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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1373 Introduced in Senate (IS)]

105th CONGRESS
  1st Session
                                S. 1373

     To establish the Commonwealth of Guam, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            November 5, 1997

 Mr. Murkowski introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL

 
     To establish the Commonwealth of Guam, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Guam Commonwealth Act''.

SEC. 2. PREAMBLE.

    (a) In recognition of the long-cherished aspiration of the people 
of Guam to direct the course of their own destiny, and with the belief 
that mutual respect, understanding, and compromise among people form a 
more perfect Union, the people of the United States of America, 
nurtured in the ideals of liberty and democracy, conscious of their 
obligations under the Treaty of Paris of 1899 and the Charter of the 
United Nations, do hereby embrace the establishment of the Commonwealth 
of Guam, ever mindful that the right of self-determination and the 
heritage of the Chamorro people of Guam shall be protected.
    (b) This Act reflects the will of the people of Guam to attain a 
greater measure of self-government in concert with the United States of 
America, and reaffirms the principle that governments derive their just 
powers only from the consent of the governed.
    (c) To this end, the Senate and House of Representatives of the 
United States of America in Congress assembled, now adopt this Act.

                    TITLE I--POLITICAL RELATIONSHIP

SEC. 101. CREATION OF THE COMMONWEALTH AND FULL SELF-GOVERNMENT.

    (a) The Island of Guam, and its adjacent islands and waters shall 
upon the enactment of this Act become a self-governing Commonwealth 
known as the ``Commonwealth of Guam''. This Act, the provisions of the 
United States Constitution, treaties, and laws of the United States 
applicable to Guam, and the Constitution of Guam shall be the supreme 
law of the Commonwealth.
    (b) The people of Guam shall have the right of full self-
government, which shall extend to all rightful subjects of government 
not inconsistent with this Act and the laws of the United States 
applicable to Guam, and shall govern themselves in accordance with this 
Act through a constitution of their own adoption. Such constitution 
shall--
            (1) recognize, and be consistent with, the sovereignty of 
        the United States over Guam, and the supremacy of the 
        provisions of the Constitution, treaties, and laws of the 
        United States applicable to Guam;
            (2) provide for a republican form of government;
            (3) provide for three branches of government; and
            (4) contain a bill of rights.
    (c) The government of the Commonwealth shall have the power to sue 
in its own name, and, with the consent of the legislature, may be sued 
upon any contract entered into with respect to, or any tort committed 
incident to, the exercise by the government of the Commonwealth of Guam 
or any of its lawful powers.
    (d) The government of the Commonwealth of Guam shall have the power 
to establish, maintain, and operate a public educational system to the 
same extent as the several States.

SEC. 102. SELF-DETERMINATION AND UNITED STATES CITIZENSHIP RIGHTS.

    (a) The Congress recognizes the inalienable right of self-
determination of the indigenous Chamorro people of Guam, defined as all 
those born on Guam before August 1, 1950, and their descendants. The 
exercise of such right of self-determination shall be provided for in a 
constitution of the Commonwealth of Guam.
    (b) The government of Guam shall ensure that, notwithstanding the 
provisions of the preceding paragraph, nothing herein shall be 
interpreted as depriving any qualified resident of Guam of the right to 
participate as a voter in any referendum or plebiscite held under the 
ratification procedure for this Act set forth in section 1204 hereof.
    (c) The United States Government shall, by means of additional 
federally funded programs, and the Commonwealth of Guam may promote--
            (1) the maintenance and preservation of the Chamorro 
        language, culture, and traditions;
            (2) the enhancement of economic, social, and educational 
        opportunities for Chamorros; and
            (3) training of Chamorros for employment as professionals, 
        skilled workers, and leaders in business and industry.
    (d) The establishment of such additional programs shall not affect 
the continued eligibility for the benefits of existing programs of 
members of all minority groups presently qualifying for such programs 
under current law.
    (e) Nothing in this Act or in the constitution of the Commonwealth 
of Guam shall impair the United States citizenship of the residents of 
Guam or their descendants, or the entitlement of legally admitted 
aliens permanently residing in Guam, to the respective rights and 
privileges accorded to each such class of persons under the first 
sentence of the fourteenth amendment of the United States Constitution.
    (f) Notwithstanding any other provisions of law or of this Act, the 
Commonwealth of Guam shall establish a trust to be known as the 
``Chamorro Land Trust'' for the benefit of the indigenous Chamorro 
people of Guam and composed of certain lands returned by the United 
States before and after the effective date of this Act to the 
Commonwealth of Guam. Nothing in this section shall inhibit or prevent 
the direct return of lands to the original owners, or the establishment 
of leasehold arrangements with them, by the government of the 
Commonwealth of Guam.
    (g) The constitution of the Commonwealth of Guam shall establish 
reasonable residency requirements for the citizens of such Commonwealth 
for the purposes of the right to vote in Commonwealth elections or to 
hold any elective office established by the constitution of Guam.

SEC. 103. MUTUAL CONSENT.

    In order to respect the self-government granted to the Commonwealth 
of Guam under this Act, the United States agrees to limit the exercise 
of its authority so that the provisions of this Act may be modified 
only with the mutual consent of the Government of the United States and 
the government of the Commonwealth of Guam.

                 TITLE II--APPLICABILITY OF FEDERAL LAW

SEC. 201. APPLICABILITY OF UNITED STATES CONSTITUTION.

    Those portions of the United States Constitution which apply to 
Guam on the effective date of this Act shall, unless specifically 
modified by this Act, continue to apply under this Act. In addition, 
the following provisions of and amendments to the Constitution of the 
United States shall apply to the Commonwealth of Guam and shall have 
the same force and effect in Guam as in the United States or in any 
State of the United States: Article IV, section 2, clause 2 and section 
4; the tenth amendment, and the first sentence of the fourteenth 
amendment.

SEC. 202. EFFECT OF FEDERAL LAW.

    Except as otherwise intended by this Act, no Federal laws, rules, 
or regulations passed after the date of this Act shall apply to the 
Commonwealth of Guam unless mutually consented to by the United States 
and the government of the Commonwealth of Guam.

SEC. 203. JOINT COMMISSION.

    (a)(1) There is hereby created a Joint Commission on the 
Applicability of Federal Law (hereinafter referred to as the 
``Commission'') to be composed of seven members: three members and 
their successors appointed by the President of the United States and 
four members and their successors appointed by the Governor with the 
advice and consent of the legislature of the Commonwealth of Guam. The 
appointees by the government of Guam shall be citizens of the 
Commonwealth of Guam who are or have been ten years continuously 
resident on Guam at the time of their appointment. Said appointees 
shall serve at the pleasure of the President of the United States and 
the Governor of the Commonwealth of Guam, respectively. Any vacancy 
which may occur on the Commission shall not affect its powers or 
functions but shall be filled in the same manner in which the original 
appointment was made. Appointments shall be made within 60 days after 
the effective date of this Act.
    (2) The Commission shall adopt its own internal regulations to 
govern its procedures and may delegate authority on particular issues 
to some of its members.
    (3) A majority of the Commission shall constitute a quorum for the 
transaction of its business. The Commission may provide for the taking 
of testimony, discussion issues with members of the Federal Government 
or government of Guam, and the reception of evidence at meetings at 
which there are present not less than three members of the Commission. 
The Chairman of the Commission shall call a meeting to organize the 
Commission within thirty days after he and a majority of the members of 
the Commission have been appointed.
    (b) The Commission shall--
            (1) be used for regular consultations between the 
        Government of the United States and the government of the 
        Commonwealth of Guam on all matters affecting the relationship 
        between them;
            (2) study existing statutes and regulations affecting the 
        relationship between Guam and the United States;
            (3) review the policies and procedures of the Federal 
        agencies as such policies and procedures relate to the 
        relationship between Guam and the United States;
            (4) compile data as may be necessary for the conduct of the 
        Commission's work or for the implementation of this Act;
            (5) draft such modifications in existing laws, regulations, 
        policies, and procedures as will, in the judgment of the 
        Commission, best serve to carry out the purposes of the 
        Commission or this Act;
            (6) obtain, if possible, the modification of these laws, 
        regulations, and procedures by negotiation and mediation, such 
        as issues concerning land claims and war claims by the people 
        of Guam; and
            (7) seek to obtain the maximum economic development and 
        political autonomy for the Commonwealth of Guam without 
        impairing United States national security interests. The heads 
        of Federal departments and agencies are authorized and directed 
        to furnish whatever assistance is requested by the Commission, 
        without reimbursement, except classified information directly 
        related to national security interests.
    (c) The Commission is authorized to appoint and fix the 
compensation of an Executive Secretary and such other additional 
personnel as may be necessary to enable the Commission to carry out its 
functions without regard to the Federal Property and Administrative 
Services Act of 1949 and civil service laws, rules, and regulations, 
but any Federal employee subject to those laws, rules, and regulations, 
who may be detailed to the Commission (which detail is hereby 
authorized) shall retain his civil service status without interruption 
or loss of status or privilege. In addition, the Commission may enter 
into contracts in order to carry out its mandate.
    (d) The United States will bear the cost of the work of the 
Commission.

SEC. 204. DELEGATION OF AUTHORITY.

    The Congress hereby authorizes the President or his designee to 
delegate to the Governor of Guam total or partial performance of 
functions now vested in administrative agencies in the Federal 
Government. The President or his designee and the Governor of Guam 
shall consult from time to time on the implementation of this 
provision.

                 TITLE III--FOREIGN AFFAIRS AND DEFENSE

SEC. 301. UNITED STATES AUTHORITY.

    The United States shall have responsibility for an authority with 
respect to matters relating to foreign affairs and defense that affect 
the Commonwealth of Guam.

SEC. 302. CONSULTATION WITH GUAM.

    (a) The United States agrees to consult with the Commonwealth of 
Guam in advance of negotiations toward any treaties or international 
agreements, including Executive agreements, which affect the well-being 
of the people of Guam.
    (b) No military security zones shall be established and no foreign 
military personnel shall be stationed on the Island of Guam without 
approval of the government of the Commonwealth except in time of 
declared war, and no military bases will be established without 
consultation with the Governor of the Commonwealth of Guam.
    (c) The United States shall consult with the government of the 
Commonwealth of Guam with respect to any proposed plan to increase or 
decrease Department of Defense activities within the Commonwealth.

SEC. 303. UNITED STATES CONSULAR AND TRADE ASSISTANCE.

    (a)(1) The United States shall assist and facilitate the 
establishment by Guam of offices in the United States and abroad.
    (2) The United States shall assist the Commonwealth of Guam to 
become a member or participate in appropriate regional and other 
international organizations to include, but not be limited to, the 
South Pacific Forum, the regional organizations of the United Nations 
Specialized agencies, and the Asian Development Bank. Under such 
authority Guam shall be free to accept and grant financial and 
technical assistance, to enter into bilateral and multilateral 
agreements to promote joint ventures private and public, exchange 
programs, and to become a party to all agreements between and among 
foreign entities involving regional and subregional affairs. The 
Commonwealth may enter into agreements with sovereign states, and the 
political entities resulting from the Trust Territory of the Pacific 
Islands, relative to reciprocal trade and tax questions and their 
application to the respective jurisdictions.
    (b) The Government of the United States shall seek to obtain from 
foreign countries favorable treatment for exports from the Commonwealth 
of Guam and will encourage other countries to consider the Commonwealth 
of Guam a developing territory.

SEC. 304. NUCLEAR WASTE.

    (a) The United States shall not utilize the water surrounding the 
Commonwealth of Guam or the island for dumping or storage of nuclear 
waste.
    (b) The United States shall clean up and make safe for human 
habitation all chemical waste dump sites used by the military in the 
past and at present, and shall not, at any time, use the island and the 
surrounding waters of Guam as a depository for hazardous chemicals in 
the future.
    (c) The United States shall compensate, in a manner to be decided 
by the District Court of Guam, any person injured as a result of 
chemical, nuclear, or other hazardous materials stored, used, or 
disposed of by agencies of the United States Government in the 
Commonwealth of Guam or its surrounding waters.

                            TITLE IV--COURTS

SEC. 401. JUDICIAL RELATIONSHIP OF GUAM TO THE UNITED STATES.

    The relations between the courts established by the Constitution or 
laws of the United States and the local courts of Guam with respect to 
appeals, certiorari, removal of causes, the issuance of writs of habeas 
corpus, and other matters or proceedings shall be governed by the laws 
of the United States pertaining to the relations between the courts of 
the United States, including the Supreme Court of the United States, 
and the courts of the several States in such matters and proceedings.

SEC. 402. JURISDICTION OF DISTRICT COURT.

    (a) The District Court of Guam established by section 22 of the 
Organic Act of Guam, as amended, is continued by this Act as the 
``District Court of Guam.''
    (b) The District Court of Guam shall have the jurisdiction of a 
district court of the United States, including, but not limited to, the 
diversity jurisdiction provided for in section 1332 of title 28, United 
States Code, and that of a bankruptcy court of the United States.

SEC. 403. APPLICABLE DISTRICT COURT RULES.

    Where appropriate, the provisions of part II of title 18 and of 
title 28, United States Code, and notwithstanding the provision in rule 
54(a), Federal Rules of Criminal Procedure, relating to the prosecution 
of criminal offenses on Guam by information, the rules of practice and 
procedure heretofore or hereafter promulgated and made effective by the 
Congress or the Supreme Court of the United States pursuant to titles 
11, 18, and 28, United States Code, shall apply to the District Court 
of Guam and appeals therefrom; except that the terms ``Attorney for the 
government'' and ``United States Attorney'', as used in the Federal 
Rules of Criminal Procedure, Federal Rules of Civil Procedure and 
Federal Rules of Appellate Procedure shall, when applicable to cases 
arising under the laws of Guam, including the Guam Commonwealth income 
tax, mean the attorney general of Guam or such other person or persons 
as may be authorized by the laws of Guam to act therein.

SEC. 404. DISTRICT COURT JUDGE, UNITED STATES ATTORNEY, MARSHAL.

    (a) The President shall appoint, by and with the advice and consent 
of the Senate, a judge for the District Court of Guam who shall hold 
office for the term of ten years and until his successor is chosen and 
qualified unless sooner removed by the President for cause. The judge 
shall receive a salary payable by the United States which shall be at 
the rate prescribed for judges of the United States district courts. 
The chief judge of the Ninth Judicial Circuit of the United States may 
assign a judge of a local court of record, a judge of the High Court of 
the Trust Territory of the Pacific Islands, a circuit or district judge 
of the Ninth Circuit, or a recalled senior judge of the District Court 
of Guam or of the District Court for the Northern Mariana Islands, and 
the Chief Justice of the United States may assign any other United 
States circuit or district judge with the consent of the judge so 
assigned and of the chief judge of his circuit, to serve temporarily as 
a judge in the District Court of Guam whenever it is made to appear 
that such an assignment is necessary for the proper dispatch of the 
business of the court.
    (b) The President shall appoint, by and with the advice and consent 
of the Senate, a United States attorney and United States marshal for 
Guam to whose offices the provisions of chapters 31 and 33 of title 28, 
United States Code, respectively, shall apply.
    (c) The judge of the District Court of Guam and the United States 
attorney and marshal serving on the effective date of this section 
shall continue to hold their positions under this Act until the 
expiration of their current terms of office.

                             TITLE V--TRADE

SEC. 501. GUAM-UNITED STATES FREE TRADE AREA.

    (a) The Commonwealth of Guam will remain outside the customs 
territory of the United States, and no duty, tariff, or quota 
restrictions shall be imposed or collected by the United States. 
Economic, trade, and commercial relationships between the United States 
and the Commonwealth of Guam of shall be conducted within the framework 
of the free trade area between the United States and the Commonwealth 
of Guam as established by subsection (b).
    (b) The Commonwealth of Guam shall not impose duties, quotas, or 
other restrictions on products of the United States imported into Guam, 
nor shall the United States impose duties, quotas, or other 
restrictions on ``products of Guam'' imported into the United States, 
nor shall the United States treat products of Guam as having originated 
in any other country.
    (c) The term ``products of Guam'' shall mean articles that contain 
at least 30 percent value added in Guam. Value added includes--
            (1) all actual labor costs involved in the growth, 
        production, manufacture, or assembly of the specific 
        merchandise, including fringe benefits, on-the-job training, 
        and the cost of engineering supervisory, quality control, and 
        similar personnel;
            (2) dies, molds, tooling, and depreciation on machinery and 
        equipment which are allocable to the specific merchandise; and
            (3) research, development, design, engineering, and 
        blueprint costs insofar as they are allocable to the specific 
        merchandise; and costs of inspecting and testing the specific 
        merchandise.
    (d) The Commonwealth of Guam may impose, increase, reduce, or 
eliminate duties and other restrictions--
            (1) on products that originate in any area outside the 
        customs territory of the United States and that are imported 
        into Guam; and
            (2) on exports from Guam, whether or not products of Guam.
    (e) The Governor of Guam shall make a certificate that the origin 
of the products as defined in subsection (c) above is the Commonwealth 
of Guam pursuant to the provisions of this Act. An agent of the United 
States Customs Service stationed on Guam shall then perform such 
customs inspections as are necessary for compliance with this Act and 
the appropriate laws of the United States. Upon completion of such 
inspections such products shall enter the United States without further 
inspection by the United States Customs Service.
    (f) Nothing herein contained shall be construed to have any effect 
on any obligations or benefits accruing to the Commonwealth of Guam or 
the United States under the Generalized System of Preferences.
    (g) Except as provided for in subsection (b) above the Trade and 
Development Act of 1974 shall continue to apply to the Commonwealth of 
Guam.

                           TITLE VI--TAXATION

SEC. 601. MIRROR IMAGE TAX.

    (a) The income tax laws in force in the United States of America 
and those which may hereafter be enacted shall be held to be likewise 
in force in Guam.
    (b) The income tax laws in force in Guam pursuant to subsection (a) 
of this section shall be deemed to impose a separate Commonwealth 
income tax, payable to the government of Guam, which tax is designated 
the ``Guam Commonwealth Income Tax.''
    (c) The administration and enforcement of the Guam Commonwealth 
income tax shall be performed pursuant to the laws of Guam. Any 
function needful to the administration and enforcement of the income 
tax laws in force in Guam pursuant to subsection (a) of this section 
shall be performed by any duly authorized officer or employee of the 
government of Guam.
    (d)(1) The income tax laws in force in Guam pursuant to subsection 
(a) of this section include, but are not limited to, the following 
provisions of the Internal Revenue Code of 1954, where not manifestly 
inapplicable or incompatible with the intent of this section: Subtitle 
A (not including chapter 2 and section 931); chapters 24 and 25 of 
subtitle C, with reference to the collection of income tax at source on 
wages; and all provisions of subtitle F which apply to the income tax, 
including provisions as to crimes, other offenses and forfeitures 
contained in chapter 75. For the period after 1950 and prior to the 
effective date of the repeal of any provision of the Internal Revenue 
Code of 1939 which corresponds to one or more of those provisions of 
the Internal Revenue Code of 1954 which are included in the income tax 
laws in force in Guam pursuant to subsection (a) of this section, such 
income tax laws include, but are not limited to, such provisions of the 
Internal Revenue Code of 1939.
    (2) The Governor or his delegate or other official duly authorized 
to act under the laws of Guam shall have the same administrative and 
enforcement powers and remedies with regard to the Commonwealth of Guam 
income tax as the Secretary of the Treasury and other United States 
officials of the executive branch have with respect to the United 
States income tax. Rules and regulations required for enforcement of 
the Commonwealth of Guam income tax shall be prescribed pursuant to the 
laws of Guam. The Governor or his delegate or other official duly 
authorized to act under the laws of Guam shall have authority to issue, 
from time to time, in whole or in part, the text of the income tax laws 
in force in Guam pursuant to subsection (a) of this section.
    (e) In applying the Commonwealth of Guam income tax the income tax 
laws in force in Guam pursuant to subsection (a) of this section, 
except where it is manifestly otherwise required, the applicable 
provisions of the Internal Revenue Code of 1954 and 1939 shall be read 
so as to subtitle ``Guam'' for ``United States,'' ``Governor or his 
delegate or other official duly authorized to act under the laws of 
Guam'' for ``Secretary or his delegate,'' ``Governor or his delegate or 
other official duly authorized to act under the laws of Guam'' for 
``Commissioner of Internal Revenue'', and ``Collector of Internal 
Revenue'' for ``Collector of Internal Revenue,'' ``District Court of 
Guam'' for ``District Court'' and with other changes in nomenclature 
and other language, including the omission of inapplicable language, 
where necessary to effect the intent of this section.

SEC. 602. ENFORCEMENT INSTITUTIONS.

    (a) Any act or failure to act with respect to the Guam Commonwealth 
income tax which constitutes a criminal offense under chapter 75 of 
subtitle F of the Internal Revenue Code of 1986, or the corresponding 
provisions of the Internal Revenue Code of 1939, as included in the 
income tax laws in force in Guam pursuant to this section, shall be an 
offense against the government of Guam and may be prosecuted in the 
name of the government of Guam by the appropriate officers thereof.
    (b) The government of Guam shall have a lien with respect to the 
Guam Commonwealth income tax in the same manner and with the same 
effect and subject to the same conditions, as the United States has a 
lien with respect to the United States income tax. Such lien in respect 
of the Guam Commonwealth income tax shall be enforceable in the name of 
and by the government of Guam. Where filing of a notice of lien is 
prescribed by the income tax laws in force in Guam pursuant to 
subsection (a) of this section, such notice shall be filed in the 
Office of the Clerk of the District Court of Guam or such other court 
as the Guam legislature may provide.
    (c)(1) The District Court of Guam shall have exclusive original 
jurisdiction over all judicial proceedings in Guam, both criminal and 
civil, regardless of the degree of the offense or of the amount 
involved, with respect to the Guam Commonwealth income tax.
    (2) Suits for the recovery of any Guam Commonwealth income tax 
alleged to have been erroneously or illegally assessed or collected, or 
of any penalty claimed to have been collected without authority, or of 
any sum alleged to have been excessive or in any manner wrongfully 
collected, under the income tax laws in force in Guam, pursuant to 
subsection (a) of this section, may, regardless of the amount of claim, 
be maintained against the government of Guam subject to the same 
statutory requirements as are applicable to suits for the recovery of 
such amounts maintained against the United States in the United States 
District Court of Guam with respect to the United States income tax. 
When any judgment against the government of Guam under this paragraph 
has become final, the Governor shall order the payment of such 
judgments out of any unencumbered funds in the treasury of Guam.
    (3) Execution shall not issue against the Governor or any officer 
or employee of the government of Guam on a final judgment in any 
proceeding against him for any acts or for the recovery of money 
exacted by or paid to him and subsequently paid into the treasury of 
Guam, in performing his official duties under the income tax laws in 
force in Guam pursuant to subsection (a) of this section, if the court 
certifies that probable cause existed, or such officer or employee 
acted under the direction of the Governor or his delegate or other 
official duly authorized to act under the laws of Guam. When such 
certificate has been issued, the Governor shall order the payment of 
such judgment out of any unencumbered funds in the treasury of Guam.
    (4) A civil action for the collection of the Guam Commonwealth 
income tax, together with fines, penalties, and forfeitures, or for the 
recovery of any erroneous refund of such tax, may be brought in the 
name of and by the Government of Guam in the District Court of Guam or 
in any district court of the United States or in any court having the 
jurisdiction of a district court of the United States.
    (5) The jurisdiction conferred upon the District Court of Guam by 
this subsection may be subject to transfer to any local court by the 
legislature of Guam.

SEC. 603. REBATE OF TAXES.

    The government of the Commonwealth of Guam may by local law provide 
for the rebate or reduction of any taxes received by it in order to 
assist new industries coming to Guam or to assist Guam's economic 
development.

SEC. 604. GUAM INCOME TAX AUTHORITY.

    (a) The Commonwealth of Guam shall have the power to determine 
under the laws of Guam the nature and amount of taxes imposed upon the 
income and property of persons within its jurisdiction, from whatever 
source derived.
    (b) The income tax established in section 601 of this Act shall be 
repealed one year following certification by the Chief Executive of 
Guam that Guam has enacted into law a comprehensive local income tax to 
replace that set forth in section 601. Upon this repeal the income tax 
laws of the United States, except for chapters 2 and 21 of the Internal 
Revenue Code of 1954, shall not be applicable to Guam or to the persons 
within the jurisdiction of Guam who have met their tax obligations 
imposed by the laws of Guam.

SEC. 605. BONDS TAX EXEMPTION.

    All bonds or other obligations issued by the Commonwealth of Guam 
or by its authority shall be exempt, as to principal and interest, from 
taxation by the Government of the United States, or by any State or 
Territory or any political subdivision thereof, or by the District of 
Columbia.

                         TITLE VII--IMMIGRATION

SEC. 701. GUAM IMMIGRATION AUTHORITY.

    (a) The Congress recognizes that Guam is a small and densely 
populated insular commonwealth with limited infrastructure and 
resources, that it is that portion of the United States which is in 
closest proximity to nations of Asia and the Pacific which supply a 
large proportion of the immigrants coming to the United States, that 
significant numbers of such immigrants have in recent years chosen to 
make Guam their home, and that the admission of substantial additional 
numbers of immigrants to Guam threatens to produce a severe impact on 
the limited infrastructure, health, education, housing, and other 
services available in Guam. Congress therefore further recognizes that 
there is a necessary and compelling need henceforth to limit the number 
of persons permitted to immigrate to Guam, and therefore the 
Commonwealth of Guam shall have the authority to control entry of all 
aliens into the Commonwealth of Guam to include the admission, 
exclusion, and expulsion of such aliens.
    (b) The Immigration and Nationality Act, and Federal regulations 
applicable thereto, shall remain applicable to Guam for two years from 
enactment of this Act. The Commonwealth of Guam shall, within the two-
year period of this subsection, enact a comprehensive law on 
immigration for Guam, such law to become effective at the end of the 
said two-year period. Enactment of local law by the legislature of Guam 
under this authority, and the actions of the Commonwealth of Guam 
pursuant to such authority shall be duly coordinated with the 
Immigration and Nationality Service, the Department of Labor, and the 
Department of State.
    (c)(1) Such actions by the Commonwealth of Guam shall not impair 
the free movement of United States citizens to and from Guam.
    (2) Such authority shall not include naturalization of aliens for 
United States citizenship.
    (3) The Governor of Guam shall continue to have the authority to 
issue United States passports within existing regulations.
    (4) Entry of aliens into Guam under the authority of subsection (a) 
above, shall not affect, either favorably or unfavorably, an alien's 
entry to any other part of the United States. This title shall not 
preclude a person who previously has been lawfully admitted for 
permanent residence in the United States and who is otherwise 
admissible from being readmitted in Guam upon return to the United 
States.
    (d) Guam shall not be considered as a port of entry for the 
entrance into the United States of aliens lawfully admitted for 
permanent residence into the United States except as provided for in 
subsection (b) or in those cases where the Governor of Guam has made 
labor determinations.

SEC. 702. GUAM-ONLY VISA.

    United States consular officials, and other officials authorized to 
issue visas for entry into the United States, are authorized to issue 
visas for travel only to the Commonwealth of Guam for any alien seeking 
to enter Guam as a nonimmigrant in order to encourage investors and 
tourists to come to Guam. Regulations governing the issuance of such 
visas shall be coordinated with the Governor of Guam. Such regulations 
shall consider the points of origin, duration of permitted stay, the 
means by which the aliens could alter visas to permit entry into the 
United States, and other appropriate conditions to assure the 
regulation serves the best interests of the Commonwealth of Guam. The 
United States and the Commonwealth of Guam shall adopt appropriate 
measures for the implementation and the enforcement of this section 
upon or after entry of the aliens into Guam.

                           TITLE VIII--LABOR

SEC. 801. FEDERAL EMPLOYMENT.

    In all vacancies in the Federal civil service occurring in Guam, 
residents of Guam possessing the requisite standards of age, health, 
character, education, knowledge, and experience shall be given 
preference over transfers of persons from off Guam or the recruiting of 
persons from outside Guam.

SEC. 802. GUAM LABOR LAWS.

    Except and to the extent prohibited by Congress, the Commonwealth 
of Guam shall have authority to enact and enforce all laws regulating 
or affecting employment in the Commonwealth. All applicable laws of the 
United States which regulate employment on Guam on the effective date 
of this Act shall remain applicable to Guam until replaced as to their 
applicability to Guam by duly enacted law of the Guam Legislature.

            TITLE IX--TRANSPORTATION AND TELECOMMUNICATIONS

SEC. 901. MARITIME SHIPPING.

    (a) No provision of the laws of the United States, including, 
without limitation, the vessel documentation laws of the United States, 
shall apply to prevent the United States registration of, and use of, 
any foreign-built vessel (including vessels engaged in towing, barges, 
dredges, vessels or boats leased, rented, or chartered to another for 
any use, including, without limitation, vessels used to take out 
chartered fishing and diving parties or sightseeing tours) for any 
purpose whatsoever within the internal waters, harbors, territorial sea 
and adjacent Exclusive Economic Zone around Guam.
    (b) The shipment of fish or fish products from Guam to any 
coastwise point of the United States shall not be subject to the 
coastwise laws of the United States.
    (c) The application of the coastwise laws of the United States to 
Guam pursuant to 46 U.S.C. 883 shall be periodically examined by the 
Commission to determine, mutually, the desirability of the continued 
applicability of such laws to Guam. Such determination by the 
Commission shall be based solely on the criteria of whether such laws 
or any or a part thereof as applied to Guam constrain Guam's economic 
development and, if such a determination is made, the Commission shall 
recommend such laws should not continue to apply to Guam: Provided, 
That so long as the coastwise laws are applicable to Guam, the United 
States Government shall be responsible for ensuring adequate and 
reliable cargo service between Guam and the United States as determined 
mutually by the Commission.

SEC. 902. AIRLINES.

    (a) The Governor of Guam shall have the authority to sponsor any 
qualified air service carrier to come to Guam subject only to 
presidential consultation concerning articulated foreign policy and 
national defense interests of the United States. The Commonwealth of 
Guam shall be exempt from all bilateral treaties between the United 
States and foreign states with respect to scheduling and to technical 
specifications or aircraft, other than safety requirements, for foreign 
or United States charter passenger flights to and from Guam where such 
flights originate from foreign jurisdictions. This provision shall not 
be applied in such a manner as to impair regularly scheduled passenger 
and cargo flights from any of the several United States States and 
Territories to and from Guam.
    (b) The Commonwealth of Guam shall remain an ``eligible point'' for 
purposes of being ensured essential air transportation under applicable 
provisions of the Federal Aviation Act of 1958, as amended by Public 
Law 98-213, section 10, with passenger and other service to be 
scheduled to provide regular and satisfactory delivery of postal mail 
and cargo to and from the United States.
    (c) In addition to any other requirement in compliance with Federal 
law for new, additional, or changed routes, United States domestic air 
carriers shall obtain the concurrence of the Governor of Guam on any 
application filed for such service to Guam.

SEC. 903. TELECOMMUNICATIONS.

    The Commonwealth of Guam shall be defined as domestic for the 
purposes of setting rates in telecommunications by the Federal 
Communications Commission.

            TITLE X--LAND, NATURAL RESOURCES, AND UTILITIES

SEC. 1001. AUTHORITY OVER LAND AND RESOURCES.

    (a) The government of the Commonwealth of Guam shall have power of 
eminent domain over property within the Commonwealth in accord with the 
constitution of Guam.
    (b) The Commonwealth of Guam shall have jurisdiction over all 
living and nonliving natural resources of the seabed, subsoil, 
tidelands, and adjacent territorial waters, as defined by the United 
States law, of the Island of Guam. The Commonwealth shall exercise 
rights to determine the conditions, including pollution control, and 
terms of all scientific research, management, exploration, and 
exploitation of all ocean resources and all sources of energy and 
prevention of pollution within the 200-mile Exclusive Economic Zone, 
including pollution originating outside the zone that poses a threat 
within the zone.
    (c) The United States may, upon written notice to the government of 
the Commonwealth of Guam, acquire for public purposes in accordance 
with Federal laws and procedures, any interest in real property in the 
Commonwealth only by voluntary means, under such terms and conditions 
as may be negotiated by the parties. The United States will continue to 
recognize and respect the scarcity and special importance of land in 
the Commonwealth of Guam. If the United States must acquire any 
interest in real property, it will follow the policy of seeking to 
acquire only the minimum area necessary to accomplish the public 
purpose for which the real property is required, of seeking only the 
minimum interest in real property necessary to support such public 
purpose, and of seeking first to satisfy its requirement by acquiring 
an interest in public rather than private real property. No interest in 
real property on Guam will be acquired by the United States unless duly 
authorized by the Congress of the United States and for which 
appropriations are available.
    (d) The United States agrees not to exercise within the 
Commonwealth the power of eminent domain except in time of war and then 
only to the extent necessary and in compliance with applicable United 
States and Commonwealth of Guam laws, and with full recognition of due 
process required by the Constitutions of Guam and the United States.
    (e) The Commonwealth of Guam is exempt from the Federal regulations 
governing the transfer or sale of excess Federal real property. All 
excess real properties of the United States on the Island of Guam 
released after establishment of the Commonwealth will be conveyed in 
fee simple to the government of the Commonwealth of Guam without any 
condition, limitation or reversion clause in said conveyance.
    (f) All land heretofore transferred to the government of Guam by 
the United States are released from any and all provisions limiting the 
use of such land, and are conveyed in fee simple.

SEC. 1002. TRANSFER OF EXCESS FEDERAL REAL PROPERTY.

    All real property, including undeveloped land and developed 
recreational facilities, controlled or owned by any United States 
military service or Federal agency on Guam and not necessary for direct 
and continuous operational, logistical, or security use as a military 
facility or other Federal function shall be transferred as excess 
Federal real property to the government of Guam: Provided, That all 
national parks, historical sites, monuments, and cemeteries shall be 
exempt from this provision. Such transfers will be, whenever possible, 
at no cost to the people of Guam, or, when appropriate, at cost no 
higher than the valuation of the property at the time of original 
acquisition by the Federal authority, regardless of any subsequent 
alterations or additions to the property. Final determination of which 
Federal real property is excess to Federal needs, and the authority to 
mandate prompt and fair transfer to the government of Guam by the 
Federal proprietor, shall be with the Joint Commission after 
consultations with the proprietor.

SEC. 1003. ACCESS TO FEDERAL PROPERTY.

    (a) All recreational facilities, and all historical and 
archaeological sites on real property retained under Federal, civil, or 
military authority shall be open to access and use by the residents of 
Guam so long as military security requirements are not compromised.
    (b) Except where prevented by military security requirements, 
easements for roadways or other means of public access through property 
retained under Federal, civil, or military authority shall be granted 
the government of Guam when such easements constitute the only 
practicable means of land access by the government of Guam or the 
public to localities within the jurisdiction of the government of Guam.
    (c) The Joint Commission shall determine, after consultation with 
the general proprietor, which Federal recreational facilities and which 
easements over Federal property shall be open to the government of Guam 
and to the general public on Guam and the manner of access.

SEC. 1004. AUTHORITY OVER UTILITIES.

    Within ninety days after the enactment of this Act, the United 
States shall transfer to the Commonwealth of Guam all rights, title, 
and interest possessed by the United States in the island's power, 
water, sewer, and other utility systems, except for those portions of 
the systems which are located within the confines of property owned by 
the United States and which are used solely for the purposes of the 
United States, and which do not serve or impact upon the normal 
operations of the island's utility system. The government of the 
Commonwealth of Guam may decline to accept any portion of such 
utilities which it believes would act as a detriment to effective use 
of the utilities it owns. The United States shall provide access for 
the Commonwealth of Guam, or its agents, to all utilities and 
transmission lines which the Commonwealth owns on Federal property on 
Guam.

              TITLE XI--UNITED STATES FINANCIAL ASSISTANCE

SEC. 1101. RETURN OF TAXES AND FEES.

    All customs duties and Federal income taxes derived from Guam, the 
proceeds of all taxes collected under the internal revenue laws of the 
United States on articles produced in Guam and transported to the 
United States, its Territories, or possessions, or consumed in Guam, 
and the proceeds of any other taxes which may be levied by the Congress 
on the inhabitants of Guam (including, but not limited to, compensation 
paid to members of the Armed Forces and pensions paid to retired 
civilian military employees of the United States, or their survivors, 
who are residents of, or who are domiciled in, Guam), and all 
quarantine, passport, immigration, and naturalization fees collected in 
Guam shall be covered into the treasury of Guam and held in account for 
the government of Guam in accordance with the annual budgets except 
that nothing in this Act shall be construed to apply to any tax imposed 
by chapter 2 or 21 of the Internal Revenue Code of 1954.

SEC. 1102. EQUAL FINANCE FOR GUAM CITIZENS WITH STATES.

    The laws of the United States providing Federal benefits and 
financial assistance and which have a general application to the 
several States shall be applicable to Guam, including section 228 or 
title II and title XVI of the Social Security Act (Supplemental 
Security Income). The formula for granting such financial assistance to 
Guam and its residents shall be the same as the formula applied to the 
several States and their residents unless such formula cannot, on its 
face, be applied to Guam or it is specifically stated to the contrary 
in this Act.

SEC. 1103. RETURN OF ECONOMIC ZONE FEES.

    The Commonwealth shall have paid to the treasury of Guam all 
licensing and other fees obtained by permitting foreign vessels to fish 
or other exploitation of the 200-mile Exclusive Economic Zone of Guam.

SEC. 1104. FEDERAL PAYMENT.

    (a) The Governor of Guam, in preparing an annual budget for the 
government of the Commonwealth of Guam, shall develop meaningful 
expenditure and revenue comparisons based on data supplied by the 
Bureau of the Census and other independent, reliable sources and 
identify elements of cost and benefits to Guam which result from the 
unusual role of Guam as one of the Nation's principal military bastions 
in the Far East despite its small size. The results of the studies 
conducted by the Governor under this subsection shall be made available 
to the Guam legislature and to the Federal Office of Management and 
Budget for their use in reviewing and revising the Governor's request 
with respect to the level of appropriation for the annual Federal 
payment to the Commonwealth of Guam. Such Federal payment should 
operate to encourage efforts on the part of the government of Guam to 
maintain and increase its level of revenues and to seek such 
efficiencies and economies in the management of its programs as are 
possible.
    (b) The Governor, in studying and identifying the costs and 
benefits to Guam brought about by its role in the nation's national 
security, should to the extent feasible, among other elements, 
consider--
            (1) revenues unobtainable because of the relative lack of 
        taxable commercial and industrial property;
            (2) revenues unobtainable because of the relative lack of 
        taxable business income;
            (3) potential revenues that would be realized if exemptions 
        from Guam taxes were eliminated;
            (4) net costs, if any, after considering other compensation 
        for tax base deficiencies and direct and indirect taxes paid, 
        of providing services to organizations and corporate offices 
        doing business only with the Defense Department;
            (5) recurring and nonrecurring costs of unreimbursed 
        services to the Defense Department;
            (6) recurring and nonrecurring costs of unreimbursed 
        services rendered Guam by the Defense Department; and
            (7) relative tax burden on Guam residents compared to that 
        of residents in other jurisdictions in the Pacific.
    (c) The Governor shall submit his request, with respect to the 
amount of an annual Federal payment, to the Guam legislature. The Guam 
legislature shall by act approve, disapprove, or modify the Governor's 
request. After the action of the legislature, the Governor shall, by 
December 1 of each calendar year, in accordance with the provisions in 
the Budget and Accounting Act, 1921 (31 U.S.C. 2), submit such request 
to the President for submission to the Congress. Each request regarding 
an annual Federal payment shall be submitted to the President seven 
months prior to the beginning of the fiscal year for which such request 
is made and shall include a request for an annual Federal payment for 
the next following fiscal year.

SEC. 1105. TRANSITION ASSISTANCE TO THE COMMONWEALTH.

    The Government of the United States in order to assist Guam to make 
the political and economic transition to Commonwealth agrees to assist 
the Commonwealth of Guam as follows:
            (1) The United States agrees to--
                    (A) finance the costs of institutional changes 
                connected with the change in Guam's political 
                relationship with the United States, to include staff, 
                contracts, and referendum costs of the Guam Commission 
                on Self-Determination;
                    (B) help meet the capital needs of Guam, in 
                accordance with the following section, necessary to 
                Guam's long-term, self-sustaining development; and
                    (C) establish an economic development fund to 
                assist expansion of the private sector.
            (2) There is hereby authorized such sums as may be 
        necessary to implement a long-term capital improvement program 
        approved by the Congress permitting the Commonwealth of Guam to 
        establish an infrastructure base adequate for development of 
        the private sector and to strengthen the utility of Guam for 
        United States national security purposes.
            (3) Guam shall submit a plan for Congressional approval 
        showing the total amounts proposed, the distribution of funds 
        by projects, phases, or programs with an assessment of needs, 
        costs, benefits, and provision of local funds where available. 
        The capital improvement plan shall take into account all 
        related economic development projects and plans by the 
        Commonwealth of Guam.
            (4) There is hereby authorized a revolving fund to 
        establish an Economic Development Fund on Guam with authority 
        to assist in the financing of the private sector needs of Guam 
        in its efforts to achieve a higher standard of living for its 
        people as members of the American community and to develop the 
        economic resources needed to meet the financial 
        responsibilities of local self-government. To this end, the 
        Economic Development Fund is authorized to provide financial 
        and other assistance to increase investments (including loans, 
        tax incentives, guarantees and equity capital) and to start or 
        expand commercial businesses on Guam in order to provide 
        employment and ownership opportunities for the residents of 
        Guam. Participation by private banks and savings and loan 
        institutions in the Economic Development Fund shall be 
        encouraged. Funds shall be made available to the Economic 
        Development Fund by Congress after the following conditions 
        have been met:
                    (A) The submission of a set of procedures to 
                Congress for the participation of private lending 
                institutions and for the processing of applications for 
                assistance, indicating the role of the Economic 
                Development Fund's staff, outside consultants, and 
                board review, and to guide reviewers in making 
                assistance and determining eligibility.
                    (B) Submission of an economic development plan, to 
                be updated annually, by the Governor of Guam to 
Congress, showing the proposed amount, the proposed distribution of the 
funds, and the terms on which the funds will be made available. Such 
plan will take into account any capital improvement projects and other 
programs related to economic development. The funds granted to the 
Economic Development Fund shall be a revolving fund, available to the 
Economic Development Fund until expended.
                    (C) The Economic Development Fund shall be headed 
                by a five-member Board of Directors with financial 
                experience for fixed terms and selected by the Governor 
                of Guam. The Economic Development Fund shall issue a 
                public and audited report annually, setting forth the 
                administrative and programmatic developments for the 
                year with full disclosure of the utilization of its 
                funds, the recipients of its assistance, and the 
                applications in process.

           TITLE XII--TECHNICAL AMENDMENTS AND INTERPRETATION

SEC. 1201. INTERPRETATION AND JURISDICTION.

    (a) It is the intention of Congress that this Act provide complete 
internal self-government for the Commonwealth of Guam and, to that end, 
that this Act be interpreted liberally to accomplish that purpose.
    (b) When ruling upon the laws of the Commonwealth, the courts of 
the United States shall give the same deference to the laws of the 
Commonwealth as they give to the laws of the several States. 
Jurisdiction to interpret the provisions of this Act is vested in 
appropriate courts of the United States and in the local courts of 
Guam.

SEC. 1202. CONTINUED EFFECTIVENESS OF LOCAL LAWS.

    The laws of Guam in force on the date of enactment of this Act, 
except as amended by this Act, are hereby continued in force, subject 
to modification or repeal by the legislature of Guam.

SEC. 1203. ACTS REPEALED AND CONTINUED.

    (a) All laws or parts of laws inconsistent with this Act are hereby 
repealed to the extent of such inconsistency.
    (b) Upon the enactment of this Act, the following sections of the 
Organic Act of Guam (Act of August 1, 1950, 64 Stat. 384), as amended, 
are repealed: Sections 1, 2, and 3; fourth sentence of section 11, 
sections 25, 27, 33, and section 34.
    (c) Upon the effective date of the constitution adopted by the 
people of Guam, the following provisions of the Organic Act of Guam 
(Act of August 1, 1950, 64 Stat. 384), as amended, and in effect at 
that time, are repealed: Sections 5(a) through (t), 6, 7, 8, 9, 9-A, 
10; the first three sentences of section 11; sections 12, 13, 14, 15, 
16, 17, 18, 19, 20, 21, 22, 22A, 22B, 22C, 22D, 24, 26, 29, 30, and 
section 31.
    (d) The following sections of the Organic Act of Guam (Act of 
August 1, 1950, 64 Stat. 384), as amended, shall continue in force and 
shall be deemed to be a part of this Act: Section 5(u), beginning at 
the fifth sentence; all the remainder of sections 11, 21-A, 24-A, 
section 28 as modified by article 10 of this Act; 32, and section 35.
    (e) Public Law 94-584 (90 Stat. 2899), as amended, is repealed as 
it affects Guam.

SEC. 1204. EFFECTIVE DATE OF THE GUAM COMMONWEALTH ACT.

    This Act, upon approval by Congress, shall be submitted to the 
registered voters of Guam for ratification through a plebiscite to be 
held in accordance with the laws of Guam. This Act will become 
effective upon the approval of this Act by a majority of the voters who 
participate in such plebiscite, and at that time, except as provided in 
section 1203 of this Act, the Organic Act of Guam, August 1, 1950, 64 
Stat. 384, shall be repealed.
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