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[Senate Report 108-159]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 299
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-159

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

 
           COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF 2003

                                _______
                                

                October 1, 2003.--Ordered to be printed

                                _______
                                

   Mr. Domenici, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                      [To accompany S.J. Res. 16]

    The Committee on Energy and Natural Resources, to which was 
referred the joint resolution (S.J. Res. 16) to approve the 
``Compact of Free Association, as amended between the 
Government of the United States of America and the Government 
of the Federated States of Micronesia'', and the ``Compact of 
Free Association, as amended between the Government of the 
United State of America and the Government of the Republic of 
the Marshall Islands'', and otherwise to amend Public Law 99-
239, and to appropriate for the purposes of amended Public Law 
99-239 for fiscal years ending on or before September 30, 2023, 
and for other purposes, having considered the same, reports 
favorably thereon with amendments and an amendment to the 
preamble and recommends that the joint resolution, as amended, 
do pass.

                                CONTENTS

                                                                   Page
Purpose..........................................................    43
Summary of Major Provisions......................................    43
Background and Need..............................................    43
Legislative History..............................................    46
Committee Recommendation.........................................    46
Committee Amendments.............................................    46
Section-by-Section Analysis......................................    47
    Title One....................................................    47
    Title Two....................................................    56
        U.S.-FSM Compact.........................................    56
        U.S.-RMI Compact.........................................    69
Cost and Budgetary Considerations................................    83
Regulatory Impact Evaluation.....................................    89
Executive Communications.........................................    89
Changes to Existing Law..........................................    97

                               Amendments

    The amendments are as follows:
    1. Strike the preamble and insert in lieu thereof the 
following:

Whereas the United States (in accordance with the Trusteeship Agreement for 
the Trust Territory of the Pacific Islands, the United Nations Charter, and 
the objectives of the international trusteeship system of the United 
Nations) fulfilled its obligations to promote the development of the people 
of the Trust Territory toward self-government or independence as 
appropriate to the particular circumstances of the Trust Territory and its 
peoples and the freely expressed wishes of the peoples concerned;

Whereas the United States, the Federated States of Micronesia, and the 
Republic of the Marshall Islands entered into the Compact of Free 
Association set forth in title II of Public Law 99-239, January 14, 1986, 
99 Stat. 1770, to create and maintain a close and mutually beneficial 
relationship;

Whereas the United States, in accordance with section 231 of the Compact of 
Free Association entered into negotiations with the Governments of the 
Federated States of Micronesia and the Republic of the Marshall Islands to 
provide continued United States assistance and to reaffirm its commitment 
to this close and beneficial relationship; and

Whereas these negotiations, in accordance with section 431 of the Compact, 
resulted in the ``Compact of Free Association, as amended between the 
Government of the United States of America and the Government of the 
Federated States of Micronesia'', and the ``Compact of Free Association, as 
amended between the Government of the United States of America and the 
Government of the Republic of the Marshall Islands'', which, together with 
their related agreements, were signed by the Government of the United 
States and the Governments of the Federated States of Micronesia and the 
Republic of the Marshall Islands on May 14, and April 30, 2003, 
respectively: Now, therefore, be it

    2. Beginning on page 2, strike line 3 and all that follows 
through page 69, line 25, and insert the following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This joint resolution, together with the 
table of contents in subsection (b) of this section, may be 
cited as the ``Compact of Free Association Amendments Act of 
2003''.
  (b) Table of Contents.--The table of contents for this joint 
resolution is as follows:

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

Sec. 101. Approval of U.S.-FSM Compact of Free Association and U.S.-RMI 
          Compact of Free Association.
    (a) Federated States of Micronesia.
    (b) Republic of the Marshall Islands.
    (c) References to the Compact, the U.S.-FSM Compact and 
      the U.S.-RMI Compact; References to Subsidiary 
      Agreements or Separate Agreements.
    (d) Amendment, Change, or Termination in the U.S.-FSM 
      Compact, the U.S.-RMI Compact and Certain Agreements.
    (e) Subsidiary Agreements Deemed Bilateral.
    (f) Entry Into Force of Future Amendments to Subsidiary 
      Agreements.
Sec. 102. Agreements With Federated States of Micronesia.
    (a) Law Enforcement Assistance.
    (b) Agreement on Audits.
Sec. 103. Agreements With and Other Provisions Related to the Republic 
          of the Marshall Islands.
    (a) Law Enforcement Assistance.
    (b) EJIT.
    (c) Section 177 Agreement.
    (d) Nuclear Test Effects.
    (e) Espousal Provisions.
    (f) DOE Radiological Health Care Program; USDA 
      Agricultural and Food Programs.
    (g) Rongelap.
    (h) Four Atoll Health Care Program.
    (i) Enjebi Community Trust Fund.
    (j) Bikini Atoll Cleanup.
    (k) Agreement on Audits.
    (l) Kwajalein.
Sec. 104. Interpretation of and United States Policy Regarding U.S.-FSM 
          Compact and U.S.-RMI Compact.
    (a) Human Rights.
    (b) Immigration and Passport Security.
    (c) Nonalienation of Lands.
    (d) Nuclear Waste Disposal.
    (e) Impact of Compacts on the State of Hawaii, Guam, the 
      Commonwealth of the Northern Mariana Islands and 
      American Samoa; Related Authorization and Continuing 
      Appropriation.
    (f) Foreign Loans.
    (g) Sense of Congress Concerning Funding of Public 
      Infrastructure.
    (h) Reports and Reviews.
    (i) Construction of Section 141(f).
    (j) Construction of Section 216 of the U.S.-FSM Compact.
    (k) Construction of Section 217 of the U.S.-RMI Compact.
    (l) Inflation Adjustment.
    (m) Promotion of Telecommunications.
    (n) Participation by Secondary Schools in the Armed 
      Services Vocational Aptitude Battery (ASVAB) Student 
      Testing Program.
Sec. 105. Supplemental Provisions.
    (a) Domestic Program Requirements.
    (b) Relations With the Federated States of Micronesia and 
      the Republic of the Marshall Islands.
    (c) Continuing Trust Territory Authorization.
    (d) Survivability.
    (e) Noncompliance Sanctions; Actions Incompatible With 
      United States Authority.
    (f) Continuing Programs and Laws.
    (g) College of Micronesia.
    (h) Trust Territory Debts to U.S. Federal Agencies.
    (i) Judicial Training.
    (j) Technical Assistance.
    (k) Prior Service Benefits Program.
    (l) Indefinite Land Use Payments.
    (m) Communicable Disease Control Program.
    (n) User Fees.
    (o) Treatment of Judgments of Courts of the Federated 
      States of Micronesia, the Republic of the Marshall 
      Islands, and the Republic of Palau.
    (p) Establishment of Trust Funds; Expedition of Process.
Sec. 106. Construction Contract Assistance.
    (a) Assistance to U.S. Firms.
    (b) Authorization of Appropriations.
Sec. 107. Prohibition.
Sec. 108. Compensatory Adjustments.
    (a) Additional Programs and Services.
    (b) Further Amounts.
Sec. 109. Authorization and Continuing Appropriation.
Sec. 110. Payment of Citizens of the Federated States of Micronesia, the 
          Republic of the Marshall Islands, and the Republic of Palau 
          Employed by the Government of the United States in the 
          Continental United States.

  TITLE II--COMPACTS OF FREE ASSOCIATION WITH THE FEDERATED STATES OF 
           MICRONESIA AND THE REPUBLIC OF THE MARSHALL ISLANDS

Sec. 201. Compacts of Free Association, as Amended Between the 
          Government of the United States of America and the Government 
          of the Federated States of Micronesia and Between the 
          Government of the United States of America and the Government 
          of the Republic of the Marshall Islands.
    (a) Compact of Free Association as amended between the 
      Government of the United States of America and the 
      Government of the Federated States of Micronesia.

                    Title One--Governmental Relations

    Article I--Self-Government.
    Article II--Foreign Affairs.
    Article III--Communications.
    Article IV--Immigration.
    Article V--Representation.
    Article VI--Environmental Protection.
    Article VII--General Legal Provisions.

                      Title Two--Economic Relations

    Article I--Grant Assistance.
    Article II--Services and Program Assistance.
    Article III--Administrative Provisions.
    Article IV--Trade.
    Article V--Finance and Taxation.

               Title Three--Security and Defense Relations
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    Article I--Authority and Responsibility.
    Article II--Defense Facilities and Operating Rights.
    Article III--Defense Treaties and International Security 
      Agreements.
    Article IV--Service in Armed Forces of the United States.
    Article V--General Provisions.

                     Title Four--General Provisions

    Article I--Approval and Effective Date.
    Article II--Conference and Dispute Resolution.
    Article III--Amendment.
    Article IV--Termination.
    Article V--Survivability.
    Article VI--Definition of Terms.
    Article VII--Concluding Provisions.
    (b) Compact of Free Association, as amended, between the 
      Government of the United States of America and the 
      Government of the Republic of the Marshall Islands.

                    Title One--Governmental Relations

    Article I--Self-Government.
    Article II--Foreign Affairs.
    Article III--Communications.
    Article IV--Immigration.
    Article V--Representation.
    Article VI--Environmental Protection.
    Article VII--General Legal Provisions.

                      Title Two--Economic Relations

    Article I--Grant Assistance.
    Article II--Services and Program Assistance.
    Article III--Administrative Provisions.
    Article IV--Trade.
    Article V--Finance and Taxation.

               Title Three--Security and Defense Relations
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---------------------------------------------------------------------------
    Article I--Authority and Responsibility.
    Article II--Defense Facilities and Operating Rights.
    Article III--Defense Treaties and International Security 
      Agreements.
    Article IV--Service in Armed Forces of the United States.
    Article V--General Provisions.

                     Title Four--General Provisions

    Article I--Approval and Effective Date.
    Article II--Conference and Dispute Resolution.
    Article III--Amendment.
    Article IV--Termination.
    Article V--Survivability.
    Article VI--Definition of Terms.
    Article VII--Concluding Provisions.

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

SEC. 101. APPROVAL OF U.S.-FSM COMPACT OF FREE ASSOCIATION AND THE 
                    U.S.-RMI COMPACT OF FREE ASSOCIATION; REFERENCES TO 
                    SUBSIDIARY EXIT AGREEMENTS OR SEPARATE AGREEMENTS.

  (a) Federated States of Micronesia.--The Compact of Free 
Association, as amended with respect to the Federated States of 
Micronesia and signed by the United States and the Government 
of the Federated States of Micronesia and set forth in Title II 
(section 201(a)) of this joint resolution, is hereby approved, 
and Congress hereby consents to the subsidiary agreements and 
amended subsidiary agreements listed in section 462 of the 
U.S.-FSM Compact. Subject to the provisions of this joint 
resolution, the President is authorized to agree, in accordance 
with section 411 of the U.S.-FSM Compact, to an effective date 
for and thereafter to implement such U.S.-FSM Compact.
  (b) Republic of the Marshall Islands.--The Compact of Free 
Association, as amended with respect to the Republic of the 
Marshall Islands and signed by the United States and the 
Government of the Republic of the Marshall Islands and set 
forth in Title II (section 201(b)) of this joint resolution, is 
hereby approved, and Congress hereby consents to the subsidiary 
agreements and amended subsidiary agreements listed in section 
462 of the U.S.-RMI Compact. Subject to the provisions of this 
joint resolution, the President is authorized to agree, in 
accordance with section 411 of the U.S.-RMI Compact, to an 
effective date for and thereafter to implement such U.S.-RMI 
Compact.
  (c) References to the Compact, the U.S.-FSM Compact, and the 
U.S.-RMI Compact; References to Subsidiary Agreements or 
Separate Agreements.--
          (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:
                          (i) Articles III, IV, and X of the 
                        agreement referred to in section 
                        462(b)(6) of the U.S.-RMI Compact:
                          (ii) Article III and IV of the 
                        agreement referred to in section 
                        462(b)(6) of the U.S.-FSM Compact.
                          (iii) Articles VI, XV, and XVII of 
                        the agreement referred to in section 
                        462(b)(7) of the U.S.-FSM Compact and 
                        U.S.-RMI Compact.
  (e) Subsidiary Agreements Deemed Bilateral.--For purposes of 
implementation of the U.S.-FSM Compact and the U.S.-RMI Compact 
and this joint resolution, the Agreement Concluded Pursuant to 
Section 234 of the Compact of Free Association and referred to 
in section 462(a)(1) of the U.S.-FSM Compact and section 
462(a)(4) of the U.S.-RMI Compact shall be deemed to be a 
bilateral agreement between the United States and each other 
party to such subsidiary agreement. The consent or concurrence 
of any other party shall not be required for the effectiveness 
of any actions taken by the United States in conjunction with 
either the Federated States of Micronesia or the Republic of 
the Marshall Islands which are intended to affect the 
implementation, modification, suspension, or termination of 
such subsidiary agreement (or any provision thereof) as regards 
the mutual responsibilities of the United States and the party 
in conjunction with whom the actions are taken.
  (f) Entry Into Force of Future Amendments to Subsidiary 
Agreements.--No agreement between the United States and the 
government of either the Federated States of Micronesia or the 
Republic of the Marshall Islands which would amend, change, or 
terminate any subsidiary agreement or portion thereof, other 
than those set forth in subsection (d) of this section shall 
enter into force until after the President has transmitted such 
agreement to the President of the Senate and the Speaker of the 
House of Representatives together with an explanation of the 
agreement and the reasons therefor. In the case of the 
agreement referred to in section 462(b)(3) of the U.S.-FSM 
Compact and the U.S.-RMI Compact, such transmittal shall 
include a specific statement by the Secretary of Labor as to 
the necessity of such amendment, change, or termination, and 
the impact thereof.

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 five years 
                after the date such grant or assistance was 
                provided and in a manner that permits such 
                grants, assistance, and payments to be 
                accounted for distinct from any other funds of 
                the Government of the Federated States of 
                Micronesia.
          (3) Status of comptroller general representatives.--
        The Comptroller General and his duly authorized 
        representatives shall be immune from civil and criminal 
        process relating to words spoken or written and all 
        acts performed by them in their official capacity and 
        falling within their functions, except insofar as such 
        immunity may be expressly waived by the Government of 
        the United States. The Comptroller General and his duly 
        authorized representatives shall not be liable to 
        arrest or detention pending trial, except in the case 
        of a grave crime and pursuant to a decision by a 
        competent judicial authority, and such persons shall 
        enjoy immunity from seizure of personal property, 
        immigration restrictions, and laws relating to alien 
        registration, fingerprinting, and the registration of 
        foreign agents. Such persons shall enjoy the same 
        taxation exemptions as are set forth in Article 34 of 
        the Vienna Convention on Diplomatic Relations. The 
        privileges, exemptions and immunities accorded under 
        this paragraph are not for the personal benefit of the 
        individuals concerned but are to safeguard the 
        independent exercise of their official functions. 
        Without prejudice to those privileges, exemptions and 
        immunities, it is the duty of all such persons to 
        respect the laws and regulations of the Government of 
        the 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.
  (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 by the 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.
  (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.
  (f) DOE Radiological Health Care Program; USDA Agricultural 
and Food Programs.--
          (1) Marshall islands program.--Notwithstanding any 
        other provision of law, upon the request of the 
        Government of the Republic of the Marshall Islands, the 
        President (either through an appropriate department or 
        agency of the United States or by contract with a 
        United States firm) shall continue to provide special 
        medical care and logistical support thereto for the 
        remaining members of the population of Rongelap and 
        Utrik who were exposed to radiation resulting from the 
        1954 United States thermo-nuclear ``Bravo'' test, 
        pursuant to Public Laws 95-134 and 96-205.
          (2) Agricultural and food programs.--
                  (A) In general.--In the joint resolution of 
                January 14, 1986 (Public Law 99-239) Congress 
                provided that notwithstanding any other 
                provision of law, upon the request of the 
                Government of the Marshall Islands, for the 
                first fifteen years after the effective date of 
                the Compact, the President (either through an 
                appropriate department or agency of the United 
                States or by contract with a United States firm 
                or by a grant to the Government of the Republic 
                of the Marshall Islands which may further 
                contract only with a United States firm or a 
                Republic of the Marshall Islands firm, the 
                owners, officers and majority of the employees 
                of which are citizens of the United States or 
                the Republic of the Marshall Islands) shall 
                provide technical and other assistance--
                          (i) without reimbursement, to 
                        continue the planting and agricultural 
                        maintenance program on Enewetak, as 
                        provided in subparagraph (C); and
                          (ii) without reimbursement, to 
                        continue the food programs of the 
                        Bikini and Enewetak people described in 
                        section 1(d) of Article II of the 
                        Subsidiary Agreement for the 
                        Implementation of Section 177 of the 
                        Compact and for continued waterborne 
                        transportation of agricultural products 
                        to Enewetak including operations and 
                        maintenance of the vessel used for such 
                        purposes.
                  (B) Population changes.--The President shall 
                ensure the assistance provided under these 
                programs reflects the changes in the population 
                since the inception of such programs.
                  (C) Planting and agricultural maintenance 
                program.--
                          (i) In general.--The planting and 
                        agricultural maintenance program on 
                        Enewetak shall be funded at a level of 
                        not less than $1,300,000 per year, as 
                        adjusted for inflation under section 
                        218 of the U.S.-RMI Compact.
                          (ii) Authorization and continuing 
                        appropriation.--There is hereby 
                        authorized and appropriated to the 
                        Secretary of the Interior, out of any 
                        funds in the Treasury not otherwise 
                        appropriated, to remain available until 
                        expended, for each fiscal year from 
                        2004 through 2023, $1,300,000, as 
                        adjusted for inflation under section 
                        218 of the U.S.-RMI Compact, for grants 
                        to carry out the planting and 
                        agricultural maintenance program.
          (3) Payments.--In the joint resolution of January 14, 
        1986 (Public Law 99-239) Congress provided that 
        payments under this subsection shall be provided to 
        such extent or in such amounts as are necessary for 
        services and other assistance provided pursuant to this 
        subsection. It is the sense of Congress that after the 
        periods of time specified in paragraphs (1) and (2) of 
        this subsection, consideration will be given to such 
        additional funding for these programs as may be 
        necessary.
  (g) Rongelap.--
          (1) In the joint resolution of January 14, 1986 
        (Public Law 99-239) Congress provided that because 
        Rongelap was directly affected by fallout from a 1954 
        United States thermonuclear test and because the 
        Rongelap people remain unconvinced that it is safe to 
        continue to live on Rongelap Island, it is the intent 
        of Congress to take such steps (if any) as may be 
        necessary to overcome the effects of such fallout on 
        the habitability of Rongelap Island, and to restore 
        Rongelap Island, if necessary, so that it can be safely 
        inhabited. Accordingly, it is the expectation of the 
        Congress that the Government of the Marshall Islands 
        shall use such portion of the funds specified in 
        Article II, section 1(e) of the subsidiary agreement 
        for the implementation of section 177 of the Compact as 
        are necessary for the purpose of contracting with a 
        qualified scientist or group of scientists to review 
        the data collected by the Department of Energy relating 
        to radiation levels and other conditions on Rongelap 
        Island resulting from the thermonuclear test. It is the 
        expectation of the Congress that the Government of the 
        Marshall Islands, after consultation with the people of 
        Rongelap, shall select the party to review such data, 
        and shall contract for such review and for submission 
        of a report to the President of the United States and 
        the Congress as to the results thereof.
          (2) In the joint resolution of January 14, 1986 
        (Public Law 99-239) Congress provided that the purpose 
        of the review referred to in paragraph (1) of this 
        subsection shall be to establish whether the data cited 
        in support of the conclusions as to the habitability of 
        Rongelap Island, as set forth in the Department of 
        Energy report entitled: ``The Meaning of Radiation for 
        Those Atolls in the Northern Part of the Marshall 
        Islands That Were Surveyed in 1978'', dated November 
        1982, are adequate and whether such conclusions are 
        fully supported by the data. If the party reviewing the 
        data concludes that such conclusions as to habitability 
        are fully supported by adequate data, the report to the 
        President of the United States and the Congress shall 
        so state. If the party reviewing the data concludes 
        that the data are inadequate to support such 
        conclusions as to habitability or that such conclusions 
        as to habitability are not fully supported by the data, 
        the Government of the Marshall Islands shall contract 
        with an appropriate scientist or group of scientists to 
        undertake a complete survey of radiation and other 
        effects of the nuclear testing program relating to the 
        habitability of Rongelap Island. Such sums as are 
        necessary for such survey and report concerning the 
        results thereof and as to steps needed to restore the 
        habitability of Rongelap Island are authorized to be 
        made available to the Government of the Marshall 
        Islands.
          (3) In the joint resolution of January 14, 1986 
        (Public Law 99-239) Congress provided that it is the 
        intent of Congress that such steps (if any) as are 
        necessary to restore the habitability of Rongelap 
        Island and return the Rongelap people to their homeland 
        will be taken by the United States in consultation with 
        the Government of the Marshall Islands and, in 
        accordance with its authority under the Constitution of 
        the Marshall Islands, the Rongelap local government 
        council.
          (4) There is hereby authorized and appropriated to 
        the Secretary of the Interior, out of any funds in the 
        Treasury not otherwise appropriated, to remain 
        available until expended, for fiscal year 2005, 
        $5,300,000 as the final contribution of the United 
        States to the Rongelap Resettlement Trust Fund as 
        established pursuant to Public Law 102-154 (105 Stat. 
        1009), for the purposes of establishing a food 
        importation program as a part of the overall 
        resettlement program of Rongelap Island.
  (h) Four Atoll Health Care Program.--
          (1) In the joint resolution of January 14, 1986 
        (Public Law 99-239) Congress provided that services 
        provided by the United States Public Health Service or 
        any other United States agency pursuant to section 1(a) 
        of Article II of the Agreement for the Implementation 
        of Section 177 of the Compact (hereafter in this 
        subsection referred to as the ``Section 177 
        Agreement'') shall be only for services to the people 
        of the Atolls of Bikini, Enewetak, Rongelap, and Utrik 
        who were affected by the consequences of the United 
        States nuclear testing program, pursuant to the program 
        described in Public Law 95-134 (91 Stat. 1159) and 
        Public Law 96-205 (94 Stat. 84) and their descendants 
        (and any other persons identified as having been so 
        affected if such identification occurs in the manner 
        described in such public laws). Nothing in this 
        subsection shall be construed as prejudicial to the 
        views or policies of the Government of the Marshall 
        Islands as to the persons affected by the consequences 
        of the United States nuclear testing program.
          (2) In the joint resolution of January 14, 1986 
        (Public Law 99-239) Congress provided that at the end 
        of the first year after the effective date of the 
        Compact and at the end of each year thereafter, the 
        providing agency or agencies shall return to the 
        Government of the Marshall Islands any unexpended funds 
        to be returned to the Fund Manager (as described in 
        Article I of the Section 177 Agreement) to be covered 
        into the Fund to be available for future use.
          (3) In the joint resolution of January 14, 1986 
        (Public Law 99-239) Congress provided that the Fund 
        Manager shall retain the funds returned by the 
        Government of the Marshall Islands pursuant to 
        paragraph (2) of this subsection, shall invest and 
        manage such funds, and at the end of 15 years after the 
        effective date of the Compact, shall make from the 
        total amount so retained and the proceeds thereof 
        annual disbursements sufficient to continue to make 
        payments for the provision of health services as 
        specified in paragraph (1) of this subsection to such 
        extent as may be provided in contracts between the 
        Government of the Marshall Islands and appropriate 
        United States providers of such health services.
  (i) Enjebi Community Trust Fund.--In the joint resolution of 
January 14, 1986 (Public Law 99-239) Congress provided that 
notwithstanding any other provision of law, the Secretary of 
the Treasury shall establish on the books of the Treasury of 
the United States a fund having the status specified in Article 
V of the subsidiary agreement for the implementation of Section 
177 of the Compact, to be known as the ``Enjebi Community Trust 
Fund'' (hereafter in this subsection referred to as the 
``Fund''), and shall credit to the Fund the amount of 
$7,500,000. Such amount, which shall be ex gratia, shall be in 
addition to and not charged against any other funds provided 
for in the Compact and its subsidiary agreements, this joint 
resolution, or any other Act. Upon receipt by the President of 
the United States of the agreement described in this 
subsection, the Secretary of the Treasury, upon request of the 
Government of the Marshall Islands, shall transfer the Fund to 
the Government of the Marshall Islands, provided that the 
Government of the Marshall Islands agrees as follows:
          (1) Enjebi trust agreement.--In the joint resolution 
        of January 14, 1986 (Public Law 99-239) Congress 
        provided that the Government of the Marshall Islands 
        and the Enewetak Local Government Council, in 
        consultation with the people of Enjebi, shall provide 
        for the creation of the Enjebi Community Trust Fund and 
        the employment of the manager of the Enewetak Fund 
        established pursuant to the Section 177 Agreement as 
        trustee and manager of the Enjebi Community Trust Fund, 
        or, should the manager of the Enewetak Fund not be 
        acceptable to the people of Enjebi, another United 
        States investment manager with substantial experience 
        in the administration of trusts and with funds under 
        management in excess of $250,000,000.
          (2) Monitor conditions.--In the joint resolution of 
        January 14, 1986 (Public Law 99-239) Congress provided 
        that upon the request of the Government of the Marshall 
        Islands, the United States shall monitor the radiation 
        and other conditions on Enjebi and within one year of 
        receiving such a request shall report to the Government 
        of the Marshall Islands when the people of Enjebi may 
        resettle Enjebi under circumstances where the 
        radioactive contamination at Enjebi, including 
        contamination derived from consumption of locally grown 
        food products, can be reduced or otherwise controlled 
        to meet whole body Federal radiation protection 
        standards for the general population, including mean 
        annual dose and mean 30-year cumulative dose standards.
          (3) Resettlement of enjebi.--In the joint resolution 
        of January 14, 1986 (Public Law 99-239) Congress 
        provided that in the event that the United States 
        determines that the people of Enjebi can within 25 
        years of January 14, 1986, resettle Enjebi under the 
        conditions set forth in paragraph (2) of this 
        subsection, then upon such determination there shall be 
        available to the people of Enjebi from the Fund such 
        amounts as are necessary for the people of Enjebi to do 
        the following, in accordance with a plan developed by 
        the Enewetak Local Government Council and the people of 
        Enjebi, and concurred with by the Government of the 
        Marshall Islands to assure consistency with the 
        government's overall economic development plan:
                  (A) Establish a community on Enjebi Island 
                for the use of the people of Enjebi.
                  (B) Replant Enjebi with appropriate food-
                bearing and other vegetation.
          (4) Resettlement of other location.--In the joint 
        resolution of January 14, 1986 (Public Law 99-239) 
        Congress provided that in the event that the United 
        States determines that within 25 years of January 14, 
        1986, the people of Enjebi cannot resettle Enjebi 
        without exceeding the radiation standards set forth in 
        paragraph (2) of this subsection, then the fund manager 
        shall be directed by the trust instrument to distribute 
        the Fund to the people of Enjebi for their resettlement 
        at some other location in accordance with a plan, 
        developed by the Enewetak Local Government Council and 
        the people of Enjebi and concurred with by the 
        Government of the Marshall Islands, to assure 
        consistency with the government's overall economic 
        development plan.
          (5) Interest from fund.--In the joint resolution of 
        January 14, 1986 (Public Law 99-239) Congress provided 
        that prior to and during the distribution of the corpus 
        of the Fund pursuant to paragraphs (3) and (4) of this 
        subsection, the people of Enjebi may, if they so 
        request, receive the interest earned by the Fund on no 
        less frequent a basis than quarterly.
          (6) Disclaimer of liability.--In the joint resolution 
        of January 14, 1986 (Public Law 99-239) Congress 
        provided that neither under the laws of the Marshall 
        Islands nor under the laws of the United States, shall 
        the Government of the United States be liable for any 
        loss or damage to person or property in respect to the 
        resettlement of Enjebi by the people of Enjebi, 
        pursuant to the provision of this subsection or 
        otherwise.
  (j) Bikini Atoll Cleanup.--
          (1) Declaration of policy.--In the joint resolution 
        of January 14, 1986 (Public Law 99-239), the Congress 
        determined and declared that it is the policy of the 
        United States, to be supported by the full faith and 
        credit of the United States, that because the United 
        States, through its nuclear testing and other 
        activities, rendered Bikini Atoll unsafe for habitation 
        by the people of Bikini, the United States will fulfill 
        its responsibility for restoring Bikini Atoll to 
        habitability, as set forth in paragraphs (2) and (3) of 
        this subsection.
          (2) Cleanup funds.--The joint resolution of January 
        14, 1986 (Public Law 99-239) authorized to be 
        appropriated such sums as necessary to implement the 
        settlement agreement of March 15, 1985, in The People 
        of Bikini, et al. against United States of America, et 
        al., Civ. No. 84-0425 (D. Ha.).
          (3) Conditions of funding.--In the joint resolution 
        of January 14, 1986 (Public Law 99-239) the Congress 
        provided that the funds referred to in paragraph (2) 
        were to be made available pursuant to Article VI, 
        Section 1 of the Compact Section 177 Agreement upon 
        completion of the events set forth in the settlement 
        agreement referred to in paragraph (2) of this 
        subsection.
  (k) Agreement on Audits.--The Comptroller General (and his 
duly authorized representatives) shall have the authorities 
necessary to carry out his responsibilities under section 232 
of the U.S.-RMI Compact and the agreement referred to in 
section 462(b)(4) of the U.S.-RMI Compact, including the 
following authorities:
          (1) General authority of the comptroller 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 five years 
                after the date such grant or assistance was 
                provided and in a manner that permits such 
                grants, assistance and payments to be accounted 
                for distinct from any other funds of the 
                Government of the Republic of the Marshall 
                Islands.
          (3) Status of comptroller general representatives.--
        The Comptroller General and his duly authorized 
        representatives shall be immune from civil and criminal 
        process relating to words spoken or written and all 
        acts performed by them in their official capacity and 
        falling within their functions, except insofar as such 
        immunity may be expressly waived by the Government of 
        the United States. The Comptroller General and his duly 
        authorized representatives shall not be liable to 
        arrest or detention pending trial, except in the case 
        of a grave crime and pursuant to a decision by a 
        competent judicial authority, and such persons shall 
        enjoy immunity from seizure of personal property, 
        immigration restrictions, and laws relating to alien 
        registration, fingerprinting, and the registration of 
        foreign agents. Such persons shall enjoy the same 
        taxation exemptions as are set forth in Article 34 of 
        the Vienna Convention on Diplomatic Relations. The 
        privileges, exemptions and immunities accorded under 
        this paragraph are not for the personal benefit of the 
        individuals concerned but are to safeguard the 
        independent exercise of their official functions. 
        Without prejudice to those privileges, exemptions and 
        immunities, it is the duty of all such persons to 
        respect the laws and regulations of the Government of 
        the Republic of the Marshall Islands.
          (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.
  (l) Kwajalein.--
          (1) Statement of policy.--It is the policy of the 
        United States that payment of funds by the Government 
        of the Marshall Islands to the landowners of Kwajalein 
        Atoll in accordance with the land use agreement dated 
        October 19, 1982, or as amended or superseded, and any 
        related allocation agreements, is required in order to 
        ensure that the Government of the United States will be 
        able to fulfill its obligation and responsibilities 
        under Title Three of the Compact and the subsidiary 
        agreements concluded pursuant to the Compact.
          (2) Failure to pay.--
                  (A) In general.--If the Government of the 
                Marshall Islands fails to make payments in 
                accordance with paragraph (1), the Government 
                of the United States shall initiate procedures 
                under section 313 of the Compact and consult 
                with the Government of the Marshall Islands 
                with respect to the basis for the nonpayment of 
                funds.
                  (B) Resolution.--The United States shall 
                expeditiously resolve the matter of any 
                nonpayment of funds required under paragraph 
                (1) pursuant to section 313 of the Compact and 
                the authority and responsibility of the 
                Government of the United States for security 
                and defense matters in or relating to the 
                Marshall Islands. This paragraph shall be 
                enforced, as may be necessary, in accordance 
                with section 105(f).
          (3) Disposition of Increased Payments Pending New 
        Land Use Agreement.--Until such time as the Government 
        of the Marshall Islands and the landowners of Kwajalein 
        Atoll have concluded an agreement amending or 
        superseding the land use agreement dated October 19, 
        1982, any amounts paid by the United States to the 
        Government of the Marshall Islands in excess of the 
        amounts required to be paid pursuant to the land use 
        agreement dated October 19, 1982, shall be paid into, 
        and held in, an interest bearing escrow account in a 
        United States financial institution by the Government 
        of the Republic of the Marshall Islands. At such time, 
        the funds and interest held in escrow shall be paid to 
        the landowners of Kwajalein in accordance with the new 
        land use agreement. If no such agreement is concluded 
        by the date which is five years after the date of 
        enactment of this resolution, then such funds shall, 
        unless otherwise mutually agreed between the Government 
        of the United States of America and the Government of 
        the Republic of the Marshall Islands, be returned to 
        the U.S. Treasury.
          (4) Notifications and report.--
                  (A) The Government of the Republic of the 
                Marshall Islands shall notify the Government of 
                the United States of America when an agreement 
                amending or superseding the land use agreement 
                dated October 19, 1982, is concluded.
                  (B) If no agreement amending or superseding 
                the land use agreement dated October 19, 1982 
                is concluded by the date five years after the 
                date of enactment of this resolution, then the 
                President shall report to Congress on the 
                intentions of the United States with respect to 
                the use of Kwajalein Atoll after 2016, on any 
                plans to relocate activities carried out on 
                Kwajalein Atoll, and on the disposition of the 
                funds and interest held in escrow under to 
                paragraph (3).
          (5) Assistance.--The President is authorized to make 
        loans and grants to the Government of the Marshall 
        Islands to address the special needs of the community 
        at Ebeye, Kwajalein Atoll, and other Marshallese 
        communities within the Kwajalein Atoll, pursuant to 
        development plans adopted in accordance with applicable 
        laws of the Marshall Islands. The loans and grants 
        shall be subject to such other terms and conditions as 
        the President, in the discretion of the President, may 
        determine are appropriate.

SEC. 104. INTERPRETATION OF AND UNITED STATES POLICY REGARDING U.S.-FSM 
                    COMPACT AND U.S.-RMI COMPACT.

  (a) Human Rights.--In approving the U.S.-FSM Compact and the 
U.S.-RMI Compact, Congress notes the conclusion in the 
Statement of Intent of the Report of The Future Political 
Status Commission of the Congress of Micronesia in July, 1969, 
that ``our recommendation of a free associated state is 
indissolubly linked to our desire for such a democratic, 
representative, constitutional government'' and notes that such 
desire and intention are reaffirmed and embodied in the 
Constitutions of the Federated States of Micronesia and the 
Republic of the Marshall Islands. Congress also notes and 
specifically endorses the preamble to the U.S.-FSM Compact and 
the U.S.-RMI Compact, which affirms that the governments of the 
parties to the U.S.-FSM Compact and the U.S.-RMI Compact are 
founded upon respect for human rights and fundamental freedoms 
for all. The Secretary of State shall include in the annual 
reports on the status of internationally recognized human 
rights in foreign countries, which are submitted to Congress 
pursuant to sections 116 and 502B of the Foreign Assistance Act 
of 1961, ``22 U.S.C. 2151n, 2304'' a full and complete report 
regarding the status of internationally recognized human rights 
in the Federated States of Micronesia and the Republic of the 
Marshall Islands.
  (b) Immigration and Passport Security.--
          (1) Naturalized citizens.--The rights of a bona fide 
        naturalized citizen of the Federated States of 
        Micronesia or the Republic of the Marshall Islands to 
        enter the United States, to lawfully engage therein in 
        occupations, and to establish residence therein as a 
        nonimmigrant, to the extent such rights are provided 
        under section 141 of the U.S.-FSM Compact and U.S.-RMI 
        Compact, shall not be deemed to extend to any such 
        naturalized citizen with respect to whom circumstances 
        associated with the acquisition of the status of a 
        naturalized citizen are such as to allow a reasonable 
        inference, on the part of appropriate officials of the 
        United States and subject to United States procedural 
        requirements, that such naturalized status was acquired 
        primarily in order to obtain such rights.
          (2) Passports.--It is the sense of Congress that up 
        to $250,000 of the grant assistance provided to the 
        Federated States of Micronesia pursuant to section 
        211(a)(4) of the U.S.-FSM Compact, and up to $250,000 
        of the grant assistance provided to the Republic of the 
        Marshall Islands pursuant to section 211(a)(4) of the 
        U.S.-RMI Compact (or a greater amount of the section 
        211(a)(4) grant, if mutually agreed between the 
        Government of the United States and the government of 
        the Federated States of Micronesia or the government of 
        the Republic of the Marshall Islands), be used for the 
        purpose of increasing the machine-readability and 
        security of passports issued by such jurisdictions. It 
        is further the sense of Congress that such funds be 
        obligated by September 30, 2004 and in the amount and 
        manner specified by the Secretary of State in 
        consultation with the Secretary of Homeland Security 
        and, respectively, with the government of the Federated 
        States of Micronesia and the government of the Republic 
        of the Marshall Islands. The United States Government 
        is authorized to require that passports used for the 
        purpose of seeking admission under section 141 of the 
        U.S.-FSM Compact and the U.S.-RMI Compact contain the 
        security enhancements funded by such assistance.
          (3) Information-sharing.--It is the sense of Congress 
        that the governments of the Federated States of 
        Micronesia and the Republic of the Marshall Islands 
        develop, prior to October 1, 2004, the capability to 
        provide reliable and timely information as may 
        reasonably be required by the Government of the United 
        States in enforcing criminal and security-related 
        grounds of inadmissibility and deportability under the 
        Immigration and Nationality Act, as amended, and shall 
        provide such information to the Government of the 
        United States.
          (4) Transition; construction of sections 141(a)(3) 
        and 141(a)(4) of the u.s.-fsm compact and u.s.-rmi 
        compact.--The words ``the effective date of this 
        Compact, as amended'' in sections 141(a)(3) and 
        141(a)(4) of the U.S.-FSM Compact and the U.S.-RMI 
        Compact shall be construed to read, ``on the day prior 
        to the enactment by the United States Congress of the 
        Amended Compact Act.''.
  (c) Nonalienation of Lands.--Congress endorses and encourages 
the maintenance of the policies of the Government of the 
Federated States of Micronesia and the Government of the 
Republic of the Marshall Islands to regulate, in accordance 
with their Constitutions and laws, the alienation of permanent 
interests in real property so as to restrict the acquisition of 
such interests to persons of Federated States of Micronesia 
citizenship and the Republic of the Marshall Islands 
citizenship, respectively.
  (d) Nuclear Waste Disposal.--In approving the U.S.-FSM 
Compact and the U.S.-RMI Compact, Congress understands that the 
Government of the Federated States of Micronesia and the 
Government of the Republic of the Marshall Islands will not 
permit any other government or any nongovernmental party to 
conduct, in the Republic of the Marshall Islands or in the 
Federated States of Micronesia, any of the activities specified 
in subsection (a) of section 314 of the U.S.-FSM Compact and 
the U.S.-RMI Compact.
  (e) Impact of Compacts on the State of Hawaii, Guam, the 
Commonwealth of the Northern Mariana Islands and American 
Samoa; Related Authorization and Continuing Appropriation.--
          (1) Statement of congressional intent.--In 
        reauthorizing the Compacts, it is not the intent of 
        Congress to cause any adverse consequences for an 
        affected jurisdiction.
          (2) Definitions.--For the purposes of this 
        subsection--
                  (A) the term ``affected jurisdiction'' means 
                American Samoa, Guam, the Commonwealth of the 
                Northern Mariana Islands, or the State of 
                Hawaii; and
                  (B) the term ``qualified nonimmigrant'' means 
                a person, or their children under the age of 
                18, admitted or resident pursuant to section 
                141 of the U.S.-RMI or U.S.-FSM Compact, or 
                section 141 of the Palau Compact who, as of a 
                date referenced in the most recently published 
                enumeration is a resident of an affected 
                jurisdiction. As used in this subsection, the 
                term ``resident'' shall be a person who has a 
                ``residence,'' as that term is defined in 
                section 101(a)(33) of the Immigration and 
                Nationality Act, as amended.
          (3) Authorization and continuing appropriation.--
        There is hereby authorized and appropriated to the 
        Secretary of the Interior, out of any funds in the 
        Treasury not otherwise appropriated, to remain 
        available until expended, for each fiscal year from 
        2004 through 2023, $30,000,000 for grants to affected 
        jurisdictions to aid in defraying costs incurred by 
        affected jurisdictions as a result of increased demands 
        placed on health, educational, social, or public safety 
        services or infrastructure related to such services due 
        to the residence in affected jurisdictions of qualified 
        nonimmigrants from the Republic of the Marshall 
        Islands, the Federated States of Micronesia, or the 
        Republic of Palau. The grants shall be--
                  (A) awarded and administered by the 
                Department of the Interior, Office of Insular 
                Affairs, or any successor thereto, in 
                accordance with regulations, policies and 
                procedures applicable to grants so awarded and 
                administered, and
                  (B) used only for health, educational, 
                social, or public safety services, or 
                infrastructure related to such services, 
                specifically affected by qualified 
                nonimmigrants.
          (4) Enumeration.--The Secretary of the Interior shall 
        conduct periodic enumerations of qualified 
        nonimmigrants in each affected jurisdiction. The 
        enumerations--
                  (A) shall be conducted at such intervals as 
                the Secretary of the Interior shall determine, 
                but no less frequently than every five years, 
                beginning in fiscal year 2003;
                  (B) shall be supervised by the United States 
                Bureau of the Census or such other organization 
                as the Secretary of the Interior may select; 
                and
                  (C) after fiscal year 2003, shall be funded 
                by the Secretary of the Interior by deducting 
                such sums as are necessary, but not to exceed 
                $300,000 as adjusted for inflation pursuant to 
                section 217 of the U.S.-FSM Compact with fiscal 
                year 2003 as the base year, per enumeration, 
                from funds appropriated pursuant to the 
                authorization contained in paragraph (2) of 
                this subsection.
          (5) Allocation.--The Secretary of the Interior shall 
        allocate to the government of each affected 
        jurisdiction, on the basis of the results of the most 
        recent enumeration, grants in an aggregate amount equal 
        to the total amount of funds appropriated under 
        paragraph (3) of this subsection, as reduced by any 
        deductions authorized by subparagraph (C) of paragraph 
        (4) of this subsection, multiplied by a ratio derived 
        by dividing the number of qualified nonimmigrants in 
        such affected jurisdiction by the total number of 
        qualified nonimmigrants in all affected jurisdictions.
          (6) Authorization for health care reimbursement.--
        There are hereby authorized to be appropriated to the 
        Secretary of the Interior such sums as may be necessary 
        to reimburse health care institutions in the affected 
        jurisdictions for costs resulting from the migration of 
        citizens of the Republic of the Marshall Islands, the 
        Federated States of Micronesia and the Republic of 
        Palau to the affected jurisdictions as a result of the 
        implementation of the Compact of Free Association, 
        approved by Public Law 99-239, or the approval of the 
        Compacts of Free Association by this resolution.
          (7) Use of dod medical facilities and national health 
        service corps.--
                  (A) Dod medical facilities.--The Secretary of 
                Defense shall make available, on a space 
                available and reimbursable basis, the medical 
                facilities of the Department of Defense for use 
                by citizens of the Federated States of 
                Micronesia, the Republic of the Marshall 
                Islands, and the Republic of Palau who are 
                properly referred to the facilities by 
                government authorities responsible for 
                provision of medical services in the Federated 
                States of Micronesia, the Republic of the 
                Marshall Islands, the Republic of Palau and the 
                affected jurisdictions.
                  (B) National health service corps.--The 
                Secretary of Health and Human Services shall 
                continue to make the services of the National 
                Health Service Corps available to the residents 
                of the Federated States of Micronesia and the 
                Republic of the Marshall Islands to the same 
                extent and for so long as such services are 
                authorized to be provided to persons residing 
                in any other areas within or outside the United 
                States.
                  (C) Authorization of appropriations.--There 
                are authorized to be appropriated to carry out 
                this paragraph such sums as are necessary for 
                each fiscal year.
          (8) Reporting requirement.--The Governor of an 
        affected jurisdiction may report to the Secretary of 
        the Interior by February 1 of each year with respect to 
        the adverse consequences from implementation of the 
        Compacts on the Governor's respective jurisdiction. If 
        any such reports are received, the Secretary of the 
        Interior shall review and forward them, by April 1 of 
        that year, to Congress with the views of the 
        Administration on the issues raised and on any 
        recommendations made in such reports.
          (9) Reconciliation of unreimbursed impact expenses.--
                  (A) In general.--Notwithstanding any other 
                provision of law, the President, to address 
                previously accrued and unreimbursed impact 
                expenses, may at the request of the Governor of 
                Guam or the Governor of the Commonwealth of the 
                Northern Mariana Islands, reduce, release, or 
                waive all or part of any amounts owed by the 
                Government of Guam or the Government of the 
                Commonwealth of the Northern Mariana Islands 
                (or either government's autonomous agencies or 
                instrumentalities), respectively, to any 
                department, agency, independent agency, office, 
                or instrumentality of the United States.
                  (B) Terms and conditions.--
                          (i) Substantiation of impact costs.--
                        Not later than 120 days after the date 
                        of the enactment of this resolution, 
                        the Governor of Guam and the Governor 
                        of the Commonwealth of the Northern 
                        Mariana Islands shall each submit to 
                        the Secretary of the Interior a report, 
                        prepared in consultation with an 
                        independent accounting firm, 
                        substantiating unreimbursed impact 
                        expenses claimed for the period from 
                        January 14, 1986, through September 30, 
                        2003. Upon request of the Secretary of 
                        the Interior, the Governor of Guam and 
                        the Governor of the Commonwealth of the 
                        Northern Mariana Islands shall submit 
                        to the Secretary of the Interior copies 
                        of all documents upon which the report 
                        submitted by that Governor under this 
                        clause was based.
                          (ii) Congressional notification.--The 
                        President shall notify Congress of his 
                        intent to exercise the authority 
                        granted in subparagraph (A).
                          (iii) Congressional review and 
                        comment.--Any reduction, release, or 
                        waiver under this Act shall not take 
                        effect until 60 days after the 
                        President notifies Congress of his 
                        intent to approve a request of the 
                        Governor of Guam or the Governor of the 
                        Commonwealth of the Northern Mariana 
                        Islands. In exercising his authority 
                        under this section and in determining 
                        whether to give final approval to a 
                        request, the President shall take into 
                        consideration comments he may receive 
                        after Congressional review.
                          (iv) Expiration.--The authority 
                        granted in subparagraph (A) shall 
                        expire on February 28, 2005.
  (f) Foreign Loans.--Congress hereby reaffirms the United 
States position that the United States Government is not 
responsible for foreign loans or debt obtained by the 
Governments of the Federated States of Micronesia and the 
Republic of the Marshall Islands.
  (g) Sense of Congress Concerning Funding of Public 
Infrastructure.--It is the sense of Congress that not less than 
30 percent of the United States annual grant assistance 
provided under section 211 of the Compact of Free Association, 
as amended, between the Government of the United States of 
America and the Government of the Federated States of 
Micronesia, and not less than 30 percent of the total amount of 
section 211 funds allocated to each of the States of the 
Federated States of Micronesia, shall be invested in 
infrastructure improvements and maintenance in accordance with 
section 211(a)(6). It is further the sense of Congress that not 
less than 30 percent of the United States annual grant 
assistance provided under section 211 of the Compact of Free 
Association, as amended, between the Government of the United 
States of America and the Government of the Republic of the 
Marshall Islands, shall be invested in infrastructure 
improvements and maintenance in accordance with section 211(d).
  (h) Reports and Reviews.--
          (1) Report by the president.--Not later than the end 
        of the first full calendar year following enactment of 
        this resolution, and not later than December 31 of each 
        year thereafter, the President shall report to Congress 
        regarding the Federated States of Micronesia and the 
        Republic of the Marshall Islands, including but not 
        limited to--
                  (A) general social, political, and economic 
                conditions, including estimates of economic 
                growth, per capita income, and migration rates;
                  (B) the use and effectiveness of United 
                States financial, program, and technical 
                assistance;
                  (C) the status of economic policy reforms 
                including but not limited to progress toward 
                establishing self-sufficient tax rates;
                  (D) the status of the efforts to increase 
                investment including: the rate of 
                infrastructure investment of U.S. financial 
                assistance under the Compacts; non-U.S. 
                contributions to the trust funds, and the level 
                of private investment; and
                  (E) recommendations on ways to increase the 
                effectiveness of United States assistance and 
                to meet overall economic performance 
                objectives, including, if appropriate, 
                recommendations to Congress to adjust the 
                inflation rate or to adjust the contributions 
                to the Trust Funds based on non-U.S. 
                contributions.
          (2) Review.--During the year of the fifth, tenth, and 
        fifteenth anniversaries of the date of enactment of 
        this resolution, the Government of the United States of 
        America and the Government of the Federated States of 
        Micronesia; and the Government of the United States of 
        America and the Government of the Republic of the 
        Marshall Islands, shall formally review the overall 
        political, economic, and security aspects of their 
        relationship, the topics set forth in paragraphs (1)(A) 
        through (1)(E) above, and progress in meeting the 
        development objectives set forth in their respective 
        development plans. The governments may agree to commit 
        themselves to take specific actions in response to the 
        findings resulting from the reviews, such as changes to 
        the inflation adjustment, or adjustments to the U.S. 
        contribution to the trust funds based on substantial 
        non-U.S. contributions to the Trust Funds. The 
        President shall include the findings resulting from 
        these reviews, and any recommendations for actions to 
        respond to such findings, in the annual reports to 
        Congress made under this section, in the years 
        following the reviews.
          (3) By the comptroller general.--Not later than the 
        date that is three years after the date of enactment of 
        this joint resolution, and every 5 years thereafter, 
        the Comptroller General of the United States shall 
        submit to Congress a report on the Federated States of 
        Micronesia and the Republic of the Marshall Islands 
        including the topics set forth in paragraphs (1)(A) 
        through (E) above, and on the effectiveness of 
        administrative oversight by the United States.
  (i) Construction of Section 141(f).--Section 141(f)(2) of the 
Compact of Free Association, as amended, between the Government 
of the United States of America and the Government of the 
Federated States of Micronesia and of the Compact of Free 
Association, as amended, between the Government of the United 
States of America and the Government of the Republic of the 
Marshall Islands, shall be construed as though, after ``may by 
regulations prescribe'', there were included the following: ``, 
except that any such regulations that would have a significant 
effect on the admission, stay and employment privileges 
provided under this section shall not become effective until 90 
days after the date of transmission of the regulations to the 
Committee on Energy and Natural Resources and the Committee on 
the Judiciary of the Senate and the Committee on Resources, the 
Committee on International Relations, and the Committee on the 
Judiciary of the House of Representatives''.
  (j) Construction of Section 216 of the U.S.-FSM Compact.--The 
table under section 216 of the Compact between the Government 
of the United States of America and the Government of the 
Federated States of Micronesia shall be construed as though 
$16,810,000 is added to the amount for each year in column two, 
``Annual Grants Section 211'', and to the amount for each year 
in column five, ``Total''.
  (k) Construction of Section 217 of the U.S.-RMI Compact.--The 
table under section 217 of the Compact between the Government 
of the United States of America and the Government of the 
Republic of the Marshall Islands shall be construed as though: 
$6,350,000 is added to the amount for each year in column two, 
``Annual Grants Section 211''; and to the amount for each year 
in column six, `` Total''.
  (l) Inflation Adjustment.--As of Fiscal Year 2015, if the 
United States Gross Domestic Product Implicit Price Deflator 
average for Fiscal Years 2009 through 2014 is greater than 
United States Gross Domestic Product Implicit Price Deflator 
average for Fiscal Years 2004 through 2008 (as reported in the 
Survey of Current Business or subsequent publication and 
compiled by the Department of Interior), then section 217 of 
the U.S.-FSM Compact and paragraph 5 of Article II of the U.S.-
FSM Fiscal Procedures Agreement and section 218 of the U.S.-RMI 
Compact and paragraph 5 of Article II of the U.S.-RMI Fiscal 
Procedures Agreement shall be construed as if ``the full'' 
appeared in place of ``two-thirds of the'' each place those 
words appear.
  (m) Promotion of Telecommunications.--
          (1) Requirement for cooperation.--In accordance with 
        the FSM Federal Programs and Services Agreements and 
        the RMI Federal Programs and Services Agreement, the 
        Government of the United States, the Government of the 
        Federated States of Micronesia, and the Government of 
        the Republic of the Marshall Islands shall cooperate 
        with each other in the development of 
        telecommunications infrastructure that is mutually 
        beneficial and improves the telecommunications 
        connectivity and interoperability among the United 
        States, Micronesia, and the Marshall Islands.
          (2) Executive agent.--For the purpose of carrying out 
        this Agreement and the Federal Programs and Services 
        Agreements, the United States Department of the Army 
        shall serve as the Executive Agent for the Department 
        of Defense in promoting and coordinating such 
        telecommunication initiatives with the Governments of 
        the Republic of the Marshall Islands and the Federated 
        States of Micronesia.
          (3) Definitions.--In this subsection:
                  (A) Federal programs and services 
                agreements.--The term ``Federal Programs and 
                Services Agreements'' means--
                          (i) the FSM Federal Programs and 
                        Services Agreement; and
                          (ii) the RMI Federal Programs and 
                        Services Agreement.
                  (B) FSM federal programs and services 
                agreement.--The term ``FSM Federal Programs and 
                Services Agreement'' means the Federal Programs 
                and Services Agreement Between the Government 
                of the United States of America and the 
                Government of the Federated States of 
                Micronesia Concluded Pursuant to Article III of 
                Title One, Article II of Title Two (including 
                Section 222), and Section 231 of the U.S.-FSM 
                Compact.
                  (C) RMI federal programs and services 
                agreement.--The term ``RMI Federal Programs and 
                Services Agreement'' means the Federal Programs 
                and Services Agreement Between the Government 
                of the United States of America and the 
                Government of the Republic of the Marshall 
                Islands Concluded Pursuant to Article III of 
                Title One, Article II of Title Two (including 
                Section 222), and Section 231 of the U.S.-RMI 
                Compact.
  (n) Participation by Secondary Schools in the Armed Services 
Vocational Aptitude Battery (ASVAB) Student Testing Program.--
In furtherance of the provisions of Title Three, Article IV, 
Section 341 of the U.S.-FSM and the U.S.-RMI Compacts, the 
purpose of which is to establish the privilege to volunteer for 
service in the U.S. Armed Forces, it is the sense of Congress 
that, to facilitate eligibility of FSM and RMI secondary school 
students to qualify for such service, the Department of Defense 
may extend the Armed Services Vocational Aptitude Battery 
(ASVAB) Student Testing Program (STP) and the ASVAB Career 
Exploration Program to selected secondary Schools in the FSM 
and the RMI to the extent such programs are available to 
Department of Defense Dependent Schools located in foreign 
jurisdictions.

SEC. 105. SUPPLEMENTAL PROVISIONS.

  (a) Domestic Program Requirements.--Except as may otherwise 
be provided in this joint resolution, all United States Federal 
programs and services extended to or operated in the Federated 
States of Micronesia or the Republic of the Marshall Islands 
are and shall remain subject to all applicable criteria, 
standards, reporting requirements, auditing procedures, and 
other rules and regulations applicable to such programs when 
operating in the United States (including its territories and 
commonwealths).
  (b) Relations With the Federated States of 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 appropriate officials of the Asian Development 
        Bank and with the Secretary of the Treasury regarding 
        overall economic conditions in the Federated States of 
        Micronesia and the Republic of the Marshall Islands and 
        regarding the activities of other donors of assistance 
        to the Federated States of Micronesia and the Republic 
        of the Marshall Islands.
          (5) United States Government employees in either the 
        Federated States of Micronesia or the Republic of the 
        Marshall Islands are subject to the authority of the 
        United States Chief of Mission, including as elaborated 
        in section 207 of the Foreign Service Act and the 
        President's Letter of Instruction to the United States 
        Chief of Mission and any order or directive of the 
        President in effect from time to time.
          (6) Interagency group on freely associated states' 
        affairs.--
                  (A) In general.--The President is hereby 
                authorized to appoint an Interagency Group on 
                Freely Associated States' Affairs to provide 
                policy guidance and recommendations on 
                implementation of the U.S.-FSM Compact and the 
                U.S.-RMI Compact to Federal departments and 
                agencies.
                  (B) Secretaries.--It is the sense of Congress 
                that the Secretary of State and the Secretary 
                of the Interior shall be represented on the 
                Interagency Group.
          (7) United states appointees to joint committees.--
                  (A) Joint economic management committee.--
                          (i) In general.--The three United 
                        States appointees (United States chair 
                        plus two members) to the Joint Economic 
                        Management Committee provided for in 
                        section 213 of the U.S.--FSM Compact 
                        and Article III of the U.S.-FSM Fiscal 
                        Procedures Agreement referred to in 
                        section 462(b)(4) of the U.S.-FSM 
                        Compact shall be United States 
                        Government officers or employees.
                          (ii) Departments.--It is the sense of 
                        Congress that the appointees should be 
                        designated from the Department of State 
                        and the Department of the Interior, and 
                        that U.S. officials of the Asian 
                        Development Bank shall be consulted in 
                        order to properly coordinate U.S. and 
                        Asian Development Bank financial, 
                        program, and technical assistance.
                          (iii) Additional scope.--Section 213 
                        of the U.S.-FSM Compact shall be 
                        construed to read as though the phrase, 
                        ``the implementation of economic policy 
                        reforms to encourage investment and to 
                        achieve self-sufficient tax rates,'' 
                        were inserted after ``with particular 
                        focus on those parts of the plan 
                        dealing with the sectors identified in 
                        subsection (a) of section 211''.
                  (B) Joint economic management and financial 
                accountability committee.--
                          (i) In general.--The three United 
                        States appointees (United States chair 
                        plus two members) to the Joint Economic 
                        Management and Financial Accountability 
                        Committee provided for in section 214 
                        of the U.S.-RMI Compact and Article III 
                        of the U.S.-RMI Fiscal Procedures 
                        Agreement referred to in section 
                        462(b)(4) of the U.S.-RMI Compact shall 
                        be United States Government officers or 
                        employees.
                          (ii) Departments.--It is the sense of 
                        Congress that the appointees should be 
                        designated from the Department of State 
                        and the Department of the Interior, and 
                        that U.S. officials of the Asian 
                        Development Bank shall be consulted in 
                        order to properly coordinate U.S. and 
                        Asian Development Bank financial, 
                        program, and technical assistance.
                          (iii) Additional scope.--Section 214 
                        of the U.S.-RMI Compact shall be 
                        construed to read as though the phrase, 
                        ``the implementation of economic policy 
                        reforms to encourage investment and to 
                        achieve self-sufficient tax rates,'' 
                        were inserted after ``with particular 
                        focus on those parts of the framework 
                        dealing with the sectors and areas 
                        identified in subsection (a) of section 
                        211''.
          (8) Oversight and coordination.--It is the sense of 
        Congress that the Secretary of State and the Secretary 
        of the Interior shall ensure that there are personnel 
        resources committed in the appropriate numbers and 
        locations to ensure effective oversight of United 
        States assistance, and effective coordination of 
        assistance among United States agencies and with other 
        international donors such as the Asian Development 
        Bank.
          (9) The United States voting members (United States 
        chair plus two or more members) of the Trust Fund 
        Committee appointed by the Government of the United 
        States pursuant to Article 7 of the Trust Fund 
        Agreement implementing section 215 of the U.S.-FSM 
        Compact and referred to in section 462(b)(5) of the 
        U.S.-FSM Compact and any alternates designated by the 
        Government of the United States shall be United States 
        Government officers or employees. The United States 
        voting members (United States chair plus two or more 
        members) of the Trust Fund Committee appointed by the 
        Government of the United States pursuant to Article 7 
        of the Trust Fund Agreement implementing section 216 of 
        the U.S.-RMI Compact and referred to in section 
        462(b)(5) of the U.S.-RMI Compact and any alternates 
        designated by the Government of the United States shall 
        be United States Government officers or employees. It 
        is the sense of Congress that the appointees should be 
        designated from the Department of State, the Department 
        of the Interior, and the Department of the Treasury.
          (10) The Trust Fund Committee provided for in Article 
        7 of the U.S.-FSM Trust Fund Agreement implementing 
        section 215 of the U.S.-FSM Compact shall be a 
        nonprofit corporation incorporated under the laws of 
        the District of Columbia. To the extent that any law, 
        rule, regulation or ordinance of the District of 
        Columbia, or of any State or political subdivision 
        thereof in which the Trust Fund Committee is 
        incorporated or doing business, impedes or otherwise 
        interferes with the performance of the functions of the 
        Trust Fund Committee pursuant to this joint resolution, 
        such law, rule, regulation, or ordinance shall be 
        deemed to be preempted by this joint resolution. The 
        Trust Fund Committee provided for in Article 7 of the 
        U.S.-RMI Trust Fund Agreement implementing section 216 
        of the U.S.-RMI Compact shall be a non-profit 
        corporation incorporated under the laws of the District 
        of Columbia. To the extent that any law, rule, 
        regulation or ordinance of the District of Columbia, or 
        of any State or political subdivision thereof in which 
        the Trust Fund Committee is incorporated or doing 
        business, impedes or otherwise interferes with the 
        performance of the functions of the Trust Fund 
        Committee pursuant to this joint resolution, such law, 
        rule, regulation, or ordinance shall be deemed to be 
        preempted by this joint resolution.
  (c) Continuing Trust Territory Authorization.--The 
authorization provided by the Act of June 30, 1954, as amended 
(68 Stat. 330) shall remain available after the effective date 
of the Compact with respect to the Federated States of 
Micronesia and the Republic of the Marshall Islands for the 
following purposes:
          (1) Prior to October 1, 1986, for any purpose 
        authorized by the Compact or the joint resolution of 
        January 14, 1986 (Public Law 99-239).
          (2) Transition purposes, including but not limited 
        to, completion of projects and fulfillment of 
        commitments or obligations; termination of the Trust 
        Territory Government and termination of the High Court; 
        health and education as a result of exceptional 
        circumstances; ex gratia contributions for the 
        populations of Bikini, Enewetak, Rongelap, and Utrik; 
        and technical assistance and training in financial 
        management, program administration, and maintenance of 
        infrastructure.
  (d) Survivability.--In furtherance of the provisions of Title 
Four, Article V, sections 452 and 453 of the U.S.-FSM Compact 
and the U.S.-RMI Compact, any provisions of the U.S.-FSM 
Compact or the U.S.-RMI Compact which remain effective after 
the termination of the U.S.-FSM Compact or U.S.-RMI Compact by 
the act of any party thereto and which are affected in any 
manner by provisions of this title shall remain subject to such 
provisions.
  (e) Noncompliance Sanctions; Actions Incompatible With United 
States Authority.--Congress expresses its understanding that 
the Governments of the Federated States of Micronesia and the 
Republic of the Marshall Islands will not act in a manner 
incompatible with the authority and responsibility of the 
United States for security and defense matters in or related to 
the Federated States of Micronesia or the Republic of the 
Marshall Islands pursuant to the U.S.-FSM Compact or the U.S.-
RMI Compact, including the agreements referred to in sections 
462(a)(2) of the U.S.-FSM Compact and 462(a)(5) of the U.S.-RMI 
Compact. Congress further expresses its intention that any such 
act on the part of either such Government will be viewed by the 
United States as a material breach of the U.S.-FSM Compact or 
U.S.-RMI Compact. The Government of the United States reserves 
the right in the event of such a material breach of the U.S.-
FSM Compact by the Government of the Federated States of 
Micronesia or the U.S.-RMI Compact by the Government of the 
Republic of the Marshall Islands to take action, including (but 
not limited to) the suspension in whole or in part of the 
obligations of the Government of the United States to that 
Government.
  (f) Continuing Programs and Laws.--
          (1) Federated states of micronesia and republic of 
        the marshall islands.--In addition to the programs and 
        services set forth in section 221 of the Compact, and 
        pursuant to section 222 of the Compact, the programs 
        and services of the following agencies shall be made 
        available to the Federated States of Micronesia and to 
        the Republic of the Marshall Islands:
                  (A) Continuation of the Programs and Services 
                of the Federal Emergency Management Agency.--
                Except as provided in clause (ii) below, the 
                programs and services of the Department of 
                Homeland Security, Federal Emergency Management 
                Agency shall continue to be available to the 
                Federated States of Micronesia and the Republic 
                of the Marshall Islands to the same extent as 
                such programs and services were available in 
                fiscal year 2003.
                          (i) Paragraph (a)(6) of section 221 
                        of the U.S.-FSM Compact and paragraph 
                        (a)(5) of the U.S-RMI Compact shall 
                        each be construed as though the 
                        paragraph reads as follows: ``the 
                        Department of Homeland Security, United 
                        States Federal Emergency Management 
                        Agency.''
                          (ii) Subsection (d) of section 211 of 
                        the U.S-FSM Compact and subsection (e) 
                        of section 211 of the U.S-RMI Compact 
                        shall each be construed as though the 
                        subsection reads as follows: ``Of the 
                        total amount of assistance made 
                        available under subsection (a) of this 
                        section, $200,000 shall be made 
                        available to the Department of Homeland 
                        Security, Federal Emergency Management 
                        Agency to facilitate the activities of 
                        the Federal Emergency Management Agency 
                        in accordance with and to the extent 
                        provided in the Federal Programs and 
                        Services Agreement.''
                  (B) Treatment of education and labor 
                programs.--
                          (i) Idea and pell grants.--The 
                        Government of the United States shall 
                        continue to make available to the 
                        Federated States of Micronesia and the 
                        Republic of the Marshall Islands for 
                        fiscal years 2004 through 2023, the 
                        services to individuals eligible for 
                        such services under the Individuals 
                        with Disabilities Education Act (20 
                        U.S.C. 1400 et seq.) to the extent that 
                        such services continue to be available 
                        to individuals in the United States; 
                        and shall continue to make available to 
                        eligible institutions in the Federated 
                        States of Micronesia and the Republic 
                        of the Marshall Islands, and to 
                        students enrolled in such institutions, 
                        and in institutions in the United 
                        States and its territories, for fiscal 
                        years 2004 through 2023, grants under 
                        subpart 1 of part A of title IV of the 
                        Higher Education Act of 1965 (20 U.S.C. 
                        1070a et seq.) to the extent that such 
                        grants continue to be available to 
                        institutions and students in the United 
                        States, and in accordance with and to 
                        the extent provided in the Federal 
                        Programs and Services Agreement.
                          (ii) Other formula-grant programs.--
                        For fiscal years 2006 through 2023, 
                        except as provided in clause (i), the 
                        Governments of the Federated States of 
                        Micronesia and the Republic of the 
                        Marshall Islands shall not receive 
                        grants under the Head Start Act (42 
                        U.S.C. 9801 et seq.) or any formula 
                        grant program administered by the 
                        Secretary of Education. In place of 
                        such grants, the Government of the 
                        Federated States of Micronesia shall 
                        receive, as a supplement to the 
                        education sector grant under section 
                        211(a)(1), $16,810,000 annually; and 
                        the Government of the Republic of the 
                        Marshall Islands shall receive, as a 
                        supplement to the education sector 
                        grant under section 211(a)(1), 
                        $6,350,000 annually. Both of these 
                        supplemental amounts are to be adjusted 
                        for inflation pursuant to section 217 
                        of the U.S.-FSM Compact and section 218 
                        of the U.S.-RMI Compact.
                          (iii) Transition.--For fiscal years 
                        2004 and 2005 the Governments of the 
                        Federated States of Micronesia and the 
                        Republic of the Marshall Islands shall 
                        continue to receive grants under any 
                        formula grant programs administered by 
                        the Secretary of Education or under the 
                        Head Start Act (42 U.S.C. 9801 et seq.) 
                        in the same amounts as in fiscal year 
                        2003, except that such grants shall be 
                        modified to provide for a smooth 
                        transition from the formula grant 
                        programs being terminated to local 
                        programs designed to meet local 
                        education needs and with performance 
                        standards and technical assistance as 
                        necessary to meet those needs, and in 
                        accordance with the Federal Programs 
                        and Services Agreement.
                          (iv) Technical assistance.--The 
                        Federated States of Micronesia and the 
                        Republic of the Marshall Islands may 
                        request technical assistance from the 
                        Secretary of Education or the Secretary 
                        of Health and Human Services, the terms 
                        of which, including reimbursement, 
                        shall be negotiated with the 
                        participation of the appropriate 
                        cabinet officer for inclusion in the 
                        Federal Programs and Services 
                        Agreement.
                          (v) Continued eligibility for 
                        competitive grants.--The Governments of 
                        the Federated States of Micronesia and 
                        the Republic of the Marshall Islands 
                        shall continue to be eligible for 
                        competitive grants administered by the 
                        Secretary of Education to the extent 
                        that such grants continue to be 
                        available to State and local 
                        governments in the United States.
                  (C) The Legal Services Corporation.
                  (D) The Public Health Service.
                  (E) The Rural Housing Service (formerly, the 
                Farmers Home Administration) in the Marshall 
                Islands and each of the four States of the 
                Federated States of Micronesia: Provided, That 
                in lieu of continuation of the program in the 
                Federated States of Micronesia, the President 
                may agree to transfer to the Government of the 
                Federated States of Micronesia without cost, 
                the portfolio of the Rural Housing Service 
                applicable to the Federated States of 
                Micronesia and provide such technical 
                assistance in management of the portfolio as 
                may be requested by the Federated States of 
                Micronesia).
          (2) Tort claims.--The provisions of section 178 of 
        the U.S.-FSM Compact and the U.S.-RMI Compact regarding 
        settlement and payment of tort claims shall apply to 
        employees of any Federal agency of the Government of 
        the United States (and to any other person employed on 
        behalf of any Federal agency of the Government of the 
        United States on the basis of a contractual, 
        cooperative, or similar agreement) which provides any 
        service or carries out any other function pursuant to 
        or in furtherance of any provisions of the U.S.-FSM 
        Compact or the U.S.-RMI Compact or this joint 
        resolution, except for provisions of Title Three of the 
        Compact and of the subsidiary agreements related to 
        such Title, in such area to which such Agreement 
        formerly applied.
          (3) PCB cleanup.--The programs and services of the 
        Environmental Protection Agency regarding PCBs shall, 
        to the extent applicable, as appropriate, and in 
        accordance with applicable law, be construed to be made 
        available to such islands for the cleanup of PCBs 
        imported prior to 1987. The Secretary of the Interior 
        and the Secretary of Defense shall cooperate and assist 
        in any such cleanup activities.
  (g) College of Micronesia.--Until otherwise provided by Act 
of Congress, or until termination of the U.S.-FSM Compact and 
the U.S.-RMI Compact, the College of Micronesia shall retain 
its status as a land-grant institution and its eligibility for 
all benefits and programs available to such land-grant 
institutions.
  (h) Trust Territory Debts to U.S. Federal Agencies.--Neither 
the Government of the Federated States of Micronesia nor the 
Government of the Marshall Islands shall be required to pay to 
any department, agency, independent agency, office, or 
instrumentality of the United States any amounts owed to such 
department, agency, independent agency, office, or 
instrumentality by the Government of the Trust Territory of the 
Pacific Islands as of the effective date of the Compact. There 
is authorized to be appropriated such sums as may be necessary 
to carry out the purposes of this subsection.
  (i) Judicial Training.--
          (1) In general.--In addition to amounts provided 
        under section 211(a)(4) of the U.S.-FSM Compact and the 
        U.S.-RMI Compact, the Secretary of the Interior shall 
        annually provide $300,000 for the training of judges 
        and officials of the judiciary in the Federated States 
        of Micronesia and the Republic of the Marshall Islands 
        in cooperation with the Pacific Islands Committee of 
        the Ninth Circuit Judicial Council and in accordance 
        with and to the extent provided in the Federal Programs 
        and Services Agreement.
          (2) Authorization and continuing appropriation.--
        There is hereby authorized and appropriated to the 
        Secretary of the Interior, out of any funds in the 
        Treasury not otherwise appropriated, to remain 
        available until expended, for each fiscal year from 
        2004 through 2023, $300,000, as adjusted for inflation 
        under section 218 of the U.S.-FSM Compact and the U.S.-
        RMI Compact, to carry out the purposes of this section.
  (j) Technical Assistance.--Technical assistance may be 
provided pursuant to section 224 of the U.S.-FSM Compact or the 
U.S.-RMI Compact by Federal agencies and institutions of the 
Government of the United States to the extent such assistance 
may be provided to States, territories, or units of local 
government. Such assistance by the Forest Service, the Natural 
Resources Conservation Service (acting through the Resource 
Conservation and Development Program), the Fish and Wildlife 
Service, the National Marine Fisheries Service, the United 
States Coast Guard, and the Advisory Council on Historic 
Preservation, the Department of the Interior, and other 
agencies providing assistance under the National Historic 
Preservation Act (80 Stat. 915; 16 U.S.C. 470-470t), shall be 
on a nonreimbursable basis. During the period the U.S.-FSM 
Compact and the U.S.-RMI Compact are in effect, the grant 
programs under the National Historic Preservation Act shall 
continue to apply to the Federated States of Micronesia and the 
Republic of the Marshall Islands in the same manner and to the 
same extent as prior to the approval of the Compact. Any funds 
provided pursuant to sections 102(a), 103(a), 103(b), 103(f), 
103(g), 103(h), 103(j), 105(c), 105(g), 105(h), 105(i), 105(j), 
105(k), 105(l), and 105(m) of this joint resolution shall be in 
addition to and not charged against any amounts to be paid to 
either the Federated States of Micronesia or the Republic of 
the Marshall Islands pursuant to the U.S.-FSM Compact, the 
U.S.-RMI Compact, or their related subsidiary agreements.
  (k) Prior Service Benefits Program.--Notwithstanding any 
other provision of law, persons who on January 1, 1985, were 
eligible to receive payment under the Prior Service Benefits 
Program established within the Social Security System of the 
Trust Territory of the Pacific Islands because of their 
services performed for the United States Navy or the Government 
of the Trust Territory of the Pacific Islands prior to July 1, 
1968, shall continue to receive such payments on and after the 
effective date of the Compact.
  (l) Indefinite Land Use Payments.--There are authorized to be 
appropriated such sums as may be necessary to complete 
repayment by the United States of any debts owed for the use of 
various lands in the Federated States of Micronesia and the 
Marshall Islands prior to January 1, 1985.
  (m) Communicable Disease Control Program.--There are 
authorized to be appropriated for grants to the Government of 
the Federated States of Micronesia, the Government of the 
Republic of the Marshall Islands, and the governments of the 
affected jurisdictions, such sums as may be necessary for 
purposes of establishing or continuing programs for the control 
and prevention of communicable diseases, including (but not 
limited to) cholera, tuberculosis, and Hansen's Disease. The 
Secretary of the Interior shall assist the Government of the 
Federated States of Micronesia, the Government of the Republic 
of the Marshall Islands and the governments of the affected 
jurisdictions in designing and implementing such a program.
  (n) User Fees.--Any person in the Federated States of 
Micronesia or the Republic of the Marshall Islands shall be 
liable for user fees, if any, for services provided in the 
Federated States of Micronesia or the Republic of the Marshall 
Islands by the Government of the United States to the same 
extent as any person in the United States would be liable for 
fees, if any, for such services in the United States.
  (o) Treatment of Judgments of Courts of the Federated States 
of Micronesia, the Republic of the Marshall Islands, and the 
Republic of Palau.--No judgment, whenever issued, of a court of 
the Federated States of Micronesia, the Republic of the 
Marshall Islands, or the Republic of Palau, against the United 
States, its departments and agencies, or officials of the 
United States or any other individuals acting on behalf of the 
United States within the scope of their official duty, shall be 
honored by the United States, or be subject to recognition or 
enforcement in a court in the United States, unless the 
judgment is consistent with the interpretation by the United 
States of international agreements relevant to the judgment. In 
determining the consistency of a judgment with an international 
agreement, due regard shall be given to assurances made by the 
Executive Branch to Congress of the United States regarding the 
proper interpretation of the international agreement.
  (p) Establishment of Trust Funds; Expedition of Process.--
          (1) In general.--The Trust Fund Agreement executed 
        pursuant to the U.S.-FSM Compact and the Trust Fund 
        Agreement executed pursuant to the U.S.-RMI Compact 
        each provides for the establishment of a trust fund.
          (2) Method of establishment.--The trust fund may be 
        established by--
                  (A) creating a new legal entity to constitute 
                the trust fund; or
                  (B) assuming control of an existing legal 
                entity including, without limitation, a trust 
                fund or other legal entity that was established 
                by or at the direction of the Government of the 
                United States, the Government of the Federated 
                States of Micronesia, the Government of the 
                Republic of the Marshall Islands, or otherwise 
                for the purpose of facilitating or expediting 
                the establishment of the trust fund pursuant to 
                the applicable Trust Fund Agreement.
          (3) Obligations.--For the purpose of expediting the 
        commencement of operations of a trust fund under either 
        Trust Fund Agreement, the trust fund may, but shall not 
        be obligated to, assume any obligations of an existing 
        legal entity and take assignment of any contract or 
        other agreement to which the existing legal entity is 
        party.
          (4) Assistance.--Without limiting the authority that 
        the United States Government may otherwise have under 
        applicable law, the United States Government may, but 
        shall not be obligated to, provide financial, 
        technical, or other assistance directly or indirectly 
        to the Government of the Federated States of Micronesia 
        or the Government of the Republic of the Marshall 
        Islands for the purpose of establishing and operating a 
        trust fund or other legal entity that will solicit bids 
        from, and enter into contracts with, parties willing to 
        serve in such capacities as trustee, depositary, money 
        manager, or investment advisor, with the intention that 
        the contracts will ultimately be assumed by and 
        assigned to a trust fund established pursuant to a 
        Trust Fund Agreement.

SEC. 106. CONSTRUCTION CONTRACT ASSISTANCE.

  (a) Assistance to U.S. Firms.--In order to assist the 
Governments of the Federated States of Micronesia and of the 
Republic of the Marshall Islands through private sector firms 
which may be awarded contracts for construction or major repair 
of capital infrastructure within the Federated States of 
Micronesia or the Republic of the Marshall Islands, the United 
States shall consult with the Governments of the Federated 
States of Micronesia and the Republic of the Marshall Islands 
with respect to any such contracts, and the United States shall 
enter into agreements with such firms whereby such firms will, 
consistent with applicable requirements of such Governments--
          (1) to the maximum extent possible, employ citizens 
        of the Federated States of Micronesia and the Republic 
        of the Marshall Islands;
          (2) to the extent that necessary skills are not 
        possessed by citizens of the Federated States of 
        Micronesia and the Republic of the Marshall Islands, 
        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 shall be 
made available to the Federated States of Micronesia and the 
Republic of the Marshall Islands: the Small Business 
Administration, Economic Development Administration, the Rural 
Utilities Services (formerly Rural Electrification 
Administration); the programs and services of the Department of 
Labor under the Workforce Investment Act of 1998; and the 
programs and services of the Department of Commerce relating to 
tourism and to marine resource development.
  (b) Further Amounts.--
          (1) The joint resolution of January 14, 1986 (Public 
        Law 99-239) provided that the governments of the 
        Federated States of Micronesia and the Marshall Islands 
        may submit to Congress reports concerning the overall 
        financial and economic impacts on such areas resulting 
        from the effect of title IV of that joint resolution 
        upon Title Two of the Compact. There were authorized to 
        be appropriated for fiscal years beginning after 
        September 30, 1990, such amounts as necessary, but not 
        to exceed $40,000,000 for the Federated States of 
        Micronesia and $20,000,000 for the Marshall Islands, as 
        provided in appropriation acts, to further compensate 
        the governments of such islands (in addition to the 
        compensation provided in subsections (a) and (b) of 
        section 111 of the joint resolution of January 14, 1986 
        (Public Law 99-239) for adverse impacts, if any, on the 
        finances and economies of such areas resulting from the 
        effect of title IV of that joint resolution upon Title 
        Two of the Compact. The joint resolution of January 14, 
        1986 (Public Law 99-239) further provided that at the 
        end of the initial fifteen-year term of the Compact, 
        should any portion of the total amount of funds 
        authorized in section 111 of that resolution not have 
        been appropriated, such amount not yet appropriated may 
        be appropriated, without regard to divisions between 
        amounts authorized in section 111 for the Federated 
        States of Micronesia and for the Marshall Islands, 
        based on either or both such government's showing of 
        such adverse impact, if any, as provided in that 
        subsection.
          (2) The governments of the Federated States of 
        Micronesia and the Republic of the Marshall Islands may 
        each submit no more than one report or request for 
        further compensation under section 111 of the joint 
        resolution of January 14, 1986 (Public Law 99-239) and 
        any such report or request must be submitted by 
        September 30, 2009. Only adverse economic effects 
        occurring during the initial 15-year term of the 
        Compact may be considered for compensation under 
        section 111 of the joint resolution of January 14, 1986 
        (Public Law 99-239).

SEC. 109. AUTHORIZATION AND CONTINUING APPROPRIATION.

  (a) There are authorized and appropriated to the Department 
of the Interior, out of any funds in the Treasury not otherwise 
appropriated, to remain available until expended, such sums as 
are necessary to carry out the purposes of sections 211, 
212(b), 215, and 217 of the U.S.-FSM Compact and sections 211, 
212, 213(b), 216, and 218 of the U.S.-RMI Compact, in this and 
subsequent years.
  (b) There are authorized to be appropriated to the 
Departments, agencies, and instrumentalities named in 
paragraphs (1) and (3) through (6) of section 221(a) of the 
U.S.-FSM Compact and paragraphs (1) and (3) through (5) of 
section 221(a) of the U.S.-RMI Compact, such sums as are 
necessary to carry out the purposes of sections 221(a) of the 
U.S.-FSM Compact and the U.S.-RMI Compact, to remain available 
until expended.

SEC. 110. PAYMENT OF CITIZENS OF THE FEDERATED STATES OF MICRONESIA, 
                    THE REPUBLIC OF THE MARSHALL ISLANDS, AND THE 
                    REPUBLIC OF PALAU EMPLOYED BY THE GOVERNMENT OF THE 
                    UNITED STATES IN THE CONTINENTAL UNITED STATES.

  Section 605 of Public Law 107-67 (the Treasury and General 
Government Appropriations Act, 2002) is amended by striking 
``or the Republic of the Philippines,'' in the last sentence 
and inserting the following: ``the Republic of the Philippines, 
the Federated States of Micronesia, the Republic of the 
Marshall Islands, or the Republic of Palau,''.

    3. On page 102, line 4, strike ``(Palau)'' and insert 
``Palau''.
    4. On page 113, line 19, strike the word ``section'' the 
first time it appears on the line.
    5. On page 118, lines 1 and 2, strike ``Federal Emergency 
Management Agency,'' and insert ``Department of Homeland 
Security,''.
    6. On page 155, line 5, strike ``(2)'' and insert ``(b)''.
    7. On page 172, line 21, strike ``to,'' and insert ``to''.
    8. On page 180, line 5, strike ``to,'' and insert ``to''.
    9. On page 201, line 7, strike ``the'' and insert ``this 
amended''.
    10. On page 208, line 16, strike ``(i)'' and insert 
``(1)''.

                                Purpose

    The purpose of S.J. Res. 16 is to approve the Compact of 
Free Association, as amended, between the Government of the 
United States of America and the Government of the Federated 
States of Micronesia, and the Compact of Free Association, as 
amended, between the Government of the United States of America 
and the Government of the Republic of the Marshall Islands, and 
to appropriate funds to carry out the amended Compacts.

                      Summary of Major Provisions

    S.J. Res. 16 consists of a preamble and two titles. The 
preamble recites the purposes of the original Compact of Free 
Association between the United States and the Federated States 
of Micronesia (FSM), and the Republic of the Marshall Islands 
(RMI), and the purposes of the amended Compacts approved by 
this resolution. Title I approves the amended Compacts with the 
FSM and the RMI, and various subsidiary agreements and 
understandings. Title II sets forth the text of the two 
Compacts.

                          Background and Need

    In 1947, the United States became Administrator of the 
United Nation's Trust Territory of the Pacific Islands, 
composed of the Marshall, Caroline, Palau and Mariana (except 
Guam) islands. All of these islands had been captured from 
Japan in World War II and included those that now comprise the 
FSM and the RMI. U.S. obligations under the Trusteeship 
included promoting economic development and the self-government 
or independence of the inhabitants. Prior to 1962, 
administrative authority resided with the U.S. Navy, and Cold 
War realities focused attention on security issues. During this 
period, the U.S. conducted nuclear weapons tests in the 
Northern Marshall Islands and maintained a military base at 
Kwajalein Atoll that is now used for missile testing. In 1962, 
administrative jurisdiction was transferred to the Department 
of the Interior and the process of promoting self-government 
was initiated. In the case of the FSM and RMI, political status 
negotiations culminated in the signing of the Compact of Free 
Association, which was approved by Congress in Public Law 99-
239 in 1986, and which ultimately ended the Trusteeship and 
resulted in international recognition of these two new nations.
    The FSM has a population of about 105,000 and a land area 
of roughly 270 square miles. The RMI has a population of about 
50,000 and a land area of some 70 square miles. Per capita 
incomes are about $2,000 per year.

                         COMPACT I (1986-2003)

    The Compact relationship had three goals: (1) to end the 
U.N. Trusteeship by securing full self-government for the 
islands; (2) to continue a close defense relationship; and (3) 
to assist the FSM and RMI in their efforts to advance economic 
self-sufficiency. The first goal was met when the FSM and RMI 
became independent nations and full members of the United 
Nations. The second goal was achieved through the Compact's 
obligation that the U.S. defend the FSM and RMI as if they are 
a part of the U.S. The Compact also grants the U.S. the right 
to deny access to the islands by the military forces of other 
nations, known as ``strategic denial,'' as well as the right to 
veto local actions that the U.S. determines are incompatible 
with its defense responsibilities, known as the ``defense 
veto.'' Finally, the Compact provides that the FSM and RMI will 
``sympathetically consider'' U.S. requests for base rights, and 
a Compact-related agreement specifically secures U.S. access to 
the missile test site at Kwajalein until 2016.
    The third goal of advancing economic development and self-
sufficiency has not been as successfully achieved. This goal 
was to be accomplished through the payment of financial 
assistance by the Department of the Interior, and through the 
continued availability of a range of U.S. domestic programs 
from other departments. While significant development occurred 
from 1986 to 2003, the remote and resource poor island 
economies continue to be based on the government sector and are 
heavily dependent on U.S. assistance. In addition, the Compact 
had weak accountability mechanisms which failed to ensure that 
funds would be spent effectively. Finally, weak local 
institutions and technical capabilities resulted in poor 
planning and management in the use of U.S. assistance.
    The Compact also granted FSM and RMI citizens the 
opportunity to live, work, and study in the U.S. as resident 
aliens. This privilege provided a critical outlet for the 
islands' high population growth rates, but has also resulted in 
significant migration to Hawaii, Guam, and the Commonwealth of 
the Northern Mariana Islands (CNMI). Due to relatively poor 
health and education conditions, these migrants pose a 
disproportionate impact on the affected jurisdictions. Finally, 
the Compact included a full and final settlement of all claims 
resulting from the U.S. nuclear testing program that was 
conducted in the RMI from 1947 to 1958. The settlement included 
a provision that additional compensation could be sought based 
on a showing that changed circumstances rendered the original 
settlement ``manifestly inadequate.''
    In 1999, negotiations began to extend those provisions of 
the Compact that were scheduled to expire on September 30, 
2003, such as the financial assistance and the defense veto. 
Two new agreements, with the FSM and RMI respectively, were 
signed in the Spring of 2003. On June 27, 2003 the Secretary of 
State transmitted the proposed amended Compacts and draft 
legislation to approve and implement the agreements. On July 
14, 2003, Senator Domenici (for himself and Senators Bingaman, 
Craig, and Akaka) introduced the administration's proposed 
legislation, by request, as S.J. Res. 16.

                         COMPACT II (2004-2023)

    Under the proposed amended Compacts, as transmitted by the 
administration, the United States would provide about $3.5 
billion in funding over the 20-year period from fiscal years 
2004 to 2023 for grants, contributions to trust funds, payments 
to extend the lease at Kwajalein, and the cost of certain 
domestic services and programs. The package also would continue 
the availability of several domestic programs, and includes $15 
million per year in ``Compact impact'' funding to be allocated 
among Hawaii, Guam, the Northern Mariana Islands, and American 
Samoa to mitigate the impact of migration from the FSM and RMI.
    The amended Compacts have strengthened accountability 
mechanisms that could improve the effectiveness of U.S. 
assistance if diligently implemented. Instead of direct cash 
payments, funds would be disbursed as sector grants targeted to 
priority areas such as health and education. A new Agreement 
Concerning Procedures for the Implementation of United States 
Economic Assistance, known as the ``Fiscal Procedures 
Agreement,'' would increase reporting and planning 
requirements, including the establishment of joint economic 
management committees with U.S. majority membership and the 
power to impose grant conditions and to withhold funds. 
Finally, the Compacts would end annual U.S. financial 
assistance by contributing to two trust funds that would 
provide an alternative source of funding after 2023. Although 
not set to expire, the amended Compacts would revise the 
existing immigration privileges.
    Although U.S. military access to Kwajalein does not expire 
until 2016, these negotiations were used as an opportunity to 
extend U.S. access until 2066, with an option to extend for an 
additional 20 years to 2086. This agreement was made with the 
Marshall Islands national government and certain of the 
affected Kwajalein Atoll landowners have objected to its terms. 
Consequently, a new land use agreement has not been signed 
between the Kwajalein landowners and the Government of the RMI.
    This legislation is needed to approve the new agreements, 
extend the expiring provisions of the Compact, appropriate 
funding for the next term of financial assistance, and update 
other provisions which govern the relationship between the U.S. 
and the FSM and RMI, respectively.

                          Legislative History

    S.J. Res. 16 was introduced by Senator Domenici (for 
himself and Senators Bingaman, Akaka, and Craig), by request, 
on July 14, 2003. The full Committee on Energy and Natural 
Resources held a hearing on S.J. Res 16 on July 15, 2003. At 
the business meeting on September 17, 2003, the Committee on 
Energy and Natural Resources ordered S.J. Res. 16, as amended, 
favorably reported.
    H.J. Res. 63, the companion measure to S.J. Res. 16, was 
introduced by Representative Leach, by request, on July 8, 
2003. The House International Relations Committee reported the 
measure on July 23, 2003. The House Resources Committee held a 
hearing on H.J. Res. 63 on July 10, 2003 and reported the bill 
on September 4, 2003. The House Judiciary Committee reported 
the bill on September 10, 2003.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in open 
business session on September 17, 2003, by a unanimous vote of 
a quorum present, recommends that the Senate pass S.J. Res. 16, 
if amended as described herein.

                          Committee Amendments

    The Committee adopted ten amendments. The first substitutes 
a new preamble for the original one. The new substitute recites 
the purposes of the original Compact and the amended Compacts, 
and states that the U.S. has fulfilled its obligations under 
the United Nations Trusteeship Agreement. The second amendment 
substitutes a new Title I for the original one. The principal 
changes in Title I include:
           Section 103(f), regarding the planting and 
        agricultural maintenance program at Enewetak Atoll, a 
        site of U.S. nuclear weapons testing, is amended to 
        provide funding of $1,300,000 annually for fiscal years 
        2004 through 2023.
           Section 103(g), regarding the resettlement 
        of Rongelap Island, one of the downwind communities 
        affected by the nuclear weapons testing program, is 
        amended to provide $5,300,000 as the final contribution 
        to the Rongelap Resettlement Trust Fund.
           A new section 103(1) is added that provides 
        for the disposition of increased payments by the U.S. 
        for land use at Kwajalein Atoll pending the conclusion 
        of a new land use agreement, and for necessary reports 
        and notifications.
           Section 104(e), regarding the impact of the 
        Compacts on Hawaii, Guam, the CNMI, and American Samoa 
        is amended to increase the level of annual compensation 
        to these areas from $15 million to $30 million, to 
        authorize reimbursement to health care institutions in 
        the affected areas, and to establish a procedure under 
        which the Governors of Guam and the CNMI may request a 
        reduction of debts owed to U.S. Government agencies as 
        a means to further reimbursed impact expenses.
           A new, section 104(i) is added that limits 
        the authority of the United States to change, by 
        regulation, the immigration privileges granted to FSM 
        and RMI citizens under the Compacts.
           A new section 104(l) is added which provides 
        that the inflation adjustment for annual grants under 
        the Compacts would be increased from two-thirds of 
        inflation to full inflation if the inflation rate from 
        2009 to 2014 is higher than the inflation rate from 
        2004 to 2008.
           Section 105(f) is amended to provide for the 
        continuation of FEMA (FEMA) programs; the continuation 
        of the Pell Grant program and the programs of the 
        Individuals with Disabilities Education Act; and to 
        phase-out all other formula-grant programs administered 
        by the Secretary of Education, and the Head Start 
        program, and replace them with supplemental financial 
        assistance.
           New text for section 105(i) provides 
        $300,000 annually for the training of judges. Section 
        108(a) is amended to require that the programs made 
        available section 111 of Public Law 99-239, ``shall'' 
        continue to be made available under this resolution, 
        instead of ``are authorized'' to be available, as 
        proposed in the resolution as introduced.
    The changes made by this second amendment are explained in 
detail in the section-by-section analysis.
    Amendments 3 through 10 make technical amendments in Title 
II.

                      Section-by-Section Analysis

    The preamble notes that the United States, in accordance 
with the Trusteeship Agreement for the Trust Territory of the 
Pacific Islands, fulfilled its obligations to promote the 
development of the people of the Trust Territory and entered 
into the Compact of Free Association with the FSM and RMI to 
create and maintain close and mutually beneficial 
relationships. The preamble further notes that the United 
States has negotiated agreements amending the terms of the 
Compact of Free Association that govern relations between the 
United States and the Federated States of Micronesia and the 
Republic of the Marshall Islands.
    Section 1 gives the short title of the Joint Resolution and 
sets forth the table of contents.

                                TITLE I

    Section 101 approves separate, amended compacts between the 
U.S. and FSM and between the U.S. and RMI.
    Subsection (a) approves the amended Compact between the 
United States and the Federated States of Micronesia (the 
``U.S.-FSM Compact'') and the accompanying subsidiary 
agreements. It further authorizes the President to agree to an 
effective date and to implement such Compact.
    Subsection (b) approves the amended Compact between the 
United States and the Republic of the Marshall Islands (the 
``U.S.-RMI Compact'') and the accompanying subsidiary 
agreements. It further authorizes the President to agree to an 
effective date and to implement such Compact.
    Subsection (c) defines and updates terms of reference to 
reflect the existence of the two separate Compacts and provides 
definitions for the terms ``subsidiary agreement'' and 
``separate agreements.''
    Subsection (d) provides that Congress must approve, by 
legislation, any amendments or changes to the U.S.-FSM Compact, 
the U.S.-RMI Compact, or to the accompanying subsidiary 
agreements or portions thereof.
    Subsection (e) provides that the one trilateral subsidiary 
agreement that is not being amended, relating to the transfer 
of title of U.S. Government property situated in the former 
Trust Territory of the Pacific Islands, shall be deemed 
bilateral. This change reflects the newly separate Compacts 
with the FSM and the RMI, respectively.
    Subsection (f) provides that, with the exception for those 
agreements identified in section 101(d), which require 
congressional action prior to modification, no changes to any 
subsidiary agreement accompanying the respective Compacts may 
be made absent prior notification and explanation to both the 
Senate and the House of Representatives.
    Section 102 authorizes certain actions pursuant to the 
U.S.-FSM Compact.
    Subsection (a) provides for non-reimbursable U.S. law 
enforcement technical and training assistance to the FSM.
    Subsection (b) provides the Comptroller General with 
authority to audit any assistance provided by the United States 
to the FSM under the amended Compacts and to review any audit 
conducted by or on behalf of the U.S. It further requires the 
FSM to provide access to all relevant information and to 
cooperate with the Comptroller General in conducting such 
audits. All relevant audit documentation must be preserved for 
at least five years after the date the grant or assistance was 
provided. Subsection (b) further provides that the Comptroller 
General, and his authorized representatives, in performing 
their official functions, shall be immune from civil and 
criminal liability.
    Section 103 authorizes certain actions pursuant to the 
U.S.-RMI Compact.
    Subsection (a) provides for non-reimbursable U.S. law 
enforcement technical and training assistance to the RMI.
    Subsection (b) repeats the language from the Compact of 
Free Association Act of 1985 (Public Law 99-239) regarding 
assurances that Bikini residents will have access to lands on 
Ejit Island or acceptable alternative lands until Bikini, the 
former site of U.S. nuclear tests, is restored and habitable. 
The Committee notes that the U.S. and the RMI entered into an 
agreement in furtherance of paragraphs (1) through (3) of this 
section on July 21, 1986. For this subsection, and all that 
follow through subsection (j), the Committee concurs in the 
understanding and policy of the administration that nothing in 
these subsections creates any rights or obligations beyond 
those provided for in the original enacted version of Public 
Law 99-239.
    Subsection (c) repeats the language from Public Law 99-239 
regarding U.S. payment of nuclear claims compensation. The 
Committee notes that the United States has made the payment 
called for under paragraph (1) of this section. The Committee 
further notes that the RMI currently has a ``changed 
circumstance'' petition pending with the United States.
    Subsection (d) repeats the language from Public Law 99-239 
regarding compensation to Bikini, Enewetak, Rongelap, and Utrik 
for nuclear test effects.
    Subsection (e) sets forth congressional intent that section 
177 of the original Compact, and the separate agreement entered 
into thereunder, constitute a full and final settlement of all 
nuclear compensation claims as described in articles X and XI 
of that separate agreement. The Committee notes that the U.S. 
has paid the specified compensation amounts, and that such 
payment constitutes a full and final settlement of all claims 
described in articles X and XI of the section 177 Agreement. 
Except as provided in the section 177 Agreement, any such 
claims pursuant to section 177 of the original Compact are 
terminated and barred.
    Subsection (f) repeats and updates the language from Public 
Law 99-239 regarding health care and agricultural programs for 
certain populations affected by U.S. nuclear tests. The 
administration has informed the Committee that, as of April 30, 
2003, there were 118 remaining members of the population of 
Rongelap and Utrik who were exposed to radiation resulting from 
the 1954 United States thermo-nuclear ``Bravo'' test. This 
subsection also provides mandatory funding pursuant to the 
U.S.-RMI Compact of no less than $1.3 million per year, as 
adjusted for inflation in accordance with the amended Compact, 
for the Enewetak planting and agricultural maintenance program. 
The Committee notes that Congress has typically provided this 
amount annually in discretionary funding in the past.
    Subsection (g) repeats the language from Public Law 99-239 
regarding restoring the habitability of Rongelap. It provides 
$5,300,000 in mandatory funding, to be appropriated in fiscal 
year 2005, as the final contribution of the United States to 
the Rongelap Resettlement Trust Fund as established pursuant to 
Public Law 102-154 (105 Stat. 1009). The purpose of this final 
contribution is to establish a food importation program as a 
part of the overall resettlement program of Rongelap Island. 
The Committee notes that these funds are to be sequestered by 
the Fund Managers and the proceeds are to be used for food 
imports.
    Subsection (h) repeats the language from Public Law 99-239 
regarding the Four Atoll Health Care Program and the 
administration of certain health care funds for the people of 
Bikini, Enewetak, Rongelap, and Utrik and their descendants.
    Subsection (i) repeats the language from Public Law 99-239 
regarding the creation and administration of the Enjebi 
Community Trust Fund. The Committee notes that the ex gratia 
payment to the Fund provided for in this subsection has been 
made.
    Subsection (j) repeats the language from Public Law 99-239 
regarding the cleanup of Bikini Atoll. The Committee notes that 
the ex gratia payment provided for in this subsection has been 
made.
    Subsection (k) provides the Comptroller General with 
authority to audit any assistance provided by the United States 
to the RMI under the amended Compacts and to review any audit 
conducted by or on behalf of the U.S. It further requires the 
RMI to provide access to all relevant information and to 
cooperate with the Comptroller General in conducting such 
audits. All relevant audit documentation must be preserved for 
at least five years after the date the grant or assistance was 
provided. Subsection (k) further provides that the Comptroller 
General, and his authorized representatives, in performing 
pursuant to their official functions, shall be immune from 
civil and criminal liability.
    Subsection (l) repeats the language from Public Law 99-239 
regarding the payment of funds by the United States to the 
Government of the Marshall Islands which are then to be paid to 
the landowners of Kwajalein Atoll pursuant to the land use 
agreement dated October 19, 1982. The Committee notes that the 
current land use agreement is set to expire in 2016 and that 
the Kwajalein landowners have not yet signed a revised land use 
agreement. Until such time as a new land use agreement is 
concluded, any amounts paid by the United States in excess of 
the amounts required to be paid pursuant to the October 19, 
1982 land use agreement shall be paid into, and held in, an 
interest bearing escrow account in a U.S. financial institution 
by the Government of the Marshall Islands. The Government of 
the Marshall Islands is to notify the U.S. when a new land use 
agreement is concluded. If a revised land use agreement is not 
concluded between the Government of the Marshall Islands and 
the Kwajalein landowners within five years from the date of 
enactment of this Joint Resolution, then, unless mutually 
agreed, such funds shall be returned to the U.S. Treasury, and 
the President shall report to Congress on the administration's 
intentions regarding the use of the Kwajalein Atoll after 2016, 
on plans to relocate any activities from Kwajalein, and on the 
future use of the funds and interest held in escrow. Finally, 
this subsection authorizes the President to make loans and 
grants to the RMI to address the special needs of the community 
at Ebeye, Kwajalein Atoll, and other communities within 
Kwajalein Atoll. Projects such as the causeway project, that 
would reduce over-crowding on Ebeye, should be given full 
consideration for such loans and grants.
    Section 104 states U.S. policies regarding the amended 
Compacts.
    Subsection (a) notes and affirms the commitment of the 
U.S., the FSM, and the RMI, to democratic government, respect 
for human rights and fundamental freedoms for all. The 
subsection further requires the Secretary of State to report on 
the status of human rights in the FSM and RMI as a part of the 
annual report to Congress under the Foreign Assistance Act of 
1961.
    Subsection (b)(1) limits the admission of certain 
naturalized citizens of the FSM and the RMI into the United 
States under the Compact.
    Subsection (b)(2) states the sense of Congress that up to 
$250,000 of the Compact grant funds be used for the development 
of machine-readable and secure FSM and RMI passports.
    Subsection (b)(3) states the sense of Congress that the FSM 
and the RMI shall develop, prior to October 1, 2004, the 
capability to share information the United States Government 
deems necessary to enforce the criminal and security-related 
provisions of the Immigration and Nationality Act, as amended.
    Subsection (b)(4) clarifies the appropriate implementation 
of sections 141(a)(3) and (4) of the amended Compacts regarding 
the grandfathering of certain naturalized citizens into the 
special immigration status granted to FSM and RMI citizens.
    Subsection (c) generally repeats the language from Public 
Law 99-239 regarding the FSM and RMI restrictions on the 
permanent sale of land to non-citizens of those countries.
    Subsection (d) generally repeats the language from Public 
Law 99-239 regarding the FSM and RMI prohibitions on certain 
forms of nuclear and toxic waste disposal in those countries.
    Subsection (e) deals with adverse impacts of migration of 
qualified nonimmigrants from the RMI, FSM, and Palau on the 
``affected jurisdictions'' of the State of Hawaii, Guam, the 
CNMI, and America Samoa. Paragraph (1) incorporates the 
statement of congressional intent regarding the impact of the 
Compact as set forth in section 104(e)(1) of Public Law 99-239. 
Paragraph (2) increases the level of annual compensation to 
these areas from $15 million to $30 million, and it provides 
definitions and procedures for the enumeration of migrants from 
the FSM and RMI to the affected areas and the allocation of the 
compensation among the affected areas. Paragraph (6) authorizes 
reimbursement to health care institutions in the affected areas 
and it incorporates modified language from Public Law 99-239 
regarding the use of DOD medical facilities by patients 
referred from the FSM, RMI and the affected areas on a space 
available and reimbursable basis. Paragraph (8) provides for 
annual reports from the Governor of an affected jurisdiction on 
any adverse consequences resulting from the Compacts' 
implementation.
    Paragraph (9) authorizes the Governor of Guam or the 
Governor of the Commonwealth of the Northern Mariana Islands to 
seek a waiver, in whole or in part, from the President of the 
United States of any amounts owed by Guam, the Northern Mariana 
Islands (or either government's autonomous agencies or 
instrumentalities) to the United States as a result of 
unreimbursed impact expenses. The Committee is aware that any 
funding made available pursuant to this paragraph could aid in 
efforts to privatize the Guam Telephone Authority, the last 
government-owned telephone authority in the nation. The 
Committee also recognizes that Guam has requested assistance in 
regard to the Super Typhoon Chat'an in June 2002; the Super 
Typhoon Pongsona in December 2002; and Typhoon Paka in December 
1997.
    Subsection (f) repeats the language from Public Law 99-239, 
reaffirming that the U.S. is not responsible for foreign debt 
contracted by the FSM or the RMI.
    Subsection (g) states the sense of the Congress that at 
least 30 percent of the U.S. grant assistance provided pursuant 
to section 211 of the amended Compacts shall be provided for 
infrastructure improvement and maintenance.
    Subsection (h)(1) directs the President to report annually 
to Congress and sets forth several topics to be included in the 
report including the general social, political, and economic 
conditions in the FSM and RMI, the use of U.S. assistance, and 
recommendations on ways to increase the effectiveness of U.S. 
assistance.
    Subsection (h)(2) directs the Governments of the United 
States, the FSM and the RMI to formally review the overall 
political, economic and security aspects of their relationship 
and the topics covered in the President's annual report to 
Congress. The governments may agree to commit themselves to 
take specific actions in response to their findings. These 
formal reviews are to be conducted during the fifth, tenth, and 
fifteenth anniversaries of the date of enactment of legislation 
approving the amended Compacts. The President shall include the 
findings, and any recommendations for action, in the next 
annual report to Congress.
    Subsection (h)(3) directs the U.S. Comptroller General to 
report to Congress on the issues set forth in sections 
104(h)(1)(A)-(E), and on the effectiveness of the U.S. 
administrative oversight. The reports are to be transmitted on 
the third anniversary of the date of enactment of legislation 
approving the amended Compacts and every five years thereafter.
    Subsection (i) provides for 90-day consideration by the 
relevant, congressional committees of any regulation proposed 
by the administration that would have a significant effect on 
the admission, stay, or employment privileges provided under 
section 141 prior to such regulation going into effect.
    Subsection (j) makes a conforming amendment to the Annual 
Grants table set forth in section 211 of the U.S.-FSM Compact.
    Subsection (k) makes a conforming amendment to the Annual 
Grants table set forth in section 211 of the U.S.-RMI Compact.
    Subsection (l) provides for an increase from two-thirds 
inflation adjustment to full inflation adjustment, beginning in 
fiscal year 2015, if the U.S. Gross Domestic Product Implicit 
Price Deflator average for fiscal years 2009 through 2014 is 
greater than the average for fiscal years 2004 through 2008.
    Subsection (m) directs the Governments of the United 
States, the FSM, and the RMI to cooperate in the development of 
telecommunication infrastructure and assigns the U.S. 
Department of the Army to serve as the Executive Agent for the 
Defense Department in such efforts.
    Subsection (n) authorizes the Department of Defense to 
extend the Armed Services Vocational Aptitude Battery (ASVAB) 
Student Testing Program (STP) and the ASVAB Career Exploration 
Program to certain secondary schools in the FSM and RMI. The 
Committee notes that these programs assist the U.S. Armed 
Services' recruiting efforts in the FSM and RMI.
    Section 105 sets forth supplemental provisions to the 
Compacts.
    Subsection (a) generally repeats the language from Public 
Law 99-239 that all U.S. Federal programs and services extended 
to the FSM and RMI are to remain subject to the same criteria, 
standards, audits, and rules as in the United States.
    Subsection (b)(1) specifies that appropriations made 
pursuant to article I of title two, including the major 
financial sector grants, and section 221(a)(2) of the amended 
Compacts, are to be made to the Secretary of the Interior.
    Subsection (b)(2) specifies that certain appropriations 
made for services and programs provided to the FSM and RMI by 
the U.S. Weather Service; Federal Aviation Administration; 
Department of Transportation; and the Department of Homeland 
Security, FEMA shall be made directly to those agencies.
    Subsection (b)(3) specifies that appropriations made for 
certain other Federal services and programs, including the 
Legal Services Corporation, Public Health Service, and Rural 
Housing Service, shall be made to the relevant agencies in 
accordance with the terms of any appropriations for such 
services and programs.
    Subsection (b)(4) requires all Federal agencies providing 
program and service assistance to the FSM or the RMI to 
coordinate with the Secretaries of State and the Interior 
regarding the provision of any such assistance. It further 
requires the Secretaries of the Interior and State to consult 
with officials of the Asian Development Bank regarding overall 
economic conditions in the FSM and the RMI, and the activities 
of other donors of assistance to the FSM and RMI.
    Subsection (b)(5) specifies that U.S. Government employees 
in either the FSM or the RMI are subject to the authority of 
the United States Chief of Mission.
    Subsection (b)(6) authorizes the appointment of an 
Interagency Group on Freely Associated States' Affairs to 
provide policy guidance to the U.S. Government. Further 
provides a sense of Congress that the Secretaries of State and 
Interior shall be represented on the Interagency Group.
    Subsection (b)(7) specifies that the three U.S. appointees 
to the Joint Economic Management Committees provided for in 
each of the amended Compacts and Fiscal Procedures Agreements 
shall be U.S. Government officers or employees. Provides a 
sense of Congress that the Secretaries of State and Interior 
shall be represented on the Joint Economic Management 
Committees and that officials of the Asian Development Bank 
should be consulted in order to properly coordinate assistance. 
The paragraph further notes that the implementation of economic 
policy reforms to encourage investment and to achieve self-
sufficient tax rates shall be considered by the Joint Economic 
Management Committees.
    Subsection (b)(8) states the sense of Congress that the 
Secretaries of State and Interior are to ensure the appropriate 
number and location of personnel to provide effective oversight 
and coordination with regard to economic assistance. The 
Committee notes that the, administration has informed the 
Committee that the Department of the Interior intends to have 
nine personnel on their Compact implementation team including 
one in Washington, D.C., six in Hawaii, and one each in the RMI 
and FSM. It is necessary, and the Committee expects, that the 
State Department will have at least three personnel assigned to 
Compact implementation and oversight, one each in Washington, 
D.C., the FSM and the RMI.
    Subsection (b)(9) specifies that the U.S. voting members of 
the Trust Fund Committees appointed by the U.S. Government 
shall be U.S. Government officers or employees. It further 
provides a sense of Congress that the Secretaries of State, the 
Interior, and Treasury shall be represented on the Trust Fund 
Committees.
    Subsection (b)(10) specifies that the Trust Fund Committees 
provided for in the amended Compacts and accompanying Trust 
Fund Agreements shall be established as non-profit corporations 
incorporated under the laws of the District of Columbia.
    Subsection (c) repeats the language from Public Law 99-239 
regarding any continuing authorizations from the Trust 
Territory period.
    Subsection (d) provides for the survivability of certain 
provisions of the joint resolution passed by Congress 
implementing the amended Compacts, such as those regarding 
audits, notwithstanding the termination of the amended 
Compacts.
    Subsection (e) states that actions by the FSM or RMI that 
are incompatible with U.S. authorities and responsibilities in 
security and defense matters toward the FSM and RMI will 
constitute a material breach of the respective Compact.
    Subsection (f) makes available to the FSM and the RMI, 
pursuant to section 222 of the amended Compacts, certain 
programs and services, including--
          Paragraph (1)(A) The programs and services of the 
        Department of Homeland Security, FEMA, and provides 
        $400,000 in mandatory annual funding to FEMA to 
        facilitate the Agency's activities in the islands.
          Paragraph (1)(B), clause (i) continues for eligible 
        individuals, the services available pursuant to the 
        Individuals with Disabilities Education Act; and 
        grants, for eligible students and institutions, 
        pursuant to subpart 1 of part A of title IV of the 
        Higher Education Act of 1965, commonly known as the 
        ``Pell Grants'' program. Clause (ii) eliminates 
        eligibility for the FSM and the RMI for the remaining 
        Education Department formula-grant programs, as well as 
        grants made pursuant to the Head Start Act. As a 
        replacement for these formula-grant programs, the FSM 
        and RMI Governments shall each receive a supplemental 
        amount to their annual education sectoral grant as 
        provided pursuant to section 211 of the amended 
        Compacts. Clause (iii) provides for a two year (FY2004 
        and FY2005) transition period from the termination of 
        the formula grant programs to local programs designed 
        to meet local needs. Clause (iv) provides that the U.S. 
        may provide technical assistance to the RMI and FSM in 
        implementing education programs, the terms of which, 
        including reimbursement, shall be incorporated in the 
        Federal Programs and Services Agreement. Clause (v) 
        continues the eligibility of the RMI and FSM for 
        competitive federal education grants.
          Subparagraphs (C), (D), and (E) state that the 
        programs and services of the Legal Services 
        Corporation, the Public Health Service, and Rural 
        Housing Service shall be made available to the FSM and 
        the RMI, pursuant to section 222 of the amended 
        Compacts.
    Subsection (f)(2) applies the tort claims provisions of the 
amended Compacts to U.S. Government employees and contractors.
    Subsection (f)(3) continues eligibility for the FSM and the 
RMI for EPA programs for PCB cleanup and directs the 
Secretaries of the Interior and Defense to cooperate and assist 
in any cleanup activities.
    The Committee notes that the relevant terms and conditions 
of the Federal Programs and Services Agreements must be updated 
in accordance with subsection (f) and that the new agreements 
must be submitted to Congress for approval.
    Subsection (g) provides that the College of Micronesia 
shall retain its status as a land-grant institution until 
otherwise provided by Congress or until termination of the 
amended Compact.
    Subsection (h) absolves the Governments of the FSM and the 
RMI from payment of certain debts of the former Trust Territory 
Government to U.S. Federal agencies.
    Subsection (i) directs the Secretary of the Interior to 
provide $300,000 annually to train members of the judiciary in 
the FSM and the RMI. Such training shall be done in cooperation 
with the Pacific Islands Committee of the Ninth Circuit 
Judicial Council. The Committee notes that the Federal Programs 
and Services Agreements must be negotiated and updated in 
accordance with this subsection and that the new agreements 
must be transmitted to Congress.
    Subsection (j) continues the authorization for certain U.S. 
Federal agencies to provide technical assistance at the request 
of the FSM and RMI. The Committee notes that such technical 
assistance shall be provided on a nonreimbursable basis.
    Subsection (k) continues the authorization for payments to 
persons, with pre-1968 service for the U.S. Navy or Trust 
Territory Government, who were eligible to receive payment 
under the Prior Service Benefits Program established during the 
Trust Territory period.
    Subsection (l) repeats the language from Public Law 99-239 
regarding the authorization of sums necessary to complete 
repayment by the United States of debts owed for use of various 
lands in the FSM and the RMI prior to January 1, 1985.
    Subsection (m) continues the authorization for grants for 
the purposes of dealing with communicable diseases in the FSM 
and RMI and expands the authorization to the governments of the 
affected jurisdictions of Hawaii, Guam, the CNMI and American 
Samoa. Subsection (m) also directs the Secretary of the 
Interior to assist the Governments of the FSM and the RMI to 
design and implement programs aimed at dealing with 
communicable diseases.
    Subsection (n) continues the requirement for the payment of 
standard user fees for services provided by the United States 
to persons in the FSM and the RMI.
    Subsection (o) provides that no judgment of an FSM, RMI, or 
Palau court against the United States or its instrumentalities 
shall be honored by the U.S., unless the judgment is consistent 
with the U.S. interpretation of international agreements 
relevant to the judgment. In making such a determination, due 
regard as to the proper interpretation of any such 
international agreement shall be given to assurances made by 
the Executive Branch to the Congress.
    Subsection (p) provides a method for establishing the new 
trust funds pursuant to the amended Compacts. It further 
provides that the U.S. Government may assist the governments of 
the FSM and the RMI in establishing and operating a trust fund 
or similar legal entity.
    Section 106 authorizes assistance to U.S. firms who may be 
awarded construction contracts within the FSM or RMI to help 
them employ and train citizens of the FSM and RMI to the 
maximum extent possible. Such assistance to eligible U.S. firms 
shall be limited to 20 percent of the contract amount.
    Section 107 states that the portions of the U.S. Code 
dealing with criminal bribery and conflict of interest apply to 
U.S. employees closely involved in the Compact negotiations.
    Section 108(a) directs that the following Federal programs 
and services be made available to the FSM and the RMI: the 
Small Business Administration; Economic Development 
Administration; Rural Utilities Services; Department of Labor's 
Workforce Investment Act; and the Department of Commerce's 
tourism and marine resource programs.
    Subsection (b) authorizes the payment, upon an adequate 
showing, of certain sums to the FSM and the RMI as compensation 
for any effects, during the term of the original Compact, of 
certain Congressional clarifications regarding trade and 
taxation enacted by the Congress in Public Law 99-239. The 
countries must submit any such funding request by September 30, 
2009.
    Section 109 authorizes and appropriates the sums required 
for grant, trust fund, and Kwajalein payments pursuant to the 
amended Compacts.
    Section 110 exempts citizens of the FSM, RMI, Palau, and 
the Philippines from the general rule of section 605 of Public 
Law 107-67 that U.S. Government employees posted within the 
continental U.S. should be U.S., citizens or someone who either 
owes allegiance to the U.S. or falls within other defined 
groups.

                               TITLE TWO

    Section 201(a) sets forth the text of the Compact of Free 
Association, as amended, between the Government of the United 
States of America and the Government of the Federated States of 
Micronesia.
          The Preamble affirms that: the relationship between 
        the U.S. and FSM is founded upon respect for human 
        rights; the people of the FSM have a right to enjoy 
        self-government; the common interests of the U.S. and 
        the FSM are in creating and maintaining their close and 
        mutually beneficial relationship; and the interest of 
        the U.S. in promoting the economic advancement and 
        budgetary self-reliance of the FSM. The Preamble also 
        recognizes that: the U.S.-FSM Compact relationship 
        entered into force in 1986; it was based on the United 
        Nations Charter; the people of the FSM have 
        progressively developed their institutions of self-
        government and have exercised that right of self-
        government to adopt a Constitution and to establish a 
        government-to-government relationship based on the 
        freely expressed wishes of the people. The Preamble 
        further recognizes that: the people of the FSM retain 
        their sovereignty and their right to self-determination 
        and the right to amend their Constitution; approval of 
        the Compact constituted an exercise of their right to 
        self-determination and the common desire of the U.S. 
        and FSM to maintain their close government-to-
        government relationship. Finally, under the Preamble, 
        the U.S. and the FSM agree to continue and strengthen 
        their relationship of free association and that the 
        respective rights and responsibilities of the U.S. and 
        FSM derive from and are set forth in this Compact, as 
        amended.

                   TITLE ONE--GOVERNMENTAL RELATIONS

Article I--Self Government

    Section 111 states that the people of the FSM are self-
governing.

Article II--Foreign Affairs

    Section 121 affirms the capacity of the Government of the 
FSM to conduct foreign affairs in its own name and right, 
except as otherwise provided in this Compact.
    Section 122 states that the U.S. will support FSM 
membership in international organizations.
    Section 123 states that the U.S. and FSM will consult with 
each other regarding foreign affairs.
    Section 124 states that the U.S. may assist the FSM with 
foreign affairs when requested and mutually agreed, but the 
U.S. shall not be responsible to third parties for the actions 
of the FSM undertaken with assistance from the U.S.
    Section 125 states that the U.S. will not be responsible 
for actions taken by the FSM in the area of foreign affairs, 
except as expressly agreed to.
    Section 126 makes available U.S. consular services to FSM 
citizens traveling outside the FSM.
    Section 127 recognizes that, except as agreed in the 
amended Compact and its related agreements, the rights and 
obligations of the U.S. as Administering Authority of the Trust 
Territory of the Pacific Islands ended on November 2, 1986.

Article III--Communications

    Section 131 states that the FSM has full authority and 
responsibility to regulate its communications and notes that 
the FSM elected in 1993 to assume telecommunications functions 
previously performed by the U.S.
    Section 132 grants the U.S. rights to operate 
telecommunications services within the FSM to the extent 
necessary to fulfill its obligations under this amended 
Compact.

Article IV--Immigration

    Section 141 governs the admission of FSM citizens into the 
U.S.
    Subsection (a) provides that otherwise admissible FSM 
citizens will be eligible for: visa-free admission to the U.S. 
(including its territories and possessions); to establish 
residence as nonimmigrants; and to lawfully engage in 
occupations without a labor certification. However, the 
Compact, as amended, now requires that such FSM citizens 
possess a valid passport. Paragraphs (3) and (4) restrict the 
class of naturalized FSM citizens eligible for this special 
status in order to address concerns about potential abuse of 
this special Compact status by non-FSM natives. Paragraph (5) 
extends this status to bona fide immediate relatives of FSM 
citizens serving on active duty with the U.S. Armed Forces.
    Subsection (b) provides that FSM children traveling to the 
U.S. for the purpose of being adopted are not eligible for 
visa-free admission under the Compact. This new language is 
intended to prevent attempted use of Compact privileges to 
circumvent U.S. immigration requirements that help ensure the 
legitimacy of international adoptions, protect the children 
involved, and provide the adoptees with lawful permanent 
immigration status.
    Subsection (c) declares that no person who has purchased 
FSM citizenship or an FSM passport shall be eligible for 
admission to the U.S. under the amended Compact. This is 
intended to remove incentives for passport sales or other abuse 
of these migration privileges.
    Subsection (d) confirms the existing privilege to work in 
the U.S. and expands the types of documents that FSM citizens 
can use to demonstrate identity and employment authorization 
under U.S. immigration law. This subsection further provides 
that the U.S. and the FSM will take steps to publicize this 
provision.
    Subsection (e) defines certain immigration terms used in 
the Compact.
    Subsection (f) provides that, except as specified in 
section 141(a), that the U.S. Immigration and Nationality Act 
(INA) applies fully to any person admitted to the U.S., or is 
seeking admission to the U.S., under the Compact; and that, 
except as provided by section 104(i), the U.S. has full 
authority under the INA to regulate the terms and conditions of 
persons seeking admission under the Compact.
    Subsection (g) provides that the governments of U.S. 
territories or possessions not subject to the INA, such as 
American Samoa and the CNMI, have the same authorities as the 
U.S. enjoys under the INA to exercise immigration authority 
under the amended Compact and to the extent authorized by the 
laws of the U.S.
    Subsection (h) notes that this section does not confer on a 
FSM citizen the right to establish residence necessary for U.S. 
naturalization under the INA, or give FSM admittees to the U.S. 
the right to petition for benefits for alien relatives under 
the INA. However, this subsection also notes that subsection 
(a) does not prevent a FSM citizen from otherwise acquiring 
such rights or lawful permanent resident alien status in the 
U.S.
    Section 142 governs the rights of U.S. citizens in the FSM.
    Subsection (a) recognizes the right of U.S. citizens to 
enter and work in the FSM, subject to the FSM's reasonable 
authority to deport and deny entry, and the right of U.S. 
citizen spouses of FSM citizens to reside in the FSM, even 
after the death of the FSM citizen spouse.
    Subsection (b) requires that the FSM accord U.S. citizens 
and nationals immigration status no less favorable than that 
accorded to citizens of other countries.
    Subsection (c) provides that the FSM will adopt immigration 
procedures towards U.S. citizens and nationals seeking 
employment or investment in the FSM that are no less favorable 
than those adopted by the U.S. toward FSM citizens.
    Section 143 states that FSM citizens and U.S. citizens or 
nationals who lose their citizenship or nationality shall be 
ineligible to receive immigration privileges under the Compact.

Article V--Representation

    Section 151 provides that relations between the U.S. and 
the FSM shall be conducted in accordance with the Vienna 
Convention on Diplomatic Relations, and that the governments 
may establish offices and representatives as mutually agreed.
    Section 152 provides that U.S. citizens and nationals who 
act as agents of FSM without authority of the U.S. are subject 
to the Foreign Agents Registration Act, except for U.S. 
citizen/national employees of the FSM whom the FSM certifies 
are not principally engaged in activities specified in that 
Act.

Article VI--Environmental Protection

    Section 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.
    Section 161(b) commits the FSM to continuing to develop, 
implement, and enforce environmental standards similar to those 
required of the U.S. in the previous subsection.
    Section 161(c) states that the parties may modify the 
environmental obligations of the previous two subsections by 
mutual agreement.
    Section 161(d) states that the obligations of section 
161(a) will continue to require Environmental Impact Statements 
until the parties mutually agree otherwise.
    Section 161(e) states that the President of the U.S. may 
exempt any United States Government (USG) activities from the 
environmental standards of section 161(a)(3)-(4) if it is in 
the ``paramount interest'' of the USG to do so, after 
considering the views of the FSM and reporting the reasons for 
the exemption, to the extent practicable.
    Section 161(f) states that the laws of the U.S. referred to 
in section 161(a)(3) apply to U.S. activities under the Compact 
only to the extent provided in section 161.
    Section 162 states that the FSM may bring an action for 
judicial review of USG environmental activities pursuant to 
section 161(a) only in the U.S. District Court for Hawaii or 
the U.S. District Court for the District of Columbia, and 
subject to certain conditions.
    Section 163 states that the U.S. and the FSM shall have 
access to each other's facilities to the extent necessary to 
gather information to carry out article VI, so long as it does 
not unreasonably interfere with the other's exercise of its 
authorities and responsibilities.

Article VII--General Legal Provisions

    Section 171 recognizes that, except as provided in the 
amended Compact or related agreements, the application of the 
laws of the U.S. to the Trust Territory of the Pacific Islands 
ceased on November 3, 1986.
    Section 172 declares that FSM citizens who are not U.S. 
residents shall have the same rights and remedies under U.S. 
law enjoyed by any non-resident alien. Subsection (b) affirms 
that the government and citizens of the FSM are ``persons'' for 
purposes of making Freedom of Information Act (FOIA) requests 
and seeking judicial review of FOIA determinations, but states 
that only the FSM government, and not its citizens, have 
standing to seek judicial review relating to U.S. Government 
environmental activities governed by sections 161 and 162.
    Section 173 states that the U.S. and the FSM agree to adopt 
and enforce measures necessary to protect U.S. assets 
maintained in the FSM pursuant to the Compact and related 
agreements.
    Section 174 states that, except as otherwise provided in 
the Compact and related agreements: (a) the FSM and U.S. 
Governments, agencies, and officials shall be immune from the 
jurisdiction of the other's courts; (b) the U.S. shall pay 
unpaid judgments and claim settlements of the Trust Territory 
of the Pacific Islands; (c) claims against the Trust Territory 
or U.S. Government arising before the 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.
    Section 175(a) declares that a separate, simultaneously 
effective agreement between the parties shall govern mutual law 
enforcement assistance and cooperation, including pursuit and 
extradition of fugitives and prisoner transfers.
    Section 175(b) declares that a separate, simultaneously 
effective agreement between the parties shall govern labor 
recruitment practices for employment in the U.S. and 
enforcement for violations. This new section has been added to 
protect FSM citizens from abusive labor recruitment practices 
that have been recently alleged.
    Section 176 confirms that final judgments in civil cases by 
courts of the Trust Territory of the Pacific Islands shall 
continue in full force and effect, subject to the power of FSM 
courts to grant relief in appropriate cases.
    Section 177 quotes the language of section 177 of the 
original Compact which constituted a full and final settlement 
of all claims related to the U.S. nuclear testing program in 
the region, and notes that the amended Compacts make no changes 
to, and have no effect upon, that settlement.
    Section 178 authorizes U.S. Federal agencies that provide 
services in the FSM to settle and pay tort claims arising in 
the FSM. Claims that cannot be settled administratively shall 
be disposed of exclusively according to the arbitration 
procedure outlined in article II of title IV of the Compact. 
The U.S. and FSM shall provide for, in a separate agreement 
under section 231, the administrative settlement of claims. 
Except as explicitly provided in U.S. law, neither the U.S. nor 
any federal agency may be named as a party in any action 
arising out of U.S. grant assistance activities.
    Section 179 states that the courts of the FSM shall not 
exercise criminal jurisdiction over the U.S. Government, 
agencies, or employees acting on behalf of the U.S. in 
providing assistance to the FSM.

                     TITLE TWO--ECONOMIC RELATIONS

Article I--Grant Assistance

    Section 211(a) states that the U.S. shall provide 20 years 
of annual sectoral grant assistance to the FSM in the priority 
sectors of education and health care, as well as in private 
sector development, the environment, public sector capacity 
building, public infrastructure, and other sectors as mutually 
agreed. The sector grants will be made available in accordance 
with mutually agreed sector development plans, and will be 
subject to monitoring according to the Fiscal Procedures 
Agreement between the parties. Section 211(a) of the Compact 
must be read in light of section 104(g) of S.J. Res. 16, which 
states the sense of Congress that not less than 30 percent of 
the annual U.S. grant assistance provided under section 211, 
and not less than 30 percent of the total amount of section 211 
funds allocated to each of the four states of the FSM, shall be 
invested in infrastructure improvements and maintenance in 
accordance with section 211(a)(6).
    Subsection (b) makes available a ``Humanitarian 
Assistance--FSM'' (HAFSM) program at the request of the FSM, 
designed to extend targeted health, education, and 
infrastructure assistance. HAFSM costs will be deducted from 
the annual grant provided under section 211(a), and the terms 
of the program will be governed by the separate Agreement 
Regarding the Military Use and Operating Rights of the U.S.
    Subsection (c) requires the FSM to prepare, maintain, and 
update a strategic development plan on a multi-year rolling 
basis that specifically addresses the sectors identified in 
Section 211 (a) and requires the concurrence of the U.S. 
insofar as U.S. grant funds are involved.
    Subsection (d) requires funds to be made available for 
disaster assistance in accordance with section 
105(f)(1)(A)(ii), the language of this subsection is 
effectively deleted and is now construed to provide that 
$200,000 per year shall be made available to FEMA by the 
Secretary of the Interior to facilitate its activities in the 
FSM. This change is made because continuation of FEMA, as in 
prior years, is essential to achieving the Compact's overall 
economic development objectives. However, because of the FSM's 
relative lack of institutional development and capacity in 
disaster preparedness and response, it is recognized that 
operating there presents special challenges for FEMA. In order 
to respond to these challenges, $200,000 per year shall be 
provided to FEMA to supplement their capacity to operate in the 
FSM. These funds may be used for providing technical assistance 
in disaster planning, preparedness, and response; for retaining 
and training personnel in the region or stateside; and for 
other purposes. Further conditions regarding these funds are to 
be negotiated between FEMA and the FSM for inclusion in the 
Federal Program and Services Agreement referred to in Section 
231.
    Section 212 states that, as reflected in the Fiscal 
Procedures Agreement, sector grants and U.S. programs and 
services shall be subject to regulations and policies normally 
applicable to U.S. assistance to State and local governments. 
The U.S. may condition such assistance on performance 
indicators, and may seek remedies for noncompliance, including 
withholding assistance. Section 212(b) states that the U.S., as 
part of its grant assistance, grant the FSM either one half of 
the cost of the annual audit, or $500,000, whichever is less.
    Section 213 requires the U.S. and FSM to establish a Joint 
Economic Management Committee (JEMCO), composed of a U.S. 
chairman, two U.S. members, and two FSM members, which shall 
review audits and reports, evaluate progress toward the 
objectives of the Development Plan under section 211(c), and 
identify problems encountered and recommend ways to increase 
the effectiveness of U.S. assistance under this Title. The 
duties and operation of the JEMCO are set forth further as 
described in the Fiscal Procedures Agreement.
    The composition and scope of the JEMCO is further specified 
by section 105(b)(7) of S.J. Res. 16 which states the sense of 
Congress that two of the three U.S. members should be 
designated from the Department of State and the Department of 
the Interior, and that U.S. officials of the Asian Development 
Bank (ADB) shall be consulted in order to properly coordinate 
U.S. and ADB financial, program, and technical assistance. 
Section 105(b)(7) further provides that the scope of the 
JEMCO's evaluation of development shall be expanded to include 
an evaluation of the implementation of economic policy reforms 
that are needed to encourage investment, and an evaluation of 
local progress toward self-sufficient tax rates. This scope is 
added to ensure that the JEMCO does not focus entirely on U.S. 
assistance and its effectiveness, but also on promoting local 
economic policies which are also necessary conditions for 
economic growth. Examples of other policy reforms which the 
JEMCO should examine include land reform and reform of business 
regulations.
    Section 214 requires the FSM to report annually to the U.S. 
on its use of U.S. grant assistance and progress toward 
economic goals. The report shall also include an evaluation of 
progress on economic policy reforms necessary for economic 
development including progress toward self-sufficient tax 
rates. The JEMCO shall review and comment on these reports and 
make appropriate recommendations that are expected to be 
reflected in the President's annual report to Congress pursuant 
to, section 104(h).
    Section 215 states that the U.S. shall provide annual 
contributions to a trust fund for 20 years in amounts set forth 
in section 216. The proceeds of the fund are to be used at the 
end of those 20 years for the purposes described in section 
211, or as mutually agreed. The U.S. contribution is 
conditioned on the FSM contributing at least $30 million to the 
fund prior to September 30, 2004. The terms regarding 
investment and management of the fund, use of the income, and 
other requirements of the fund are set forth in a separate 
Trust Fund Agreement.
    Section 216 sets forth the amounts of U.S. sector grants 
and trust fund contributions for each of the 20 years of 
assistance. The combined amount for each year is $92.7 million.
    Section 217 states that the grant and trust fund 
contributions for each fiscal year shall be adjusted by two-
thirds the amount of the U.S. GDP Implicit Price Deflator or 
five percent, whichever is less. However, this section is 
effectively deleted and replaced by section 104(l) which 
provides for a possible increase in the inflation adjustment 
from two-thirds to full inflation after the tenth year of the 
Compact based on certain conditions.
    Section 218 states that unobligated balances from any year 
shall remain available to the FSM in future years.

Article II--Services and Program Assistance

    Section 221(a) states that the U.S. shall make available to 
the FSM, in accordance with and to the extent provided in the 
Federal Programs and Services Agreement, the services and 
related programs of: (1) U.S. Weather Service; (2) U.S. Postal 
Service; (3) Federal Aviation Administration; (4) U.S. 
Department of Transportation; (5) Federal Deposit Insurance 
Corporation; and (6) FEMA and U.S. Agency for International 
Development/Office of Foreign Disaster Assistance (USAID/OFDA). 
However, section 105(f)(1)(A) of S.J. Res. 16 modifies this 
section by effectively deleting OFDA and by requiring the 
continuation of FEMA to the same extent as its services and 
programs were available to the FSM in 2003. Section 
105(f)(1)(A) also modifies section 211(d) of the Compact to 
provide $200,000 annually to FEMA to facilitate operations in 
the FSM.
    Section 221(b) states that, with the exception of those 
services and programs covered by section 221(a) and unless 
Congress provides otherwise, the U.S. shall make available to 
the FSM the services and programs that were available to the 
FSM on the effective date of the amended Compact to the extent 
that such services are available to U.S. State and local 
governments. The subsection notes that the Fiscal Procedures 
Agreement provides that funds provided under section 211 will 
be considered local revenues of the FSM when used as the local 
matching share for obtaining Federal programs and services. 
Finally, the subsection states that, unless other wise 
provided, these programs and services shall be extended in 
accordance with the terms of the Federal Programs and Services 
Agreement. However, section 105(f)(1)(B) of S.J. Res. 16 
modifies section 221(b) of the Compact by extending the 
services of the Individuals with Disabilities Education Act and 
grants under subpart 1 of Part A of title IV of the Higher 
Education Act of 1965. Section 105(f)(1)(B) also provides for a 
supplemental education grant, a transition period for the 
phase-out of other formula grant programs administered by the 
Secretary of Education, as well as the Head Start program, an 
authorization for continued technical assistance, and continued 
eligibility for competitive grants administered by the 
Secretary of Education.
    Section 221(c) states that the U.S. has the authority to 
monitor and administer all service and program assistance to 
the FSM and that the Federal Programs and Services Agreement 
shall also set forth the extent to which services and programs 
shall be provided to the FSM. Because of the changes 
effectively made to this section, the Federal Programs and 
Services Agreement will need to be renegotiated accordingly, 
and resubmitted to Congress for approval.
    Section 221(d) states that, except as otherwise provided, 
federal programs and services extended to the FSM shall be 
subject to the same standards and rules applicable to such 
programs in the U.S.
    Section 221(e) states that the U.S. shall make available to 
the FSM, to the extent provided in U.S. law, alternate energy 
development projects and conservation measures.
    Section 222 states that the U.S. and the FSM may agree from 
time to time to extend additional U.S. grant assistance to the 
FSM, which shall be governed by the Federal Programs and 
Services Agreement.
    Section 223 requires the FSM to make available to the U.S., 
at no cost, such land as may be necessary for the operations of 
the services and programs provided pursuant to article II, and 
whatever facilities are currently provided at no cost to the 
U.S., or may be mutually agreed to in the future.
    Section 224 states that the FSM may from time to time 
request technical assistance from U.S. Federal agencies that, 
if provided, would give priority consideration to the FSM over 
other non-U.S. recipients.

Article III--Administrative Provisions

    Section 231 notes that the extent of U.S. program 
assistance, the status of U.S. agencies and employees, and 
other program and service-related arrangements are set forth in 
a separate Federal Programs and Services Agreement.
    Section 232 states that the U.S. shall determine and 
implement procedures for audits of all grant and program 
assistance in accordance with the Fiscal Procedures Agreement 
described in section 211(a), and authorizes the U.S. 
Comptroller General to conduct audits in the FSM.
    Section 233 pledges the U.S. to provide the grant 
assistance specified in section 211 for the 20 year term 
specified, subject to the terms and conditions of, title II and 
related subsidiary agreements.
    Section 234 pledges the FSM to cooperate in U.S. 
investigations of misuse of Compact funds and that it will not 
unreasonably withhold U.S.-requested subpoena assistance in the 
FSM. The FSM acknowledges that its receipt of Compact funding 
is conditioned on its fulfillment of these obligations and the 
U.S. agrees to pay any reasonable costs of the FSM in carrying 
out this section.

Article IV--Trade

    Section 241 states that the FSM is not within the customs 
territory of the U.S.
    Section 242 directs the President to proclaim tariff 
treatment for articles imported from the FSM. Subsection (a) 
states that, unless otherwise excluded, articles imported from 
the FSM shall be exempt from duty.
    Subsection (b) states that imports of ``tuna in airtight 
containers'' from the FSM shall be exempt from duty, in an 
amount not to exceed, when aggregated with the amount imported 
from the RMI, 10 percent of the previous year's U.S. 
consumption of ``tuna in airtight containers.''
    Subsection (c) states that duty-free treatment shall not be 
extended to certain classes of watches, clocks, buttons, 
textiles, apparel, footwear, luggage.
    Subsection (d) provides that the value of U.S. inputs into 
products imported from the FSM, up to 15 percent of the 
article's total appraised value, may be applied for duty 
assessment purposes toward determining the percentage referred 
to in section 503(a)(2) of title V of the Trade Act of 1974.
    Section 243 states that articles imported from the FSM and 
not exempt from duty under section 242 are subject to the duty 
rates in column 1-general of the Harmonized Tariff Schedule of 
the U.S.
    Section 244 ensures that all U.S. products imported into 
the FSM receive customs treatment no less favorable than that 
accorded like products of any foreign country, except for 
advantages accorded by the FSM to other governments listed in 
Article 26 of the Pacific Island Countries Trade Agreement 
(PICTA). The FSM commits to consult with the U.S. before 
concluding a free trade agreement with any government not 
listed in PICTA.

Article V--Finance and Taxation

    Section 251 notes that U.S. currency is the legal tender of 
the FSM, and states that the FSM will agree on a transitional 
period with the U.S. before switching to any other currency.
    Section 252 allows the FSM to tax U.S. persons on income 
earned and property located within the FSM.
    Section 253 exempts FSM citizens domiciled in the FSM from 
U.S. estate, gift, and generation-skipping transfer taxes, 
provided that they are neither citizens nor residents of the 
U.S.
    Section 254 states that the FSM shall have authority to tax 
FSM residents for income earned outside the FSM to the same 
extent that it taxes income earned in the FSM. If the FSM 
imposes such taxes, any FSM resident who is subject to U.S. 
taxes on the same income shall be relieved of such tax 
liability to the U.S. in the form of a foreign tax credit or 
exclusion under section 911 of the Internal Revenue Code.
    Section 255 grants U.S. tax benefits for conventions held 
in the FSM.

              TITLE THREE--SECURITY AND DEFENSE RELATIONS

Article I--Authority and Responsibility

    Section 311 grants the U.S. full authority and 
responsibility for defense matters in or relating to the FSM, 
including: the obligation to defend the FSM as the U.S. is 
defended; strategic denial; and the option to establish and use 
military facilities in the FSM. Subsection (c) confirms that 
the U.S. will act in accordance with the Charter of the United 
Nations in the exercise of this authority and responsibility.
    Section 312 permits the U.S. to conduct necessary military 
operations in FSM lands, waters, and airspace, subject to the 
terms of agreements negotiated in accordance with sections 321 
and 323.
    Section 313 requires the FSM to refrain from actions that 
the U.S., after consultation, deems incompatible with U.S. 
defense authorities and responsibilities, known as the 
``defense veto.'' Such consultations shall be conducted 
expeditiously at senior levels and the FSM shall be afforded an 
opportunity to raise its concerns with the U.S. Secretary of 
State and Secretary of Defense personally regarding any 
determination made in accordance with this section.
    Section 314 prohibits the U.S. from testing, disposing of, 
or storing any nuclear, chemical, or biological weapon in the 
FSM, unless otherwise agreed, other than for transit or during 
times of national emergency or state of war or impending 
attack. Such materials shall not be stored except in a manner 
which would not be hazardous to public health and safety, and 
such materials not intended for weapons shall not be affected 
by this section.
    Section 315 allows the U.S. to invite other countries' 
armed forces, under the control of U.S. forces, to use military 
facilities in the FSM. Such use is subject to consultation 
with, and in the case of major units, approval of the FSM.
    Section 316 prohibits the U.S. from transferring or 
assigning its authority or responsibility under Title II of the 
Compact.

Article II--Defense Facilities and Operating Rights

    Section 321 notes that specific arrangements for 
establishment of U.S. military facilities in the FSM are set 
forth in a separate agreement. The U.S. may request to lease 
additional areas within FSM for such purposes and the FSM will 
consider such requests sympathetically. In making such 
requests, the U.S. will respect the scarcity and special 
importance of land in the FSM and will request only the minimum 
necessary.
    Section 322 notes that the U.S. will provide and maintain 
fixed and floating navigational aids in the FSM at least to the 
extent necessary for the exercise of its authority and 
responsibility under this Title.
    Section 323 notes that the U.S. military operating rights 
and the status of U.S. forces in the FSM are set forth in 
separate agreements.

Article III--Defense Treaties and International Security Agreements

    Section 331 states that the U.S. has assumed and enjoys all 
rights and obligations of pre-Compact treaties and 
international security agreements applied by the U.S. as 
Administering Authority of the Trust Territory of the Pacific 
Islands, and any treaty or international security agreement to 
which the U.S. is a party and deems applicable in the FSM.

Article IV--Service in Armed Forces of the United States

    Section 341 states that persons entitled to the Compact 
migration benefits pursuant to section 141 are eligible to 
volunteer for service in the U.S. Armed Forces.
    Section 342 states that the U.S. will have at any given 
time at least one qualified FSM student enrolled in its Coast 
Guard Academy and Merchant Marine Academy.

Article V--General Provisions

    Section 351 states that the U.S. and the FSM will continue 
to maintain a Joint Committee of senior officials to consider 
disputes arising under this title of the Compact, which will 
meet annually or upon request of either country. Unresolved 
issued of the Joint Committee shall be referred to the 
governments for resolution and the FSM shall be afforded an 
opportunity to raise its concerns with the U.S. Secretary of 
Defense personally regarding any unresolved issue that 
threatens its continued association with the U.S.
    Section 352 states that in exercising its authority under 
title three, the U.S. shall accord due respect to the authority 
and responsibility of the FSM to assure the well-being of its 
people.
    Section 353 states that the U.S. will not name the FSM as a 
party to a declaration of war without the FSM's consent. 
Without such consent, the Compact will not prejudice any FSM 
petitions for redress from the U.S. or claims against third 
countries arising out of armed conflict.
    Section 354(a) states that the security provisions of title 
three shall remain binding for the duration of the Compact, and 
thereafter as mutually agreed. If either the U.S. or the FSM 
unilaterally terminates this Title, it will be considered a 
termination of the entire Compact and in which case the 
provisions of either sections 442 and 452, or sections 443 and 
453, as appropriate, shall apply.
    Subsection (b) states that even if title three should 
terminate, any attack on the FSM during the period in which the 
separate Military Use and Operating Rights agreement is in 
effect will result in the U.S. taking action to meet the danger 
to the U.S. and the FSM.
    Subsection (c) states that even if title three should 
terminate, the FSM shall refrain from acts which the U.S. 
determines to be incompatible with its authority and 
responsibility for security and defense matters relating to the 
FSM and RMI. This provides for continuation of the defense 
veto.

                     TITLE FOUR--GENERAL PROVISIONS

Article I--Approval and Effective Date

    Section 411 provides that the amended Compact shall come 
into effect upon mutual agreement between the U.S. and the FSM 
after approval by their respective governments.

Article II--Conference and Dispute Resolution

    Section 421 states that both governments shall confer 
promptly upon the request of the other on Compact-related 
matters.
    Section 422 states that if, after conferring, one 
government determines that there is a dispute and notifies the 
other in writing, both governments shall make a good faith 
effort to resolve it between themselves.
    Section 423 states that if the governments cannot resolve a 
dispute within 90 days of the written notice, either party may 
refer it to arbitration according to section 424.
    Section 424 states that disputes will be referred to a 
binding Arbitration Board comprised of one Chairman (jointly 
selected by the parties) and two other members (one each 
selected by the U.S. and FSM). Unless otherwise provided, the 
decision of the Board shall be binding, and the Board shall 
have jurisdiction over disputes arising exclusively under the 
Compact and related agreements. The Board shall conduct its 
proceedings as it deems appropriate and reach its decision by 
majority vote, preferably within 30 days after the conclusion 
of arguments. Except as otherwise decided by the Board, the 
U.S. and the FSM shall split the costs of the arbitration.

                         Article III--Amendment

    Section 431 provides that the amended Compact may be 
further amended by mutual agreement of the parties, according 
to their respective constitutional processes.

                        Article IV--Termination

    Section 441 provides that the amended Compact may be 
terminated by mutual agreement of the parties, in which case 
section 451 will apply.
    Section 442 provides that the amended Compact may be 
terminated by the U.S., in which case section 452 will apply. 
Such termination shall be effective not earlier than six months 
following delivery of the notice of termination.
    Section 443 provides that the amended Compact may be 
terminated by the FSM if the FSM people vote for termination in 
a plebiscite, or by some other mutually agreed process, in 
which case section 453 will apply. The FSM shall notify the 
U.S. of its intentions and the plebiscite or other process 
shall take place not earlier than three months after delivery 
of such notice. If approved, termination shall be effective not 
earlier than three months following notice to the U.S. of the 
results of the plebiscite vote for termination.

Article V--Survivability

    Section 451(a) provides that if the parties mutually 
terminate the Compact pursuant to section 441, U.S. economic 
and other assistance to the FSM shall continue only by mutual 
agreement.
    Subsection (b) provides that if the parties mutually 
terminate the Compact prior to the 20th anniversary of the 
amended Compact, the U.S. will continue to make its 
contributions to the FSM Trust Fund so long as the U.S. 
continues to enjoy the right of strategic denial and defense 
veto.
    Subsection (c) provides that if the parties mutually 
terminate the Compact after the 20th anniversary of the amended 
Compact, the FSM will be entitled to receive proceeds from the 
Trust Fund as described in section 215 and the Trust Fund 
Agreement.
    Section 452(a) provides that if the U.S. terminates the 
amended Compact before its 20th anniversary pursuant to section 
442, certain provisions shall continue including those 
regarding: environmental protection, grant audits and fund 
misuse investigations, security and defense relations, and 
dispute resolution. Those provisions shall remain in effect 
until the 20th anniversary, and thereafter as mutually agreed.
    Subsection (b) provides that if the U.S. terminates the 
amended Compact before its 20th anniversary, economic and other 
assistance will continue only by mutual agreement, except that 
the U.S. will continue to make its contributions to the FSM 
Trust Fund so long as the U.S. continues to enjoy the right of 
strategic denial and defense veto under section 354(c) and the 
separate mutual security agreement.
    Subsection (c) provides that if the U.S. terminates the 
amended Compact after its 20th anniversary, the FSM shall 
continue to be eligible to receive proceeds from the Trust Fund 
as described in section 215 and in the manner described in the 
Trust Fund Agreement.
    Section 453(a) provides that if the FSM terminates the 
amended Compact before the 20th anniversary pursuant to section 
443, certain provisions shall continue including those 
regarding: environmental protection, grant audits and fund 
misuse investigations, security and defense relations, and 
dispute resolution. Those provisions remain in effect until the 
20th anniversary, and thereafter as mutually agreed.
    Subsection (b) provides that if the FSM terminates the 
Compact, there shall be prompt consultations between the 
countries regarding their future relationship to determine the 
level of future U.S. assistance, if any, other than what is 
provided in subsections (c) and (d) of this section.
    Subsection (c) provides that if the FSM terminates the 
amended Compact before its 20th anniversary, the U.S. will 
continue to make its contributions to the FSM Trust Fund in 
view of the special relationship reflected in subsections (b) 
and (c) of section 354 and the Trust Fund Agreement.
    Subsection (d) provides that if the FSM terminates the 
amended Compact after its 20th anniversary, the FSM will be 
eligible to receive proceeds from the Trust Fund as described 
in section 215 and in a manner described in the Trust Fund 
Agreement.
    Section 454 reaffirms the U.S. interest in promoting the 
economic advancement and budgetary self-reliance of the FSM, 
and the separate Military Use and Operating Rights Agreement 
and Status of Forces Agreement shall remain in effect in 
accordance with their terms.

Article VI--Definition of Terms

    Section 461 sets forth definitions for numerous terms used 
in the amended Compact.
    Section 462(a) lists the separate agreements that will 
remain in effect under the amended Compact, including: (1) the 
trilateral agreement concluded pursuant to section 234 on 
transfer of Trust Territory property; (2) the Friendship, 
Cooperation, and Mutual Security Agreement; and (3) the 
Maritime Sovereignty and Jurisdiction Agreement.
    Subsection (b) lists the separate agreements that will go 
into effect under the amended Compact, including: (1) the 
Federal Programs and Services Agreement; (2) the Extradition, 
Mutual Assistance in Law Enforcement, and Penal Sanctions 
Agreement; (3) the Labor Recruitment Agreement implementing 
section 175(b); (4) the Agreement Concerning Procedures for the 
Implementation of United States Economic Assistance, the 
``Fiscal Procedures Agreement''; (5) the Trust Fund Agreement; 
(6) the Military Use and Operating Rights Agreement; and (7) 
the Status of Forces Agreement. The Committee notes that 
certain agreements including the Federal Programs and Services 
Agreement and the Fiscal Procedures Agreement will need to be 
modified to reflect changes made during Congressional 
consideration and enactment of this resolution. Following those 
modifications, the new agreements will need to be resubmitted 
for Congressional approval.
    Section 463 clarifies that certain references in the 
amended Compact to various U.S. laws constitutes the 
incorporation of the applicable language of those laws into the 
amended Compact.

Article VII--Concluding Provisions

    Section 471 requires both the U.S. and the FSM to take all 
necessary steps to ensure the conformity of their respective 
laws and regulations with the provisions of the amended 
Compact.
    Section 472 provides that the amended Compact may be 
accepted by the U.S. and the FSM by signature or otherwise.
    Section 201(b) sets forth the text of the Compact of Free 
Association, as amended, between the Government of the United 
States of America and the Government of the Republic of the 
Marshall Islands.
          The Preamble affirms that: the relationship between 
        the U.S. and RMI is founded upon respect for human 
        rights; the common interests of the U.S. and the RMI 
        are in creating and maintaining their close and 
        mutually beneficial relationship through free and 
        voluntary association; and the interest of the U.S. in 
        promoting the economic advancement and budgetary self-
        reliance of the RMI. The Preamble also recognizes that: 
        the U.S.-RMI Compact relationship entered into force in 
        1986; it was based on the United Nations Charter; the 
        people of the RMI have progressively developed their 
        institutions of self-government and have exercised that 
        right of self-government to adopt a Constitution and to 
        establish a government-to-government relationship based 
        on the freely expressed wishes of the people. The 
        Preamble further recognizes that: the people of the RMI 
        retain their sovereignty and their right to self-
        determination and the right to amend their 
        Constitution; approval of the Compact constituted an 
        exercise of their right to self-determination and the 
        common desire of the U.S. and RMI to maintain their 
        close government-to-government relationship. Finally, 
        under the Preamble, the U.S. and the RMI agree to 
        continue and strengthen their relationship of free 
        association and that the respective rights and 
        responsibilities of the U.S. and FSM derive from and 
        are set forth in this Compact, as amended.

                   TITLE ONE--GOVERNMENTAL RELATIONS

Article I--Self Government

    Section 111 states that the people of the RMI are self-
governing.

Article II--Foreign Affairs

    Section 121 affirms the capacity of the Government of the 
RMI to conduct foreign affairs in its own name and right, 
except as otherwise provided in this Compact.
    Section 122 states that the U.S. will support RMI 
membership in international organizations.
    Section 123 states that the U.S. and RMI will consult with 
each other regarding foreign affairs.
    Section 124 states that the U.S. may assist the RMI with 
foreign affairs when requested and mutually agreed but the U.S. 
shall not be responsible to third parties for the actions of 
the RMI undertaken with assistance from the U.S.
    Section 125 states that the U.S. will not be responsible 
for actions taken by the RMI in the area of foreign affairs, 
except as expressly agreed to.
    Section 126 makes available U.S. consular services to RMI 
citizens traveling outside the RMI.
    Section 127 recognizes that, except as agreed in the 
amended Compact and related agreements, the rights and 
obligations of the U.S. as Administering Authority of the Trust 
Territory of the Pacific Islands ended on October 20, 1986.

Article III--Communications

    Section 131 states that the RMI has full authority and 
responsibility to regulate its communications, and notes that 
the RMI assumed telecommunications functions previously 
performed by the U.S., except for those functions set forth in 
a separate agreement entered into pursuant to this section.
    Section 132 grants the U.S. rights to operate 
telecommunications services within the RMI to the extent 
necessary to fulfill its obligations under this amended Compact 
and in accordance with the terms of separate agreements entered 
into pursuant to this section.

Aricle IV--Immigration

    Section 141(a) governs the admission of RMI citizens into 
the U.S. Subsection (a) provides that otherwise admissible RMI 
citizens will continue to be eligible for visa-free admission 
to the U.S. (including territories and possessions) to lawfully 
engage in occupations and establish residence as nonimmigrants, 
but now requires that they possess valid passports. Paragraphs 
(3) and (4) restrict the class of naturalized RMI citizens 
eligible for this special status to address concerns about 
potential abuse of the special status by non-RMI natives. 
Paragraph (5) extends this status to bona fide immediate 
relatives of RMI citizens serving on active duty with the U.S. 
Armed Forces.
    Subsection (b) provides that RMI children traveling to the 
U.S. for the purpose of being adopted are not eligible for 
visa-free admission under the Compact. This new language is 
intended to prevent attempted use of Compact privileges to 
circumvent U.S. immigration requirements that help ensure the 
legitimacy of international adoptions, protect the children 
involved, and provide the adoptees with lawful permanent 
immigration status.
    Subsection (c) declares that no person who has purchased 
RMI citizenship or an RMI passport shall be eligible for 
admission to the U.S. under the amended Compact, is intended to 
remove incentives for passport sales or other abuse of these 
migration privileges.
    Subsection (d) confirms the existing privilege to work in 
the U.S. and expands the types of documents that RMI citizens 
can use to demonstrate identity and employment authorization 
under U.S. immigration law. This subsection further provides 
that the U.S. and the FSM will take steps to publicize this 
provision.
    Subsection (e) defines certain terms used in this 
immigration title.
    Subsection (f) provides, except as specified in section 
141(a), that the U.S. INA applies fully to any person admitted 
to the U.S., or seeking admission to the U.S. under the 
Compact; and that, except as provided in section 104(i), the 
U.S. has full authority under the INA to regulate the terms and 
conditions of persons seeking admission under the Compact.
    Subsection (g) provides that the governments of U.S. 
territories or possessions not subject to the INA, such as 
American Samoa and the CNMI, have the same authorities as the 
U.S. enjoys under the INA to exercise immigration authority 
under the amended Compact and to the extent authorized by the 
laws of the U.S.
    Subsection (h) notes that this section does not confer on a 
RMI citizen the right to establish residence necessary for U.S. 
naturalization under the INA, or give RMI admittees to the U.S. 
the right to petition for benefits for alien relatives under 
the INA. However, this subsection also notes that subsection 
(a) does not prevent a RMI citizen from otherwise acquiring 
such rights or lawful permanent resident alien status in the 
U.S.
    Subsection 142 governs the rights of U.S. citizens in the 
FSM. Subsection (a) recognizes the right of U.S. citizens to 
enter and work in the RMI, subject to the RMI's reasonable 
authority to deport and deny entry, and the right of U.S. 
citizen spouses of RMI citizens to reside in the RMI, even 
after the death of the RMI citizen spouse.
    Subsection (b) requires that the RMI accords U.S. citizens 
and nationals immigration status no less favorable than that 
accorded to citizens of other countries.
    Subsection (c) provides that the RMI will adopt immigration 
procedures towards U.S. citizens and nationals seeking 
employment or investment in the RMI that are no less favorable 
than those adopted by the U.S. toward RMI citizens.
    Section 143 states that RMI citizens and U.S. citizens or 
nationals who lose their citizenship or nationality shall be 
ineligible to receive immigration privileges under the Compact.

Article V--Representation

    Section 151 provides that relations between the U.S. and 
the RMI shall be conducted in accordance with the Vienna 
Convention on Diplomatic Relations, and that the governments 
may establish offices and representatives as mutually agreed.
    Section 152 provides that U.S. citizens and nationals who 
act as agents of RMI without authority of the U.S. are subject 
to the Foreign Agents Registration Act, except for U.S. 
citizen/national employees of the RMI whom the RMI certifies 
are not principally engaged in activities specified in that 
Act.

Article VI--Environmental Protection

    Subsection 161(a) declares the policy of the parties to 
prevent damage to the environment, and commits the U.S. to 
conducting its activities in accord with certain environmental 
standards similar to those in effect in the U.S.
    Subsection (b) commits the RMI to continuing to develop, 
implement, and enforce environmental standards similar to those 
required of the U.S. in the previous subsection.
    Subsection (c) states that the parties may modify the 
environmental obligations of the previous two subsections by 
mutual agreement.
    Subsection (d) states that the obligations of section 
161(a) will continue to require Environmental Impact Statements 
until the parties mutually agree otherwise.
    Subsection (e) states that the President of the U.S. may 
exempt any USG activities from the environmental standards of 
section 161(a)(3)-(4) if it is in the ``paramount interest'' of 
the USG to do so, after considering the views of the RMI and 
explaining the reasons for the exemption, to the extent 
practicable.
    Subsection (f) states that the laws of the U.S. referred to 
in section 161(a)(3) apply to U.S. activities under the Compact 
only to the extent provided in section 161.
    Section 162 states that the RMI may bring an action for 
judicial review of USG environmental activities pursuant to 
section 161(a) only in the U.S. District Court for Hawaii or 
the U.S. District Court for the District of Columbia, and 
subject to certain conditions.
    Section 163 states that the U.S. and the RMI shall have 
access to each other's facilities to the extent necessary to 
gather information to carry out article VI, so long as it does 
not unreasonably interfere with the other's exercise of its 
authorities and responsibilities.

Article VII--General Legal Provisions

    Section 171 recognizes that, except as provided in the 
amended Compact or related agreements, the application of the 
laws of the U.S. to the Trust Territory of the Pacific Islands 
ceased on November 3, 1986.
    Section 172 declares that RMI citizens who are not U.S. 
residents shall have the same rights and remedies under U.S. 
law enjoyed by any non-resident alien. Subsection (b) affirms 
that the government and citizens of the RMI are ``persons'' for 
purposes of making FOIA requests and seeking judicial review of 
FOIA determinations, but states that only the RMI government, 
and not its citizens, have standing to seek judicial review 
relating to U.S. environmental activities governed by sections 
161 and 162.
    Section 173 states that the U.S. and the RMI agree to adopt 
and enforce measures necessary to protect U.S. assets 
maintained in the RMI pursuant to the Compact and related 
agreements.
    Section 174 states that, except as otherwise provided in 
the Compact and related agreements: (a) the RMI and U.S. 
governments, agencies, and officials shall be immune from the 
jurisdiction of the other's courts; (b) the U.S. shall pay 
unpaid judgments and claim settlements of the Trust Territory 
of the Pacific Islands; (c) claims against the Trust Territory 
or U.S. Governments arising before the original Compact may be 
pursued against the U.S. Government according to certain 
conditions and procedures; and (d) the RMI and U.S. Governments 
shall not be immune from the jurisdiction of the other's courts 
in civil cases that fall within exceptions to foreign state 
immunity in the Foreign Sovereign Immunities Act.
    Section 175(a) declares that a separate, simultaneously 
effective agreement between the parties shall govern mutual law 
enforcement assistance and cooperation, including pursuit and 
extradition of fugitives and prisoner transfers.
    Subsection (b)--Declares that a separate, simultaneously 
effective agreement between the parties shall govern labor 
recruitment practices for employment in the U.S. and 
enforcement for violations. This new section has been added to 
protect RMI citizens from abusive labor recruitment practices 
that have been recently alleged.
    Section 176 confirms that final judgments in civil cases by 
courts of the Trust Territory of the Pacific Islands shall 
continue in full force and effect subject to the power of FSM 
courts to grant relief in appropriate cases.
    Section 177 quotes the language of section 177 of the 
original Compact which constituted a full and final settlement 
of all claims related to the U.S. nuclear testing program in 
the region, and notes that the amended Compacts make no changes 
to, and have no effect upon, that settlement.
    Section 178 authorizes U.S. Federal agencies that provide 
services in the RMI to settle and pay tort claims arising in 
the RMI. Claims that cannot be settled administratively, shall 
be disposed of exclusively according to the arbitration 
procedure outlined in article II of title IV of the Compact. 
The U.S. and RMI shall provide for, in a separate agreement 
under section 231, the administrative settlement of claims. 
Except as explicitly provided in U.S. law, neither the U.S. nor 
any Federal agency may be named as a party in any action 
arising out of U.S. grant assistance activities.
    Section 179 states that the courts of the RMI shall not 
exercise criminal jurisdiction over the U.S. Government, 
agencies, or employees acting on behalf of the U.S. in 
providing assistance to the RMI.

                     TITLE TWO--ECONOMIC RELATIONS

Article I--Grant Assistance

    Section 211(a) states that the U.S. shall provide 20 years 
of annual grant assistance to the RMI in the priority sectors 
of education and health care, as well as in private sector 
development, the environment, public sector capacity building, 
public infrastructure, and other sectors as mutually agreed. 
The sector grants shall be used consistent with the budget and 
investment framework described in subsection (f), and will be 
subject to mutual agreement and monitoring through the Joint 
Economic Management and Financial Accountabilty Committee. The 
U.S. shall disburse and monitor such grant assistance in 
accordance with the Fiscal Procedures Agreement between the 
parties.
    Section 211(b)(1) provides that of the total grant 
assistance made available to the RMI, a specified amount shall 
be allocated to advance the objectives and specific priorities 
set forth in subsections (a) and (d) of this section and the 
Fiscal Procedures Agreement to address the special needs of the 
community at Ebeye and other Marshallese communities within 
Kwajalein Atoll. Such assistance shall be made available in 
accordance with the budget and investment framework described 
in subsection (f) to support and improve the infrastructure and 
delivery of services. This annual amount shall be $3.1 million 
(with an inflation adjustment) through FY2013, and shall be 
increased by an additional $2 million (with an inflation 
adjustment) for FY2014 through FY2023, and thereafter in 
accordance with the Military Use and Operating Rights 
Agreement.
    Paragraph (2) provides that in addition to the 211(a) 
funding earmarked for Kwajalein in the paragraph above, the 
U.S. will provide $1.9 million annually (with an inflation 
adjustment and subject to the Fiscal Procedures Agreement) to 
further address those special needs, from FY2004 through FY2023 
and thereafter in accordance with the Military Use and 
Operating Rights Agreement.
    Paragraph (3) provides that of the total 211(a) annual 
grant assistance, $200,000 (with an inflation adjustment) shall 
be allocated for increasing the RMI's participation in and 
ability to analyze the annual U.S. Army Kwajalein Atoll 
Environmental Standards Survey.
    Subsection (c) makes available a ``Humanitarian 
Assistance--RMI'' (HARMI) program at the request of the RMI, 
designed to extend targeted health, education, and 
infrastructure assistance. HARMI costs will be deducted from 
the annual grant provided under section 211(a), and the terms 
of the program will be governed by the separate Military Use 
and Operating Rights agreement.
    Subsection (d) provides that unless otherwise agreed, 
between 30 and 50 percent of U.S. annual grant assistance shall 
be made available for infrastructure improvement and 
maintenance. Consistent with this subsection, section 104(g) 
states that it is the sense of Congress that not less than 30 
percent of the annual U.S. grant assistance provided under 
section 211 shall be invested in infrastructure improvements 
and maintenance. Five percent of the total amount shall be set 
aside, with an equal RMI contribution, for an infrastructure 
maintenance fund.
    Subsection (e) requires funds to be made available for 
disaster assistance in accordance with section 
105(t)(1)(A)(ii), the language of this subsection is 
effectively deleted and is now construed to provide that 
$200,000 per year shall be made available to FEMA by the 
Secretary of the Interior to facilitate its activities in the 
RMI. This change is made because continuation of FEMA, as in 
prior years, is essential to achieving the Compact's overall 
economic development objectives. However, because of the RMI's 
relative lack of institutional development and capacity in 
disaster preparedness and response, it is recognized that 
operating there presents special challenges for FEMA. In order 
to respond to these challenges, $200,000 per year shall be 
provided to FEMA to supplement their capacity to operate in the 
RMI. These funds may be used for providing technical assistance 
in disaster planning, preparedness, and response; for retaining 
and training personnel in the region or stateside, and for 
other purposes. Further conditions regarding these funds are to 
be negotiated between FEMA and the RMI for inclusion in the 
Federal Program and Services Agreement referred to in section 
231.
    Subsection (f) requires the RMI to prepare, maintain, and 
update a strategic, medium-term budget and investment framework 
that specifically addresses the sectors identified in section 
211(a), is strategic in nature, shall be continuously reviewed 
and updated, makes projections on a multi-year basis, and 
requires the concurrence of the U.S. insofar as U.S. grant 
funds are involved.
    Section 212 provides that in conjunction with section 321 
(a) and military use of Kwajalein Atoll, the U.S. shall provide 
to the RMI an annual payment of $15 million (with an inflation 
adjustment) from FY2004 through FY2013. From FY2014 through 
FY2023 the annual payment will be either the FY2013 amount or 
$18 million, whichever is greater (also with an annual 
inflation adjustment).
    Section 213 states that, as reflected in the Fiscal 
Procedures Agreement, sector grants and U.S. programs and 
services shall be subject to regulations and policies normally 
applicable to U.S. assistance to State and local governments. 
The U.S. may condition such assistance on performance 
indicators, and may seek remedies for noncompliance, including 
withholding assistance. Section 212(b) states that the U.S., as 
part of its grant assistance, will grant the RMI either one 
half of the cost of the annual audit, or $500,000, whichever is 
less.
    Section 214 requires the U.S. and the RMI to establish a 
Joint Economic Management and Financial Accountability 
Committee, composed of a U.S. chairman, two U.S. members, and 
two RMI members, which shall review audits and reports, 
evaluate progress toward objectives identified in the Budget 
and Investment Framework under section 211(f), identify 
problems encountered and recommend ways to increase the 
effectiveness of U.S. assistance under this, title. The 
establishment and operations of the Committee shall be governed 
by the Fiscal Procedures Agreement.
    The composition and scope of the Committee is further 
specified by section 105(b)(7) of S.J. Res. 16 which states the 
sense of Congress that two of the three U.S. members should be 
designated from the Department of State and the Department of 
the Interior, and that U.S. officials of the Asian Development 
Bank (ADB) shall be consulted in order to properly coordinate 
U.S. and ADB financial, program, and technical assistance. 
Section 105(b)(7) further provides that the scope of the 
Committee's evaluation of development shall be expanded to 
include an evaluation of the implementation of economic policy 
reforms that are needed to encourage investment, and an 
evaluation of local progress toward self-sufficient tax rates. 
This scope is added to ensure that the Committee does not focus 
entirely on U.S. assistance and its effectiveness, but also on 
promoting local economic policies which are also necessary 
conditions for economic growth. Examples of other policy 
reforms which the Committee should examine include land reform 
and reform of business regulations.
    Section 215 requires the RMI to report annually to the U.S. 
on its use of U.S. grant assistance and progress toward 
economic goals. The report shall also include an evaluation of 
progress on economic policy reforms necessary for economic 
development including progress toward self-sufficient tax 
rates. The Committee established under section 214 shall review 
and comment on these reports and make appropriate 
recommendations which are expected to be reflected in the 
President's annual report to Congress pursuant to section 
104(h).
    Section 216 states that the U.S. shall provide annual 
contributions to a trust fund for 20 years in amounts set forth 
in section 217. The proceeds of the fund are to be used at the 
end of those 20 years for the purposes set forth in section 
211, or as mutually agreed. The U.S. contribution is 
conditioned on the RMI contributing at least $30 million to the 
fund prior to October 1, 2005. The terms regarding investment 
and management of the fund, use of the income, and other 
requirements of the fund are set forth in a separate Trust Fund 
Agreement.
    Section 217 sets forth the amounts of U.S. sector grants 
and trust fund contributions for each of the 20 years of 
assistance. The combined amount for each year until 2013 is 
$57.7 million, and from 2014 to 2023, $62.7 million.
    Section 218 states that the grant and trust fund 
contributions for each fiscal year shall be adjusted by two-
thirds the amount of the U.S. GDP Implicit Price Deflator, or 
five percent, whichever is less. However, this section is 
effectively deleted and replaced by Section 104(1) which 
provides for a possible increase in the inflation adjustment 
from two-thirds to full inflation after the tenth year of the 
Compact based on certain conditions.
    Section 219 states that unobligated balances from any year 
shall remain available to the RMI in future years.

Article II--Services and Program Assistance

    Section 221(a) states that the U.S. shall make available to 
the RMI, in accordance with and to the extent provided in the 
Federal Programs and Services Agreement, the services and 
related programs of (1) U.S. Weather Service; (2) U.S. Postal 
Service; (3) Federal Aviation Administration; (4) U.S. 
Department of Transportation; and (5) the Department of 
Homeland Security, FEMA and USAID/OFDA. However, section 
105(f)(1)(A) of S.J. Res. 16 modifies this section by 
effectively deleting OFDA and by requiring the continuation of 
FEMA to the same extent as its services and programs were 
available to the RMI in 2003. Section 105(f)(1)(A) also 
modifies section 211(e) of the Compact to provide $200,000 
annually to FEMA to facilitate operations in the RMI.
    Subsection (b) states that, with the exception of those 
services and programs covered by section 221(a) and unless 
Congress provides otherwise, the U.S. shall make available to 
the RMI the services and programs that were available to the 
RMI on the effective date of the amended Compact to the extent 
that such services are available to U.S. State and local 
governments. The subsection notes that the Fiscal Procedures 
Agreement provides that funds provided under section 211 will 
be considered local revenues of the RMI when used as the local 
matching share for obtaining Federal programs and services. 
Finally, the subsection states that, unless otherwise provided, 
these programs and services shall be extended in accordance 
with the terms of the Federal Programs and Services Agreement. 
However, section 105(f)(1)(B) of S.J. Res. 16 modifies section 
221(b) of the Compact by extending the services of the 
Individual with Disabilities Education Act and grants under 
subpart 1 of Part A of title IV of the Higher Education Act of 
1965. Section 105(f)(1)(B) also provides for a supplemental 
education grant, a transition period for the phase-out of other 
formula grant programs administered by the Secretary of 
Education, as well as the Head Start program, an authorization 
for continued technical assistance, and continued eligibility 
for competitive grants administered by the Secretary of 
Education.
    Subsection (c) states that the U.S. has the authority to 
monitor and administer all service and program assistance to 
the RMI and that the Federal Programs and Services Agreement 
shall also set forth the extent to which services and programs 
shall be provided to the RMI. Because of the changes 
effectively made to this section, the Federal Programs and 
Services Agreement will need to be renegotiated accordingly, 
and resubmitted to Congress for approval.
    Subsection (d) states that, except as otherwise provided, 
Federal programs and services extended to the RMI shall be 
subject to the same standards and rules applicable to such 
programs in the U.S.
    Subsection (e) states that the U.S. shall make available to 
the RMI, to the extent provided in U.S. law, alternate energy 
development projects and conservation measures.
    Section 222 states that the U.S. and the RMI may agree from 
time to time to extend additional U.S. grant assistance to the 
RMI, which shall be governed by the Federal Programs and 
Services Agreement.
    Section 223 requires the RMI to make available, at no cost, 
such land as may be necessary for the operations of the 
services and programs provided pursuant to this article II of 
the Compact, and whatever facilities are currently provided at 
no cost to the U.S., or may be mutually agreed to in the 
future.
    Section 224 states that the RMI may from time to time 
request technical assistance from U.S. Federal agencies that, 
if provided, would give priority consideration to the RMI over 
other non-U.S. recipients.

Article III--Administrative Provisions

    Section 231 notes that the extent of U.S. program 
assistance, the status of U.S. agencies and employees, and 
other program and service-related arrangements are set forth in 
a separate Federal Programs and Services Agreement.
    Section 232 states that the U.S. shall determine and 
implement procedures for audits of all grant and program 
assistance in accordance with the Fiscal Procedures Agreement 
described in. section 211(a), and authorizes the U.S. 
Comptroller General to conduct audits in the RMI.
    Section 233 pledges the U.S. to provide the grant 
assistance specified in section 211 for the 20-year term 
specified, subject to the terms and conditions of title II and 
related subsidiary agreements.
    Section 234 pledges the RMI to cooperate in U.S. 
investigations of misuse of Compact funds and that it will not 
unreasonably withhold U.S.-requested subpoena assistance in the 
RMI. The RMI acknowledges that its receipt of Compact funding 
is conditioned on its fulfillment of these obligations and the 
U.S. agrees to pay any reasonable costs of the FSM in carrying 
out this section.

Article IV--Trade

    Section 241 states that the RMI is not within the customs 
territory of the U.S.
    Section 242 directs the President to proclaim tariff 
treatment for articles imported from the RMI. Subsection (a) 
states that unless otherwise excluded, articles imported from 
the RMI shall be exempt from duty.
    Subsection (b) states that imports of ``tuna in airtight 
containers'' from the RMI shall be exempt from duty, in an 
amount not to exceed, when aggregated with the amount imported 
from the FSM, 10 percent of the previous year's U.S. 
consumption of ``tuna in airtight containers.''
    Subsection (c) states that duty-free treatment shall not be 
extended to certain classes of watches, clocks, buttons, 
textiles, apparel, footwear, luggage.
    Subsection (d) provides that the value of U.S. inputs into 
products imported from the RMI (up to 15 percent of the 
article's total appraised value) may be applied for duty 
assessment purposes toward determining the percentage referred 
to in section 503(a)(2) of title V of the Trade Act of 1974.
    Section 243 states that articles imported from the RMI and 
not exempt from duty under section 242 are subject to the duty 
rates in column 1--general of the Harmonized Tariff Schedule of 
the U.S.
    Section 244 ensures that all U.S. products imported into 
the RMI receive customs treatment no less favorable than that 
accorded like products of any foreign country, except for 
advantages accorded by the RMI to other governments listed in 
article 26 of the Pacific Island Countries Trade Agreement 
(PICTA). The RMI commits to consult with the U.S. before 
concluding a free trade agreement with any government not 
listed in PICTA.

Article V--Finance and Taxation

    Section 251 notes that U.S. currency is the legal tender of 
the RMI, and states that the RMI will agree on a transitional 
period with the U.S. before switching to any other currency.
    Section 252 allows the RMI to tax U.S. persons on income 
earned and property located within the RMI.
    Section 253 exempts RMI citizens domiciled in the RMI from 
U.S. estate, gift, and generation-skipping transfer taxes, 
provided that they are neither citizens nor residents of the 
U.S.
    Section 254 states that the RMI shall have authority to tax 
RMI residents for income earned outside the RMI to the same 
extent that it taxes income earned in the RMI. If the RMI 
imposes such taxes, any RMI resident who is subject to U.S. 
taxes on the same income shall be relieved of such tax 
liability to the U.S. in the form of a foreign tax credit or 
exclusion under section 911 of the Internal Revenue Code.
    Section 255 grants U.S. tax benefits for conventions held 
in the RMI.

              TITLE THREE--SECURITY AND DEFENSE RELATIONS

Article I--Authority and Responsibility

    Section 311 grants the U.S. full authority and 
responsibility for defense matters in or relating to the RMI, 
including: the obligation to defend the RMI as the U.S. is 
defended; strategic denial; and the option to establish and use 
military facilities in the FSM. Subsection (c) confirms that 
the U.S. will act in accordance with the Charter of the United 
Nations in exercise of this authority and responsibility.
    Section 312 permits the U.S. to conduct necessary military 
operations in RMI lands, waters, and airspace, subject to the 
terms of agreements negotiated in accordance with sections 321 
and 323.
    Section 313 requires the RMI to refrain from actions that 
the U.S., after consultation, deems incompatible with U.S. 
defense authorities and responsibilities, the ``defense veto.'' 
Such consultations shall be conducted expeditiously at senior 
levels and the RMI shall be afforded an opportunity to raise 
its concerns with the U.S. Secretary of State and Secretary of 
Defense personally regarding any determination made in 
accordance with this section.
    Section 314 prohibits the U.S. from testing, disposing of, 
or storing any nuclear, chemical, or biological weapon in the 
RMI, unless otherwise agreed, other than for transit or during 
times of national emergency or state of war or impending 
attack. Such materials shall not be stored except in a manner 
which would not be hazardous to public health and safety, and 
such materials not intended for weapons shall not be affected 
by this section.
    Section 315 allows the U.S. to invite other countries' 
armed forces, under the control of U.S. forces, to use military 
facilities in the RMI. Such use is subject to consultation 
with, and in the case of major units, approval of the RMI.
    Section 316 prohibits the U.S. from transferring or 
assigning its authority or responsibility under title 11 of the 
Compact.

Article II--Defense Facilities and Operating Rights

    Section 321 notes that specific arrangements for 
establishment of U.S. military facilities in the RMI are set 
forth in a separate agreement. The U.S. may request to lease 
additional areas within RMI for such purposes and the RMI will 
consider such requests sympathetically. In making such 
requests, the U.S. will respect the scarcity and special 
importance of land in the RMI and will request only the minimum 
necessary.
    Section 322 notes that the U.S. will provide and maintain 
certain fixed and floating navigational aids in the RMI at 
least to the extent necessary for the exercise of its authority 
and responsibility under this title.
    Section 323 notes that U.S. military operating rights and 
the status of U.S. forces in the RMI are set forth in separate 
agreements.

Article III--Defense Treaties and International Security Agreements

    Section 331 states that the U.S. has assumed and enjoys all 
rights and obligations of pre-Compact treaties and 
international security agreements applied by the U.S. as 
Administering Authority of the Trust Territory of the Pacific 
Islands, and any treaty or international security agreement to 
which the U.S. is a party and deems applicable in the RMI.

Article IV--Service in Armed Forces of the United States

    Section 341 states that persons entitled to the Compact 
immigration benefits pursuant to section 141 are eligible to 
volunteer for service in the U.S. Armed Forces.
    Section 342 states that the U.S. will have at any given 
time at least one qualified RMI student enrolled in its Coast 
Guard Academy and Merchant Marine Academy.

Article V--General Provisions

    Section 351 states that the U.S. and the RMI will continue 
to maintain a Joint Committee of senior officials to consider 
disputes arising under the Security title of the Compact, which 
will meet annually or upon request of either country. 
Unresolved issues of the Joint Committee shall be referred to 
the governments for resolution and the RMI shall be afforded an 
opportunity to raise its concerns with the U.S. Secretary of 
Defense personally regarding any unresolved issue that 
threatens its continued association with the U.S.
    Section 352 states that in exercising its authority under 
title three, the U.S. shall accord due respect to the authority 
and responsibility of the RMI to assure the well-being of its 
people.
    Section 353 states that the U.S. will not name the RMI as a 
party to a declaration of war without the RMI's consent. 
Without such consent, the Compact will not prejudice any RMI 
petitions for redress from the U.S. or claims against third 
countries arising out of armed conflict.
    Section 354(a) states that the security provisions of title 
three shall remain binding for the duration of the Compact, and 
thereafter as mutually agreed. If either the U.S. or the RMI 
unilaterally terminates this title, it will be considered a 
termination of the entire Compact and in which case the 
provisions of either sections 442 and 452, or sections 443 and 
453, as appropriate, shall apply.
    Subsection (b) states that even if title three should 
terminate, any attack on the RMI during the period in which the 
separate Military Use and Operating Rights agreement is in 
effect will result in the U.S. taking action to meet the danger 
to the U.S. and the RMI.
    Subsection (c) states that even if title three should 
terminate, the RMI shall refrain from acts which the U.S. 
determines to be incompatible with its authority and 
responsibility for security and defense matters relating to the 
RMI and FSM. This provides for continuation of the defense 
veto.

                     TITLE FOUR--GENERAL PROVISIONS

Article I--Approval and Effective Date

    Section 411 provides that the amended Compact shall come 
into effect upon mutual agreement between the U.S. and the RMI 
after approval by their respective governments.

Article II--Conference and Dispute Resolution

    Section 421 states that both governments shall confer 
promptly upon the request of the other on Compact-related 
matters.
    Section 422 states that if, after conferring, one 
government determines that there is a dispute and notifies the 
other in writing, both governments shall make a good faith 
effort to resolve it between themselves.
    Section 423 states that if the governments cannot resolve a 
dispute within 90 days of the written notice, either party may 
refer it to arbitration according to section 424.
    Section 424 states that disputes will be referred to a 
binding Arbitration Board comprised of one Chairman (jointly 
selected by the parties) and two other members (one each 
selected by the U.S. and RMI). Unless otherwise provided, the 
decision of the Board shall be binding, and the Board shall 
have jurisdiction over disputes arising exclusively under the 
Compact and related agreements. The Board shall conduct its 
proceedings as it deems appropriate and reach its decision by 
majority vote, preferably within 30 days after the conclusion 
of arguments. Except as otherwise decided by the board, the 
U.S. and the RMI shall split the costs of the arbitration.

Article III--Amendment

    Section 431 provides that the amended Compact may be 
further amended by mutual agreement of the parties, according 
to their respective constitutional processes.

Article IV--Termination

    Section 441 provides that the amended Compact may be 
terminated by mutual agreement of the parties, in which case 
section 451 will apply.
    Section 442 provides that the amended Compact may be 
terminated by the U.S., in which case section 452 will apply. 
Such termination shall be effective not earlier than six months 
following delivery of the notice of termination.
    Section 443 provides that the amended Compact may be 
terminated by the RMI if the RMI people vote for termination in 
a plebiscite, or by some other mutually agreed process, in 
which case section 453 will apply. The RMI shall notify the 
U.S. of its intentions and the plebiscite or other process 
shall take place not earlier than three months after delivery 
of such notice. If approved, termination shall be effective not 
earlier than three months following notice to the U.S. of the 
results of the plebiscite vote for termination.

Article V--Survivability

    Section 451(a) provides that if the parties mutually 
terminate the Compact pursuant to section 441, U.S. economic 
and other assistance to the RMI shall continue only by mutual 
agreement.
    Subsection (b) provides that if the parties mutually 
terminate the Compact prior to the 20th anniversary of the 
amended Compact, the U.S. will continue to make its 
contributions to the RMI Trust Fund so long as the U.S. 
continues to enjoy the right of strategic denial and the 
defense veto.
    Subsection (c) provides that if the parties mutually 
terminate the Compact after the 20' anniversary of the amended 
Compact, the RMI will be entitled to receive proceeds from the 
Trust Fund as described in section 215 and the Trust Fund 
Agreement.
    Section 452(a) provides that if the U.S. terminates the 
amended Compact before its 20th anniversary pursuant to section 
442, certain provisions shall continue including those 
regarding: environmental protection, grant audits and fund 
misuse investigations, security and defense relations, and 
dispute resolution. Those provisions shall remain in effect 
until the 20th anniversary, and thereafter as mutually agreed.
    Subsection (b) provides that if the U.S. terminates the 
amended Compact before its 20th anniversary, economic and other 
assistance will continue only by mutual agreement, except that 
the U.S. will continue to make its contributions to the RMI 
Trust Fund so long as the U.S. continues to enjoy the right of 
strategic denial and defense veto under section 354(c) and the 
separate mutual security agreement.
    Subsection (c) provides that if the U.S. terminates the 
amended Compact after its 20th anniversary, the RMI shall 
continue to be eligible to receive proceeds from the Trust Fund 
as described in section 215 and in the manner described in the 
Trust Fund Agreement.
    Section 453(a) provides that if the RMI terminates the 
amended Compact before the 20th anniversary pursuant to section 
443, certain provisions shall continue including those 
regarding: environmental protection, grant audits and fund 
misuse investigations, security and defense relations, and 
dispute resolution. Those provisions remain in effect until the 
20th anniversary, and thereafter as mutually agreed.
    Subsection (b) provides that if the RMI terminates the 
Compact, there shall be prompt consultations between the 
countries regarding their future relationship to determine the 
level of future U.S. assistance, if any, other than what is 
provided in subsections (c) and (d) of this section.
    Subsection (c) provides that if the RMI terminates the 
amended Compact before its 20th anniversary, the U.S. will 
continue to make its contributions to the RMI Trust Fund in 
view of the special relationship reflected in subsections (b) 
and (c) of section 354 and the Trust Fund Agreement.
    Subsection (d) provides that if the RMI terminates the 
amended Compact after its 20th anniversary, the RMI will be 
eligible to receive proceeds from the Trust Fund as described 
in section 215 and in a manner described in the Trust Fund 
Agreement.
    Section 454 reaffirms the U.S. interest in promoting the 
economic advancement of the RMI, and the separate Military Use 
and Operating Rights Agreement and Status of Forces Agreement 
shall remain in effect in accordance with their terms.

Article VI--Definition of Terms

    Section 461 sets forth definitions for numerous terms used 
in the amended Compact.
    Section 462(a) lists the separate agreements that will 
remain in effect under the amended Compact, including: (1) the 
Agreement for the Implementation of section 177; (2) the 
Agreement on Persons Displaced as a Result of the U.S. Nuclear 
Testing Program; (3) the Agreement on the Settlement of Enjebi 
Island: (4) the Agreement on section 234; and (5) the Agreement 
Regarding Mutual Security Agreement.
    Subsection (b) lists the separate agreements that will go 
into effect under the amended Compact, including: (1) the 
Federal Programs and Services Agreement; (2) the Extradition, 
Mutual Assistance in Law Enforcement, and Penal Sanctions 
Agreement; (3) the Labor Recruitment Agreement implementing 
section 175(b); (4) the Agreement Concerning Procedures for the 
Implementation of United States Economic Assistance, the 
``Fiscal Procedures Agreement''; (5) the Trust Fund Agreement; 
(6) the Military Use and Operating Rights Agreement; and (7) 
the Status of Forces Agreement. The Committee notes that 
certain agreements including the Federal Programs and Services 
Agreement and the Fiscal Procedures Agreement will need to be 
modified to reflect changes made during Congressional 
consideration and enactment of this resolution. Following those 
modifications, the new agreements will need to be resubmitted 
for Congressional approval.
    Section 463 clarifies that certain references in the 
amended Compact to various U.S. laws constitutes the 
incorporation of the applicable language of those laws into the 
amended Compact.

Article VII--Concluding Provisions

    Section 471 requires both the U.S. and the RMI to take all 
necessary steps to ensure the conformity of their respective 
laws and regulations with the provisions of the amended 
Compact.
    Section 472 provides that the amended Compact may be 
accepted by the U.S. and the RMI by signature or otherwise.

                   Cost and Budgetary Considerations

    The following estimate of the cost of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 25, 2003.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget office has 
prepared the enclosed estimate for S.J. Res. 16, the Compact of 
Free Association Amendments Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

               Congressional Budget Office Cost Estimate

S.J. Res. 16--Compact of Free Association Amendments Act of 2003

    Summary: S.J. Res. 16 would amend the Compact of Free 
Association Act of 1988 and subsidiary agreements between the 
United States and the Republic of the Marshall Islands (RMI) 
and the Federated States of Micronesia (FSM). The compacts with 
RMI and FSM, together with the subsidiary agreements, govern 
the political, economic, and military relationship between the 
United States and these two freely associated states. Although 
the compact does not expire, certain provisions that authorized 
federal funding for RMI and FSM expired in 2001. The compact 
provides that expired provisions be extended until 2003 if 
negotiations to renew the compact had not concluded by 2001.
    S.J. Res. 16 would provide financial assistance for RMI and 
FSM for the next 20 years. The legislation would make several 
changes to the compact to increase monitoring of financial 
assistance, create a joint oversight committee, and establish 
trust funds to provide funds to RMI and FSM beyond 2023. S.J. 
Res. 16 also would provide $30 million a year for costs related 
to the migration of RMI and FSM nationals to other 
jurisdictions and about $25 million annually for additional 
education grants for RMI and FSM.
    Consistent with the baseline construction rules in the 
Balanced Budget and Emergency Deficit Control Act, CBO's 
baseline assumes that direct spending for grants to RMI and FSM 
will continue over the 2004-2013 period-beyond--the scheduled 
expiration date--at an average annual cost of $157 million a 
year. We estimate that enacting this legislation would increase 
direct spending by $622 million above the amounts assumed in 
our baseline projections over the 2004-2013 period.
    In addition, the legislation would extend the authority to 
appropriate funds for certain federal services for RMI and FSM 
for the next 20 years. The legislation also would authorize 
appropriations for grants to reimburse certain healthcare 
institutions for costs related to the migration of RMI and FSM 
nationals to other jurisdictions. Assuming appropriation of the 
necessary amounts, CBO estimates that implementing those 
provisions of S.J. Res. 16 would cost $631 million over the 
2004-2013 period.
    S.J. Res 16 contains an intergovernmental mandate as 
defined in the Unfunded Mandates Reform Act (UMRA). CBO 
estimates that this mandate would impose no cost on state and 
local governments; thus, it would not exceed the threshold 
established in UMRA ($59 million in 2003, adjusted for 
inflation). The resolution contains no private-sector mandates 
as defined in UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S.J. Res. 16 is shown in the following 
table. The costs of this legislation fall within budget 
function 800 (general government).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        By fiscal year, in millions of dollars--
                                                               -----------------------------------------------------------------------------------------
                                                                  2004     2005     2006     2007     2008     2009     2010     2011     2012     2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     DIRECT SPENDING

Baseline Spending for Compact of Free Association Under
 Current Law:
    Estimated Budget Authority................................      156      156      156      156      156      156      158      158      158      158
    Estimated Outlays.........................................      156      156      156      156      156      156      158      158      158      158
Proposed Changes:
    Estimated Budget Authority................................       51       58       56       58       61       64       64       67       70       73
    Estimated Outlays.........................................       51       58       56       58       61       64       64       67       70       73
Spending for Compact of Free Association Under S.J. Res. 16:
    Estimated Budget Authority................................      207      214      212      214      217      220      222      225      228      231
    Estimated Outlays.........................................      207      214      212      214      217      220      222      225      228      231

                                                      CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Federal Program Services for RMI and FSM:
    Estimated Authorization Level.............................       60       61       62       64       65       66       68       69       70       72
    Estimated Outlays.........................................       45       61       62       63       65       66       67       69       70       71
Head Start and Education programs:
    Estimated Authorization Level.............................        0        0      -21      -21      -22      -22      -23      -23      -24      -24
    Estimated Outlays.........................................        0        0       -5      -17      -21      -22      -22      -23      -23      -24
Health Care Reimbursement:
    Estimated Authorization Level.............................       29       12       12       13       13       13       14       14       14       14
    Estimated Outlays.........................................       16       12       12       13       13       13       14       14       14       14
Total Changes:
    Estimated Authorization Level.............................       89       73       54       55       56       57       58       60       61       62
    Estimated Outlays.........................................       74       73       70       59       57       57       58       60       61       62
--------------------------------------------------------------------------------------------------------------------------------------------------------

Basis of estimate

    For this estimate, CBO assumes that the legislation will be 
enacted near the start of fiscal year 2004, that the necessary 
amounts will be appropriated for each fiscal year, and that 
outlays will occur at the historical rate for grants to RMI and 
FSM and other programs.
            Direct spending
    S.J. Res. 16 would authorize and appropriate federal funds 
for economic assistance to RMI and FSM over the 2004-2023 
period. Grant assistance would be aimed at needs for education, 
health, infrastructure, private-sector development, and the 
environment. In addition, the resolution would establish trust 
funds for RMI and FSM involving annual contributions for 20 
years by RMI, FSM, and the federal government. Those trust 
funds are aimed at providing funds to RMI and FSM after federal 
grant assistance expires under the bill in 2023.
    CBO estimates that direct spending authorized by this 
legislation would total $2.2 billion over the 2004-2013 period. 
However, consistent with the Balanced Budget and Emergency 
Deficit Control Act, which specifies that certain expiring 
provisions should be assumed to continue for budget projection 
purposes, CBO's baseline includes budget authority and outlays 
for payments to RMI and FSM totaling $1.6 billion over the 
2004-2013 period. Thus, we estimate that S.J. Res. 16 would 
provide an increase in direct spending of $622 million above 
the baseline over the 10-year period. The following paragraphs 
discuss the financial assistance that would be provided by this 
legislation.
    Republic of the Marshall Islands. Over the 2004-2013 
period, S.J. Res. 16 would provide RMI with grants of $356 
million, $99 million in trust fund contributions, $160 million 
for U.S. defense operations on the Kwajalein Atoll, $20 million 
to compensate the Kwajalein landholders and RMI for the use of 
its territory by the U.S. military, and $14 million for 
agricultural programs. In addition, the legislation would 
provide for $5.3 million in fiscal year 2005 as the final 
contribution of the United States to the Rongelap Resettlement 
Trust Fund for a food importation program.
    Federated States of Micronesia. Over the 2004-2013 period, 
S.J. Res. 16 would provide FSM with grants of $793 million and 
$195 million in trust fund contributions.
    General Assistance. The legislation would provide $30 
million a year for health, education, social, public safety, 
and infrastructure costs associated with the migration of RMI 
and FSM nationals to Hawaii, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Islands (CNMI). This 
general assistance would cost $300 million over the 2004-2013 
period.
    Head Start and Education Programs. Beginning in fiscal year 
2006, S.J. Res. 16 would make RMI and FSM ineligible to receive 
grants appropriated under the Head Start Act or any formula 
grant programs administered by the Secretary of Education. In 
place of those grants, the legislation would appropriate $23 
million a year over the 2004-2023 period, and would adjust that 
amount annually for inflation. We estimate this provision would 
cost a total of $247 million over the 2004-2013 period.
    Debt Forgiveness. Section 104 would allow the President--at 
the request of the Governors of Guam and the CNMI-to reduce, 
waive, or release all or part of any amounts owed by the 
respective governments to the United States. This authority 
would expire in February 2005. Based on information from the 
Office of Insular Affairs, Guam, and the CNMI, CBO estimates 
that the amount of outstanding debt owed to the United States 
by Guam and the CNMI is approximately $160 million. This amount 
consists of debts owed by Guam for telephone infrastructure 
improvements, disaster assistance, water consumption, and the 
construction of student housing. Based on information from the 
Office of Insular Affairs and the Office of Management and 
Budget, CBO has no expectation that this debt forgiveness 
authority would be exercised. If any changes were made to a 
federal loan using this authority, such as the $105 million 
loan to the Guam Telephone Authority from the Department of 
Agriculture for telephone infrastructure improvements, the cost 
would be recorded in the year that the change was effective, 
pursuant to the Federal Credit Reform Act, and could exceed 
$100 million. No costs for debt forgiveness are included in 
this cost estimate.
    Other Programs and Services. S.J. Res. 16 also would 
continue to make available services currently provided by the 
U.S. Postal Service (USPS) and Federal Deposit Insurance 
Corporation (FDIC). Spending by these agencies is generally not 
subject to the annual appropriations process. Based on 
information from the Office of Insular Affairs, CBO expects 
that mail service to RMI and FSM costs USPS approximately $1 
million annually; this cost is reimbursed by the Department of 
the Interior, subject to the availability of appropriations. In 
addition, CBO expects costs to the FDIC for continuing to 
insure deposits in the Bank of the Federated States of 
Micronesia would be offset by fees assessed on the industry, 
resulting in no net cost to the federal government.
            Spending subject to appropriation
    Federal Programs and Services for RMI and FSM. S.J. Res. 16 
would specifically extend the authority to continue services to 
RMI and FSM provided by the National Weather Service, the 
Federal Aviation Administration, the Departments of 
Transportation and Homeland Security, and the Agency for 
International Development. Based on information from the 
Departments of State and the Interior, and the General 
Accounting Office (GAO), CBO estimates that continuing those 
programs for RMI and FSM would cost approximately $10 million 
annually, assuming appropriation of the necessary amounts.
    Other federal agencies currently providing programs and 
services to RMI and FSM include the Departments of Labor, 
Education, Agriculture, and Health and Human Services. Most of 
this assistance is provided through those agencies' annual 
appropriations. Based on information from GAO and the 
Departments of State, the Interior, and Education, CBO 
estimates that these other programs and services for RMI and 
FSM currently cost about $50 million a year. Section 109 
authorizes appropriations to continue federal services and 
programs to RMI and FSM, so these costs are included in this 
estimate.
    Head Start and Education Programs. Beginning in fiscal year 
2006, S.J. Res. 16 would make RMI and FSM ineligible to receive 
grants appropriated under the Head Start Act or any formula 
grant programs administered by the Secretary of Education. 
Based on information from the Departments of Education and 
Health and Human Services, CBO estimates that RMI and FSM 
received about $13 million through discretionary formula grant 
programs for education and about $8 million under the Head 
Start Act in 2003. Assuming future appropriation acts would be 
consistent with S.J. Res. 16 and end such funding for RMI and 
FSM, this provision could reduce discretionary costs by an 
estimated $157 million over the next 10 years, including 
adjustments for anticipated inflation.
    Health Care Reimbursement. Some RMI, FSM, and Republic of 
Palau (Palau) nationals receive medical care in other affected 
jurisdictions, particularly Hawaii, Guam, American Samoa, and 
CNMI. In Some cases, individuals may be referred to those 
jurisdictions because they cannot be treated at their local 
hospitals. In other cases, incentives to migrate result in RMI, 
FSM, and Palau nationals seeking medical treatment while 
residing outside of their home jurisdictions.
    FMS and RMI nationals are sometimes diagnosed with health 
conditions that cannot be treated at their local hospitals. In 
such cases, patients may be referred to hospitals in Hawaii, 
Guam, CNMI, or American Samoa for treatment. The cost of 
treatment at health care institutions in other jurisdictions 
can exceed the insurance payment from RMI and FSM nationals. 
S.J. Res. 16 would authorize the appropriation of such sums as 
are necessary to compensate health care institutions outside 
RMI and FSM for the cost of services provided to referred RMI 
and FSM nationals that have not been reimbursed prior to 
October 1, 2003. Based on information from the embassies of RMI 
and FSM, CBO estimates that implementing this provision would 
cost $4 million in fiscal year 2004, subject to the 
appropriation of the necessary amounts.
    Because of incentives for migration, FMS, RMI, and Palau 
nationals are sometimes treated at hospitals in Hawaii, Guam, 
American Samoa, and CNMI. S.J. Res. 16 would authorize the 
appropriation on such sums as are necessary to compensate 
health care institutions outside RMI, FSM, and Palau for the 
cost of services provided to RMI, FSM, and Palau nationals that 
have not been reimbursed prior to October 1, 2003. Based on 
information from Hawaii, CBO estimates that reimbursing 
Hawaiian institutions for unpaid expenses resulting from the 
migration of RMI, FSM, and Palau nationals would cost $13 
million in fiscal year 2004, subject to the appropriation of 
the necessary amounts.
    In addition, S.J. Res. 16 would authorize the appropriation 
of necessary sums for grants to Hawaii, Guam, American Samoa, 
and CNMI to help defray the anticipated future cost of 
responding to increased demands for health care services for 
RMI, FSM, and Palau nationals who migrate to those areas. Based 
on information from GAO, Hawaii, Guam, American Samoa, and 
CNMI, CBO estimates that the increased demands on health, 
education, social, and infrastructure services associated with 
the migration of RMI, FSM, and Palau nationals cost these areas 
approximately $30 million annually above the $30 million in 
annual general assistance payments provided by S.J. Res. 16. 
Based on information from GAO and CNMI, CBO estimates that of 
the $30 million, approximately 40 percent of the increased 
demand for services is related to health care. Hence, CBO 
estimates that implementing this provision would cost an 
average of $13 million annually, or $131 million over the 2004-
2013 period, assuming appropriation of the necessary amounts.
    Estimated impact on state, local, and tribal governments: 
S.J. Res. 16 contains an intergovernmental mandate as defined 
in UMRA because it would explicitly prohibit states from taxing 
revenue generated by the trust funds established in the bill 
and from treating the fund as anything other than a nonprofit 
corporation, incorporated under the laws of the District of 
Columbia. Since the trust funds do not currently exist, this 
provision would not affect state budgets relative to current 
law and the threshold established in UMRA ($59 million in 2003, 
adjusted for inflation) would not be exceeded.
    If S.J. Res. 16 were enacted, affected jurisdictions, 
including Hawaii, Guam, American Samoa, and the Commonwealth of 
the Northern Mariana Islands, would continue to incur costs for 
services to migrants; however, such costs would not be the 
result of enforceable duties imposed by the federal government. 
The joint resolution would appropriate $30 million per year for 
each year over the 2004-2023 period to offset the impacts of 
migrants to affected jurisdictions plus such sums as may be 
necessary to reimburse health care institutions in the affected 
jurisdictions for costs incurred for treating migrants.
    Estimated impact on the private sector: S.J. Res. 16 
contains no private-sector mandates as defined in UMRA.
    Previous CBO estimates: On September 15, 2003, CBO 
transmitted a revised cost estimate for H.J. Res. 63, the 
Compact of Free Association Amendments Act of 2003, as reported 
by the House Committee on International Relations on September 
4, 2003; an estimate for H.J. Res. 63 as ordered reported by 
the House Committee on the Judiciary on September 10, 2003; and 
an estimate for H.J. Res. 63 as ordered reported by the House 
Committee on Resources on September 4, 2003. H.J. Res. 63 also 
would amend the Compact of Free Association in a manner similar 
to S.J. Res. 16. Different versions of the legislation provide 
different levels of funding, and our estimates reflect those 
differences.
    Estimate prepared by: Federal costs: Matthew Pickford and 
Donna Wong impact on state, local, and tribal governments: 
Sarah Puro; impact on the private sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S.J. Res. 16.
    It is the Committee's expressed opinion that the bill is 
not a regulatory measure in the sense of imposing Government-
established standards of significant responsibilities on 
private individuals or businesses.
    S.J. Res. 16 includes several provisions that are designed 
to enhance accountability with respect to the assistance to be 
made available under the Compacts. These provisions include new 
reporting requirements under sections 104(e) and 104(h), and 
new planning requirements under sections 211(c), 212, 213, and 
214 of the U.S.-FSM Compact, and sections 211(f), 213, 214, and 
215 of the U.S.-RMI Compact. While these new requirements will 
result in additional paperwork, it is the Committee's opinion 
that these enhanced accountability mechanisms are needed to 
increase accountability and the effectiveness of U.S. 
assistance under the Compacts.

                        Executive Communications

    Following is a copy of the letter transmitting the text of 
legislation that was introduced as S.J. Res 16, and a copy of 
the testimony presented by the Administration's lead witness at 
the Committee's hearing on S.J. Res 16. The Administration also 
transmitted copies of the subsidiary agreements which are 
retained in the Committee files.

                                    The Secretary of State,
                                     Washington, DC, June 27, 2003.
Hon. Richard B. Cheney,
President of the Senate.
    Dear Mr. President: The Secretary of the Interior joins me 
in transmitting the enclosed draft bill to approve the 
``Compact of Free Association, as amended between the 
Government of the United States of America and the Government 
of the Federated States of Micronesia,'' and the ``Compact of 
Free Association,'' as amended between the Government of the 
United States of America and the Government of the Republic of 
the Marshall Islands,'' and otherwise to amend PL 99-239, and 
to appropriate for the purposes of the amended PL 99-239 for 
fiscal years ending on or before September 30, 2023, and for 
other purposes.
    We strongly urge that the draft bill be introduced, 
referred appropriately and enacted. The draft bill could be 
referred to as the ``Compact of Free Association Amendments Act 
of 2003.''
    Section 231 of the current Compact of Free Association 
required that the Governments of the United States, the 
Republic of the Marshall Islands (RMI) and the Federated States 
of Micronesia (FSM) commence negotiations in 1999, regarding 
the expiring provisions of the compact. The negotiations 
regarding those and other provisions were concluded with the 
signing of the compact of Free Association; as amended between 
the United States and the RMI on April 30, 2003, and as amended 
between the United States and the FSM on May 14, 2003.
    In addition to the revisions to the financial assistance 
provisions discussed in the next paragraph, revisions to Title 
One of the Compact address issues that arose during the first 
16 years of the Compact relationship. Thus, the amendments 
would improve the provisions regarding non-immigrant migration 
to the United States under the Compact, including by requiring 
a passport. Amendments to Title Three of the Compact and 
subsidiary agreements would extend the defense relationship 
with the FSM and RMI indefinitely, and secure United States 
access to the important Ronald Reagan Ballistic Missile Defense 
Test Site at Kwajalein Atoll, a key component of our space and 
ballistic missile defense programs, potentially through 2086. 
In addition to approving the amendments to the Compact, the 
draft bill would provide compensation for the impact on several 
United States jurisdictions that have welcomed migrants from 
the freely associated states.
    For fiscal years 2004 through 2023, the newly negotiated 
compact amendments would provide $92.7 million a year for the 
FSM in sector grants and contributions to a trust fund, plus 
partial adjustment for inflation, and from $57.7 to $62.7 
million a year for the RMI in sector grants, payments related 
to U.S use of Kwajalein, and contributions to a trust fund, 
plus partial adjustment for inflation. The income from the 
trust funds would be used for sector grants in the same sectors 
after 2023 when U.S. annual financial assistance is terminated. 
The draft bill funds grants in the six areas of greatest need, 
with priority given to the education and health sectors. 
Funding for the financial assistance provided by the negotiated 
agreements is in the President's fiscal year 2004 budget for 
the Department of the Interior. The Compact, as amended, 
features accountability provisions that are substantially 
strengthened over those of the existing Compact. In sum, 
approval of the amended Compact and of the rest of the draft 
bill would protect United States interests and promote the 
continued mutual well-being of our three countries.
    Current Compact financial assistance is scheduled to sunset 
after September 30, 2003. To ensure continuity of financial 
assistance for the two freely associated states, we are eager 
to provide the Congress whatever information and assistance is 
necessary to secure early passage of the Compact of Free 
Association Amendments Act of 2003.
    The Office of Management and Budget has advised that 
enactment of the draft bill would be in accord with the program 
of the President.
            Sincerely,
                                                   Colin L. Powell.
                                ------                                

   Statement of Albert V. Short, Negotiator for the Compact of Free 
                              Association

    Mr. Chairmen and Members of the Committees,
    Thank you for this opportunity to testify on the 
Administration's recently submitted act to amend the Compact of 
Free Association with the Federated States of Micronesia (FSM) 
and the Republic of the Marshall Islands (RMI).

                          THE ORIGINAL COMPACT

    Original Compact funding authorization for the FSM and RMI 
ended in Fiscal Year 2001, with an extension for up to two 
years authorized through September 30, 2003, as the Compact 
negotiations progressed. The original Compact successfully met 
its main goal of providing for a stable transition from United 
Nations Trusteeship to sovereign self-government for the FSM 
and RMI. At the same time, the Compact protected U.S. security, 
maritime, and commercial interests in the Pacific by assuming 
defense responsibilities for the vast sea and air space of the 
Freely Associated States (FAS) including Palau--and by ensuring 
access to important defense sites operated by the Department of 
Defense on Kwajalein Atoll in the Marshall Islands.
    The original Compact was successful in transforming the 
relationship between these islands and the United States to one 
of our closest bilateral relationships. We now number the FSM 
and RMI among our staunchest friends in the United Nations. 
These achievements are solid and lasting, and the American and 
FAS peoples can be justly proud of them.

                       CURRENT COMPACT ASSISTANCE

    The U.S. currently provides about $150 million annually in 
financial assistance to the FSM and RMI, 80 percent from the 
Compact and 20 percent from other federal agencies such as the 
Departments of Education and Health and Human Services.
    The past seventeen years have witnessed recurring problems 
stemming from the lack of accountability and the sometimes 
ineffective use of U.S. economic assistance. Therefore, a 
principal task of the recently signed agreements to amend the 
Compact is to improve the effectiveness and accountability of 
U.S. assistance. Moreover, we have agreed to put an increasing 
percentage of the annual U.S. assistance into a trust fund that 
will provide an ongoing source of revenue to the two countries 
when annual payments by the United States end in 2023.

                 REASONS TO CONTINUE COMPACT ASSISTANCE

    The United States has strong interests in these countries 
that justify continued economic assistance through FY 2023 and 
the contributions to the trust fund, provided this assistance 
is structured and managed as proposed. These interests include:
           Advancing economic self-reliance. (In this 
        regard, the United States will continue its commitment 
        to the economic strategies that the RMI and FSM have 
        developed with the support of the United States, the 
        Asian Development Bank (ADB), the International 
        Monetary Fund, and our partners in the ADB Consultative 
        Group, including Japan and Australia);
           Improving the health, education, and social 
        conditions of the people of the RMI and FSM.
           Sustaining the political stability and close 
        ties which we have developed with these two emerging 
        democracies;
           Assuring that our strategic interests 
        continue to be secured, including access to our 
        important defense sites on the Kwajalein Atoll;
           Putting in place and contributing to a trust 
        fund that will provide an ongoing source of revenue 
        when annual payments by the United States end in 2023.
           Strengthening immigration provisions in the 
        wake of the September 11th attacks and addressing 
        various problems that have arisen since the Compact was 
        first approved by the U.S. Congress; and
           Mitigating the impact of immigration under 
        the Compact on Hawaii, Guam, the Commonwealth of the 
        Northern Mariana Islands, and American Samoa.

                          ECONOMIC ASSISTANCE

    The Administration recognizes that too sharp a reduction in 
U.S. assistance at this stage of economic development of the 
RMI and the FSM could result in economic instability and other 
disruptions, and could encourage an increase in the level of 
immigration under the Compact to the United States by citizens 
of those countries. We continue to believe that providing 
substantial financial and other assistance will help to assure 
economic stability while the RMI and FSM continue to implement 
economic development and reform strategies.
    The Compact, as amended, continues economic assistance from 
Fiscal Year 2004 through Fiscal Year 2023. Furthermore, the 
economic package includes annual contributions to a trust fund 
that will provide an ongoing source of revenue, to be used for 
the same purposes as the previous grant assistance when the 
annual grant assistance ends in Fiscal Year 2023. Federal 
service and program assistance also continues, unless otherwise 
provided by Congress.

                            COMPACT FUNDING

    Compact funding will ensure economic and social stability 
and a smooth transition to Fiscal Year 2024 when annual 
payments from the U.S. will have terminated and the trust fund 
becomes a source of revenue.
           The FSM will receive $76.7 million in 
        sectoral grants and $16 million for its trust fund 
        annually beginning in Fiscal Year 2004.
           Beginning in Fiscal Year 2007, the FSM base 
        grant decreases by $800,000 per year through Fiscal 
        Year 2023, with this decrement added to the trust fund.
           The RMI will receive $30.5 million in 
        sectoral grants, $5.2 million for Kwajalein impact, and 
        $7 million for its trust fund annually beginning in 
        Fiscal Year 2004.
           Beginning in Fiscal Year 2005, the RMI base 
        grant decreases by $500,000 per year through Fiscal 
        Year 2023, with this decrement added to the trust fund.
           These amounts are partially adjusted for 
        inflation: two-thirds of the implicit price deflator 
        will be applied as in the original Compact period.
           Under the Compact, as amended, the U.S. 
        contributions to the trust funds are conditioned on the 
        FSM contributing at least $30 million to the FSM trust 
        fund prior to September 30, 2004 and the RMI 
        contributing at least $25 million to the RMI trust fund 
        on the effective date of the Trust Fund Agreement or 
        October 1, 2003, whichever is later, and $2.5 million 
        prior to October 1, 2004 and $2.5 million prior to 
        October 1, 2005.
           Under the Compact, grant assistance will be 
        used for six sectors, with priorities in the education 
        and health sectors and tied to specific outcomes and 
        purposes and monitored by the Department of the 
        Interior.
           Misuse of Compact funds can lead to 
        withholding of funds until the problem is resolved. The 
        FSM and the RMI have agreed to cooperate with the 
        United States on criminal investigations regarding 
        misuse of funds, if necessary.
    The Administration is putting in place an effective 
accountability mechanism with respect to future U.S. economic 
assistance to the FSM and the RMI. Economic assistance will no 
longer be made available through transfers that co-mingle U.S. 
funds with local funds, thereby rendering it difficult to track 
and monitor their use. Instead, future funds will be provided 
through targeted, sectoral assistance, each with clearly 
defined scope and objectives.
    In the amended Compacts, the FSM, RMI and U.S. have agreed 
that future grant assistance shall be used in six sectors: 
health, education, infrastructure, private sector development, 
public sector capacity building, and the environment.
    Built into each sectoral grant will be regular planning, 
monitoring, and reporting requirements. The amended Compacts 
also provide the necessary authority and resources to assure 
effective oversight and reasonable progress toward the agreed 
objectives.

                               TRUST FUND

    A major element of the new Compact provisions is the 
termination of annual mandatory payments to the FSM and the RMI 
at the end of Fiscal Year 2023--and the establishment of a 
trust fund to provide an ongoing source of revenue starting in 
Fiscal Year 2024. In its earlier proposals to the U.S., both 
the FSM and RMI anticipated the U.S. interest in the 
termination of mandatory annual financial assistance by 
proposing that the U.S. capitalize a trust fund over the next 
term of Compact assistance. Under the amended Compact, the 
Administration has agreed annual U.S. financial assistance will 
be terminated at the end of Fiscal Year 2024, and thereafter 
the trust fund will provide an ongoing source of revenue. 
Congress has previously authorized and funded the use of 
similar trust funds, including one established under the 
Compact with the Republic of Palau, and several established in 
the Marshall Islands as compensation for the U.S. nuclear 
weapons testing program.

                FEDERAL SERVICES AND PROGRAM ASSISTANCE

    With a few notable exceptions, Federal program coordination 
and oversight under the existing Compact has been ineffective. 
We are committed to putting in place a more effective system of 
coordinating and monitoring such assistance during the amended 
Compact period.

                       KWAJALEIN MUORA EXTENSION

    As part of the amended Compact, the United States and the 
Republic of the Marshall Islands have agreed to a long-term 
extension of the Military Use and Operating Rights Agreement 
(MUORA) for the Ronald Reagan Ballistic Missile Defense Test 
Site on Kwajalein Atoll. The Reagan Test Site (RTS) serves a 
key role in research, development, test and evaluation for the 
Administration's high-priority missile defense and space 
programs.
    Although the current Military Use and Operating Rights 
Agreement covering U.S. use of these defense sites runs through 
2016, in November 2001, RMI President Note reaffirmed the RMI's 
willingness to consider a long-term extension of U.S. use of 
Kwajalein Atoll for our defense needs. Subsequently, the RMI 
Government proposed that the ongoing negotiations to amend the 
Compact of Free Association provided a convenient forum to 
consider amendments extending the Military Use and Operating 
Rights Agreement. Following consultations with the Department 
of Defense, the Administration decided to pursue such an 
extension, if agreement could be concluded on acceptable terms, 
and negotiations on this issue would not delay our efforts to 
obtain agreement on amendments to the Compact.
    Sections 211 and 212 of Title Two of the Compact, as 
amended, and the MUORA, as amended, provide for the following:
    The parties agree to extend the MUORA for a period of fifty 
years from 2016 (the current expiration date) to 2066, with a 
U.S. option to extend it for an additional twenty years to 
Fiscal Year 2086.
    To achieve the flexibility necessary to permit the long-
term extension of the agreement, both sides agreed to a 
schedule of early termination payments in the event the United 
States needs to leave Kwajalein before the end of the 
agreement. This outcome could be exercised anytime after 2023, 
on advance notice of at least seven years.
    As Compensation:
    These agreements establish a new series of Kwajalein 
payments beginning in Fiscal Year 2004 (October 1, 2003) at a 
level of $15 million per year (increased from the current $11.3 
million) with a further increase to a new base of $18 million 
in 2014. The United States Government is obligated in any case 
to make payments through Fiscal Year 2023, and thereafter, 
depending on whether it chooses to continue its use of 
Kwajalein Atoll. The RMI has assured us that it will endeavor 
to ensure that payments to landowners are distributed more 
equitably than they have been in the past in a manner 
consistent with Marshallese custom and tradition.
    The U.S. will continue paying the $1.9 million per year in 
Kwajalein impact money established in the current agreement. 
However, beginning in 2004, this payment, which has not 
previously been adjusted for inflation, will be subject to the 
provisions of the new Compact Fiscal Procedures Agreement, will 
be indexed for inflation based on the formula established in 
the Compact, as amended, and emphasis will be on addressing the 
special needs of the Kwajalein landowners most impacted by the 
United States presence on Kwajalein.
    Pursuant to the Compact, U.S. Army Kwajalein Atoll (USAKA) 
has developed, in cooperation with the RMI Environmental 
Protection Authority, a strong set of environmental standards 
and a formal process to review these standards annually and 
report to both governments. To promote a greater RMI capability 
for independent analysis of the Survey's findings and 
conclusions, the U.S. will provide an annual grant of 
$200,000.00 to support increased participation of the GRMI EPA 
in the Survey.
    For some years now overcrowding on the Kwajalein island of 
Ebeye where most of the Marshallese work force supporting the 
defense sites lives, has created an unmet series of special 
infrastructure needs for the Marshallese Communities on Ebeye 
and some other islands of the Kwajalein Atoll. This agreement 
will address these needs in the following way:
    First, the U.S. and the RMI have agreed that $3.1 million 
per year of the RMI grant funding will go towards meeting the 
special infrastructure and development needs of the Marshallese 
communities on Kwajalein Atoll. In 2014, this funding will 
increase to $5.1 million per year. These funds are indexed 
according to the Compact Title Two formula.
    Second, considering the $1.9 million impact funding 
mentioned above, which is specified by the Compact to offset 
the impact of U.S. defense activities on Kwajalein Atoll, 
together with the Ebeye special needs funding, $5 million per 
year (increasing to $7 million in 2014), all of which will be 
focused on improving the quality of life of the Marshallese 
communities on Kwajalein, starting 1 October 2004.
    In sum, the Administration feels that extending the MUORA, 
in concert with the provisions of the amended Compact, will 
promote the economic stability and opportunity of the RMI for 
the indefinite future.

                              IMMIGRATION

    Based on our mixed experience since the Compact entered 
into effect, as well as in the wake of the September 11th 
attack, we have reexamined the immigration provisions of the 
existing Compact. These sections provide that citizens of the 
RMI and FSM ``may enter into, lawfully engage in occupations, 
and establish residence as a nonimmigrant in the United 
States.'' Our examination concluded the new provisions would be 
amended to:
           Require FAS citizens to use passports.
           Institute child adoption visa procedures.
           Implement visa entry procedures for 
        naturalized citizens.
           Preclude passport sales and similar 
        ``legal'' programs that afford persons from countries 
        other than the FSM and the RMI country visa-free 
        admission privileges under the Compact.
           Make explicit the inherent authority of the 
        Government of the United States to regulate the terms 
        and conditions of an FSM or RMI citizens' admission and 
        stay in the United States, including its territories 
        and possessions,
           Make explicit that the Immigration and 
        Nationality Act, as amended, applies in full to persons 
        seeking admission to, or the right to remain in, the 
        United States pursuant to the Compact.
    Under the Compact, as amended, the United States will now 
require passports for FSM and RMI citizens seeking admission as 
nonimmigrants to the United States. Further, naturalized 
citizens of the FSM and RMI will now, with certain limited 
exceptions, be ineligible for visa-free admission to the United 
States. In addition, the Compact, as amended, provides other 
safeguards to prevent the admission of inadmissible persons who 
might seek to exploit the visa-free immigration privileges 
provided under the Compact. It addresses explicitly the problem 
of passport sales and other ``legal'' naturalization schemes 
designed to provide visa-free admission privileges to persons 
from countries other than the FSM and the RMI under the 
Compact. The Compact, as amended, also provides express 
safeguards for FSM and RMI children who are coming to the 
United States permanently pursuant to an adoption, or for the 
purpose of adoption, by requiring that such children to be in 
possession of an immigrant visa. This codifies existing law and 
brings the Freely Associated States into harmony with other 
countries concerning child adoptions and protections available 
to adopted children.

                                 IMPACT

    Section 104(e) of the existing and amended Compact requires 
the President to report annually to Congress on the impact of 
the Compact. Past annual reports and a recent GAO study 
document the substantial impact of FAS migration to the State 
of Hawaii, Guam, and the Commonwealth of the Northern Mariana 
Islands (CNMI). The amended Compact and other proposed 
amendments to the Compact Act address the migratory impact 
issue in three ways:
           First, we propose to provide $15 million per 
        year of direct compensation to Hawaii, Guam, American 
        Samoa, and the CNMI for the negative impacts of 
        migration.
           Second, our amended Compacts strengthen 
        immigration provisions to improve our ability to 
        regulate RMI and FSM migrants who are eligible for 
        admission.
           Third, our amended Compacts commit a 
        substantial portion of U.S. economic assistance through 
        Fiscal Year 2023 and thereafter of the proceeds of the 
        Trust Fund to improve the health and education of 
        potential migrants from the FSM and RMI, thereby 
        reducing the impact of migration under the Compact.
    The annual impact funding of $15 million will be:
           a mandatory appropriation for twenty years.
           allocated based on a pro rata formula 
        reflecting a periodic census of Micronesians living in 
        Hawaii, Guam, American Samoa, and the Commonwealth of 
        the Northern Mariana Islands.

Conclusion

    Thank you for this opportunity to present the 
Administration's views on the Compact Act, including the 
Compacts we signed with the FSM and RMI. Let me assure you that 
we welcome any and every opportunity to keep the Committee 
informed as your deliberations proceed on the Compact Act.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the Resolution S.J. Res. 16, as ordered reported, are shown as 
follows (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

PUBLIC LAW 107-67

           *       *       *       *       *       *       *

    Sec. 605. Unless otherwise specified during the current 
fiscal year, no part of any appropriation contained in this or 
any other Act shall be used to pay the compensation of any 
officer or employee of the Government of the United States 
(including any agency the majority of the stock of which is 
owned by the Government of the United States) whose post of 
duty is in the continental United States unless such person: 
(1) is a citizen of the United States, (2) is a person in the 
service of the United States on the date of the enactment of 
this Act who, being eligible for citizenship, has filed a 
declaration of intention to become a citizen of the United 
States prior to such date and is actually residing in the 
United States; (3) is a person who owes allegiance to the 
United States; (4) is an alien from Cuba, Poland, South 
Vietnam, the countries of the former Soviet Union, or the 
Baltic countries lawfully admitted to the United States for 
permanent residence; (5) is a South Vietnamese, Cambodian, or 
Laotian refugee paroled in the United States after January 1, 
1975; or (6) is a national of the People's Republic of China 
who qualifies for adjustment of status pursuant to the Chinese 
Student Protection Act of 1992: Provided, That for the purpose 
of this section, an affidavit signed by any such person shall 
be considered prima facie evidence that the requirements of 
this section with respect to his or her status have been 
complied with: Provided further, That any person making a false 
affidavit shall be guilty of a felony, and, upon conviction, 
shall be fined no more than $4,000 or imprisoned for not more 
than 1 year, or both: Provided further, That the above penal 
clause shall be in addition to, and not in substitution for, 
any other provisions of existing law: Provided further, That 
any payment made to any officer or employee contrary to the 
provisions of this section shall be recoverable in action by 
the Federal Government. This section shall not apply to 
citizens of Ireland, Israel, [or the Republic of the 
Philippines,] the Republic of the Phippines, Federated States 
of Micronesia, the Republic of the Marshall Islands, or the 
Republic of Palau, or to nationals of those countries allied 
with the United States in a current defense effort, or to 
international broadcasters employed by the United States 
Information Agency, or to temporary employment of translators, 
or to temporary employment in the field service (not to exceed 
60 days) as a result of emergencies.

           *       *       *       *       *       *       *

                                
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