To recognize Puerto Rico's sovereign nationhood under either independence or free association and to provide for a transition process, and for other purposes.

To recognize Puerto Rico’s sovereign nationhood under either independence or free association and to provide for a transition process, and for other purposes. 1. Findings Congress finds the following: (1) In order to ensure the legitimate interests of Puerto Rico and the United States, Congress should recognize Puerto Rico as a sovereign nation. (2) Consistent with article IV, section 3 of the Constitution, only Congress has the power to dispose of and make all needful rules and regulations respecting Puerto Rico. (3) Puerto Rico’s territorial condition constitutes an unsustainable status of political subordination. (4) Annexation of Puerto Rico as a State of the Union would be detrimental to both Puerto Rico and the United States. (5) A majority of the voters rejected the continuation of territorial status in the referendum on the political status of Puerto Rico held in Puerto Rico on November 6, 2012. (6) The people of Puerto Rico should, through participation in a referendum vote on the future status of Puerto Rico, choose between independence or free association. (7) Congress should dispose of the territory of Puerto Rico, recognize its sovereign nationhood, and provide for an appropriate transition process to take place under independence or under a compact of free association with the United States, in harmony with the results of the vote expressed by the People of Puerto Rico in the referendum. 2. Referendum (a) In general The Legislative Assembly of Puerto Rico shall provide for a referendum to take place in Puerto Rico, in which eligible voters shall express their preference between the non-territorial options of either independence or free association, as herein provided. (b) Eligible voters An individual shall be eligible to vote in the referendum held under this Act if that individual— (1) was born in Puerto Rico; or (2) has a parent who was born in Puerto Rico. (c) Independence (1) Authorization to negotiate treaty The President shall negotiate a Treaty of Friendship and Cooperation and other bilateral agreements with the government of an independent Puerto Rico that will provide for equitable economic relations between both nations. (2) Treaty of Friendship and Cooperation The Treaty of Friendship and Cooperation shall establish the details of the bilateral relations of Puerto Rico and the United States under the guidelines set forth below: (A) Citizenship Puerto Ricans shall become citizens of the Republic of Puerto Rico. United States citizenship shall be guaranteed to all Puerto Rican citizens who choose to retain their United States citizenship after the proclamation of Puerto Rico’s independence. Those born thereafter may acquire non-immigrant status, dual or reciprocal United States citizenship as provided by law, or as otherwise agreed by treaty, so that their freedom to travel to and from the United States and to live and work there shall not be impaired. (B) Vested Rights Veterans benefits, Federal pensions, and full Social Security rights, as well as any other vested rights and benefits under the laws of the United States are hereby guaranteed to citizens of Puerto Rico until the normal expiration of such benefits; provided that all necessary agreements to protect the rights of workers who acquire permanently insured status during 5 years following the proclamation of Puerto Rico’s independence, but are not yet beneficiaries under the Old-Age, Survivors, and Disability Insurance Benefits program under title II of the Social Security Act ( 42 U.S.C. 401 (C) Trade The United States shall eliminate trade barriers with Puerto Rico, provided that limitations on imports or exports agreed upon by both nations shall ensure mutual benefits and assist each nation in meeting its trade and economic development objectives. (D) Public Debt and Economic Transition As partial indemnity for more than 118 years of political and economic subordination, during which the total payment of interest earnings and dividends from Puerto Rico to United States corporations have far exceeded net transfers of Federal assistance to both the government and the residents of Puerto Rico, the United States shall enter into negotiations with Puerto Rico to restructure the outstanding debts and obligations of the government of the Commonwealth of Puerto Rico and its instrumentalities. Moreover, during a transition period, an independent Puerto Rico shall receive annual transfer block grants equal to the total amount of grants, programs, and services currently provided by the Federal Government in Puerto Rico, adjusted for inflation, for a period to be negotiated to take place immediately following the joint proclamation of Puerto Rico’s independence. (E) Currency If so requested by Puerto Rico, both nations shall make the necessary arrangements with respect to the use of United States currency by the Republic of Puerto Rico. (F) Defense The United States and the Republic of Puerto Rico shall enter into agreements leading to the complete demilitarization of the Republic of Puerto Rico, and the devolution and decontamination of any real estate previously held by any branch of the Armed Forces. (d) Free association (1) Authorization to negotiate compact To provide a process consonant with the laws and policies of the United States and in accordance with principles of international law, the President shall negotiate the terms for a Compact of Free Association with the government of Puerto Rico which, prior to the territory’s recognition and proclamation of sovereignty, shall establish the terms of the association. (2) Compact of Free Association The Compact of Free Association between the United States and Puerto Rico shall be submitted to Congress and the People of Puerto Rico for ratification under the agreed guidelines set forth below: (A) Puerto Rico as sovereign state International legal personality of Puerto Rico as a sovereign state. (B) Self-government Full self-government not subject to the Constitution or laws of the United States, except for those specific powers delegated to the United States and which are subject to revocation by Puerto Rico. (C) Termination of free association The right of Puerto Rico and of the United States to unilaterally put an end to the relationship of free association and Puerto Rico becoming fully independent. (D) United States citizenship The continuation of United States citizenship for the citizens of Puerto Rico. (E) Trade relations The continuation of existing trade relations with the United States and an agreed upon level of participation by residents of Puerto Rico in Federal economic and social assistance programs.

Summary: This bill requires the Legislative Assembly of Puerto Rico to provide for a referendum in Puerto Rico in which eligible voters shall express their preference between the non-territorial options of either independence or free association. An individual shall be eligible to vote in such referendum if that individual was born in, or has a parent who was born in, Puerto Rico. The President shall negotiate a Treaty of Friendship and Cooperation and other bilateral agreements with the government of an independent Puerto Rico that will provide for equitable economic relations. Such treaty shall establish the details of the bilateral relations of Puerto Rico and the United States under specified guidelines with respect to citizenship, vested rights, trade, public debt and economic transition, currency, and defense. The President shall negotiate the terms for a Compact of Free Association with the government of Puerto Rico, which shall be submitted to Congress and the people of Puerto Rico for ratification under specified agreed guidelines with respect to Puerto Rican sovereignty and self-government, the termination of the free association relationship when Puerto Rico becomes fully independent, the continuation of U.S. citizenship for citizens of Puerto Rico, and the continuation of trade relations with the United States.