I 
115TH CONGRESS 
1ST SESSION H. R. 2085 
To approve an agreement between the United States and the Republic of 
Palau, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 8, 2017 
Mr. SABLAN (for himself and Ms. BORDALLO) introduced the following bill; 
which was referred to the Committee on Natural Resources, and in addi-
tion to the Committee on Foreign Affairs, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To approve an agreement between the United States and 
the Republic of Palau, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. APPROVAL OF THE AGREEMENT BETWEEN THE 
UNITED STATES AND THE REPUBLIC OF 
PALAU. 
(a) DEFINITIONS.—In this section: 
(1) 
AGREEMENT.—The 
term 
‘‘Agreement’’ 
means the Agreement and appendices signed by the 
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United States and the Republic of Palau on Sep-
tember 3, 2010. 
(2) COMPACT
OF
FREE
ASSOCIATION.—The 
term ‘‘Compact of Free Association’’ means the 
Compact of Free Association between the Govern-
ment of the United States of America and the Gov-
ernment of Palau (48 U.S.C. 1931 note; Public Law 
99–658). 
(b) RESULTS OF COMPACT REVIEW.— 
(1) IN GENERAL.—Title I of Public Law 99– 
658 (48 U.S.C. 1931 et seq.) is amended by adding 
at the end the following: 
‘‘SEC. 105. RESULTS OF COMPACT REVIEW. 
‘‘(a) IN GENERAL.—The Agreement and appendices 
signed by the United States and the Republic of Palau 
on September 3, 2010 (referred to in this section as the 
‘Agreement’), in connection with section 432 of the Com-
pact of Free Association between the Government of the 
United States of America and the Government of Palau 
(48 U.S.C. 1931 note; Public Law 99–658) (referred to 
in this section as the ‘Compact of Free Association’), are 
approved— 
‘‘(1) except for the extension of Article X of the 
Agreement Regarding Federal Programs and Serv-
ices, and Concluded Pursuant to Article II of Title 
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II and section 232 of the Compact of Free Associa-
tion; and 
‘‘(2) subject to the provisions of this section. 
‘‘(b) WITHHOLDING OF FUNDS.—If the Republic of 
Palau withdraws more than $9,000,000 from the trust 
fund established under section 211(f) of the Compact of 
Free Association in fiscal year 2018, amounts payable 
under sections 1, 2(a), 3, and 4(a), of the Agreement shall 
be withheld from the Republic of Palau until the date on 
which the Republic of Palau reimburses the trust fund for 
the total amounts withdrawn that exceeded $9,000,000 in 
that fiscal year, except that funds to be provided under 
section 3 of the Agreement may be released to replenish 
the 211(f) Fund if an arrangement had been made be-
tween the United States and the Republic of Palau to ad-
vance funds during such fiscal year from the 211(f) Fund 
for the purposes allowable under section 3 of the Agree-
ment. 
‘‘(c) FUNDING FOR CERTAIN PROVISIONS UNDER 
SECTION 105 OF COMPACT OF FREE ASSOCIATION.—Not 
later than 30 days after the date of the enactment of this 
section, out of any funds in the Treasury not otherwise 
appropriated, the Secretary of the Treasury shall transfer 
to the Secretary of the Interior such sums as are necessary 
for the Secretary of the Interior to implement sections 1, 
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2(a), 3, 4(a), 5, and 6 of the Agreement, which sums shall 
remain available until expended without any further ap-
propriation. 
‘‘(d) AUTHORIZATIONS OF APPROPRIATIONS.—There 
are authorized to be appropriated— 
‘‘(1) to the Secretary of the Interior to sub-
sidize postal services provided by the United States 
Postal Service to the Republic of Palau, the Repub-
lic of the Marshall Islands, and the Federated States 
of Micronesia, $1,500,000 for each of fiscal years 
2018 through 2024, to remain available until ex-
pended but may be available pursuant to this para-
graph to the United States Postal Service only so 
long as domestic postage may be used for mail to 
Palau, the Federated States of Micronesia, and the 
Republic of the Marshall Islands; and 
‘‘(2) to the head of each Federal entity de-
scribed in paragraphs (1), (3), and (4) of section 
221(a) of the Compact of Free Association (includ-
ing the successor of each Federal entity) to carry 
out the responsibilities of the Federal entity under 
section 221(a) of the Compact of Free Association 
such sums as are necessary, to remain available 
until expended.’’. 
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(2) OFFSET.—Section 3 of the Act of June 30, 
1954 (68 Stat. 330, 82 Stat. 1213, chapter 423), is 
repealed. 
(c) PAYMENT SCHEDULE; WITHHOLDING OF FUNDS; 
FUNDING.— 
(1) COMPACT SECTION 211(f) FUND.—Section 
1 of the Agreement shall be construed as though the 
section reads as follows: 
‘‘SEC. 1. COMPACT SECTION 211(f) FUND. 
‘‘The Government of the United States shall con-
tribute $30,250,000 to the Fund referred to in section 
211(f) of the Compact in accordance with the following 
schedule: 
‘‘(1) $22,000,000 in fiscal year 2018. 
‘‘(2) $2,000,000 in each of fiscal years 2019 
through 2022. 
‘‘(3) $250,000 in fiscal year 2023.’’. 
(2) INFRASTRUCTURE MAINTENANCE FUND.— 
Subsection (a) of section 2 of the Agreement shall 
be construed as though the subsection reads as fol-
lows: 
‘‘(a) The Government of the United States shall pro-
vide a grant of $16,000,000 in fiscal year 2018, rep-
resenting the amounts to have been provided by the 
United States in fiscal years 2011 through 2017 under 
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section 2(a) of the Agreement, and a grant of $2,000,000 
annually from the beginning of fiscal year 2019 through 
fiscal year 2024 to create a trust fund, to be known as 
the ‘Infrastructure Maintenance Fund’, to be used for the 
routine and periodic maintenance of major capital im-
provement projects financed by funds provided by the 
United States. The Government of the Republic of Palau 
shall match the contributions made by the United States 
by making contributions of $150,000 to the Infrastructure 
Maintenance Fund on a quarterly basis from the begin-
ning of fiscal year 2018 through fiscal year 2024. Imple-
mentation of this subsection shall be carried out in accord-
ance with the provisions of Appendix A of this Agree-
ment.’’. 
(3) FISCAL CONSOLIDATION FUND.—Section 3 
of the Agreement shall be construed as though the 
section reads as follows: 
‘‘SEC. 3. FISCAL CONSOLIDATION FUND. 
‘‘The Government of the United States shall provide 
the Government of Palau $10,000,000 in fiscal year 2018 
for deposit in an interest bearing account to be used to 
reduce government arrears of Palau. Implementation of 
this section shall be carried out in accordance with the 
provisions of Appendix B of this Agreement.’’. 
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(4) 
DIRECT
ECONOMIC
ASSISTANCE.—Sub-
section (a) of section 4 of the Agreement shall be 
construed as though the subsection reads as follows: 
‘‘(a) In addition to the economic assistance of 
$13,147,000 provided to the Government of Palau by the 
Government of the United States in each of fiscal years 
2010, 2011, 2012, 2013, 2014, 2015, 2016, and 2017, 
and unless otherwise specified in this Agreement or in an 
Appendix of this Agreement, the Government of the 
United States shall provide the Government of Palau 
$27,250,000 in economic assistance as follows: 
‘‘(1) $7,250,000 in fiscal year 2018. 
‘‘(2) $6,000,000 in fiscal year 2019. 
‘‘(3) $5,000,000 in fiscal year 2020. 
‘‘(4) $4,000,000 in fiscal year 2021. 
‘‘(5) $3,000,000 in fiscal year 2022. 
‘‘(6) $2,000,000 in fiscal year 2023. 
The funds provided in any fiscal year under this sub-
section for economic assistance shall be provided in 4 
quarterly payments (30 percent in the first quarter, 30 
percent in the second quarter, 20 percent in the third 
quarter, and 20 percent in the fourth quarter) unless oth-
erwise specified in this Agreement or in an Appendix of 
this Agreement.’’. 
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(5) INFRASTRUCTURE PROJECTS.—Section 5 of 
the Agreement shall be construed as though the sec-
tion reads as follows: 
‘‘SEC. 5. INFRASTRUCTURE PROJECTS. 
‘‘The Government of the United States shall provide 
in fiscal year 2018, $40,000,000 to the Government of 
Palau towards one or more mutually agreed infrastructure 
projects in accordance with the provisions of Appendix C 
to this Agreement.’’. 
(d) CONTINUING PROGRAMS
AND LAWS.—Section 
105(f)(1)(B)(ix) of the Compact of Free Association 
Amendments Act of 2003 (48 U.S.C. 192ld(f)(1)(B)(ix)) 
is amended by striking ‘‘2009’’ and inserting ‘‘2024’’. 
(e) AUDIT; FULL FAITH AND CREDIT; INFLATION 
ADJUSTMENT.—The Secretary of the Interior shall fund 
the amounts necessary to conduct the audits required by 
section 6 and Appendix D of the Agreement. Section 236 
of the Compact applies to the commitments of the United 
States under sections 1, 2(a), 3, 4(a), and 5 of the Agree-
ment, and to the amounts necessary to conduct such au-
dits, to the same extent as section 236 applies to the Com-
pact. Section 215 of the Compact shall be applied to such 
commitments and amounts by substituting ‘‘2010’’ for 
‘‘1981’’. 
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(f) PASSPORT REQUIREMENT.—Section 141 of Arti-
cle IV of Title One of the Compact of Free Association 
shall be construed and applied as if it read as follows: 
‘‘SEC. 141. PASSPORT REQUIREMENT. 
‘‘(a) IN GENERAL.—An individual in one of the fol-
lowing categories may be admitted to lawfully engage in 
occupations and establish residence as a nonimmigrant in 
the United States and its territories and possessions with-
out regard to paragraphs (5) or (7)(B)(i)(II) of section 
212(a) of the Immigration and Nationality Act (8 U.S.C. 
1182(a)(5) or (a)(7)(B)(i)(II)), if the passport presented 
to satisfy section 212(a)(7)(B)(i)(I) of such Act is a valid, 
unexpired, machine-readable passport that satisfies the 
internationally accepted standard for machine readability: 
‘‘(1) An individual who, on September 30, 
1994, was a citizen of the Trust Territory of the Pa-
cific Islands, as defined in title 53 of the Trust Ter-
ritory Code in force on January 1, 1979, and has 
become and remains a citizen of Palau. 
‘‘(2) An individual who acquires the citizenship 
of Palau, at birth, on or after the effective date of 
the Constitution of Palau. 
‘‘(3) A naturalized citizen of Palau, who has 
been an actual resident of Palau for not less than 
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five years after attaining such naturalization and 
who holds a certificate of actual residence. 
‘‘(b) EMPLOYMENT.—An individual in one of the cat-
egories in paragraphs (1) through (3) of subsection (a) 
shall be considered to have the permission of the Secretary 
of Homeland Security of the United States to accept em-
ployment in the United States. 
‘‘(c) HABITUAL RESIDENCE.—The right of an indi-
vidual in one of the categories in paragraphs (1) through 
(3) of subsection (a) to establish habitual residence in a 
territory or possession of the United States may be sub-
jected to non-discriminatory limitations provided for— 
‘‘(1) in statutes or regulations of the United 
States; and 
‘‘(2) in those statutes or regulations of the ter-
ritory or possession concerned which are authorized 
by the laws of the United States. 
‘‘(d) CLARIFICATION.—Subsection (a)— 
‘‘(1) does not confer on a citizen of Palau the 
right to establish the residence necessary for natu-
ralization under the Immigration and Nationality 
Act, or to petition for benefits for alien relatives 
under that Act; and 
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‘‘(2) shall not prevent a citizen of Palau from 
otherwise acquiring such rights or lawful permanent 
resident alien status in the United States.’’. 
Æ 
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