire Compact, as amended, in which case the provisions of section 442 
and 452 (in the case of termination by the Government of the United 
States) or sections 443 and 453 (in the case of termination by the 
Government of the Republic of the Marshall Islands), with the exception 
of paragraph (3) of subsection (a) of section 452 or paragraph (3) of 
subsection (a) of section 453, as the case may be, shall apply.
    (b) The Government of the United States recognizes, in view of the 
special relationship between the Government of the United States and 
the Government of the Republic of the Marshall Islands, and in view of 
the existence of the separate agreement regarding mutual security 
concluded with the Government of the Republic of the Marshall Islands 
pursuant to sections 321 and 323, that, even if this Title should 
terminate, any attack on the Republic of the Marshall Islands during 
the period in which such separate agreement is in effect, would 
constitute a threat to the peace and security of the entire region and 
a danger to the United States. In the event of such an attack, the 
Government of the United States would take action to meet the danger to 
the United States and to the Republic of the Marshall Islands in 
accordance with its constitutional processes.
    (c) As reflected in Article 21(1)(b) of the Trust Fund Agreement, 
the Government of the United States and the Government of the Republic 
of the Marshall Islands further recognize, in view of the special 
relationship between their countries, that even if this Title should 
terminate, the Government of Republic of the Marshall Islands shall 
refrain from actions which the Government of the United States 
determines, after appropriate consultation with that Government, to be 
incompatible with its authority and responsibility for security and 
defense matters in or relating to the Republic of the Marshall Islands 
or the Federated States of Micronesia.

                               TITLE FOUR

                           GENERAL PROVISIONS

                               Article I

                      Approval and Effective Date

Section 411
    Pursuant to section 432 of the Compact and subject to subsection 
(e) of section 461 of the Compact, as amended, the Compact, as amended, 
shall come into effect upon mutual agreement between the Government of 
the United States and the Government of the Republic of the Marshall 
Islands subsequent to completion of the following:
            (a) Approval by the Government of the Republic of the 
        Marshall Islands in accordance with its constitutional 
        processes.
            (b) Approval by the Government of the United States in 
        accordance with its constitutional processes.

                               Article II

                   Conference and Dispute Resolution

Section 421
    The Government of the United States shall confer promptly at the 
request of the Government of the Republic of the Marshall Islands and 
that Government shall confer promptly at the request of the Government 
of the United States on matters relating to the provisions of this 
Compact, as amended, or of its related agreements.
Section 422
    In the event the Government of the United States or the Government 
of the Republic of the Marshall Islands, after conferring pursuant to 
section 421, determines that there is a dispute and gives written 
notice thereof, the two Governments shall make a good faith effort to 
resolve the dispute between themselves.
Section 423
    If a dispute between the Government of the United States and the 
Government of the Republic of the Marshall Islands cannot be resolved 
within 90 days of written notification in the manner provided in 
section 422, either party to the dispute may refer it to arbitration in 
accordance with section 424.
Section 424
    Should a dispute be referred to arbitration as provided for in 
section 423, an Arbitration Board shall be established for the purpose 
of hearing the dispute and rendering a decision which shall be binding 
upon the two parties to the dispute unless the two parties mutually 
agree that the decision shall be advisory. Arbitration shall occur 
according to the following terms:
            (a) An Arbitration Board shall consist of a Chairman and 
        two other members, each of whom shall be a citizen of a party 
        to the dispute. Each of the two Governments that is a party to 
        the dispute shall appoint one member to the Arbitration Board. 
        If either party to the dispute does not fulfill the appointment 
        requirements of this section within 30 days of referral of the 
        dispute to arbitration pursuant to section 423, its member on 
        the Arbitration Board shall be selected from its own standing 
        list by the other party to the dispute. Each Government shall 
        maintain a standing list of 10 candidates. The parties to the 
        dispute shall jointly appoint a Chairman within 15 days after 
        selection of the other members of the Arbitration Board. 
        Failing agreement on a Chairman, the Chairman shall be chosen 
        by lot from the standing lists of the parties to the dispute 
        within 5 days after such failure.
            (b) Unless otherwise provided in this Compact, as amended, 
        or its related agreements, the Arbitration Board shall have 
        jurisdiction to hear and render its final determination on all 
        disputes arising exclusively under Articles I, II, III, IV and 
        V of TitleOne, Title Two, Title Four, and their related 
agreements.
            (c) Each member of the Arbitration Board shall have one 
        vote. Each decision of the Arbitration Board shall be reached 
        by majority vote.
            (d) In determining any legal issue, the Arbitration Board 
        may have reference to international law and, in such reference, 
        shall apply as guidelines the provisions set forth in Article 
        38 of the Statute of the International Court of Justice.
            (e) The Arbitration Board shall adopt such rules for its 
        proceedings as it may deem appropriate and necessary, but such 
        rules shall not contravene the provisions of this Compact, as 
        amended. Unless the parties provide otherwise by mutual 
        agreement, the Arbitration Board shall endeavor to render its 
        decision within 30 days after the conclusion of arguments. The 
        Arbitration Board shall make findings of fact and conclusions 
        of law and its members may issue dissenting or individual 
        opinions. Except as may be otherwise decided by the Arbitration 
        Board, one-half of all costs of the arbitration shall be borne 
        by the Government of the United States and the remainder shall 
        be borne by the Government of the Republic of the Marshall 
        Islands.

                              Article III

                               Amendment

Section 431
    The provisions of this Compact, as amended, may be further amended 
by mutual agreement of the Government of the United States and the 
Government of the Republic of the Marshall Islands, in accordance with 
their respective constitutional processes.

                               Article IV

                              Termination

Section 441
    This Compact, as amended, may be terminated by mutual agreement of 
the Government of the Republic of the Marshall Islands and the 
Government of the United States, in accordance with their respective 
constitutional processes. Such mutual termination of this Compact, as 
amended, shall be without prejudice to the continued application of 
section 451 of this Compact, as amended, and the provisions of the 
Compact, as amended, set forth therein.
Section 442
    Subject to section 452, this Compact, as amended, may be terminated 
by the Government of the United States in accordance with its 
constitutional processes. Such termination shall be effective on the 
date specified in the notice of termination by the Government of the 
United States but not earlier than six months following delivery of 
such notice. The time specified in the notice of termination may be 
extended. Such termination of this Compact, as amended, shall be 
without prejudice to the continued application of section 452 of this 
Compact, as amended, and the provisions of the Compact, as amended, set 
forth therein.
Section 443
    This Compact, as amended, shall be terminated by the Government of 
the Republic of the Marshall Islands, pursuant to its constitutional 
processes, subject to section 453 if the people represented by that 
Government vote in a plebiscite to terminate the Compact. The 
Government of the Republic of the Marshall Islands shall notify the 
Government of the United States of its intention to call such a 
plebiscite, which shall take place not earlier than three months after 
delivery of such notice. The plebiscite shall be administered by the 
Government of the Republic of the Marshall Islands in accordance with 
its constitutional and legislative processes, but the Government of the 
United States may send its own observers and invite observers from a 
mutually agreed party. If a majority of the valid ballots cast in the 
plebiscite favors termination, the Government of the Republic of the 
Marshall Islands shall, upon certification of the results of the 
plebiscite, give notice of termination to the Government of the United 
States, such termination to be effective on the date specified in such 
notice but not earlier than three months following the date of delivery 
of such notice. The time specified in the notice of termination may be 
extended.

                               Article V

                             Survivability

Section 451
    (a) Should termination occur pursuant to section 441, economic and 
other assistance by the Government of the United States shall continue 
only if and as mutually agreed by the Governments of the United States 
and the Republic of the Marshall Islands, and in accordance with the 
countries' respective constitutional processes.
    (b) In view of the special relationship of the United States and 
the Republic of the Marshall Islands, as reflected in subsections (b) 
and (c) of section 354 of this Compact, as amended, and the separate 
agreement entered into consistent with those subsections, if 
termination occurs pursuant to section 441 prior to the twentieth 
anniversary of the effective date of this Compact, as amended, the 
United States shall continue to make contributions to the Trust Fund 
described in section 216 of this Compact, as amended.
    (c) In view of the special relationship of the United States and 
the Republic of the Marshall Islands described in subsection (b) of 
this section, if termination occurs pursuant to section 441 following 
the twentieth anniversary of the effective date of this Compact, as 
amended, the Republic of the Marshall Islands shall be entitled to 
receive proceeds from the Trust Fund described in section 216 of this 
Compact, as amended, in the manner described in those provisions and 
the Trust Fund Agreement.
Section 452
    (a) Should termination occur pursuant to section 442 prior to the 
twentieth anniversary of the effective date of this Compact, as 
amended, the following provisions of this amended Compact shall remain 
in full force and effect until the twentieth anniversary of the 
effective date of this Compact, as amended, and thereafter as mutually 
agreed:
            (1) Article VI and sections 172, 173, 176 and 177 of Title 
        One;
            (2) Article One and sections 232 and 234 of Title Two;
            (3) Title Three; and
            (4) Articles II, III, V and VI of Title Four.
    (b) Should termination occur pursuant to section 442 before the 
twentieth anniversary of the effective date of this Compact, as 
amended:
            (1) Except as provided in paragraph (2) of this subsection 
        and subsection (c) of this section, economic and other 
        assistance by the United States shall continue only if and as 
        mutually agreed by the Governments of the United States and the 
        Republic of the Marshall Islands.
            (2) In view of the special relationship of the United 
        States and the Republic of the Marshall Islands, as reflected 
        in subsections (b) and (c) of section 354 of this Compact, as 
        amended, and the separate agreement regarding mutual security, 
        and the Trust Fund Agreement, the United States shall continue 
        to make contributions to the Trust Fund described in section 
        216 of this Compact, as amended, in the manner described in the 
        Trust Fund Agreement.
    (c) In view of the special relationship of the United States and 
the Republic of the Marshall Islands, as reflected in subsections 
354(b) and (c) of this Compact, as amended, and the separate agreement 
regarding mutual security, and the Trust Fund Agreement, if termination 
occurs pursuant to section 442 following the twentieth anniversary of 
the effective date of this Compact, as amended, the Republic of the 
Marshall Islands shall continue to be eligible to receive proceeds from 
the Trust Fund described in section 216 of this Compact, as amended, in 
the manner described in those provisions and the Trust Fund Agreement.
Section 453
    (a) Should termination occur pursuant to section 443 prior to the 
twentieth anniversary of the effective date of this Compact, as 
amended, the following provisions of this Compact, as amended, shall 
remain in full force and effect until the twentieth anniversary of the 
effective date of this Compact, as amended, and thereafter as mutually 
agreed:
            (1) Article VI and sections 172, 173, 176 and 177 of Title 
        One;
            (2) Sections 232 and 234 of Title Two;
            (3) Title Three; and
            (4) Articles II, III, V and VI of Title Four.
    (b) Upon receipt of notice of termination pursuant to section 443, 
the Government of the United States and the Government of the Republic 
of the Marshall Islands shall promptly consult with regard to their 
future relationship. Except as provided in subsections (c) and (d) of 
this section, these consultations shall determine the level of economic 
and other assistance, if any, which the Government of the United States 
shall provide to the Government of the Republic of the Marshall Islands 
for the period ending on the twentieth anniversary of the effective 
date of this Compact, as amended, and for any period thereafter, if 
mutually agreed.
    (c) In view of the special relationship of the United States and 
the Republic of the Marshall Islands, as reflected in subsections 
354(b) and (c) of this Compact, as amended, and the separate agreement 
regarding mutual security, and the Trust Fund Agreement, if termination 
occurs pursuant to section 443 prior to the twentieth anniversary of 
the effective date of this Compact, as amended, the United States shall 
continue to make contributions to the Trust Fund described in section 
216 of this Compact, as amended.
    (d) In view of the special relationship of the United States and 
the Republic of the Marshall Islands, as reflected in subsections 
354(b) and (c) of this Compact, as amended, and the separate agreement 
regarding mutual security, and the Trust Fund Agreement, if termination 
occurs pursuant to section 443 following the twentieth anniversary of 
the effective date of this Compact, as amended, the Republic of the 
Marshall Islands shall continue to be eligible to receive proceeds from 
the Trust Fund described in section 216 of this Compact, as amended, in 
the manner described in those provisions and the Trust Fund Agreement.
Section 454
    Notwithstanding any other provision of this Compact, as amended:
            (a) The Government of the United States reaffirms its 
        continuing interest in promoting the economic advancement and 
        budgetary self-reliance of the people of the Republic of the 
        Marshall Islands.
            (b) The separate agreements referred to in Article II of 
        Title Three shall remain in effect in accordance with their 
        terms.

                               Article VI

                          Definition of Terms

Section 461
    For the purpose of this Compact, as amended, only, and without 
prejudice to the views of the Government of the United States or the 
Government of the Republic of the Marshall Islands as to the nature and 
extent of the jurisdiction of either of them under international law, 
the following terms shall have the following meanings:
            (a) ``Trust Territory of the Pacific Islands'' means the 
        area established in the Trusteeship Agreement consisting of the 
        former administrative districts of Kosrae, Yap, Ponape, the 
        Marshall Islands and Truk as described in Title One, Trust 
        Territory Code, section 1, in force on January 1,1979. This 
term does not include the area of Palau or the Northern Mariana 
Islands.
            (b) ``Trusteeship Agreement'' means the agreement setting 
        forth the terms of trusteeship for the Trust Territory of the 
        Pacific Islands, approved by the Security Council of the United 
        Nations April 2, 1947, and by the United States July 18, 1947, 
        entered into force July 18, 1947, 61 Stat. 3301, T.I.A.S. 1665, 
        8 U.N.T.S. 189.
            (c) ``The Republic of the Marshall Islands'' and ``the 
        Federated States of Micronesia'' are used in a geographic sense 
        and include the land and water areas to the outer limits of the 
        territorial sea and the air space above such areas as now or 
        hereafter recognized by the Government of the United States.
            (d) ``Compact'' means the Compact of Free Association 
        Between the United States and the Federated States of 
        Micronesia and the Marshall Islands, that was approved by the 
        United States Congress in section 201 of Public Law 99-239 
        (Jan. 14, 1986) and went into effect with respect to the 
        Republic of the Marshall Islands on October 21, 1986.
            (e) ``Compact, as amended'' means the Compact of Free 
        Association Between the United States and the Republic of the 
        Marshall Islands, as amended. The effective date of the 
        Compact, as amended, shall be on a date to be determined by the 
        President of the United States, and agreed to by the Government 
        of the Republic of the Marshall Islands, following formal 
        approval of the Compact, as amended, in accordance with section 
        411 of this Compact, as amended.
            (f) ``Government of the Republic of the Marshall Islands'' 
        means the Government established and organized by the 
        Constitution of the Republic of the Marshall Islands including 
        all the political subdivisions and entities comprising that 
        Government.
            (g) ``Government of the Federated States of Micronesia'' 
        means the Government established and organized by the 
        Constitution of the Federated States of Micronesia including 
        all the political subdivisions and entities comprising that 
        Government.
            (h) The following terms shall be defined consistent with 
        the 1978 Edition of the Radio Regulations of the International 
        Telecommunications as follows:
                    (1) ``Radiocommunication'' means telecommunication 
                by means of radio waves.
                    (2) ``Station'' means one or more transmitters or 
                receivers or a combination of transmitters and 
                receivers, including the accessory equipment, necessary 
                at one location for carrying on a radiocommunication 
                service, or the radio astronomy service.
                    (3) ``Broadcasting Service'' means a 
                radiocommunication service in which the transmissions 
                are intended for direct reception by the general 
                public. This service may include sound transmissions, 
                television transmissions or other types of 
                transmission.
                    (4) ``Broadcasting Station'' means a station in the 
                broadcasting service.
                    (5) ``Assignment (of a radio frequency or radio 
                frequency channel)'' means an authorization given by an 
                administration for a radio station to use a radio 
                frequency or radio frequency channel under specified 
                conditions.
                    (6) ``Telecommunication'' means any transmission, 
                emission or reception of signs, signals, writings, 
                images and sounds or intelligence of any nature by 
                wire, radio, optical or other electromagnetic systems.
            (i) ``Military Areas and Facilities'' means those areas and 
        facilities in the Republic of the Marshall Islands reserved or 
        acquired by the Government of the Republic of the Marshall 
        Islands for use by the Government of the United States, as set 
        forth in the separate agreements referred to in section 321.
            (j) ``Tariff Schedules of the United States'' means the 
        Tariff Schedules of the United States as amended from time to 
        time and as promulgated pursuant to United States law and 
        includes the Tariff Schedules of the United States Annotated 
        (TSUSA), as amended.
            (k) ``Vienna Convention on Diplomatic Relations'' means the 
        Vienna Convention on Diplomatic Relations, done April 18, 1961, 
        23 U.S.T. 3227, T.I.A.S. 7502, 500 U.N.T.S. 95.
Section 462
    (a) The Government of the United States and the Government of the 
Republic of the Marshall Islands previously have concluded agreements, 
which shall remain in effect and shall survive in accordance with their 
terms, as follows:
            (1) Agreement Between the Government of the United States 
        and the Government of the Marshall Islands for the 
        Implementation of Section 177 of the Compact of Free 
        Association;
            (2) Agreement Between the Government of the United States 
        and the Government of the Marshall Islands by Persons Displaced 
        as a Result of the United States Nuclear Testing Program in the 
        Marshall Islands;
            (3) Agreement Between the Government of the United States 
        and the Government of the Marshall Islands Regarding the 
        Resettlement of Enjebi Island;
            (4) Agreement Concluded Pursuant to Section 234 of the 
        Compact; and
            (5) 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 Association.
    (b) The Government of the United States and the Government of the 
Republic of the Marshall Islands shall conclude prior to the date of 
submission of this Compact to the legislatures of the two countries, 
the following related agreements which shall come into effect on the 
effective date of this Compact, as amended, and shall survive in 
accordance with their terms, as follows:
            (1) 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 IIIof Title One, Article II of Title Two (including 
Section 222), and Section 231 of the Compact of Free Association, as 
Amended, which include:
                    (i) Postal Services and Related Programs;
                    (ii) Weather Services and Related Programs;
                    (iii) Civil Aviation Safety Service and Related 
                Programs;
                    (iv) Civil Aviation Economic Services and Related 
                Programs;
                    (v) United States Disaster Preparedness and 
                Response Services and Related Programs; and
                    (vi) Telecommunications Services and Related 
                Programs.
            (2) Agreement Between the Government of the United States 
        of America and the Government of the Republic of the Marshall 
        Islands on Extradition, Mutual Assistance in Law Enforcement 
        Matters and Penal Sanctions Concluded Pursuant to Section 175 
        (a) of the Compact of Free Association, as Amended;
            (3) Agreement Between the Government of the United States 
        of America and the Government of the Republic of the Marshall 
        Islands on Labor Recruitment Concluded Pursuant to Section 175 
        (b) of the Compact of Free Association, as Amended;
            (4) Agreement Concerning Procedures for the Implementation 
        of United States Economic Assistance Provided in the Compact, 
        as Amended, of Free Association Between the Government of the 
        United States of America and the Government of the Republic of 
        the Marshall Islands;
            (5) Agreement Between the Government of the United States 
        of America and the Government of the Republic of the Marshall 
        Islands Implementing Section 216 and Section 217 of the 
        Compact, as Amended, Regarding a Trust Fund;
            (6) Agreement Regarding the Military Use and Operating 
        Rights of the Government of the United States in the Republic 
        of the Marshall Islands Concluded Pursuant to Sections 321 and 
        323 of the Compact of Free Association, as Amended; and,
            (7) Status of Forces Agreement Between the Government of 
        the United States of America and the Government of the Republic 
        of the Marshall Islands Concluded Pursuant to Section 323 of 
        the Compact of Free Association, as Amended.
Section 463
    (a) Except as set forth in subsection (b) of this section, any 
reference in this Compact, as amended, to a provision of the United 
States Code or the Statutes at Large of the United States constitutes 
the incorporation of the language of such provision into this Compact, 
as amended, as such provision was in force on the effective date of 
this Compact, as amended.
    (b) Any reference in Article IV and VI of Title One, and Sections 
174, 175, 178 and 342 to a provision of the United States Code or the 
Statutes at Large of the United States or to the Privacy Act, the 
Freedom of Information Act, the Administrative Procedure Act or the 
Immigration and Nationality Act constitutes the incorporation of the 
language of such provision into this Compact, as amended, as such 
provision was in force on the effective date of this Compact, as 
amended, or as it may be amended thereafter on a non-discriminatory 
basis according to the constitutional processes of the United States.

                              Article VII

                         Concluding Provisions

Section 471
    Both the Government of the United States and the Government of the 
Republic of the Marshall Islands shall take all necessary steps, of a 
general or particular character, to ensure, no later than the entry 
into force date of this Compact, as amended, the conformity of its 
laws, regulations and administrative procedures with the provisions of 
this Compact, as amended, or, in the case of subsection (d) of section 
141, as soon as reasonably possible thereafter.
Section 472
    This Compact, as amended, may be accepted, by signature or 
otherwise, by the Government of the United States and the Government of 
the Republic of the Marshall Islands.
    IN WITNESS WHEREOF, the undersigned, duly authorized, have signed 
this Compact of Free Association, as amended, which shall enter into 
force upon the exchange of diplomatic notes by which the Government of 
the United States of America and the Government of the Republic of the 
Marshall Islands inform each other about the fulfillment of their 
respective requirements for entry into force.
    DONE at Majuro, Republic of the Marshall Islands, in duplicate, 
this thirtieth (30) day of April, 2003, each text being equally 
authentic.

                          Purpose and Summary

    House Joint Resolution 63, the Compact of Free Association 
Amendments Act of 2003, is the authorizing and implementing 
legislation for the amended Compacts of Free Association that 
the United States recently has renegotiated with the Federated 
States of Micronesia (FSM) and the Republic of the Marshall 
Islands (RMI). Critical portions of the original Compact of 
Free Association with those countries are set to expire at the 
end of Fiscal Year 2003. As described in greater detail below, 
the legislation secures certain U.S. defense interests and 
supports those countries' development and movement toward 
budgetary self-sufficiency. Among other things, H.J. Res. 63: 
(1) extends U.S. financial and program assistance to those 
island nations, but fundamentally restructures the way it is 
provided, to increase fiscal accountability and economic 
planning; (2) prepares for the end of U.S. grant assistance in 
2023 by capitalizing a trust fund for each nation; (3) secures 
certain U.S. strategic interests, such as the U.S. ``defense 
veto'' and extended U.S. access to the Kwajalein atoll missile 
testing range; and (4) modifies and clarifies the unique U.S. 
immigration status enjoyed by FSM and RMI citizens, to address 
concerns primarily related to U.S. homeland security.

                Background and Need for the Legislation

    The United States has shared a unique relationship with the 
peoples of Micronesia and the Marshall Islands for the past 
half-century. For almost 40 years after World War II, the 
United States administered both Micronesia and the Marshall 
Islands (along with Palau and the Northern Mariana Islands) as 
part of the United Nations Trust Territory of the Pacific 
Islands. In the Marshall Islands, the United States conducted 
both underwater and atmospheric nuclear tests (at Bikini and 
Enewetok) during the 1940's and 1950's, and has maintained a 
U.S. Army base and missile test range at Kwajalein atoll since 
1964.
    In 1986, Micronesia and the Marshall Islands chose to 
become sovereign states. The Federated States of Micronesia 
(FSM), which has a current population of about 136,000, is a 
grouping of 607 small islands (with a total land mass of 270 
square miles) stretched across more than one million square 
miles of the Western Pacific. The Republic of the Marshall 
Islands (RMI), which has a population of about 74,000, consists 
of more than 1,100 islands (with a total land area of about 70 
miles) stretched across 750,000 miles of the Central Pacific. 
The FSM and RMI entered into a Compact of Free Association with 
the United States that was intended to ensure self-government 
for the new island nations, to assist them in their economic 
development towards self-sufficiency, and to secure certain 
national security rights for the parties. The United States' 
unique and close relationship with the FSM and the RMI has 
continued under the Compact, with those nations acting as 
stalwart U.S. allies in the United Nations General Assembly, 
and with a significant number of Micronesians and Marshallese 
serving honorably in the United States Armed Forces, including 
in the war in Iraq.
    On the defense front, the original Compact obligates the 
United States to defend the FSM and RMI. It also grants the 
U.S. the right of ``strategic denial'' (i.e., the right to 
prevent access to the islands and their territorial waters by 
the militaries of other countries) as well as a ``defense 
veto'' (the right to veto FSM or RMI actions that the U.S. 
deems incompatible with its defense responsibilities). In 
addition, a Compact-related agreement secured U.S. rights to 
the Kwajalein missile testing facility until 2016.
    In terms of economic and development assistance, the 
original Compact provided for 15 years of direct U.S. financial 
payments to Micronesia and the Marshall Islands (as well as a 
2-year extension during negotiations for future assistance). It 
also authorized them to receive various forms of program 
assistance and services from U.S. Federal agencies. In 
addition, it allowed FSM and RMI citizens to live, work, and 
study in the U.S. as resident aliens, without passports or 
visas. The countries remain dependent on U.S. funds, though to 
a lesser extent than at the inception of the Compact. During 
the term of the first Compact, poor planning, mismanagement, 
and misuse of Compact funds (exacerbated by a lack of effective 
oversight by U.S. Government agencies) impaired the countries' 
movement toward economic development and self-sufficiency.
    The original Compact also included a full and final 
settlement of all compensation claims regarding U.S. nuclear 
tests in the Marshall Islands, but also allowed the Marshallese 
to petition Congress for additional compensation on the basis 
of ``changed circumstances.'' Such a petition was submitted in 
September 2000, and is currently under review by Executive 
branch agencies with relevant expertise.
    Under the original Compact, U.S. financial assistance and 
the ``defense veto'' were set to expire in 2001, but could be 
continued for an additional 2 years while the nations 
renegotiated the expiring provisions. The U.S. and the two 
island nations began renegotiating those provisions in the fall 
of 1999.
    During the past 3 years, the Committee has actively 
conferred with the State Department's Office of Compact 
Negotiation, the U.S. General Accounting Office, Congressional 
committees of jurisdiction, and the governments of the FSM and 
the RMI, both to review the implementation and efficacy of the 
original Compact and to monitor the Compact renegotiation. In 
the spring of 2003, the parties finalized revised Compacts of 
Free Association (a separate U.S. Compact with the FSM and 
another with the RMI), which are included in the body of H.J. 
Res. 63.
    H.J. Res. 63 and the amended Compacts are a significant 
improvement upon the original Compact package and address the 
key issues raised in Congressional oversight hearings and GAO 
reports of recent years.
    Annual grant assistance under the amended Compacts is 
structured to ensure better oversight and planning than 
occurred under the original Compact. Instead of direct cash 
transfers, funds under the new Compacts will be disbursed as 
sector grants targeted to priority areas such as health, 
education, and infrastructure. New fiscal procedures agreements 
increase reporting and planning requirements, and establish a 
Joint Economic Management Committee in each country, to which 
the United States appoints a majority of the members. 
Furthermore, the new Compacts allow the U.S. to withhold funds 
if either country fails to comply with grant conditions or to 
cooperate in misuse-of-funds investigations.
    The new Compacts also anticipate an end to U.S. annual 
funding by capitalizing a trust fund for each country that 
eventually will provide an income stream after U.S. grant 
assistance ends in 2023. During each year of the new Compact 
payments, the grant funding decreases, and the trust fund 
contribution increases by a commensurate amount. The new 
Compacts also grant the U.S. effective control over management 
of those trust funds.
    The new Compacts provide for annual grant assistance over 
the 20-year period from 2004 to 2023, with the FSM receiving 
roughly $92 million per year, and the RMI approximately $57 
million ($42 million in Compact funds plus $15 million for 
Kwajalein compensation, as discussed below). Additional future 
assistance to the Marshall Islands is possible if the United 
States extends its military access to Kwajalein Atoll (as 
discussed below). H.J. Res. 63 also includes $15 million per 
year in ``Compact impact'' funding to be apportioned among U.S. 
jurisdictions (such as Hawaii, Guam, and the Commonwealth of 
the Northern Mariana Islands) that bear the health and social 
services costs associated with out-migration from the FSM and 
RMI under the Compacts.
    Although U.S. military access to Kwajalein does not expire 
until 2016, the RMI and the U.S. also took the Compact 
renegotiation as an opportunity to negotiate an extension of 
the Kwajalein lease, given that the Kwajalein site likely will 
remain important for U.S. missile defense testing beyond the 
current term. The new agreement extends U.S. use by an 
additional 50 years (from 2016 to 2066), with an option to 
extend for an additional 20 years (to 2086), and includes a 
mechanism for early termination. Annual compensation for 
Kwajalein use will increase to $15 million (from the current 
level of $11.3 million), and then to $18 million per year 
beginning in 2014.
    Although it was not set to expire, the unique U.S. 
immigration status enjoyed by FSM and RMI citizens is tightened 
in the new Compacts, largely at the insistence of the U.S. 
Department of Homeland Security. The new Compacts: (1) require 
that FSM and RMI citizens have a valid passport in order to be 
admitted to the U.S.; (2) deny the special Compact immigration 
status to naturalized citizens of those countries; (3) deny the 
special status to children traveling from those countries to 
the U.S. for adoption; and (4) affirm the authority of the U.S. 
Attorney General to promulgate regulations that might condition 
the admission of FSM and RMI citizens to the United States.
    During Committee consideration of H.J. Res. 63, concerns 
were raised about the non-payment of certain judgments in favor 
of United States citizens by courts of the Federated States of 
Micronesia, which are discussed in the Additional Views section 
of this report, below.
    On July 8, 2003, the Chairmen and Ranking Members of the 
International Relations Committee, the International Relations 
Subcommittee on Asia and the Pacific, and the Committee on 
Resources introduced H.J. Res. 63 at the request of the 
Administration. Since then, the International Relations 
Committee has expedited its consideration of this legislation, 
given the prospective expiration of critical provisions of the 
original Compact at the end of the current fiscal year. At the 
same time, the Committee remains committed to working with the 
other committees of jurisdiction to make additional 
modifications to ensure that the FSM and the RMI have continued 
access to certain forms of education assistance and disaster 
relief, which are important to the development goals that lie 
at the heart of the Compacts of Free Association.

                                Hearings

    The Committee's Subcommittee on Asia and the Pacific held 1 
day of hearings on the amended Compacts of Free Association on 
June 18, 2003. Testimony was received from three witnesses, 
representing the Department of State, the Department of the 
Interior, and the General Accounting Office, with additional 
material submitted by six individuals and organizations.

                        Committee Consideration

    On July 18, 2003, the Subcommittee on Asia and the Pacific 
met in open session and ordered favorably reported the bill 
H.J. Res. 63, as amended, by voice vote, a quorum being 
present. On July 23, 2003, the Committee met in open session 
and ordered favorably reported the bill H.J. Res. 63, with 
amendment, by voice vote, a quorum being present.

                      Committee Oversight Findings

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

               New Budget Authority and Tax Expenditures

    The relevant information required by clause 3(c)(2) of 
House Rule XIII is incorporated in the Congressional Budget 
Office Cost Estimate, below.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.J. Res. 63, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 2, 2003.
Hon. Henry J. Hyde, Chairman,
Committee on International Relations,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed estimate for H.J. Res. 63, 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, who can be reached at 226-2860.
            Sincerely,
                                        Douglas Holtz-Eakin
Enclosure

cc:
        Honorable Tom Lantos
        Ranking Member
H.J. Res. 63--Compact of Free Association Amendments Act of 2003.

                                SUMMARY

    H.J. Res. 63 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.
    H.J. Res. 63 would provide financial assistance for RMI and 
FSM for the next 20 years. H.J. Res. 63 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. The 
legislation also would provide $15 million a year for costs 
related to the migration of RMI and FSM nationals to other 
jurisdictions.
    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 the 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 around $13 million a year 
above the amounts assumed in our baseline projections. Thus, 
CBO estimates that enacting H.J. Res. 63 would increase direct 
spending by $131 million over the 2004-2013 period.
    In addition, the resolution also would extend the authority 
to provide certain federal services for RMI and FSM for the 
next 20 years. CBO estimates that continuing those federal 
services would cost $640 million over the 2004-2013 period, 
subject to appropriation of the necessary amounts.
    H.J. Res. 63 contains intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA), but the costs would 
be significantly below 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 H.J. Res. 63 is shown in 
the following table. The costs of this legislation fall within 
budget function 800 (general government).

                                     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         156    156    156    156    156    156    158    158    158    158
 Association Under Current Law
  Estimated Budget Authority
  Estimated Outlays                           156    156    156    156    156    156    158    158    158    158
 Proposed Changes:                              13     14     14     14     14     14     12     12     12     12
  Estimated Budget Authority
  Estimated Outlays                            13     14     14     14     14     14     12     12     12     12
 Spending for Compact of Free Association      169    170    170    170    170    170    170    170    170    170
 Under H.J. Res. 63
  Estimated Budget Authority
  Estimated Outlays                           169    170    170    170    170    170    170    170    170    170
 CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 Federal Program Services for RMI and FSM       60     61     62     64     65     66     68     69     70     72
  Estimated Authorization Level
  Estimated Outlays                            45     61     62     63     65     66     67     69     70     71
----------------------------------------------------------------------------------------------------------------

                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that the legislation will be 
enacted near the start of fiscal year 2004 and that outlays 
will occur at the historical rate for grants to the RMI and 
FSM.
Direct Spending
    H.J. Res. 63 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 enacting the legislation would cost $1.7 
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 
projects budget authority for payments to RMI and FSM will 
total $1.6 billion over the 2004-2013 period. Thus, we estimate 
H.J. Res. 63 would provide an increase in direct spending of 
$134 million above the baseline over the 2004-2013 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, H.J. Res. 63 would provide RMI with grants of $339 
million in grants, $94 million in trust fund contributions, 
$152 million for U.S. defense operations on the Kwajalein 
Atoll, and $27 million to compensate for the Kwajalein 
landholders and RMI for the use of its territory by the U.S. 
military.
    Federated States of Micronesia. Over the 2004-2013 period, 
H.J. Res. 63 would provide FSM with grants of $755 million and 
$185 million in trust fund contributions.
    General Assistance. In addition, the legislation would 
provide $15 million a year for health, education, social, and 
infrastructure costs associated with the migration of RMI and 
FSM nationals to other jurisdictions. The jurisdictions that 
would likely receive these funds include Hawaii, Guam, American 
Samoa, and the Commonwealth of the Northern Mariana Islands. 
CBO estimates general assistance would cost $150 million over 
the 2004-2013 period.
    H.J. Res. 63 would also 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 Insular 
Affairs, CBO expects that mail service to RMI and FSM costs 
USPS approximately $1 million annually and 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
    CBO cannot identify the amounts allocated to RMI and FSM 
from 2003 federal agency appropriations. Based on historical 
spending for RMI and FSM, however, we estimate that 2003 
discretionary spending for these freely associated states is 
about $60 million.
    H.J. Res. 63 also would specifically extend the authority 
to continue services provided by the U.S. Weather Service, 
Federal Aviation Administration, the Departments of 
Transportation and Homeland Security, and the Agency for 
International Development to RMI and FSM. 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 the appropriation of the necessary amounts.
    Other federal agencies currently providing programs and 
services to the 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 and the Interior, 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 cost estimate.

        ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

    H.J. Res. 63 contains intergovernmental mandates as defined 
in UMRA because it would explicitly prohibit states from taxing 
revenue generated by the trust fund established in the bill and 
from treating the fund as anything other than a nonprofit 
corporation. The costs of complying with these prohibitions 
would total no more than $2 million over the 2004-2008 period, 
falling significantly below the threshold established in UMRA 
($59 million in 2003, adjusted for inflation). If H.J. Res. 63 
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 are not the result of enforceable 
duties imposed by the federal government. The joint resolution 
would authorize $15 million per year to offset these impacts, 
but data from the jurisdictions and GAO suggest the cost may be 
substantially higher.

                 ESTIMATED IMPACT ON THE PRIVATE SECTOR

    H.J. Res. 63 contains no private-sector mandates as defined 
in UMRA.

                         ESTIMATE PREPARED BY:

Federal Costs: Matthew Pickford (226-2860)
Impact on State, Local, and Tribal Governments: Sarah Puro 
        (225-3220)
Impact on the Private Sector: Paige Piper/Bach (226-2940)

                         ESTIMATE APPROVED BY:

Peter H. Fontaine
Deputy Assistant Director for Budget Analysis

                    Performance Goals and Objectives

    H.J. Res. 63 will secure certain U.S. defense rights in the 
Federated States of Micronesia and the Republic of the Marshall 
Islands, and will support those countries' movement towards 
economic development and budgetary self-reliance, as discussed 
in greater detail in the Background section, above.

                   Constitutional Authority Statement

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

               Section-by-Section Analysis and Discussion

    The Preamble has been updated to reflect that the Compact, 
as amended, now consists of two separate Compacts with the 
Republic of the Marshall Islands (RMI) and the Federated States 
of Micronesia (FSM), respectively.

  TITLE I--APPROVAL, INTERPRETATION, AND U.S. POLICIES REGARDING THE 
               AMENDED COMPACTS; SUPPLEMENTAL PROVISIONS

Sec. 101--Approval of Amended Compacts; References to Subsidiary 
        Agreements
    Sec. 101(a) Federated States of Micronesia--Notes the 
existence of a separate Compact, as amended, between the United 
States and the Federated States of Micronesia (the ``U.S.-FSM 
Compact'').
    Sec. 101(b) Republic of the Marshall Islands--Notes the 
existence of a separate Compact, as amended, between the United 
States and the Republic of the Marshall Islands (the ``U.S.-RMI 
Compact'').
    Sec. 101(c) References to the Compacts and Subsidiary 
Agreements--Defines and updates terms of reference to reflect 
the existence of the two separate Compacts referred to above 
and to provide definitions for the terms ``subsidiary'' or 
``separate'' agreements.
    Sec. 101(d) Amendment, Change, or termination of Compacts 
and Agreements--Requires that any changes or amendments to 
either of the two Compacts, or to certain subsidiary agreements 
(or portions), be approved through an Act of Congress.
    Sec. 101(e) Subsidiary Agreements Deemed Bilateral--States 
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, reflecting the newly 
separate Compacts.
    Sec. 101(f) Entry Into Force of Future Amendments to 
Subsidiary Agreements--Provides generally that (except for 
those agreements identified in section 101(d), which require an 
Act of Congress for modification) no changes to any subsidiary 
agreement may be made without prior notification and 
explanation to both Houses of Congress.
Sec. 102--Agreements With Federated States of Micronesia
    Sec. 102(a) Law Enforcement Assistance--Provides generally 
for law enforcement technical and training assistance to the 
FSM.
    Sec. 102(b) Agreement on Audits--Provides the Comptroller 
General with authority to audit assistance provided by the 
United States to the FSM under the amended Compacts, and 
requires the FSM to cooperate with the Comptroller General in 
conducting such audits.
Sec. 103--Agreements With and Other Provisions Related to the Republic 
        of the Marshall Islands
    Sec. 103(a) Law Enforcement Assistance--This subsection 
provides generally for technical and training assistance to the 
RMI in the area of law enforcement.
    Sec. 103(b) Ejit--Repeats the language from Public Law 99-
239 (regarding assurances that Bikini residents will have 
access to lands on Ejit island until Bikini--the site of past 
US nuclear tests--is restored and habitable), but adds a new 
paragraph noting that the United States and the RMI entered 
into an agreement in furtherance of paragraphs (1) through (3) 
of this subsection on July 21, 1986.
    Sec. 103(c) Section 177 Agreement--Repeats the language 
from Public Law 99-239 regarding U.S. payment of nuclear claims 
compensation, but adds a new paragraph (6) stating that the 
United States made the payment called for under paragraph (1) 
of this subsection.
    Sec. 103(d) Nuclear Test Effects--Repeats the language from 
Public Law 99-239 regarding compensation to Bikini, Enewetak, 
Rongelap, and Utrik for nuclear test effects, and notes that 
this section does not create any rights or obligations beyond 
those in the original statutory language.
    Sec. 103(e) Espousal Provisions--Repeats Congress's 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 (described in 
articles X and XI of that separate agreement). A new paragraph 
(3) has been added, noting that the specified compensation 
amounts have been paid.
    Sec. 103(f) DOE Radiological Health Care Program; USDA 
Agricultural and Food Programs--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, and provides that nothing in this subsection 
creates any rights or obligations beyond those in the original 
statutory language.
    Sec. 103(g) Rongelap--Repeats the language of Public Law 
99-239 regarding restoring the habitability of Rongelap , and 
provides that nothing in this subsection creates any rights or 
obligations beyond those in the original statutory language.
    Sec. 103(h) Four Atoll Health Care Program--Deals with the 
Four Atoll Health Care Program, repeating the language of 
Public Law 99-239 regarding the administration of certain 
health care funds (for Bikini, Enewetak, Rongelap, and Utrik), 
and provides that nothing in this subsection of creates any 
rights or obligations beyond those in the original statutory 
language.
    Sec. 103(i) Enjebi Community Trust Fund--Deals with the 
Enjebi Community Trust Fund, repeating the language of Public 
Law 99-239 regarding the creation and administration of that 
fund, but adding a new paragraph stating that the ex gratia 
payment provided for has been made and that nothing in this 
subsection creates any rights or obligations beyond those in 
the original statutory language.
    Sec. 103(j) Bikini Atoll Cleanup--Deals with the cleanup of 
Bikini Atoll, repeating and updating the language of Public Law 
99-239, and providing that nothing in this subsection creates 
any rights or obligations beyond those in the original 
statutory language.
    Sec. 103(k) Agreement on Audits--Generally provides the 
Comptroller General with authority to audit all grants, program 
assistance, and other assistance provided by the United States 
to the RMI under the amended Compact, and requires the RMI to 
cooperate with the Comptroller General in conducting such 
audits.
Sec. 104--Interpretation of and U.S. Policy Regarding the Amended 
        Compacts
    Sec. 104(a) Human Rights--This subsection, which notes and 
affirms the parties' commitment to democratic government and 
respect for human rights, has been updated to reflect the 
existence of the two separate amended Compacts, but is 
otherwise unchanged from the original statute.
    Sec. 104(b)--Immigration and Passport Security--
          Sec. 104(b)(1) Naturalized Citizens--Places 
        restrictions on the admission of certain naturalized 
        citizens of the FSM and the RMI into the United States 
        under the Compact. While generally similar to the 
        original statute, it contains updated citations to 
        reflect the restrictions on the admission of most 
        naturalized citizens of the FSM and the RMI found in 
        section 141 of the amended Compacts.
          Sec. 104(b)(2) Passports--Directs that $250,000 of 
        the Compact grant funds for each country be used for 
        the development of machine-readable and secure FSM and 
        RMI passports.
          Sec. 104(b)(3) Information-Sharing--Provides 
        generally that the FSM and the RMI shall share 
        information the United States Government deems 
        necessary to enforce the criminal and security-related 
        provisions of the Immigration and Nationality Act, as 
        amended.
          Sec. 104(b)(4) Transition; Construction of Sections 
        141(A)(3) and 141(A)(4) of Compacts--Contains a 
        clarification relating to the proper implementation of 
        sections 141(a)(3) and (4) of the amended Compacts 
        (regarding the grandfathering of certain naturalized 
        citizens into the special immigration status enjoyed by 
        FSM and RMI citizens).
    Sec. 104(c) Nonalienation of Lands--Generally repeats the 
language of Sec. 104(c) of the original statute, which endorses 
FSM and RMI restrictions on the permanent sale of land to non-
citizens of those countries.
    Sec. 104(d) Nuclear Waste Disposal--Generally repeats the 
language of Sec. 104(d) of the original statute, which 
recognizes FSM and RMI prohibitions on certain forms of nuclear 
and toxic waste disposal in their countries.
    Sec. 104(e) Effect of Compacts on Certain U.S. Areas; 
Related Authorization and Continuing Appropriation--Deals with 
certain adverse effects of migration (from the RMI, FSM, and 
Palau to the U.S.) on the State of Hawaii, Guam, the 
Commonwealth of the Northern Mariana Islands, and America 
Samoa. This subsection authorizes and appropriates $15 million 
in Compact impact funding per fiscal year from FY 2004 through 
2032, allocates it to those U.S. jurisdictions by formula, 
places limitations on the use of any such funding, and requires 
periodic enumerations of FSM, RMI, and Palau citizens within 
those four affected jurisdictions.
    Sec. 104(f) Foreign Loans--Repeats section 104(g) of Public 
Law 99-239, reaffirming that the U.S. is not responsible for 
foreign debt contracted by the FSM or RMI.
Sec. 105--Supplemental Provisions--
    Sec. 105(a) Domestic Program Requirements--Generally 
repeats Sec. 105(a) of the original statute, that all U.S. 
Federal programs and services extended to the FSM and RMI 
remain subject to the same criteria, standards, audits, and 
rules as in the U.S.
    Sec. 105(b)--Relations with the Federated States of 
Micronesia and the Republic of the Marshall Islands--
          Sec. 105(b)(1)--Specifies that appropriations made 
        pursuant to article I of title two (which includes the 
        major financial sector grants) and section 221(a)(2) of 
        the amended Compacts (regarding U.S. Postal Service), 
        are to be made to the Secretary of the Interior.
          Sec. 105(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, Federal 
        Deposit Insurance Corporation, Federal Emergency 
        Management Agency, and USAID/Office of Foreign Disaster 
        Assistance, shall be made directly to those agencies.
          Sec. 105(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.
          Sec. 105(b)(4)--Requires all Federal agencies 
        providing program and service assistance to the FSM or 
        the RMI to consult and coordinate with the Secretaries 
        of State and the Interior regarding the provision of 
        any such assistance.
          Sec. 105(b)(5)--Provides that U.S. Government 
        employees in either the FSM or the RMI are subject to 
        the authority of the United States Chief of Mission.
          Sec. 105(b)(6)--Authorizes the appointment of an 
        Interagency Group on Freely Associated States' Affairs 
        to provide policy guidance to the U.S. Government.
          Sec. 105(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.
          Sec. 105(b)(8)--Specifies that the United States 
        voting members of the Trust Fund Committees appointed 
        by the U.S. Government shall be U.S. Government 
        officers or employees.
          Sec. 105(b)(9)--Specifies that the Trust Fund 
        Committees provided for in the amended Compacts and 
        Trust Fund Agreements shall be non-profit corporations 
        incorporated under the laws of the District of 
        Columbia.
    Sec. 105(c) Continuing Trust Territory Authorization--
Repeats the content of Sec. 105(c) of the original statute, 
which deals with any continuing authorizations from the Trust 
Territory period.
    Sec. 105(d) Survivability--Provides for the survivability 
of certain provisions of this joint resolution (such as those 
regarding audits) even if the amended Compacts are terminated.
    Sec. 105(e) Noncompliance Sanctions--States that actions by 
the FSM or RMI that are incompatible with U.S. defense 
authorities and responsibilities toward those countries will 
constitute a material breach of the respective Compact.
    Sec. 105(f) Continuing Programs and Laws--States in 
paragraph (1) that certain programs and services (from the 
Legal Services Corporation, Public Health Service, and Rural 
Housing Service) be made available to the FSM and the RMI, 
pursuant to section 222 of the amended Compacts. Paragraph (2) 
applies the tort claims provisions of the amended Compacts to 
U.S. Government employees and contractors. Paragraph (3) 
continues eligibility for EPA programs for PCB cleanup.
    Sec. 105(g) College of Micronesia--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.
    Sec. 105(h) Trust Territory Debts to U.S. Federal 
Agencies--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.
    Sec. 105(i) Use of DOD Medical Facilities--Requires the 
Secretary of Defense to make available certain Department of 
Defense medical facilities to properly referred citizens of the 
FSM and the RMI. Generally the same as the original statutory 
language, but updated to reflect the amended Status of Forces 
Agreement.
    Sec. 105(j) Technical Assistance--Continues the 
authorization for certain U.S. Federal agencies to provide 
technical assistance at the request of the FSM and RMI.
    Sec. 105(k) Prior Service Benefits Program--Authorizes 
continued payments to persons who were eligible to receive 
payment under the Prior Service Benefits Program established 
during the Trust Territory period (due to pre-1968 service for 
the U.S. Navy or Trust Territory Government).
    Sec. 105(l) Indefinite Land Use Payments--Repeats the 
language of the original statute authorizing certain sums to 
complete repayment by the United States of debts owed for use 
of various land in the FSM and the RMI prior to January 1, 
1985.
    Sec. 105(m) Communicable Disease Control Program--
Authorizes grants for the purposes of dealing with communicable 
diseases in the FSM and RMI.
    Sec. 105(n) User Fees--Requires payment of standard user 
fees for services provided by the United States to persons in 
the FSM and the RMI.
    Sec. 105(o) Treatment of Judgments of FSM, RMI, and Palau 
Courts--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 deference 
shall be given to assurances made by the Executive Branch to 
the Congress regarding proper interpretation of any such 
international agreement.
Section 106--Construction and Contract Assistance--
    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 extent 
possible.
Section 107--Prohibition--
    States that the portions of the U.S. Code dealing with 
criminal bribery and conflict of interest apply in full to U.S. 
employees involved in the Compact negotiations.
Section 108--Compensatory Adjustments
    Sec. 108(a) Additional Programs and Services--Authorizes 
the provision of certain Federal programs and services (Small 
Business Administration, Economic Development Administration, 
Rural Utilities Services, Department of Labor/Workforce 
Investment Act, and Department of Commerce/tourism and marine 
resource programs) to the FSM and the RMI.
    Sec. 108(b) Further Amounts--Authorizes the payment, upon 
an adequate showing, of certain sums to the FSM and the RMI as 
compensation for the effects, if any, during the first 15 years 
following the effective date 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 request by September 30, 2004.
Sec. 109--Authorization and Continuing Appropriation--
    Authorizes and appropriates, through fiscal year 2023 
(September 30, 2023), the sums required for grant, trust fund, 
and Kwajalein payments under the amended Compacts.
Sec. 110--Payment of Citizens of the FSM, RMI, and Palau Employed by 
        the U.S. Government in the Continental U.S.--
    Exempts citizens of the FSM, RMI, and Palau 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 owes allegiance to the U.S. or 
falls within other defined groups).

    TITLE II--COMPACTS OF FREE ASSOCIATION WITH THE FSM AND THE RMI

    Title II reproduces the amended Compacts between the U.S. 
and the Federated States of Micronesia [Sec. 201(a)] and the 
Republic of the Marshall Islands [Sec. 201(b)], which are 
discussed below.

 Section-by-Section Summary of the Amended Compact of Free Association 
 with the Federated States of Micronesia [Sec. 201(a) of H.J. Res. 63]

    The Preamble has been updated to reflect that the Federated 
States of Micronesia (FSM) is a sovereign country (not a Trust 
Territory), that the amended Compacts are now separate (one 
each with the FSM and RMI), and the term ``self-sufficiency'' 
has been replaced by ``budgetary self-reliance'' (to reflect 
the objective that the FSM end its reliance on U.S. financial 
assistance and obtain revenues from other legitimate sources).

                   TITLE ONE--GOVERNMENTAL RELATIONS

Article I--Self Government
    Sec. 111--States that the people of the FSM are self-
governing.
Article II--Foreign Affairs
    Sec. 121--Affirms the capacity of the Government of the FSM 
to conduct foreign affairs.
    Sec. 122--States that the U.S. will support FSM membership 
in international organizations.
    Sec. 123--States that the U.S. and FSM will consult with 
each other regarding foreign affairs.
    Sec. 124--The U.S. may assist the FSM with foreign affairs 
when requested and mutually agreed.
    Sec. 125--The U.S. cannot be obligated by the FSM's conduct 
of foreign affairs unless expressly agreed.
    Sec. 126--Makes available U.S. consular services to FSM 
citizens traveling outside the FSM.
    Sec. 127--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 November 2, 1986.
Article III--Communications
    Sec. 131--States that the FSM has authority to regulate its 
communications, notes that the FSM elected in 1993 to assume 
telecommunications functions previously performed by the U.S., 
and grants the U.S. rights to operate telecommunications 
services within the FSM to the extent necessary to fulfill its 
obligations under the amended Compact.
Article IV--Immigration
    Sec. 141(a)--Provides that otherwise admissible FSM 
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. Subsections 
(3) and (4) restrict the class of naturalized FSM citizens 
eligible for this special status (to address concerns about 
potential abuse of the special status by non-FSM natives). 
Subsection (5) extends this status to bona fide immediate 
relatives of FSM citizens serving on active duty with the U.S. 
Armed Forces.
    Sec. 141(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.
    Sec. 141(c)--This new language, which 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, is intended to remove incentives for passport sales or 
other abuse.
    Sec. 141(d)--Confirms the existing privilege to work in the 
U.S. and expands the types of documents that FSM citizens can 
use to demonstrate identity and employment authorization under 
U.S. immigration law.
    Sec. 141(e)--Defines certain terms used in this immigration 
title.
    Sec. 141(f)--Affirms that (except as specified in Sec. 
141(a)) the U.S. Immigration and Nationality Act (INA) applies 
fully to any person admitted to the U.S. (or seeking admission 
to the U.S.) under the Compact, and that the U.S. has full 
authority under the INA to regulate the terms and conditions of 
persons seeking admission under the Compact.
    Sec. 141(g)--Provides that the governments of U.S. 
territories or possessions not subject to the INA (such as 
American Samoa and the Commonwealth of the Northern Mariana 
Islands) have the same authorities as the U.S. enjoys under the 
INA to exercise immigration authority under the amended 
Compact.
    Sec. 141(h)--Notes that admission to the U.S. under the 
Compact does not count as residence necessary for U.S. 
naturalization, or give FSM admittees to the U.S. the right to 
petition for benefits for alien relatives under the INA.
    Sec. 142(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), as well as the right of U.S. citizen 
spouses of FSM citizens to reside in the FSM, even after the 
death of the FSM citizen spouse.
    Sec. 142(b)--Requires that the FSM accord U.S. citizens and 
nationals immigration status no less favorable than that 
accorded to citizens of other countries.
    Sec. 142(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.
    Sec. 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
    Sec. 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.
    Sec. 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
    Sec. 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.
    Sec. 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.
    Sec. 161(c)--States that the parties may modify the 
environmental obligations of the previous two subsections by 
mutual agreement.
    Sec. 161(d)--In the event that U.S. law no longer requires 
Environmental Impact Statements, the obligations of Sec. 161(a) 
will continue to require them until the parties mutually agree 
otherwise.
    Sec. 161(e)--The President of the U.S. may exempt any USG 
activities from the environmental standards of Sec. 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 explaining the 
reasons for the exemption, to the extent practicable.
    Sec. 161(f)--States that the laws of the U.S. referred to 
in Sec. 161(a)(3) apply to U.S. activities under the Compact 
only to the extent provided in Sec. 161.
    Sec 162--States that the FSM may bring an action for 
judicial review of USG environmental activities pursuant to 
Sec. 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.
    Sec. 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
    Sec. 171--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.
    Sec. 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 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. environmental activities governed by Sec. 161 
and 162.
    Sec. 173--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.
    Sec. 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. Governments arising before the original Compact may be 
pursued against the U.S. Government according 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.
    Sec. 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.
    Sec. 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.
    Sec. 176--The FSM confirms that final judgments in civil 
cases by courts of the Trust Territory of the Pacific Islands 
shall continue in full force and effect.
    Sec. 177--Quotes the language of Sec. 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.
    Sec. 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. 
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.
    Sec. 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
    Sec. 211(a) Sector Grants--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.
    Sec. 211(b) Humanitarian Assistance--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 Sec. 211(a), and the terms of 
the program will be governed by the separate Military Use and 
Operating Rights agreement.
    Sec. 211(c) Development Plan--Requires the FSM to prepare, 
maintain, and update a strategic development plan that 
specifically addresses the sectors identified in Sec. 211(a) 
and requires the concurrence of the U.S. (insofar as U.S. grant 
funds are involved).
    Sec. 211(d) Disaster Assistance Emergency Fund--Provides 
that $200,000 per year shall be provided, with a matching 
contribution from the FSM, to a Disaster Assistance Emergency 
Fund (DAEF), which may be used only for assistance and 
rehabilitation needs resulting from officially declared 
disasters or emergencies, and which shall be governed by the 
Fiscal Procedures Agreement.
    Sec. 212 Accountability--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. Sec. 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.
    Sec. 213 Joint Economic Management Committee--The U.S. and 
the FSM shall establish a Joint Economic Management Committee 
(comprised of a U.S. chairman, 2 U.S. members, and 2 FSM 
members) governed by the Fiscal Procedures Agreement. The 
Committee will review the audits, reports, and progress toward 
plan objectives, and recommend ways to increase effectiveness.
    Sec. 214 Annual Report--The FSM shall report annually to 
the U.S. on its use of U.S. grant assistance and progress 
toward economic goals.
    Sec. 215 Trust Fund--States that the U.S. shall provide 20 
years of annual contributions to a trust fund (governed by the 
separate Trust Fund Agreement) the proceeds of which may be 
used at the end of those 20 years for the purposes described in 
Sec. 211, or as mutually agreed. The U.S. contribution is 
conditioned on the FSM having already contributed $30 million 
to the fund by September 30, 2004.
    Sec. 216 Sector Grant Funding and Trust Fund 
Contributions--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.
    Sec. 217 Inflation Adjustment--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 5 percent, whichever is less.
    Sec. 218 Carry-Over of Unused Funds--States that 
unobligated balances from any year shall remain available to 
the FSM in future years.
Article II--Services and Program Assistance
    Sec. 221(a) Services--States that the U.S. shall make 
available to the FSM (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) Federal Emergency Management Agency, and USAID/Office of 
Foreign Disaster Assistance.
    Sec. 221(b) Programs--States that, with the exception of 
those services covered by Sec. 221(a), the U.S. shall (unless 
Congress provides otherwise) 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 & local governments.
    Sec. 221(c)--States that the U.S. has the authority to 
monitor and administer all service and program assistance to 
the FSM.
    Sec. 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.
    Sec. 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.
    Sec. 222--States that the U.S. and the FSM may agree to 
extend additional U.S. grant assistance to the FSM, which shall 
be governed by the Federal Programs and Services Agreement.
    Sec. 223--The FSM shall make available at no charge to the 
U.S. whatever land is necessary for such service and program 
assistance, and whatever facilities are currently provided at 
no cost to the U.S., or may be mutually agreed in the future.
    Sec. 224--States that the FSM may 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
    Sec. 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.
    Sec. 232--States that the U.S. shall determine and 
implement procedures for audits of all grant and program 
assistance, and authorizes the U.S. Comptroller General to 
conduct audits in the FSM.
    Sec. 233--The U.S. pledges that it will provide the grant 
assistance (specified in Sec. 211) for the 20 year term 
specified, subject to the terms and conditions of title II and 
related subsidiary agreements.
    Sec. 234--The FSM pledges that it will 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.
Article IV--Trade
    Sec. 241--States that the FSM is not within the customs 
territory of the U.S.
    Sec. 242(a)--Unless otherwise excluded, articles imported 
from the FSM shall be exempt from duty.
    Sec. 242(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.''
    Sec. 242(c)--States that duty-free treatment shall not be 
extended to certain classes of watches, clocks, buttons, 
textiles, apparel, footwear, and luggage.
    Sec. 242(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 Sec. 503(a)(2) of title V of the Trade Act of 1974.
    Sec. 243--States that articles imported from the FSM and 
not exempt from duty under Sec. 242 are subject to the duty 
rates in column 1-general of the Harmonized Tariff Schedule of 
the U.S.
    Sec. 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
    Sec. 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.
    Sec. 252--The FSM may tax U.S. persons on income earned and 
property located within the FSM.
    Sec. 253--FSM citizens domiciled in the FSM are exempt from 
U.S. estate, gift, and generation-skipping transfer taxes, 
provided that they are neither citizens nor residents of the 
U.S.
    Sec. 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 Sec. 911 of the Internal Revenue Code).
    Sec. 255--Grants U.S. tax benefits for conventions held in 
the FSM.

              TITLE THREE--SECURITY AND DEFENSE RELATIONS

Article I--Authority and Responsibility
    Sec. 311--The U.S. has full authority and responsibility 
for defense matters in or relating to the FSM, including: the 
obligation to defend the FSM; the option to foreclose military 
access to the FSM to any third country (a.k.a. ``strategic 
denial''); and the option to establish military facilities in 
the FSM.
    Sec. 312--The U.S. may conduct necessary military 
operations in FSM lands, waters, and airspace.
    Sec. 313--The FSM shall refrain from actions that the U.S., 
after consultation, deems incompatible with U.S. defense 
authorities and responsibilities (a.k.a. ``defense veto'').
    Sec. 314--Unless otherwise agreed, the U.S. shall not test, 
dispose of, or store (outside of a time of emergency or war) 
any nuclear, chemical, or biological weapon in the FSM.
    Sec. 315--The U.S. may 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.
    Sec. 316--The U.S. may not transfer or assign its authority 
or responsibility under this title.
Article II--Defense Facilities and Operating Rights
    Sec. 321--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. The FSM will consider such requests 
sympathetically, and the U.S. will respect the scarcity of land 
in the FSM.
    Sec. 322--The U.S. will provide and maintain certain fixed 
and floating navigational aids in the FSM.
    Sec. 323--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
    Sec. 331--States that the U.S. has assumed and enjoys all 
rights and obligations of (a) pre-Compact treaties and 
international security agreements applied by the U.S. as 
Administering Authority of the Trust Territory of the Pacific 
Islands, and (b) 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
    Sec. 341--States that persons entitled to the Compact 
immigration benefits (in Sec. 141) are eligible to volunteer 
for service in the U.S. Armed Forces.
    Sec. 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
    Sec. 351--The U.S. and the FSM 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.
    Sec. 352--In exercising its authority under this title, the 
U.S. shall accord due respect to the authority and 
responsibility of the FSM to assure the well-being of its 
people.
    Sec. 353--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 US or claims against third countries arising 
out of armed conflict.
    Sec. 354(a)--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 (as provided in articles IV and V of title 
four).
    Sec. 354(b)--Even if this security title 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.
    Sec. 354(c)--Even if this security title 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 (i.e., the 
``defense veto'' continues).

                     TITLE FOUR--GENERAL PROVISIONS

Article I--Approval and Effective Date
    Sec. 411--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
    Sec. 421--Both governments shall confer promptly upon the 
request of the other on Compact-related matters.
    Sec. 422--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.
    Sec. 423--If the governments cannot resolve a dispute 
within 90 days of the written notice, either party may refer it 
to arbitration according to Sec. 424.
    Sec. 424--Such 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 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
    Sec. 431--The amended Compact may be further amended by 
mutual agreement of the parties, according to their respective 
constitutional processes.
Article IV--Termination
    Sec. 441--The amended Compact may be terminated by mutual 
agreement of the parties, in which case Sec. 451 will apply.
    Sec. 442--The amended Compact may be terminated by the 
U.S., in which case Sec. 452 will apply. Such termination shall 
be effective not earlier than 6 months following delivery of 
the notice of termination.
    Sec. 443--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 Sec. 453 will 
apply. Such termination shall be effective not earlier than 3 
months following notice to the U.S. of the plebiscite vote for 
termination.
Article V--Survivability
    Sec. 451 (After mutual termination, per Sec. 441)
          Sec. 451(a)--Should the parties mutually terminate 
        the Compact, U.S. economic and other assistance to the 
        FSM shall continue only by mutual agreement.
          Sec. 451(b)--In the event of mutual termination 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 the defense veto (under 
        Sec. 354(c) and the separate mutual security 
        agreement).
          Sec. 451(c)--In the event of mutual termination after 
        the 20th anniversary of the amended Compact, the FSM 
        will be entitled to receive proceeds from its Trust 
        Fund as described in Sec. 215 and the Trust Fund 
        Agreement.
    Sec. 452 (After U.S. termination, per Sec. 442)
          Sec. 452(a)--Describes the Compact provisions that 
        survive if the U.S. terminates the amended Compact 
        before its 20th anniversary (including certain 
        provisions 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.
          Sec. 452(b)--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 
        the defense veto (under Sec. 354(c) and the separate 
        mutual security agreement).
          Sec. 452(c)--If the U.S. terminates the amended 
        Compact after its 20th anniversary, the FSM will be 
        entitled to receive proceeds from its Trust Fund as 
        described in Sec. 215 and the Trust Fund Agreement.
    Sec. 453 (After FSM termination, per Sec. 443)
          Sec. 453(a)--Describes the Compact provisions that 
        survive if the FSM terminates the amended Compact 
        before its 20th anniversary (including certain 
        provisions 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.
          Sec. 453(b)--In the event of FSM termination, 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.
          Sec. 453(c)--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 so long as the U.S. continues to enjoy the right 
        of strategic denial and the defense veto (under Sec. 
        354(c) and the separate mutual security agreement).
          Sec. 453(d)--If the FSM terminates the amended 
        Compact after its 20th anniversary, the FSM will be 
        entitled to receive proceeds from its Trust Fund as 
        described in Sec. 215 and the Trust Fund Agreement.
    Sec. 454--Notwithstanding any other provision of the 
amended Compact: (1) the U.S. reaffirms its interest in 
promoting the economic advancement of the FSM; and (2) the 
separate Military Use and Operating Rights Agreement and Status 
of Forces Agreement shall remain in effect in accordance with 
their terms.
Article VI--Definition of Terms
    Sec. 461--Sets forth definitions for a number of terms used 
in the amended Compact.
    Sec. 462(a)--Lists the separate agreements that will remain 
in effect under the amended Compact, including: (1) the 
trilateral agreement on transfer of Trust Territory property; 
(2) the Friendship, Cooperation, and Mutual Security Agreement; 
and (3) the Maritime Sovereignty and Jurisdiction Agreement.
    Sec. 462(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 
Sec. 175(b)); (4) the Fiscal Procedures Agreement; (5) the 
Trust Fund Agreement; (6) the Military Use and Operating Rights 
Agreement; and (7) the Status of Forces Agreement.
    Sec. 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
    Sec. 471--Both the U.S. and the FSM shall take all 
necessary steps to ensure the conformity of their respective 
laws and regulations with the provisions of the amended 
Compact.
    Sec. 472--The amended Compact may be accepted by the U.S. 
and the FSM by signature or otherwise.

 Section-by-Section Summary of the Amended Compact of Free Association 
with the Republic of the Marshall Islands [Sec. 201(b) of H.J. Res. 63]

    The Preamble has been updated to reflect that the Republic 
of the Marshall Islands (RMI) is a sovereign country (not a 
Trust Territory), that the amended Compacts are now separate 
(one each with the RMI and the FSM), and the term ``self-
sufficiency'' has been replaced by ``budgetary self-reliance'' 
(to reflect the objective that the RMI end its reliance on U.S. 
financial assistance and obtain revenues from other legitimate 
sources).

                   TITLE ONE--GOVERNMENTAL RELATIONS

Article I--Self Government
    Sec. 111--States that the people of the RMI are self-
governing.
Article II--Foreign Affairs
    Sec. 121--Affirms the capacity of the Government of the RMI 
to conduct foreign affairs.
    Sec. 122--States that the U.S. will support RMI membership 
in international organizations.
    Sec. 123--States that the U.S. and RMI will consult with 
each other regarding foreign affairs.
    Sec. 124--The U.S. may assist the RMI with foreign affairs 
when requested and mutually agreed.
    Sec. 125--The U.S. cannot be obligated by the RMI's conduct 
of foreign affairs unless expressly agreed.
    Sec. 126--Makes available U.S. consular services to RMI 
citizens traveling outside the RMI.
    Sec. 127--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
    Sec. 131--States that the RMI has authority to regulate its 
communications, and notes that the RMI assumed 
telecommunications functions previously performed by the U.S., 
except as otherwise provided.
Aricle IV--Immigration
    Sec. 141(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. Subsections 
(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 non-RMI natives). 
Subsection (5) extends this status to bona fide immediate 
relatives of RMI citizens serving on active duty with the U.S. 
Armed Forces.
    Sec. 141(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.
    Sec. 141(c)--This new language, which 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.
    Sec. 141(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.
    Sec. 141(e)--Defines certain terms used in this immigration 
title.
    Sec. 141(f)--Affirms that (except as specified in Sec. 
141(a)) the U.S. Immigration and Nationality Act (INA) applies 
fully to any person admitted to the U.S. (or seeking admission 
to the U.S.) under the Compact, and that the U.S. has full 
authority under the INA to regulate the terms and conditions of 
persons seeking admission under the Compact.
    Sec. 141(g)--Provides that the governments of U.S. 
territories or possessions not subject to the INA (such as 
American Samoa and the Commonwealth of the Northern Mariana 
Islands) have the same authorities as the U.S. enjoys under the 
INA to exercise immigration authority under the amended 
Compact.
    Sec. 141(h)--Notes that admission to the U.S. under the 
Compact does not count as residence necessary for U.S. 
naturalization, or give RMI admittees to the U.S. the right to 
petition for benefits for alien relatives under the INA.
    Sec. 142(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), as well as the right of U.S. citizen 
spouses of RMI citizens to reside in the RMI, even after the 
death of the RMI citizen spouse.
    Sec. 142(b)--Requires that the RMI accord U.S. citizens and 
nationals immigration status no less favorable than that 
accorded to citizens of other countries.
    Sec. 142(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.
    Sec. 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.
Article V--Representation
    Sec. 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.
    Sec. 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
    Sec. 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.
    Sec. 161(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.
    Sec. 161(c)--States that the parties may modify the 
environmental obligations of the previous two subsections by 
mutual agreement.
    Sec. 161(d)--In the event that U.S. law no longer requires 
Environmental Impact Statements, the obligations of Sec. 161(a) 
will continue to require them until the parties mutually agree 
otherwise.
    Sec. 161(e)--The President of the U.S. may exempt any USG 
activities from the environmental standards of Sec. 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.
    Sec. 161(f)--States that the laws of the U.S. referred to 
in Sec. 161(a)(3) apply to U.S. activities under the Compact 
only to the extent provided in Sec. 161.
    Sec 162--States that the RMI may bring an action for 
judicial review of USG environmental activities pursuant to 
Sec. 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.
    Sec. 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
    Sec. 171--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.
    Sec. 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 citizens) have standing to seek judicial review 
relating to U.S. environmental activities governed by Sec. 161 
and 162.
    Sec. 173--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.
    Sec. 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.
    Sec. 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.
    Sec. 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 RMI citizens from abusive labor recruitment practices 
that have been recently alleged.
    Sec. 176--The RMI confirms that final judgments in civil 
cases by courts of the Trust Territory of the Pacific Islands 
shall continue in full force and effect.
    Sec. 177--Quotes the language of Sec. 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.
    Sec. 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. 
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.
    Sec. 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
    Sec. 211--Annual Grant Assistance
    Sec. 211(a)--States that the U.S. shall provide 20 years of 
annual grant assistance to the RMI in the areas of education, 
health care, the environment, public sector capacity building, 
and private sector development, and other areas 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.
    Sec. 211(b) Kwajalein Atoll--
          Sec. 211(b)(1)--Of the total grant assistance made 
        available to the RMI, a specified amount shall be used 
        to address the special needs (including infrastructure 
        and services delivery) of the population at Ebeye and 
        other Marshallese communities within Kwajalein Atoll. 
        That 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.
          Sec. 211(b)(2)--In addition to the 211(a) money 
        earmarked in the subsection above, the U.S. will 
        provide an additional $1.9 million per year (with an 
        inflation adjustment and subject to the Fiscal 
        Procedures Agreement) for those special needs, from 
        FY2004 through FY2023 (and thereafter in accordance 
        with the Military Use and Operating Rights Agreement).
          Sec. 211(b)(3)--Of the total 211(a) annual grant 
        assistance, $200,000 (w/ 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.
    Sec. 211(c) Humanitarian Assistance--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 Sec. 211(a), and the terms of 
the program will be governed by the separate Military Use and 
Operating Rights agreement.
    Sec. 211(d) Public Infrastructure--Unless otherwise agreed, 
between 30 and 50 percent of U.S. annual grant assistance shall 
be made available for infrastructure improvement and 
maintenance. Five percent of that amount shall be set aside, 
with an equal RMI contribution, for an infrastructure 
maintenance fund.
    Sec. 211(e) Disaster Assistance Emergency Fund--Provides 
that $200,000 per year of the grant assistance in Sec. 211(a) 
shall be provided, with a matching contribution from the RMI, 
for a Disaster Assistance Emergency Fund (DAEF), which may be 
used only for assistance and rehabilitation needs resulting 
from officially declared disasters or emergencies, and which 
shall be governed by the Fiscal Procedures Agreement.
    Sec. 211(f) Budget and Investment Framework--Requires the 
RMI to prepare, maintain, and update a strategic, medium term 
budget and investment framework that specifically addresses the 
sectors and areas identified in Sec. 211(a) and requires the 
concurrence of the U.S. (insofar as U.S. grant funds are 
involved).
    Sec. 212 Kwajalein Impact and Use--In connection with its 
military use of Kwajalein Atoll, the U.S. shall provide to the 
RMI an annual payment of $15 million (with an inflation 
adjustment) from FY04 through FY2013. From FY2014 through 
FY2023 the annual payment will be either the 2013 amount or $18 
million, whichever is greater (also with an annual inflation 
adjustment).
    Sec. 213 Accountability--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. Sec. 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.
    Sec. 214 Joint Economic Management and Financial 
Accountability Committee--The U.S. and the RMI shall establish 
a Joint Economic Management and Financial Accountability 
Committee (comprised of a U.S. chairman, 2 U.S. members, and 2 
RMI members) governed by the Fiscal Procedures Agreement. The 
Committee will review the audits, reports, and progress toward 
plan objectives, and recommend ways to increase effectiveness.
    Sec. 215 Annual Report--The RMI shall report annually to 
the U.S. on its use of U.S. grant assistance and progress 
toward economic goals.
    Sec. 216 Trust Fund--States that the U.S. shall provide 20 
years of annual contributions to a trust fund (governed by the 
separate Trust Fund Agreement) the proceeds of which may be 
used at the end of those 20 years for the purposes described in 
Sec. 211, or as mutually agreed. The U.S. contribution is 
conditioned on the RMI contributing $25 million to the fund by 
September 30, 2003, an additional $2.5 million by October 1, 
2004, and an additional $2.5 million by October 1, 2005.
    Sec. 217 Annual Grant Funding and Trust Fund 
Contributions--Sets forth the amounts of U.S. grant assistance 
and trust fund contributions for each of the 20 years of 
assistance. The combined amount is $57.7 million annually from 
FY04 through FY2013, and $62.7 million annually from FY2014 
through FY2023.
    Sec. 218 Inflation Adjustment--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 5 percent, whichever is less.
    Sec. 219 Carry-Over of Unused Funds--States that 
unobligated balances from any year shall remain available to 
the RMI in future years.
Article II--Services and Program Assistance
    Sec. 221(a) Services--States that the U.S. shall make 
available to the RMI (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, 
and USAID/Office of Foreign Disaster Assistance.
    Sec. 221(b) Programs--States that, with the exception of 
those services covered by Sec. 221(a), the U.S. shall (unless 
Congress provides otherwise) 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 available to U.S. State & local governments.
    Sec. 221(c)--States that the U.S. has the authority to 
monitor and administer all service and program assistance to 
the RMI.
    Sec. 221(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.
    Sec. 221(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.
    Sec. 222--States that the U.S. and the RMI may agree to 
extend additional U.S. grant assistance to the RMI, which shall 
be governed by the Federal Programs and Services Agreement.
    Sec. 223--The RMI shall make available at no charge to the 
U.S. whatever land is necessary for such service and program 
assistance, and whatever facilities are currently provided at 
no cost to the U.S., or may be mutually agreed in the future.
    Sec. 224--States that the RMI may 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
    Sec. 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.
    Sec. 232--States that the U.S. shall determine and 
implement procedures for audits of all grant and program 
assistance, and authorizes the U.S. Comptroller General to 
conduct audits in the RMI.
    Sec. 233--The U.S. pledges that it will provide the grant 
assistance (specified in Sec. 211) for the 20 year term 
specified, subject to the terms and conditions of title II and 
related subsidiary agreements.
    Sec. 234--The RMI pledges that it will 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.
Article IV--Trade
    Sec. 241--States that the RMI is not within the customs 
territory of the U.S.
    Sec. 242(a)--Unless otherwise excluded, articles imported 
from the RMI shall be exempt from duty.
    Sec. 242(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.''
    Sec. 242(c)--States that duty-free treatment shall not be 
extended to certain classes of watches, clocks, buttons, 
textiles, apparel, footwear, and luggage.
    Sec. 242(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 Sec. 503(a)(2) of title V of the Trade Act of 1974.
    Sec. 243--States that articles imported from the RMI and 
not exempt from duty under Sec. 242 are subject to the duty 
rates in column 1-general of the Harmonized Tariff Schedule of 
the U.S.
    Sec. 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
    Sec. 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.
    Sec. 252--The RMI may tax U.S. persons on income earned and 
property located within the RMI.
    Sec. 253--RMI citizens domiciled in the RMI are exempt from 
U.S. estate, gift, and generation-skipping transfer taxes, 
provided that they are neither citizens nor residents of the 
U.S.
    Sec. 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 income shall be relieved of such tax 
liability to the U.S. (in the form of a foreign tax credit or 
exclusion under Sec. 911 of the Internal Revenue Code).
    Sec. 255--Grants U.S. tax benefits for conventions held in 
the RMI.

              TITLE THREE--SECURITY AND DEFENSE RELATIONS

Article I--Authority and Responsibility
    Sec. 311--The U.S. has full authority and responsibility 
for defense matters in or relating to the RMI, including: the 
obligation to defend the RMI; the option to foreclose military 
access to the RMI to any third country (a.k.a. ``strategic 
denial''); and the option to establish military facilities in 
the RMI.
    Sec. 312--The U.S. may conduct necessary military 
operations in RMI lands, waters, and airspace.
    Sec. 313--The RMI shall refrain from actions that the U.S., 
after consultation, deems incompatible with U.S. defense 
authorities and responsibilities (a.k.a. ``defense veto'').
    Sec. 314--Unless otherwise agreed, the U.S. shall not test, 
dispose of, or store (outside of a time of emergency or war) 
any nuclear, chemical, or biological weapon in the RMI.
    Sec. 315--The U.S. may 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.
    Sec. 316--The U.S. may not transfer or assign its authority 
or responsibility under this title.
Article II--Defense Facilities and Operating Rights
    Sec. 321--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. The RMI will consider such requests 
sympathetically, and the U.S. will respect the scarcity of land 
in the RMI.
    Sec. 322--The U.S. will provide and maintain certain fixed 
and floating navigational aids in the RMI.
    Sec. 323--U.S. military operating rights and the status of 
U.S. forces in the RMI are set forth in separate agreements.
Article III--Defense Treaties and International Security Agreements
    Sec. 331--States that the U.S. has assumed and enjoys all 
rights and obligations of (a) pre-Compact treaties and 
international security agreements applied by the U.S. as 
Administering Authority of the Trust Territory of the Pacific 
Islands, and (b) 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
    Sec. 341--States that persons entitled to the Compact 
immigration benefits (in Sec. 141) are eligible to volunteer 
for service in the U.S. Armed Forces.
    Sec. 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
    Sec. 351--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.
    Sec. 352--In exercising its authority under this title, the 
U.S. shall accord due respect to the authority and 
responsibility of the RMI to assure the well-being of its 
people.
    Sec. 353--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 US or claims against third countries arising 
out of armed conflict.
    Sec. 354(a)--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 (as provided in articles IV and V of title 
four).
    Sec. 354(b)--Even if this security title 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.
    Sec. 354(c)--Even if this security title 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 (i.e., the 
``defense veto'' continues).

                     TITLE FOUR--GENERAL PROVISIONS

Article I--Approval and Effective Date
    Sec. 411--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
    Sec. 421--Both governments shall confer promptly upon the 
request of the other on Compact-related matters.
    Sec. 422--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.
    Sec. 423--If the governments cannot resolve a dispute 
within 90 days of the written notice, either party may refer it 
to arbitration according to Sec. 424.
    Sec. 424--Such 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 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
    Sec. 431--The amended Compact may be further amended by 
mutual agreement of the parties, according to their respective 
constitutional processes.
Article IV--Termination
    Sec. 441--The amended Compact may be terminated by mutual 
agreement of the parties, in which case Sec. 451 will apply.
    Sec. 442--The amended Compact may be terminated by the 
U.S., in which case Sec. 452 will apply. Such termination shall 
be effective not earlier than 6 months following delivery of 
the notice of termination.
    Sec. 443--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 Sec. 453 will 
apply. Such termination shall be effective not earlier than 3 
months following notice to the U.S. of the plebiscite vote for 
termination.
Article V--Survivability
    Sec. 451 (After mutual termination, per Sec. 441)
          Sec. 451(a)--Should the parties mutually terminate 
        the Compact, U.S. economic and other assistance to the 
        RMI shall continue only by mutual agreement.
          Sec. 451(b)--In the event of mutual termination 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 (under 
        Sec. 354(c) and the separate mutual security 
        agreement).
          Sec. 451(c)--In the event of mutual termination after 
        the 20th anniversary of the amended Compact, the RMI 
        will be entitled to receive proceeds from its Trust 
        Fund as described in Sec. 215 and the Trust Fund 
        Agreement.
    Sec. 452 (After U.S. termination, per Sec. 442)
          Sec. 452(a)--Describes the Compact provisions that 
        survive if the U.S. terminates the amended Compact 
        before its 20th anniversary (including certain 
        provisions 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.
          Sec. 452(b)--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 
        the defense veto (under Sec. 354(c) and the separate 
        mutual security agreement).
          Sec. 452(c)--If the U.S. terminates the amended 
        Compact after its 20th anniversary, the RMI will be 
        entitled to receive proceeds from its Trust Fund as 
        described in Sec. 215 and the Trust Fund Agreement.
    Sec. 453 (After RMI termination, per Sec. 443)
          Sec. 453(a)--Describes the Compact provisions that 
        survive if the RMI terminates the amended Compact 
        before its 20th anniversary (including certain 
        provisions 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.
          Sec. 453(b)--In the event of RMI termination, 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.
          Sec. 453(c)--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 so long as the U.S. continues to enjoy the right 
        of strategic denial and the defense veto (under Sec. 
        354(c) and the separate mutual security agreement).
          Sec. 453(d)--If the RMI terminates the amended 
        Compact after its 20th anniversary, the RMI will be 
        entitled to receive proceeds from its Trust Fund as 
        described in Sec. 215 and the Trust Fund Agreement.
    Sec. 454--Notwithstanding any other provision of the 
amended Compact: (1) the U.S. reaffirms its interest in 
promoting the economic advancement of the RMI; and (2) the 
separate Military Use and Operating Rights Agreement and Status 
of Forces Agreement shall remain in effect in accordance with 
their terms.
Article VI--Definition of Terms
    Sec. 461--Sets forth definitions for a number of terms used 
in the amended Compact.
    Sec. 462(a)--Lists the separate agreements that will remain 
in effect under the amended Compact, including: (1) the 
trilateral agreement on transfer of Trust Territory property; 
(2) the Friendship, Cooperation, and Mutual Security Agreement; 
and (3) the Maritime Sovereignty and Jurisdiction Agreement.
    Sec. 462(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 
Sec. 175(b)); (4) the Fiscal Procedures Agreement; (5) the 
Trust Fund Agreement; (6) the Military Use and Operating Rights 
Agreement; and (7) the Status of Forces Agreement.
    Sec. 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
    Sec. 471--Both the U.S. and the RMI shall take all 
necessary steps to ensure the conformity of their respective 
laws and regulations with the provisions of the amended 
Compact.
    Sec. 472--The amended Compact may be accepted by the U.S. 
and the RMI by signature or otherwise.

                        New Advisory Committees

    Section 105(b)(6) of H.J. Res. 63 provides that ``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.''

                    Congressional Accountability Act

    H.J. Res. 63 does not apply to the legislative branch.

                            Federal Mandates

    According to the analysis prepared by the Congressional 
Budget Office, based on the best information available at this 
time, ``H.J. Res. 63 contains intergovernmental mandates as 
defined in UMRA [Unfunded Mandates Reform Act] because it would 
explicitly prohibit states from taxing revenue generated by the 
trust fund established in the bill and from treating the fund 
as anything other than a nonprofit corporation. The costs of 
complying with these prohibitions would total no more than $2 
million over the 2004-2008 period, falling significantly below 
the threshold established in UMRA ($59 million in 2003, 
adjusted for inflation).''

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

SECTION 605 OF THE TREASURY AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 
                                  2002

                          (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 not apply to 
citizens of Ireland, Israel, [or the Republic of the 
Philippines,] the Republic of the Philippines, the 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.
             Additional Views of Representative Nick Smith

    Congress is aware that for numerous years Chuuk State of 
the Federated States of Micronesia has been delinquent in 
satisfying various judgment debts raised against it. In the 
106th Congress, language was included in the report 
accompanying the Interior Appropriations bill that advocated 
withholding all funds appropriated for the FSM unless Chuuk 
fully complied with judgments against it by FSM courts. It 
seems that Chuuk and the FSM still have progress to make in 
addressing these matters.
    As one example, my constituent, Mr. Danny Barrett of 
Whitmore Lake, Michigan, obtained a judgment from the Supreme 
Court of the Federated States of Micronesia for contract 
benefits owed him by the State of Chuuk. This judgment was 
issued in 1993. In 2001, the Acting Director of the U.S. Office 
of Insular Affairs urged the State of Chuuk's governor to make 
payments as dictated by the Supreme Court Finding, but the 
issue has still not been resolved.
    The loss of this money is significant to my constituent, 
but even more importantly, its loss discourages other American 
citizens and investors from doing business with states of the 
FSM. The failure of Chuuk to live up to both its contractual 
obligations and even the judgments of its own Supreme Court 
could raise fundamental questions about rule of law in the 
federation and cast doubt on prospects for economic investment.
    The Embassy of the Federated States of Micronesia has 
recently committed to ensuring that this issue is rectified. It 
is my view that doing so will reflect well on the FSM and only 
help to strengthen American business and government confidence 
in the FSM's legal institutions and commitment to the rule of 
law. Of course, a failure to appreciate the importance of these 
issues would have the opposite effect and possibly force 
Congress to once again question the prudence of appropriating 
money to institutions hostile to American citizens.

                                   Nick Smith of Michigan.

                                
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