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[Senate Report 113-55]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 109
113th Congress                                                   Report
                                 SENATE
 1st Session                                                     113-55

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                        NORTHERN MARIANA ISLANDS

                                _______
                                

                 June 27, 2013.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 256]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 256) to amend Public Law 93-435 with 
respect to the Northern Mariana Islands, providing parity with 
Guam, the Virgin Islands, and American Samoa, having considered 
the same, reports favorably thereon with an amendment and 
recommends that the bill, as amended, do pass.
    The amendment is as follows:
  At the end of the bill, add the following:

SEC. 2. ADJUSTMENT OF SCHEDULED WAGE INCREASES IN THE COMMONWEALTH OF 
                    THE NORTHERN MARIANA ISLANDS.

  Section 8103(b)(1)(B) of the Fair Minimum Wage Act of 2007 (29 U.S.C. 
206 note; Public Law 110-28) is amended by striking ``2011'' and 
inserting ``2011, 2013, and 2015''.

                                Purpose

    The purpose of S. 256 is to convey to the government of the 
Commonwealth of the Northern Mariana Islands (CNMI) the 
submerged lands surrounding the islands extending three 
geographical miles outward from the coastline.

                          Background and Need

    The Northern Mariana Islands are an archipelago of fourteen 
islands between the Philippines and Japan and extending north 
of Guam. The United States captured the islands in World War II 
and in 1947 they became a district of the U.S.-administered, 
United Nations Trust Territory of the Pacific Islands. In 
accordance with the terms of the U.N. Trusteeship Agreement, 
the people of the Northern Mariana Islands expressed their 
desire for their future political status which was to join in 
political union with the U.S. Following bilateral negotiations, 
the Covenant to Establish a Commonwealth of the Northern 
Mariana Islands in Political Union with the United States of 
America (the ``Covenant'') was approved in a U.N.-observed 
plebiscite in the Mariana Islands and by the U.S. Congress with 
the enactment of Public Law 94-241 in 1976.
    The Covenant defined the relationship between the U.S. and 
the CNMI and provided for the establishment of self-government 
under a local constitution, but under the sovereignty of the 
U.S. The Covenant also extended U.S. citizenship to the 
islands' residents. Article VIII provided for the transfer of 
real property from the Trust Territory Government to the new 
CNMI government, but disagreement arose regarding the status of 
submerged lands.
    In 1999, the CNMI filed a quiet title suit against the U.S. 
in the U.S. District Court for the Northern Mariana Islands, 
seeking a ruling that the CNMI holds title to the submerged 
lands underlying the internal waters, archipelagic waters, and 
territorial waters adjacent to the Northern Mariana Islands. 
The district court granted summary judgment in favor of the 
United States, based on the paramountcy doctrine. As 
established by the Supreme Court in United States v. 
California, 332 U.S. 19 (1947), and subsequent cases, the 
paramountcy doctrine holds that the United States possesses 
paramount rights over seaward submerged lands, as a function of 
national external sovereignty.
    On appeal, the U.S. Court of Appeals for the Ninth Circuit 
Court of Appeals affirmed the district court's judgment. CNMI 
v. United States, 399 F.3d 1057 (9th Cir. 2005). The Ninth 
Circuit held that the U.S. acquired paramount rights in the 
submerged lands off the shores of the CNMI based on the U.S. 
sovereignty over the CNMI pursuant to the Covenant. The court 
recognized, however, that Congress can, and has, transferred 
ownership of submerged lands to the states and other 
territories. The Court specifically cited the Submerged Lands 
Act, 43 U.S.C. 1301 et seq., which conveyed submerged lands up 
to three geographical miles from shore to the states, and the 
Territorial Submerged Lands Act, 42 U.S.C. 1705, which 
transferred submerged lands to the territories of Guam, the 
U.S. Virgin Islands, and American Samoa.
    The Territorial Submerged Lands Act, which became law in 
1974, two years before approval of the Covenant, did not 
include the CNMI, and CNMI remains the only U.S. territory that 
does not have title to its submerged lands. Legislation is 
needed to convey to the CNMI title to its submerged lands 
seaward of its coastline.

                          Legislative History

    On October 25, 2005, during the 109th Congress, the 
Committee on Energy and Natural Resources held a hearing on S. 
1831, legislation that contained language along the lines of S. 
256 (S. Hrg. 109-291), but no further action was taken due to 
objections from the CNMI.
    On February 10, 2009, during the 110th Congress, the 
Delegate from the CNMI, Gregorio Kilili Sablan, introduced H.R. 
934, which contained language along the lines of S. 256. It was 
reported by the House Committee on Natural Resources on June 
23, 2009, H. Rept. 111-176, and passed the House on July 15, 
2009, by a vote of 416 to 0.
    H.R. 934 was referred to the Senate Committee on Energy and 
Natural Resources on July 16, 2009. The Committee held a 
hearing on December 17, 2009 (S. Hrg. 111-364), and ordered 
H.R. 934 favorably reported at a business meeting on May 6, 
2010. However, no further action was taken on the bill during 
the 111th Congress.
    During the 112th Congress, the Committee held a hearing on 
S. 590, introduced by Senator Bingaman and Senator Murkowski 
(by request) (S. Hrg. 112-39), and the House passed similar 
legislation, H.R. 670, but the Senate took no further action on 
either bill.
    S. 256 was introduced in the 113th Congress on February 7, 
2013, by Senator Wyden and Senator Murkowski. The Committee on 
Energy and Natural Resources held a hearing on April 25, 2013, 
and ordered S. 256 favorably reported, as amended, at a 
business meeting on May 16, 2013.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in open 
business session on May 16, 2013, by a unanimous voice vote of 
a quorum present, recommends that the Senate pass S. 256, if 
amended as described herein.

                          Committee Amendment

    During its consideration of S. 256, the Committee adopted 
an amendment to slow the rate of increase of the minimum wage 
in the Commonwealth of the Northern Mariana Islands to mitigate 
the impact of a rapid increase on the CNMI economy. The 
amendment would delay parity of the CNMI minimum wage with the 
national minimum wage from 2016 to 2018.

                      Section-by-Section Analysis

    Section 1(a) amends the first section of Public Law 93-438 
(48 U.S.C. 1705; commonly known as the Territorial Submerged 
Lands Act), which conveys the submerged lands up to three 
geographical miles seaward from the coastlines of Guam, the 
Virgin Islands, and American Samoa, to the governments of those 
territories, by inserting ``the Commonwealth of the Northern 
Mariana Islands'' after ``Guam,'' every place it appears. The 
effect of the amendment is to convey to the government of the 
CNMI the lands covered by tidal waters up to three geographical 
miles from the coastline of the CNMI, on the same terms as 
submerged lands were conveyed to Guam, the Virgin Islands, and 
American Samoa.
    Subsection (b) provides that each reference of the date of 
enactment of Public Law 93-435 shall also be considered as a 
reference to the date of enactment of S. 256.
    Section 2 amends section 8103 of Public Law 110-28 
(b)(1)(B) (29 U.S.C. 206 note; commonly known as the Fair 
Minimum Wage Act), which phases in application of the national 
minimum wage to the Commonwealth of the Northern Mariana 
Islands, by striking ``2011'' and inserting ``2011, 2013, and 
2015''. The effect of this change is to prevent the minimum 
wage in the Commonwealth of the Northern Mariana Islands from 
increasing in 2013 and 2015 as originally required under the 
Fair Minimum Wage Act and, instead, delaying parity between the 
CNMI minimum wage and the national minimum wage from 2016, 
under current law, to 2018.

                    Cost and Budgetary Consideration

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office.

S. 256--A bill to amend Public Law 93-435 with respect to the Northern 
        Mariana Islands, providing parity with Guam, the Virgin 
        Islands, and American Samoa

    CBO estimates that enacting S. 256 would have no 
significant effect on the federal budget. The bill would convey 
ownership of submerged lands to the Commonwealth of the 
Northern Mariana Islands (CNMI) from the mean high tide seaward 
to the point that is three geographical miles from its coast 
line. The legislation also would include CNMI among the islands 
where the United States may establish a naval defensive 
perimeter. Finally, S. 256 would amend the process for changing 
the minimum wage in American Samoa and CNMI.
    Based on information from the Department of the Interior, 
CBO estimates that implementing S. 256 would have no 
significant cost to the federal government. Enacting the bill 
would not affect direct spending or revenues; therefore, pay-
as-you-go procedures do not apply.
    S. 256 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    On May 2, 2013, CBO transmitted a cost estimate for H.R. 
573, a bill to amend Public Law 93-435 with respect to the 
Northern Mariana Islands, providing parity with Guam, the 
Virgin Islands, and American Samoa, as ordered reported by the 
House Committee on Natural Resources on April 24, 2013. The two 
pieces of legislation are similar, and the CBO cost estimates 
are the same.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by Theresa Gullo, 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. 256.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals or businesses.
    No personal information would be collected by the Federal 
government. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would be required by 
the Federal government from the enactment of S. 256.

                   Congressionally Directed Spending

    S. 256, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in rule XLIV of the Standing Rules 
of the Senate.

                        Executive Communications

    The testimony provided by the Department of the Interior at 
the April 25, 2013, hearing on S. 256 follows:

       Statement for the Record of the Department of the Interior

    Mr. Chairman and members of the Committee, the Department 
of the Interior is pleased to provide this statement for the 
record in support of enactment of legislation that would convey 
the three geographical miles of submerged lands adjacent to the 
Northern Mariana Islands to the Government of the Northern 
Mariana Islands. The Administration would strongly support this 
bill if amended to address the issues outlined below.
    The bill is intended to give the Commonwealth of the 
Northern Mariana Islands (CNMI) authority over its submerged 
lands from mean high tide seaward to three geographical miles 
distant from its coast lines.
    It has been the position of the Federal Government that 
United States submerged lands around the Northern Mariana 
Islands did not transfer to the CNMI when the Covenant came 
into force. This position was validated in Ninth Circuit Court 
of Appeals opinion in the case of the Commonwealth of the 
Northern Mariana Islands v. the United States of America. One 
consequence of this decision is that CNMI law enforcement 
personnel lack jurisdiction in the territorial waters 
surrounding the islands of the CNMI without a grant from the 
Federal Government.
    At present, the CNMI is the only United States territory 
that does not have title to the submerged lands in that portion 
of the United States territorial sea that is three miles 
distant from the coastline. It is appropriate that the CNMI be 
given the same authority as her sister territories.
    Second, on January 6, 2009, by presidential proclamation, 
the Marianas Trench Marine National Monument was created, 
including the Islands Unit, comprising the submerged lands and 
waters surrounding Uracas, Maug, and Asuncion, the northernmost 
islands of the CNMI. While creation of the monument is a 
historic achievement, it should be remembered that the leaders 
and people of the CNMI were and are these three islands' first 
preservationists. They included in their 1978, plebiscite-
approved constitution the following language:
ARTICLE XIV: NATURAL RESOURCES
          Section 1: Marine Resources. The marine resources in 
        the waters off the coast of the Commonwealth over which 
        the Commonwealth now or hereafter may have any 
        jurisdiction under United States law shall be managed, 
        controlled, protected and preserved by the legislature 
        for the benefit of the people.
          Section 2: Uninhabited Islands. . . . The islands of 
        Maug, Uracas, Asuncion, Guguan and other islands 
        specified by law shall be maintained as uninhabited 
        places and used only for the preservation and 
        protection of natural resources, including but not 
        limited to bird, wildlife and plant species.

    It is important to note that the legislature has never 
taken action adverse to the preservation of these northern 
islands and the waters surrounding them. The people of the CNMI 
are well aware of their treasures. CNMI leaders consented to 
creation of the monument because they believed that the 
monument would bring Federal assets for marine surveillance, 
protection, and enforcement to the northern islands that the 
CNMI cannot afford.
    If enacted as introduced, S. 256 would become a public law 
enacted subsequent to the creation of the monument. S. 256's 
amendments to the Territorial Submerged Lands Act would convey 
to the CNMI the submerged lands surrounding Uracas, Maug, and 
Asuncion without addressing the effect of this conveyance on 
the administrative responsibilities of the Department of the 
Interior and the Department of Commerce. Presidential 
Proclamation 8335 assigned management responsibility of the 
Marianas Trench Marine National Monument to the Secretary of 
the Interior, in consultation with the Secretary of Commerce. 
The proclamation further states that the ``Secretary of 
Commerce shall have the primary management responsibility . . . 
with respect to fishery-related activities regulated pursuant 
to the Magnuson-Stevens Fishery Conservation and Management Act 
(16 U.S.C. Sec. Sec. 1801 et seq.) and any other applicable 
authorities.'' The proclamation provides that submerged lands 
that are granted to the CNMI ``but remain controlled by the 
United States under the Antiquities Act may remain part of the 
monument'' for coordinated management with the CNMI. As 
envisioned by the Presidential Proclamation establishing the 
Marianas Trench Marine National Monument, the Administration is 
proposing an amendment to ensure that the outstanding resources 
in the waters surrounding the CNMI's three northernmost islands 
remain protected. Thus, the Administration recommends that 
language be included in S. 256 referencing the coordination of 
management contemplated within the Proclamation prior to the 
transfer of the submerged lands within the Islands Unit of the 
monument to the CNMI. This language is intended to protect the 
Islands Unit of the monument and at the same time acknowledge 
the prescient and historic conservation effort of the leaders 
and people of the CNMI in protecting Uracas, Maug, and 
Asuncion, and their surrounding waters.
    The Administration recommends that S. 256 include an 
amendment to subsection (b) of section 1 of the Territorial 
Submerged Lands Act, Public Law 93-435, 48 U.S.C. 1705, as 
follows:

          (xii) any submerged lands within the Islands Unit of 
        the Marianas Trench Marine National Monument unless or 
        until such time as the Commonwealth of the Northern 
        Mariana Islands enters into an agreement with the 
        Secretary of the Interior and the Secretary of Commerce 
        for the permanent protection and co-management of such 
        portion of the Islands Unit.

    The Department of the Interior strongly supports S. 256 if 
it is amended to include the legislative language provided. The 
Department of the Interior looks forward to the Commonwealth of 
the Northern Mariana Islands gaining rights in surrounding 
submerged lands similar to those accorded her sister 
territories.

                        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 bill, S. 256, as ordered reported, are shown as follows 
(new matter is printed in italic and existing law in which no 
change is proposed is shown in roman):

                     Public Law 93-435, as amended

AN ACT To place certain submerged lands within the jurisdiction of the 
 governments of Guam, the Virgin Islands, and American Samoa, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That (a) 
subject to valid existing rights, all right, title, and 
interest of the United States in lands permanently or 
periodically covered by tidal waters up to but not above the 
line of mean high tide and seaward to a line three geographical 
miles distant from the coastlines of the territories of Guam, 
the Commonwealth of the Northern Mariana Islands, the Virgin 
Islands, and American Samoa, as heretofore or hereafter 
modified by accretion, erosion, and reliction, and in 
artificially made, filled in, or reclaimed lands which were 
formerly permanently or periodically covered by tidal waters, 
are hereby conveyed to the governments of Guam, the 
Commonwealth of the Northern Mariana Islands, the Virgin 
Islands, and American Samoa, as the case may be, to be 
administered in trust for the benefit of the people thereof.
    (b) There are excepted from the transfer made by subsection 
(a) hereof--
          (i) all deposits of oil, gas, and other minerals, but 
        the term ``minerals'' shall not include coral, sand, 
        and gravel;

           *       *       *       *       *       *       *

          (xi) all submerged lands within the Buck Island Reef 
        National Monument as described in Presidential 
        Proclamation 3448 dated December 28, 1961.
Upon request of the Governor of Guam, the Commonwealth of the 
Northern Mariana Islands, the Virgin Islands, or American 
Samoa, the Secretary of the Interior may, with or without 
reimbursement, and subject to the procedure specified in 
subsection (c) of this section convey all right, title, and 
interest of the United States in any of the lands described in 
clauses (ii), (iii), (iv), (v), (vi), (vii), or (viii) of this 
subsection to the government of Guam, the Commonwealth of the 
Northern Mariana Islands, the Virgin Islands, or American 
Samoa, as the case may be, with the concurrence of the agency 
having custody thereof.

           *       *       *       *       *       *       *

    (d)(1) The Secretary of the Interior shall, not later than 
sixty days after the date of enactment of this subsection, 
convey to the governments of Guam, the Commonwealth of the 
Northern Mariana Islands, the Virgin Islands, and American 
Samoa, as the case may be, all right, title, and interest of 
the United States in deposits of oil, gas, and other minerals 
in the submerged lands conveyed to the government of such 
territory by subsection (a) of this section.

           *       *       *       *       *       *       *

                     Public Law 110-28, as amended

  AN ACT Making emergency supplemental appropriations and additional 
   supplemental appropriations for agricultural and other emergency 
assistance for the fiscal year ending September 30, 2007, and for other 
purposes.

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              TITLE VIII--FAIR MINIMUM WAGE AND TAX RELIEF

                     Subtitle A--Fair Minimum Wage

SEC. 8101. SHORT TITLE.

    This subtitle may be cited as the ``Fair Minimum Wage Act 
of 2007''.

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SEC. 8103. APPLICABILITY OF MINIMUM WAGE TO AMERICAN SAMOA AND THE 
                    COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS.

    (a) In General.--Section 6 of the Fair Labor Standards Act 
of 1938 (29 U.S.C. 206) shall apply to American Samoa and the 
Commonwealth of the Northern Mariana Islands.
    (b) Transition.--Notwithstanding subsection (a)--
          (1) the minimum wage applicable to the Commonwealth 
        of the Northern Mariana Islands under section 6(a)(1) 
        of the Fair Labor Standards Act of 1938 (29 U.S.C. 
        206(a)(1)) shall be--
                  (A) $3.55 an hour, beginning on the 60th day 
                after the date of enactment of this Act; and
                  (B) increased by $0.50 an hour (or such 
                lesser amount as may be necessary to equal the 
                minimum wage under section 6(a)(1) of such 
                Act), beginning 1 year after the date of 
                enactment of this Act and each year thereafter 
                until the minimum wage applicable to the 
                Commonwealth of the Northern Mariana Islands 
                under this paragraph is equal to the minimum 
                wage set forth in such section, except that, 
                beginning in 2010 and each year thereafter 
                (except [2011] 2011, 2013, and 2015, when there 
                shall be no increase), such increase shall 
                occur on September 30; and
          (2) the minimum wage applicable to American Samoa 
        under section 6(a)(1) of the Fair Labor Standards Act 
        of 1938 (29 U.S.C. 206(a)(1)) shall be--

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