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108th Congress                                            Rept. 108-262
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2
======================================================================

 
  APPROVING THE ``COMPACT OF FREE ASSOCIATION, AS AMENDED BETWEEN THE 
 GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE 
      FEDERATED STATES OF MICRONESIA'', AND THE ``COMPACT OF FREE 
ASSOCIATION, AS AMENDED BETWEEN THE GOVERNMENT OF THE UNITED STATES OF 
 AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF THE MARSHALL ISLANDS'', 
 AND OTHERWISE TO AMEND PUBLIC LAW 99-239, AND TO APPROPRIATE FOR THE 
  PURPOSES OF AMENDED PUBLIC LAW 99-239 FOR FISCAL YEARS ENDING ON OR 
           BEFORE SEPTEMBER 30, 2023, AND FOR OTHER PURPOSES

                                _______
                                

               September 15, 2003.--Ordered to be printed

                                _______
                                

  Mr. Pombo, from the Committee on Resources, submitted the following

                              R E P O R T

                      [To accompany H.J. Res. 63]

  The Committee on Resources, to whom was referred the joint 
resolution (H.J. Res. 63) to approve the ``Compact of Free 
Association, as amended between the Government of the United 
States of America and the Government of the Federated States of 
Micronesia'', and the ``Compact of Free Association, as amended 
between the Government of the United States of America and the 
Government of the Republic of the Marshall Islands'', and 
otherwise to amend Public Law 99-239, and to appropriate for 
the purposes of amended Public Law 99-239 for fiscal years 
ending on or before September 30, 2023, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the joint resolution as amended do 
pass.
  The amendment is as follows:
  Strike all after the resolving clause and insert the 
following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

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

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

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

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

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

                   Title One--Governmental Relations

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

                     Title Two--Economic Relations

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

              Title Three--Security and Defense Relations

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

                     Title Four--General Provisions

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

                   Title One--Governmental Relations

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

                     Title Two--Economic Relations

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

              Title Three--Security and Defense Relations

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

                     Title Four--General Provisions

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

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

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

  (a) Federated States of Micronesia.--The Compact of Free Association, 
as amended with respect to the Federated States of Micronesia and 
signed by the United States and the Government of the Federated States 
of Micronesia and set forth in Title II (section 201(a)) of this joint 
resolution, is hereby approved, and Congress hereby consents to the 
subsidiary agreements and amended subsidiary agreements listed in 
section 462 of the U.S.-FSM Compact. Subject to the provisions of this 
joint resolution, the President is authorized to agree, in accordance 
with section 411 of the U.S.-FSM Compact, to an effective date for and 
thereafter to implement such U.S.-FSM Compact.
  (b) Republic of the Marshall Islands.--The Compact of Free 
Association, as amended with respect to the Republic of the Marshall 
Islands and signed by the United States and the Government of the 
Republic of the Marshall Islands and set forth in Title II (section 
201(b)) of this joint resolution, is hereby approved, and Congress 
hereby consents to the subsidiary agreements and amended subsidiary 
agreements listed in section 462 of the U.S.-RMI Compact. Subject to 
the provisions of this joint resolution, the President is authorized to 
agree, in accordance with section 411 of the U.S.-RMI Compact, to an 
effective date for and thereafter to implement such U.S.-RMI Compact.
  (c) References to the Compact, the U.S.-FSM Compact, and the U.S.-RMI 
Compact; References to Subsidiary Agreements or Separate Agreements.--
          (1) Any reference in this joint resolution (except references 
        in title II) to ``the Compact'' shall be treated as a reference 
        to the Compact of Free Association set forth in title II of 
        Public Law 99-239, January 14, 1986 (99 Stat. 1770). Any 
        reference in this joint resolution to the ``U.S.-FSM Compact'' 
        shall be treated as a reference to the Compact of Free 
        Association, as amended between the Government of the United 
        States of America and the Government of the Federated States of 
        Micronesia and set forth in Title II (section 201(a)) of this 
        joint resolution. Any reference in this joint resolution to the 
        ``U.S.-RMI Compact'' shall be treated as a reference to the 
        Compact of Free Association, as amended between the Government 
        of the United States of America and the Government of the 
        Republic of the Marshall Islands and set forth in Title II 
        (section 201(b)) of this joint resolution.
          (2) Any reference to the term ``subsidiary agreements'' or 
        ``separate agreements'' in this joint resolution shall be 
        treated as a reference to agreements listed in section 462 of 
        the U.S.-FSM Compact and the U.S.-RMI Compact, and any other 
        agreements that the United States may from time to time enter 
        into with either the government of the Federated States of 
        Micronesia or the government of the Republic of the Marshall 
        Islands, or with both such governments in accordance with the 
        provisions of the U.S.-FSM Compact and the U.S.-RMI Compact.
  (d) Amendment, Change, or Termination in the U.S.-FSM Compact and 
U.S.-RMI Compact and Certain Agreements.--
          (1) Any amendment, change, or termination by mutual agreement 
        or by unilateral action of the Government of the United States 
        of all or any part of the U.S.-FSM Compact or U.S.-RMI Compact 
        shall not enter into force until after Congress has 
        incorporated it in an Act of Congress.
          (2) The provisions of paragraph (1) shall apply--
                  (A) to all actions of the Government of the United 
                States under the U.S.-FSM Compact or U.S.-RMI Compact 
                including, but not limited to, actions taken pursuant 
                to sections 431, 441, or 442;
                  (B) to any amendment, change, or termination in the 
                Agreement Between the Government of the United States 
                and the Government of the Federated States of 
                Micronesia Regarding Friendship, Cooperation and Mutual 
                Security Concluded Pursuant to Sections 321 and 323 of 
                the Compact of Free Association referred to in section 
                462(a)(2) of the U.S.-FSM Compact and the Agreement 
                Between the Government of the United States and the 
                Government of the Marshall Islands Regarding Mutual 
                Security Concluded Pursuant to Sections 321 and 323 of 
                the Compact of Free Association referred to in section 
                462(a)(5) of the U.S.-RMI Compact;
                  (C) to any amendment, change, or termination of the 
                agreements concluded pursuant to Compact section 177, 
                and section 215(a) of the U.S.-FSM Compact and section 
                216(a) of the U.S.-RMI Compact, the terms of which are 
                incorporated by reference into the U.S.-FSM Compact and 
                the U.S.-RMI Compact; and
                  (D) to the following subsidiary agreements, or 
                portions thereof: Articles III, IV and X of the 
                agreement referred to in section 462(b)(6) of the U.S.-
                RMI Compact:
                          (i) Article III and IV of the agreement 
                        referred to in section 462(b)(6) of the U.S.-
                        FSM Compact.
                          (ii) Articles VI, XV, and XVII of the 
                        agreement referred to in section 462(b)(7) of 
                        the U.S.-FSM Compact and U.S.-RMI Compact.
  (e) Subsidiary Agreements Deemed Bilateral.--For purposes of 
implementation of the U.S.-FSM Compact and the U.S.-RMI Compact and 
this joint resolution, the Agreement Concluded Pursuant to Section 234 
of the Compact of Free Association and referred to in section 462(a)(1) 
of the U.S.-FSM Compact and section 462(a)(4) of the U.S.-RMI Compact 
shall be deemed to be a bilateral agreement between the United States 
and each other party to such subsidiary agreement. The consent or 
concurrence of any other party shall not be required for the 
effectiveness of any actions taken by the United States in conjunction 
with either the Federated States of Micronesia or the Republic of the 
Marshall Islands which are intended to affect the implementation, 
modification, suspension, or termination of such subsidiary agreement 
(or any provision thereof) as regards the mutual responsibilities of 
the United States and the party in conjunction with whom the actions 
are taken.
  (f) Entry Into Force of Future Amendments to Subsidiary Agreements.--
No agreement between the United States and the government of either the 
Federated States of Micronesia or the Republic of the Marshall Islands 
which would amend, change, or terminate any subsidiary agreement or 
portion thereof, other than those set forth is subsection (d) of this 
section shall enter into force until after the President has 
transmitted such agreement to the President of the Senate and the 
Speaker of the House of Representatives together with an explanation of 
the agreement and the reasons therefor. In the case of the agreement 
referred to in section 462(b)(3) of the U.S.-FSM Compact and the U.S.-
RMI Compact, such transmittal shall include a specific statement by the 
Secretary of Labor as to the necessity of such amendment, change, or 
termination, and the impact thereof.

SEC. 102. AGREEMENTS WITH FEDERATED STATES OF MICRONESIA.

  (a) Law Enforcement Assistance.--Pursuant to sections 222 and 224 of 
the U.S.-FSM Compact, the United States shall provide nonreimbursable 
technical and training assistance as appropriate, including training 
and equipment for postal inspection of illicit drugs and other 
contraband, to enable the Government of the Federated States of 
Micronesia to develop and adequately enforce laws of the Federated 
States of Micronesia and to cooperate with the United States in the 
enforcement of criminal laws of the United States. Funds appropriated 
pursuant to section 105(j) of this title may be used to reimburse State 
or local agencies providing such assistance.
  (b) Agreement on Audits.--The Comptroller General (and his duly 
authorized representatives) shall have the authorities necessary to 
carry out his responsibilities under section 232 of the U.S.-FSM 
Compact and the agreement referred to in section 462(b)(4) of the U.S.-
FSM Compact, including the following authorities:
          (1) General authority of the comptroller general to audit.--
                  (A) The Comptroller General of the United States (and 
                his duly authorized representatives) shall have the 
                authority to audit--
                          (i) all grants, program assistance, and other 
                        assistance provided to the Government of the 
                        Federated States of Micronesia under Articles I 
                        and II of Title Two of the U.S.-FSM Compact; 
                        and
                          (ii) any other assistance provided by the 
                        Government of the United States to the 
                        Government of the Federated States of 
                        Micronesia.
                Such authority shall include authority for the 
                Comptroller General to conduct or cause to be conducted 
                any of the audits provided for in section 232 of the 
                U.S.-FSM Compact. The authority provided in this 
                paragraph shall continue for at least ten years after 
                the last such grant has been made or assistance has 
                been provided.
                  (B) The Comptroller General (and his duly authorized 
                representatives) shall also have authority to review 
                any audit conducted by or on behalf of the Government 
                of the United States. In this connection, the 
                Comptroller General shall have access to such personnel 
                and to such records, documents, working papers, 
                automated data and files, and other information 
                relevant to such review.
          (2) Comptroller general access to records.--
                  (A) In carrying out paragraph (1), the Comptroller 
                General (and his duly authorized representatives) shall 
                have such access to the personnel and (without cost) to 
                records, documents, working papers, automated data and 
                files, and other information relevant to such audits. 
                The Comptroller General may duplicate any such records, 
                documents, working papers, automated data and files, or 
                other information relevant to such audits.
                  (B) Such records, documents, working papers, 
                automated data and files, and other information 
                regarding each such grant or other assistance shall be 
                maintained for at least ten years after the date such 
                grant or assistance was provided and in a manner that 
                permits such grants, assistance, and payments to be 
                accounted for distinct from any other funds of the 
                Government of the Federated States of Micronesia.
          (3) Status of comptroller general representatives.--The 
        Comptroller General and his duly authorized representatives 
        shall be immune from civil and criminal process relating to 
        words spoken or written and all acts performed by them in their 
        official capacity and falling within their functions, except 
        insofar as such immunity may be expressly waived by the 
        Government of the United States. The Comptroller General and 
        his duly authorized representatives shall not be liable to 
        arrest or detention pending trial, except in the case of a 
        grave crime and pursuant to a decision by a competent judicial 
        authority, and such persons shall enjoy immunity from seizure 
        of personal property, immigration restrictions, and laws 
        relating to alien registration, fingerprinting, and the 
        registration of foreign agents. Such persons shall enjoy the 
        same taxation exemptions as are set forth in Article 34 of the 
        Vienna Convention on Diplomatic Relations. The privileges, 
        exemptions and immunities accorded under this paragraph are not 
        for the personal benefit of the individuals concerned but are 
        to safeguard the independent exercise of their official 
        functions. Without prejudice to those privileges, exemptions 
        and immunities, it is the duty of all such persons to respect 
        the laws and regulations of the Government of the Federated 
        States of Micronesia.
          (4) Audits defined.--As used in this subsection, the term 
        ``audits'' includes financial, program, and management audits, 
        including determining--
                  (A) whether the Government of the Federated States of 
                Micronesia has met the requirements set forth in the 
                U.S.-FSM Compact, or any related agreement entered into 
                under the U.S.-FSM Compact, regarding the purposes for 
                which such grants and other assistance are to be used; 
                and
                  (B) the propriety of the financial transactions of 
                the Government of the Federated States of Micronesia 
                pursuant to such grants or assistance.
          (5) Cooperation by federated states of micronesia.--The 
        Government of the Federated States of Micronesia will cooperate 
        fully with the Comptroller General of the United States in the 
        conduct of such audits as the Comptroller General determines 
        necessary to enable the Comptroller General to fully discharge 
        his responsibilities under this joint resolution.

SEC. 103. AGREEMENTS WITH AND OTHER PROVISIONS RELATED TO THE REPUBLIC 
                    OF THE MARSHALL ISLANDS.

  (a) Law Enforcement Assistance.--Pursuant to sections 222 and 224 of 
the U.S.-RMI Compact, the United States shall provide non-reimbursable 
technical and training assistance as appropriate, including training 
and equipment for postal inspection of illicit drugs and other 
contraband, to enable the Government of the Marshall Islands to develop 
and adequately enforce laws of the Marshall Islands and to cooperate 
with the United States in the enforcement of criminal laws of the 
United States. Funds appropriated pursuant to section 105(j) of this 
title may be used to reimburse State or local agencies providing such 
assistance.
  (b) Ejit.--
          (1) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that the President of the United 
        States shall negotiate with the Government of the Marshall 
        Islands an agreement whereby, without prejudice as to any 
        claims which have been or may be asserted by any party as to 
        rightful title and ownership of any lands on Ejit, the 
        Government of the Marshall Islands shall assure that lands on 
        Ejit used as of January 1, 1985, by the people of Bikini, will 
        continue to be available without charge for their use, until 
        such time as Bikini is restored and inhabitable and the 
        continued use of Ejit is no longer necessary, unless a Marshall 
        Islands court of competent jurisdiction finally determines that 
        there are legal impediments to continued use of Ejit by the 
        people of Bikini.
          (2) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that if the impediments described in 
        paragraph (1) do arise, the United States will cooperate with 
        the Government of the Marshall Islands in assisting any person 
        adversely affected by such judicial determination to remain on 
        Ejit, or in locating suitable and acceptable alternative lands 
        for such person's use.
          (3) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that paragraph (1) shall not be 
        applied in a manner which would prevent the Government of the 
        Marshall Islands from acting in accordance with its 
        constitutional processes to resolve title and ownership claims 
        with respect to such lands or from taking substitute or 
        additional measures to meet the needs of the people of Bikini 
        with their democratically expressed consent and approval.
  (c) Kwajalein.--
          (1) It is the policy of the United States that payment of 
        funds by the Government of the Marshall Islands to the 
        landowners of Kwajalein Atoll in accordance with the land use 
        agreement dated October 19, 1982, or as amended or superceded, 
        and any related allocation agreements, is required in order to 
        ensure that the Government of the United States will be able to 
        fulfill its obligation and responsibilities under Title Three 
        of the Compact and the subsidiary agreements concluded pursuant 
        to the Compact.
          (2)(A) If the Government of the Marshall Islands fails to 
        make payments in accordance with paragraph (1), the Government 
        of the United States shall initiate procedures under section 
        313 of the Compact and consult with the Government of the 
        Marshall Islands with respect to the basis for the nonpayment 
        of funds.
          (B) The United States shall expeditiously resolve the matter 
        of any nonpayment of funds required under paragraph (1) 
        pursuant to section 313 of the Compact and the authority and 
        responsibility of the Government of the United States for 
        security and defense matters in or relating to the Marshall 
        Islands.
          (C) This paragraph shall be enforced in accordance with 
        section 105(f)(2).
          (3) Until such time as the Government of the Marshall Islands 
        and the landowners of Kwajalein Atoll have concluded an 
        agreement amending or superceding the land use agreement dated 
        October 19, 1982, any amounts paid by the United States to the 
        Government of the Marshall Islands in excess of the amounts 
        required to be paid pursuant to the land use agreement dated 
        October 19, 1982, shall be paid into, and held in, an interest 
        bearing account in a United States financial institution by the 
        Government of the Republic of the Marshall Islands.
          (4)(A) The Government of the Republic of the Marshall Islands 
        shall notify the Government of the United States when an 
        agreement amending or superceding the land use agreement dated 
        October 19, 1982, is concluded.
          (B) If no agreement amending or superceding the land use 
        agreement dated October 19, 1982, is concluded by the date five 
        years after the date of enactment of this resolution, the 
        President shall report to Congress on the intentions of the 
        United States with respect to the use of Kwajalein Atoll after 
        2016, and on any plans to relocate activities carried out at 
        Kwajalein Atoll.
  (d) Section 177 Agreement.--
          (1) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that in furtherance of the purposes 
        of Article I of the Subsidiary Agreement for Implementation of 
        Section 177 of the Compact, the payment of the amount specified 
        therein shall be made by the United States under Article I of 
        the Agreement between the Government of the United States and 
        the Government of the Marshall Islands for the Implementation 
        of section 177 of the Compact (hereafter in this subsection 
        referred to as the ``Section 177 Agreement'') only after the 
        Government of the Marshall Islands has notified the President 
        of the United States as to which investment management firm has 
        been selected by such Government to act as Fund Manager under 
        Article I of the Section 177 Agreement.
          (2) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that in the event that the President 
        determines that an investment management firm selected by the 
        Government of the Marshall Islands does not meet the 
        requirements specified in Article I of the Section 177 
        Agreement, the United States shall invoke the conference and 
        dispute resolution procedures of Article II of Title Four of 
        the Compact. Pending the resolution of such a dispute and until 
        a qualified Fund Manager has been designated, the Government of 
        the Marshall Islands shall place the funds paid by the United 
        States pursuant to Article I of the Section 177 Agreement into 
        an interest-bearing escrow account. Upon designation of a 
        qualified Fund Manager, all funds in the escrow account shall 
        be transferred to the control of such Fund Manager for 
        management pursuant to the Section 177 Agreement.
          (3) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that if the Government of the 
        Marshall Islands determines that some other investment firm 
        should act as Fund Manager in place of the firm first (or 
        subsequently) selected by such Government, the Government of 
        the Marshall Islands shall so notify the President of the 
        United States, identifying the firm selected by such Government 
        to become Fund Manager, and the President shall proceed to 
        evaluate the qualifications of such identified firm.
          (4) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that at the end of 15 years after the 
        effective date of the Compact, the firm then acting as Fund 
        Manager shall transfer to the Government of the Marshall 
        Islands, or to such account as such Government shall so notify 
        the Fund Manager, all remaining funds and assets being managed 
        by the Fund Manager under the Section 177 Agreement.
  (e) Nuclear Test Effects.--In the joint resolution of January 14, 
1986 (Public Law 99-239) Congress provided that in approving the 
Compact, the Congress understands and intends that the peoples of 
Bikini, Enewetak, Rongelap, and Utrik, who were affected by the United 
States nuclear weapons testing program in the Marshall Islands, will 
receive the amounts of $75,000,000 (Bikini); $48,750,000 (Enewetak); 
$37,500,000 (Rongelap); and $22,500,000 (Utrik), respectively, which 
amounts shall be paid out of proceeds from the fund established under 
Article I, section 1 of the subsidiary agreement for the implementation 
of section 177 of the Compact. The amounts specified in this subsection 
shall be in addition to any amounts which may be awarded to claimants 
pursuant to Article IV of the subsidiary agreement for the 
implementation of Section 177 of the Compact. Nothing in this 
subsection creates any rights or obligations beyond those provided for 
in the original enacted version of Public Law 99-239.
  (f) Espousal Provisions.--
          (1) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that it is the intention of the 
        Congress of the United States that the provisions of section 
        177 of the Compact of Free Association and the Agreement 
        between the Government of the United States and the Government 
        of the Marshall Islands for the Implementation of Section 177 
        of the Compact (hereafter in this subsection referred to as the 
        ``Section 177 Agreement'') constitute a full and final 
        settlement of all claims described in Articles X and XI of the 
        Section 177 Agreement, and that any such claims be terminated 
        and barred except insofar as provided for in the Section 177 
        Agreement.
          (2) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that in furtherance of the intention 
        of Congress as stated in paragraph (1) of this subsection, the 
        Section 177 Agreement is hereby ratified and approved. It is 
        the explicit understanding and intent of Congress that the 
        jurisdictional limitations set forth in Article XII of such 
        Agreement are enacted solely and exclusively to accomplish the 
        objective of Article X of such Agreement and only as a 
        clarification of the effect of Article X, and are not to be 
        construed or implemented separately from Article X.
  (g) DOE Radiological Health Care Program; USDA Agricultural and Food 
Programs.--
          (1) Notwithstanding any other provision of law, upon the 
        request of the Government of the Republic of the Marshall 
        Islands, the President (either through an appropriate 
        department or agency of the United States or by contract with a 
        United States firm) shall continue to provide special medical 
        care and logistical support thereto for the remaining members 
        of the population of Rongelap and Utrik who were exposed to 
        radiation resulting from the 1954 United States thermo-nuclear 
        ``Bravo'' test, pursuant to Public Laws 95-134 and 96-205.
          (2)(A) In the joint resolution of January 14, 1986 (Public 
        Law 99-239), Congress provided that notwithstanding any other 
        provision of law, upon the request of the Government of the 
        Marshall Islands, for the first fifteen years after the 
        effective date of the Compact, the President (either through an 
        appropriate department or agency of the United States or by 
        contract with a United States firm or by a grant to the 
        Government of the Republic of the Marshall Islands which may 
        further contract only with a United States firm or a Republic 
        of the Marshall Islands firm, the owners, officers and majority 
        of the employees of which are citizens of the United States or 
        the Republic of the Marshall Islands) shall provide technical 
        and other assistance--
                  (i) without reimbursement, to continue the planting 
                and agricultural maintenance program on Enewetak, as 
                provided in subparagraph (C);
                  (ii) without reimbursement, to continue the food 
                programs of the Bikini and Enewetak people described in 
                section 1(d) of Article II of the Subsidiary Agreement 
                for the Implementation of Section 177 of the Compact 
                and for continued waterborne transportation of 
                agricultural products to Enewetak including operations 
                and maintenance of the vessel used for such purposes.
          (B) The President shall ensure the assistance provided under 
        these programs reflects the changes in the population since the 
        inception of such programs.
          (C)(i) The planting and agricultural maintenance program on 
        Enewetak shall be funded at a level of not less than $1,300,000 
        per year, as adjusted for inflation under section 218 of the 
        U.S.-RMI Compact.
          (ii) There is hereby authorized and appropriated to the 
        Secretary of the Interior, out of any funds in the Treasury not 
        otherwise appropriated, to remain available until expended, for 
        each fiscal year from 2004 through 2023, $1,300,000, as 
        adjusted for inflation under section 218 of the U.S.-RMI 
        Compact, to carry out the planting and agricultural maintenance 
        program.
          (3) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that payments under this subsection 
        shall be provided to such extent or in such amounts as are 
        necessary for services and other assistance provided pursuant 
        to this subsection. It is the sense of Congress that after the 
        periods of time specified in paragraphs (1) and (2) of this 
        subsection, consideration will be given to such additional 
        funding for these programs as may be necessary.
  (h) Rongelap.--
          (1) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that because Rongelap was directly 
        affected by fallout from a 1954 United States thermonuclear 
        test and because the Rongelap people remain unconvinced that it 
        is safe to continue to live on Rongelap Island, it is the 
        intent of Congress to take such steps (if any) as may be 
        necessary to overcome the effects of such fallout on the 
        habitability of Rongelap Island, and to restore Rongelap 
        Island, if necessary, so that it can be safely inhabited. 
        Accordingly, it is the expectation of the Congress that the 
        Government of the Marshall Islands shall use such portion of 
        the funds specified in Article II, section 1(e) of the 
        subsidiary agreement for the implementation of section 177 of 
        the Compact as are necessary for the purpose of contracting 
        with a qualified scientist or group of scientists to review the 
        data collected by the Department of Energy relating to 
        radiation levels and other conditions on Rongelap Island 
        resulting from the thermonuclear test. It is the expectation of 
        the Congress that the Government of the Marshall Islands, after 
        consultation with the people of Rongelap, shall select the 
        party to review such data, and shall contract for such review 
        and for submission of a report to the President of the United 
        States and the Congress as to the results thereof.
          (2) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that the purpose of the review 
        referred to in paragraph (1) of this subsection shall be to 
        establish whether the data cited in support of the conclusions 
        as to the habitability of Rongelap Island, as set forth in the 
        Department of Energy report entitled: ``The Meaning of 
        Radiation for Those Atolls in the Northern Part of the Marshall 
        Islands That Were Surveyed in 1978'', dated November 1982, are 
        adequate and whether such conclusions are fully supported by 
        the data. If the party reviewing the data concludes that such 
        conclusions as to habitability are fully supported by adequate 
        data, the report to the President of the United States and the 
        Congress shall so state. If the party reviewing the data 
        concludes that the data are inadequate to support such 
        conclusions as to habitability or that such conclusions as to 
        habitability are not fully supported by the data, the 
        Government of the Marshall Islands shall contract with an 
        appropriate scientist or group of scientists to undertake a 
        complete survey of radiation and other effects of the nuclear 
        testing program relating to the habitability of Rongelap 
        Island. Such sums as are necessary for such survey and report 
        concerning the results thereof and as to steps needed to 
        restore the habitability of Rongelap Island are authorized to 
        be made available to the Government of the Marshall Islands.
          (3) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that it is the intent of Congress 
        that such steps (if any) as are necessary to restore the 
        habitability of Rongelap Island and return the Rongelap people 
        to their homeland will be taken by the United States in 
        consultation with the Government of the Marshall Islands and, 
        in accordance with its authority under the Constitution of the 
        Marshall Islands, the Rongelap local government council.
  (i) Four Atoll Health Care Program.--
          (1) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that services provided by the United 
        States Public Health Service or any other United States agency 
        pursuant to section 1(a) of Article II of the Agreement for the 
        Implementation of Section 177 of the Compact (hereafter in this 
        subsection referred to as the ``Section 177 Agreement'') shall 
        be only for services to the people of the Atolls of Bikini, 
        Enewetak, Rongelap, and Utrik who were affected by the 
        consequences of the United States nuclear testing program, 
        pursuant to the program described in Public Law 95-134 (91 
        Stat. 1159) and Public Law 96-205 (94 Stat. 84) and their 
        descendants (and any other persons identified as having been so 
        affected if such identification occurs in the manner described 
        in such public laws). Nothing in this subsection shall be 
        construed as prejudicial to the views or policies of the 
        Government of the Marshall Islands as to the persons affected 
        by the consequences of the United States nuclear testing 
        program.
          (2) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that at the end of the first year 
        after the effective date of the Compact and at the end of each 
        year thereafter, the providing agency or agencies shall return 
        to the Government of the Marshall Islands any unexpended funds 
        to be returned to the Fund Manager (as described in Article I 
        of the Section 177 Agreement) to be covered into the Fund to be 
        available for future use.
          (3) In the joint resolution of January 14, 1986 (Public Law 
        99-239) Congress provided that the Fund Manager shall retain 
        the funds returned by the Government of the Marshall Islands 
        pursuant to paragraph (2) of this subsection, shall invest and 
        manage such funds, and at the end of 15 years after the 
        effective date of the Compact, shall make from the total amount 
        so retained and the proceeds thereof annual disbursements 
        sufficient to continue to make payments for the provision of 
        health services as specified in paragraph (1) of this 
        subsection to such extent as may be provided in contracts 
        between the Government of the Marshall Islands and appropriate 
        United States providers of such health services.
  (j) Enjebi Community Trust Fund.--In the joint resolution of January 
14, 1986 (Public Law 99-239) Congress provided that notwithstanding any 
other provision of law, the Secretary of the Treasury shall establish 
on the books of the Treasury of the United States a fund having the 
status specified in Article V of the subsidiary agreement for the 
implementation of Section 177 of the Compact, to be known as the 
``Enjebi Community Trust Fund'' (hereafter in this subsection referred 
to as the ``Fund''), and shall credit to the Fund the amount of 
$7,500,000. Such amount, which shall be ex gratia, shall be in addition 
to and not charged against any other funds provided for in the Compact 
and its subsidiary agreements, this joint resolution, or any other Act. 
Upon receipt by the President of the United States of the agreement 
described in this subsection, the Secretary of the Treasury, upon 
request of the Government of the Marshall Islands, shall transfer the 
Fund to the Government of the Marshall Islands, provided that the 
Government of the Marshall Islands agrees as follows:
          (1) Enjebi trust agreement.--In the joint resolution of 
        January 14, 1986 (Public Law 99-239) Congress provided that the 
        Government of the Marshall Islands and the Enewetak Local 
        Government Council, in consultation with the people of Enjebi, 
        shall provide for the creation of the Enjebi Community Trust 
        Fund and the employment of the manager of the Enewetak Fund 
        established pursuant to the Section 177 Agreement as trustee 
        and manager of the Enjebi Community Trust Fund, or, should the 
        manager of the Enewetak Fund not be acceptable to the people of 
        Enjebi, another United States investment manager with 
        substantial experience in the administration of trusts and with 
        funds under management in excess of 250 million dollars.
          (2) Monitor conditions.--In the joint resolution of January 
        14, 1986 (Public Law 99-239) Congress provided that upon the 
        request of the Government of the Marshall Islands, the United 
        States shall monitor the radiation and other conditions on 
        Enjebi and within one year of receiving such a request shall 
        report to the Government of the Marshall Islands when the 
        people of Enjebi may resettle Enjebi under circumstances where 
        the radioactive contamination at Enjebi, including 
        contamination derived from consumption of locally grown food 
        products, can be reduced or otherwise controlled to meet whole 
        body Federal radiation protection standards for the general 
        population, including mean annual dose and mean 30-year 
        cumulative dose standards.
          (3) Resettlement of enjebi.--In the joint resolution of 
        January 14, 1986 (Public Law 99-239) Congress provided that in 
        the event that the United States determines that the people of 
        Enjebi can within 25 years of January 14, 1986, resettle Enjebi 
        under the conditions set forth in paragraph (2) of this 
        subsection, then upon such determination there shall be 
        available to the people of Enjebi from the Fund such amounts as 
        are necessary for the people of Enjebi to do the following, in 
        accordance with a plan developed by the Enewetak Local 
        Government Council and the people of Enjebi, and concurred with 
        by the Government of the Marshall Islands to assure consistency 
        with the government's overall economic development plan:
                  (A) Establish a community on Enjebi Island for the 
                use of the people of Enjebi.
                  (B) Replant Enjebi with appropriate food-bearing and 
                other vegetation.
          (4) Resettlement of other location.--In the joint resolution 
        of January 14, 1986 (Public Law 99-239) Congress provided that 
        in the event that the United States determines that within 25 
        years of January 14, 1986, the people of Enjebi cannot resettle 
        Enjebi without exceeding the radiation standards set forth in 
        paragraph (2) of this subsection, then the fund manager shall 
        be directed by the trust instrument to distribute the Fund to 
        the people of Enjebi for their resettlement at some other 
        location in accordance with a plan, developed by the Enewetak 
        Local Government Council and the people of Enjebi and concurred 
        with by the Government of the Marshall Islands, to assure 
        consistency with the government's overall economic development 
        plan.
          (5) Interest from fund.--In the joint resolution of January 
        14, 1986 (Public Law 99-239) Congress provided that prior to 
        and during the distribution of the corpus of the Fund pursuant 
        to paragraphs (3) and (4) of this subsection, the people of 
        Enjebi may, if they so request, receive the interest earned by 
        the Fund on no less frequent a basis than quarterly.
          (6) Disclaimer of liability.--In the joint resolution of 
        January 14, 1986 (Public Law 99-239) Congress provided that 
        neither under the laws of the Marshall Islands nor under the 
        laws of the United States, shall the Government of the United 
        States be liable for any loss or damage to person or property 
        in respect to the resettlement of Enjebi by the people of 
        Enjebi, pursuant to the provision of this subsection or 
        otherwise.
  (k) Bikini Atoll Cleanup.--
          (1) Declaration of policy.--In the joint resolution of 
        January 14, 1986 (Public Law 99-239), the Congress determined 
        and declared that it is the policy of the United States, to be 
        supported by the full faith and credit of the United States, 
        that because the United States, through its nuclear testing and 
        other activities, rendered Bikini Atoll unsafe for habitation 
        by the people of Bikini, the United States will fulfill its 
        responsibility for restoring Bikini Atoll to habitability, as 
        set forth in paragraph (2) and (3) of this subsection.
          (2) Cleanup funds.--The joint resolution of January 14, 1986 
        (Public Law 99-239) authorized to be appropriated such sums as 
        necessary to implement the settlement agreement of March 15, 
        1985, in The People of Bikini, et al. against United States of 
        America, et al., Civ. No. 84-0425 (D. Ha.).
          (3) Conditions of funding.--In the joint resolution of 
        January 14, 1986 (Public Law 99-239) the Congress provided that 
        the funds referred to in paragraph (2) were to be made 
        available pursuant to Article VI, Section 1 of the Compact 
        Section 177 Agreement upon completion of the events set forth 
        in the settlement agreement referred to in paragraph (2) of 
        this subsection.
  (l) Agreement on Audits.--The Comptroller General (and his duly 
authorized representatives) shall have the authorities necessary to 
carry out his responsibilities under section 232 of the U.S.-RMI 
Compact and the agreement referred to in section 462(b)(4) of the U.S.-
RMI Compact, including the following authorities:
          (1) General authority of the comptroller general to audit.--
                  (A) The Comptroller General of the United States (and 
                his duly authorized representatives) shall have the 
                authority to audit--
                          (i) all grants, program assistance, and other 
                        assistance provided to the Government of the 
                        Republic of the Marshall Islands under Articles 
                        I and II of Title Two of the U.S.-RMI Compact; 
                        and
                          (ii) any other assistance provided by the 
                        Government of the United States to the 
                        Government of the Republic of the Marshall 
                        Islands.
                Such authority shall include authority for the 
                Comptroller General to conduct or cause to be conducted 
                any of the audits provided for in section 232 of the 
                U.S.-RMI Compact. The authority provided in this 
                paragraph shall continue for at least three years after 
                the last such grant has been made or assistance has 
                been provided.
                  (B) The Comptroller General (and his duly authorized 
                representatives) shall also have authority to review 
                any audit conducted by or on behalf of the Government 
                of the United States. In this connection, the 
                Comptroller General shall have access to such personnel 
                and to such records, documents, working papers, 
                automated data and files, and other information 
                relevant to such review.
          (2) Comptroller general access to records.--
                  (A) In carrying out paragraph (1), the Comptroller 
                General (and his duly authorized representatives) shall 
                have such access to the personnel and (without cost) to 
                records, documents, working papers, automated data and 
                files, and other information relevant to such audits. 
                The Comptroller General may duplicate any such records, 
                documents, working papers, automated data and files, or 
                other information relevant to such audits.
                  (B) Such records, documents, working papers, 
                automated data and files, and other information 
                regarding each such grant or other assistance shall be 
                maintained for at least three years after the date such 
                grant or assistance was provided and in a manner that 
                permits such grants, assistance and payments to be 
                accounted for distinct from any other funds of the 
                Government of the Republic of the Marshall Islands.
          (3) Status of comptroller general representatives.--The 
        Comptroller General and his duly authorized representatives 
        shall be immune from civil and criminal process relating to 
        words spoken or written and all acts performed by them in their 
        official capacity and falling within their functions, except 
        insofar as such immunity may be expressly waived by the 
        Government of the United States. The Comptroller General and 
        his duly authorized representatives shall not be liable to 
        arrest or detention pending trial, except in the case of a 
        grave crime and pursuant to a decision by a competent judicial 
        authority, and such persons shall enjoy immunity from seizure 
        of personal property, immigration restrictions, and laws 
        relating to alien registration, fingerprinting, and the 
        registration of foreign agents. Such persons shall enjoy the 
        same taxation exemptions as are set forth in Article 34 of the 
        Vienna Convention on Diplomatic Relations. The privileges, 
        exemptions and immunities accorded under this paragraph are not 
        for the personal benefit of the individuals concerned but are 
        to safeguard the independent exercise of their official 
        functions. Without prejudice to those privileges, exemptions 
        and immunities, it is the duty of all such persons to respect 
        the laws and regulations of the Government of the Republic of 
        the Marshall Islands.
          (4) Audits defined.--As used in this subsection, the term 
        ``audits'' includes financial, program, and management audits, 
        including determining--
                  (A) whether the Government of the Republic of the 
                Marshall Islands has met the requirements set forth in 
                the U.S.-RMI Compact, or any related agreement entered 
                into under the U.S.-RMI Compact, regarding the purposes 
                for which such grants and other assistance are to be 
                used; and
                  (B) the propriety of the financial transactions of 
                the Government of the Republic of the Marshall Islands 
                pursuant to such grants or assistance.
          (5) Cooperation by the republic of the marshall islands.--The 
        Government of the Republic of the Marshall Islands will 
        cooperate fully with the Comptroller General of the United 
        States in the conduct of such audits as the Comptroller General 
        determines necessary to enable the Comptroller General to fully 
        discharge his responsibilities under this joint resolution.

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

  (a) Human Rights.--In approving the U.S.-FSM Compact and the U.S.-RMI 
Compact, the Congress notes the conclusion in the Statement of Intent 
of the Report of The Future Political Status Commission of the Congress 
of Micronesia in July, 1969, that ``our recommendation of a free 
associated state is indissolubly linked to our desire for such a 
democratic, representative, constitutional government'' and notes that 
such desire and intention are reaffirmed and embodied in the 
Constitutions of the Federated States of Micronesia and the Republic of 
the Marshall Islands. The Congress also notes and specifically endorses 
the preamble to the U.S.-FSM Compact and the U.S.-RMI Compact, which 
affirms that the governments of the parties to the U.S.-FSM Compact and 
the U.S.-RMI Compact are founded upon respect for human rights and 
fundamental freedoms for all. The Secretary of State shall include in 
the annual reports on the status of internationally recognized human 
rights in foreign countries, which are submitted to the Congress 
pursuant to sections 116 and 502B of the Foreign Assistance Act of 1961 
(22 U.S.C. 2151n, 2304), a full and complete report regarding the 
status of internationally recognized human rights in the Federated 
States of Micronesia and the Republic of the Marshall Islands.
  (b) Immigration and Passport Security.--
          (1) Naturalized citizens.--The rights of a bona fide 
        naturalized citizen of the Federated States of Micronesia or 
        the Republic of the Marshall Islands to enter the United 
        States, to lawfully engage therein in occupations, and to 
        establish residence therein as a nonimmigrant, to the extent 
        such rights are provided under section 141 of the U.S.-FSM 
        Compact and U.S.-RMI Compact, shall not be deemed to extend to 
        any such naturalized citizen with respect to whom circumstances 
        associated with the acquisition of the status of a naturalized 
        citizen are such as to allow a reasonable inference, on the 
        part of appropriate officials of the United States and subject 
        to United States procedural requirements, that such naturalized 
        status was acquired primarily in order to obtain such rights.
          (2) Passports.--It is the intent of Congress that up to 
        $250,000 of the grant assistance provided to the Federated 
        States of Micronesia pursuant to section 211(a)(4) of the U.S.-
        FSM Compact, and up to $250,000 of the grant assistance 
        provided to the Republic of the Marshall Islands pursuant to 
        section 211(a)(4) of the U.S.-RMI Compact (or a greater amount 
        of the section 211(a)(4) grant, if mutually agreed between the 
        Government of the United States and the government of the 
        Federated States of Micronesia or the government of the 
        Republic of the Marshall Islands), be used for the purpose of 
        increasing the machine-readability and security of passports 
        issued by such jurisdictions. It is the intent of Congress that 
        funds be obligated by September 30, 2004 and in the amount and 
        manner specified by the Secretary of State in consultation with 
        the Secretary of Homeland Security and, respectively, with the 
        government of the Federated States of Micronesia and the 
        government of the Republic of the Marshall Islands. The United 
        States Government is authorized to require that passports used 
        for the purpose of seeking admission under section 141 of the 
        U.S.-FSM Compact and the U.S.-RMI Compact contain the security 
        enhancements funded by such assistance.
          (3) Information-sharing.--It is the intent of Congress that 
        the governments of the Federated States of Micronesia and the 
        Republic of the Marshall Islands develop, prior to October 1, 
        2004, the capability to provide reliable and timely information 
        as may reasonably be required by the Government of the United 
        States in enforcing criminal and security-related grounds of 
        inadmissibility and deportability under the Immigration and 
        Nationality Act, as amended, and shall provide such information 
        to the Government of the United States.
          (4) Transition; construction of sections 141(a)(3) and 
        141(a)(4) of the u.s.-fsm compact and u.s.-rmi compact.--The 
        words ``the effective date of this Compact, as amended'' in 
        sections 141(a)(3) and 141(a)(4) of the U.S.-FSM Compact and 
        the U.S.-RMI Compact shall be construed to read, ``on the day 
        prior to the enactment by the United States Congress of the 
        Amended Compact Act.''.
  (c) Nonalienation of Lands.--The Congress endorses and encourages the 
maintenance of the policies of the Government of the Federated States 
of Micronesia and the Government of the Republic of the Marshall 
Islands to regulate, in accordance with their Constitutions and laws, 
the alienation of permanent interests in real property so as to 
restrict the acquisition of such interests to persons of Federated 
States of Micronesia citizenship and the Republic of the Marshall 
Islands citizenship, respectively.
  (d) Nuclear Waste Disposal.--In approving the U.S.-FSM Compact and 
the U.S.-RMI Compact, the Congress understands that the Government of 
the Federated States of Micronesia and the Government of the Republic 
of the Marshall Islands will not permit any other government or any 
nongovernmental party to conduct, in the Republic of the Marshall 
Islands or in the Federated States of Micronesia, any of the activities 
specified in subsection (a) of section 314 of the U.S.-FSM Compact and 
the U.S.-RMI Compact.
  (e) Impact of Compacts on Guam, the State of Hawaii, the Commonwealth 
of the Northern Mariana Islands, and American Samoa; Related 
Authorization and Continuing Appropriation.--
          (1) Reconciliation of unreimbursed impact expenses.--
                  (A) In general.--Notwithstanding any other provision 
                of law, the President, to address previously accrued 
                and unreimbursed impact expenses, may at the request of 
                the Governor of Guam or the Governor of the 
                Commonwealth of the Northern Mariana Islands, reduce, 
                release, or waive all or part of any amounts owed by 
                the Government of Guam or the Government of the 
                Commonwealth of the Northern Mariana Islands (or either 
                government's autonomous agencies or instrumentalities), 
                respectively, to any department, agency, independent 
                agency, office, or instrumentality of the United 
                States.
                  (B) Terms and conditions.--
                          (i) Substantiation of impact costs.--Not 
                        later than 120 days after the date of the 
                        enactment of this resolution, the Governor of 
                        Guam and the Governor of the Commonwealth of 
                        the Northern Mariana Islands shall each submit 
                        to the Secretary of the Interior a report, 
                        prepared in consultation with an independent 
                        accounting firm, substantiating unreimbursed 
                        impact expenses claimed for the period from 
                        January 14, 1986, through September 30, 2003. 
                        Upon request of the Secretary of the Interior, 
                        the Governor of Guam and the Governor of the 
                        Commonwealth of the Northern Mariana Islands 
                        shall each submit to the Secretary of the 
                        Interior copies of all documents upon which the 
                        report submitted by that Governor under this 
                        clause was based.
                          (ii) Congressional notification.--The 
                        President shall notify Congress of his intent 
                        to exercise the authority granted in 
                        subparagraph (A).
                          (iii) Congressional review and comment.-- Any 
                        reduction, release, or waiver under this Act 
                        shall not take effect until 60 days after the 
                        President notifies Congress of his intent to 
                        approve a request of the Governor of Guam or 
                        the Governor of the Commonwealth of the 
                        Northern Mariana Islands. In exercising his 
                        authority under this section and in determining 
                        whether to give final approval to a request, 
                        the President shall take into consideration 
                        comments he may receive after Congressional 
                        review.
                          (iv) Expiration.--The authority granted in 
                        subparagraph (A) shall expire on February 28, 
                        2005.
          (2) Statement of congressional intent.--In approving the 
        Compacts, it is not the intent of the Congress to cause any 
        adverse consequences for Guam, the State of Hawaii, the 
        Commonwealth of the Northern Mariana Islands, and American 
        Samoa.
          (3) Annual reports and recommendations.--One year after the 
        date of enactment of this joint resolution, and at one year 
        intervals thereafter, the Governors of Guam, the State of 
        Hawaii, the Commonwealth of the Northern Mariana Islands, and 
        American Samoa may provide to the Secretary of the Interior by 
        February 1 of each year their comments with respect to the 
        impacts of the Compacts on their respective jurisdiction. The 
        Secretary of the Interior, upon receipt of any such comments, 
        shall report to the Congress not later than May 1 of each year 
        to include the following:
                  (A) The Governor's comments on the impacts of the 
                Compacts as well as the Administration's analysis of 
                such impact.
                  (B) Any adverse consequences resulting from the 
                Compacts and recommendations for corrective action to 
                eliminate those consequences.
                  (C) Matters relating to trade, taxation, immigration, 
                labor laws, minimum wages, health, educational, social, 
                and public safety services and infrastructure, and 
                environmental regulation.
                  (D) With regard to immigration, statistics concerning 
                the number of persons availing themselves of the rights 
                described in section 141(a) of the Compact during the 
                year covered by each report.
                  (E) With regard to trade, the reports shall include 
                an analysis of the impact on the economy of American 
                Samoa resulting from imports of canned tuna into the 
                United States from the Federated States of Micronesia, 
                and the Republic of the Marshall Islands.
          (4) Commitment of congress to redress adverse consequences.--
        The Congress hereby declares that, if any adverse consequences 
        to Guam, the State of Hawaii, the Commonwealth of the Northern 
        Mariana Islands, or American Samoa result from implementation 
        of the Compacts, the Congress will act sympathetically and 
        expeditiously to redress those adverse consequences.
          (5) Qualified nonimmigrant.--For the purposes of this 
        section, the term ``qualified nonimmigrant'' means person 
        admitted to the United States pursuant to:
                  (A) section 141 of the Compact of Free Association 
                between the United States and the Government of the 
                Federated States of Micronesia set forth in Title I;
                  (B) section 141 of the Compact of Free Association 
                between the United States and the Government of the 
                Republic of the Marshall Islands set forth in Title I; 
                or
                  (C) section 141 of the Compact of Free Association 
                between the United States and the Government of the 
                Republic of Palau.
          (6) Authorization and continuing appropriation.--There are 
        hereby authorized and appropriated to the Secretary of the 
        Interior, for each fiscal year beginning after September 30, 
        2003 through 2023, $30,000,000 for grants to the governments of 
        Guam, the State of Hawaii, the Commonwealth of the Northern 
        Mariana Islands, and American Samoa as a result of increased 
        demands placed on educational, social, or public safety 
        services or infrastructure related to such services due to the 
        presence in Guam, the State of Hawaii, the Commonwealth of the 
        Northern Mariana Islands, or American Samoa of qualified 
        nonimmigrants from the Federated States of Micronesia, the 
        Republic of the Marshall Islands, or the Republic of Palau.
                  (A) Awarding.--The grants shall be--
                          (i) awarded and administered by the 
                        Department of the Interior, Office of Insular 
                        Affairs, or any successor thereto, in 
                        accordance with regulations, policies and 
                        procedures applicable to grants so awarded and 
                        administered; and
                          (ii) used only for health, educational, 
                        social, or public safety services, or 
                        infrastructure related to such services, 
                        specifically affected by qualified 
                        nonimmigrants.
                  (B) Enumeration.--For purposes of carrying out this 
                section, the Secretary of the Interior shall provide 
                for a periodic census of qualified nonimmigrants in 
                Guam, the State of Hawaii, the Commonwealth of the 
                Northern Mariana Islands, and American Samoa. The 
                enumeration--
                          (i) shall be provided by the Secretary of the 
                        Interior beginning in fiscal year 2004 and 
                        thereafter in calendar years 2005, 2010, 2015, 
                        and 2020;
                          (ii) shall be supervised by the United States 
                        Bureau of the Census and any other supporting 
                        organization(s) as the Secretary of the 
                        Interior may select; and
                          (iii) after fiscal year 2003, shall be funded 
                        by the Secretary of the Interior by deducting 
                        such sums as are necessary from funds 
                        appropriated pursuant to the authorization 
                        contained in paragraph (6) of this subsection.
                  (C) Allocation.--The Secretary of the Interior shall 
                allocate to each of the governments of Guam, the State 
                of Hawaii, the Commonwealth of the Northern Mariana 
                Islands, and American Samoa, on the basis of the 
                results of the most recent enumeration, grants in an 
                aggregate amount equal to the total amount of funds 
                appropriated under paragraph (6) of this subsection, as 
                reduced by any deductions authorized by subparagraph 
                (iii) of subparagraph (B) of paragraph (6) of this 
                subsection, multiplied by a ratio derived by dividing 
                the number of qualified nonimmigrants in such affected 
                jurisdiction by the total number of qualified 
                nonimmigrants in the governments of Guam, the 
                Commonwealth of the Northern Mariana Islands, and 
                American Samoa.
          (7) Authorization of appropriations for grants.--There are 
        hereby authorized to the Secretary of the Interior for each of 
        fiscal years 2004 through 2023 such sums as may be necessary 
        for grants to the governments of Guam, the State of Hawaii, the 
        Commonwealth of the Northern Mariana Islands, and American 
        Samoa, as a result of increased demands placed on educational, 
        social, or public safety services or infrastructure related to 
        service due to the presence in Guam, Hawaii, the Commonwealth 
        of the Northern Mariana Islands, and American Samoa of 
        qualified nonimmigrants from the Federated States of 
        Micronesia, the Republic of the Marshall Islands, and the 
        Republic of Palau.
          (8) Authorization of appropriations for the reimbursement of 
        health care services.--
                  (A) Authorization.--In addition to amounts 
                appropriated pursuant to the authorization provided in 
                section 221(b) of Article II of Title Two of the U.S.-
                FSM Compact and the U.S.-RMI Compact, there are hereby 
                authorized to be appropriated to the Secretary of the 
                Interior such sums as may be necessary to reimburse 
                designated health care providers for qualifying health 
                care costs for medical debt referral claims for health 
                care services furnished before October 1, 2003.
                  (B) Designated health care providers.--For purposes 
                of subparagraph (A), the term ``designated health care 
                provider'' means an institutional provider of health 
                care services (such as a public or private hospital) 
                located in Hawaii, Guam, the Commonwealth of the 
                Northern Mariana Islands, or American Samoa.
                  (C) Qualifying health care costs.--For purposes of 
                subparagraph (A), the term ``qualifying health care 
                costs'' means costs that the Secretary determines are 
                incurred by a designated health care provider for 
                health care services furnished in Hawaii, Guam, the 
                Commonwealth of the Northern Mariana Islands, and 
                American Samoa (as the case may be) to a citizen of the 
                Republic of the Marshall Islands, the Federated States 
                of Micronesia, or the Republic of Palau pursuant to 
                medical referral programs in the Federated States of 
                Micronesia and the Republic of the Marshall Islands.
          (9) Use of dod medical facilities and national health service 
        corps.--
                  (A) DOD medical facilities.--The Secretary of Defense 
                shall make available, on a space available and 
                reimbursable basis, the medical facilities of the 
                Department of Defense for use by citizens of the 
                Federated States of Micronesia, the Republic of the 
                Marshall Islands, and the Republic of Palau who are 
                properly referred to the facilities by government 
                authorities responsible for provision of medical 
                services in the Federated States of Micronesia, the 
                Republic of the Marshall Islands, the Republic of Palau 
                and the affected jurisdictions.
                  (B) National health service corps.--The Secretary of 
                Health and Human Services shall continue to make the 
                services of the National Health Service Corps available 
                to the residents of the Federated States of Micronesia 
                and the Republic of the Marshall Islands to the same 
                extent and for so long as such services are authorized 
                to be provided to persons residing in any other areas 
                within or outside the United States.
                  (C) Authorization of appropriations.--There are 
                authorized to be appropriated to carry out this 
                paragraph such sums as are necessary for each fiscal 
                year.
  (f) Sense of Congress Concerning Funding of Public Infrastructure.--
It is the sense of Congress that--
          (1) not less than 30 percent of the United States annual 
        grant assistance provided under section 211 of the Compact of 
        Free Association, as amended, between the Government of the 
        United States of America and the Government of the Federated 
        States of Micronesia, and not less than 30 percent of the total 
        amount of section 211 funds allocated to each of the states of 
        the Federated States of Micronesia, shall be invested in 
        infrastructure improvements in accordance with the list of 
        specific projects included in the plan described in section 
        211(a)(6)(i) and for maintenance in accordance with section 
        211(a)(6)(ii); and
          (2) not less than 30 percent of the United States annual 
        grant assistance provided under section 211 of the Compact of 
        Free Association, as amended, between the Government of the 
        United States of America and the Government of the Republic of 
        the Marshall Islands, shall be used for infrastructure 
        improvement and maintenance in accordance with section 211(d).
  (g) Foreign Loans.--The Congress hereby reaffirms the United States 
position that the United States Government is not responsible for 
foreign loans or debt obtained by the Governments of the Federated 
States of Micronesia and the Republic of the Marshall Islands.
  (h) Reports and Reviews.--
          (1) Report by the president.--Not later than the end of the 
        first full calendar year following enactment of this 
        resolution, and not later than December 31 of each year 
        thereafter, the President shall submit a report to Congress 
        regarding the Federated States of Micronesia and the Republic 
        of the Marshall Islands. The report shall include, at a 
        minimum, the following with regard to:
                  (A) General social, political, and economic 
                conditions, including estimates of economic growth, per 
                capita income, and migration rates.
                  (B) The use and effectiveness of United States 
                financial and program assistance.
                  (C) The status of economic policy reforms in the 
                Federated States of Micronesia and the Republic of the 
                Marshall Islands.
                  (D) The status of the efforts by the Federated States 
                of Micronesia and the Republic of the Marshall Islands 
                to attract foreign investment and to increase 
                indigenous business activity.
                  (E) Recommendations on ways to increase the 
                effectiveness of United States assistance.
          (2) Review.--During the year of the fifth and fifteenth 
        anniversaries of the date of enactment of this resolution, the 
        Government of the United States and the Government of the 
        Federated States of Micronesia, and the Government of the 
        Republic of the Marshall Islands, shall formally review the 
        terms of their respective Compacts and shall consider the 
        overall nature and development of their relationship. In these 
        formal reviews, the governments shall consider the operating 
        requirements of the Government of the Federated States of 
        Micronesia and the Government of the Republic of the Marshall 
        Islands and their progress in meeting the development 
        objectives set forth in their respective development plans. The 
        governments may agree to commit themselves to take specific 
        measures in response to the findings resulting from the 
        reviews. The President shall include the findings resulting 
        from the reviews, and any recommendations for actions to 
        respond to such findings, in the annual reports to Congress for 
        the years following the reviews.
          (3) By the comptroller general.--Not later than the date that 
        is 3 years after the date of enactment of this joint 
        resolution, and every 5 years thereafter, the Comptroller 
        General of the United States shall submit to Congress a report 
        on the Federated States of Micronesia and the Republic of the 
        Marshall Islands, including the topics set forth in paragraph 
        (1) and the effectiveness of administrative oversight by the 
        United States.
  (i) Construction of Section 141(f).--Section 141(f)(2) of the Compact 
of Free Association between the Government of the United States of 
America and the Government of the Federated States of Micronesia and of 
the Compact of Free Association between the Government of the United 
States of America and the Government of the Republic of the Marshall 
Islands, shall be construed as though ``, except that any such 
regulations that would have a significant effect on the admission, stay 
and employment privileges provided under this section shall not become 
effective until 90 days after the date of transmission of the 
regulations to the Committee on Energy and Natural Resources and the 
Committee on the Judiciary of the Senate and the Committee on 
Resources, the Committee on International Relations, and the Committee 
on the Judiciary of the House of Representatives'' was inserted after 
``may by regulations prescribe''.

SEC. 105. SUPPLEMENTAL PROVISIONS.

  (a) Domestic Program Requirements.--Except as may otherwise be 
provided in this joint resolution, all United States Federal programs 
and services extended to or operated in the Federated States of 
Micronesia or the Republic of the Marshall Islands are and shall remain 
subject to all applicable criteria, standards, reporting requirements, 
auditing procedures, and other rules and regulations applicable to such 
programs when operating in the United States (including its territories 
and commonwealths).
  (b) Relations With the Federated States of Micronesia and the 
Republic of the Marshall Islands.--
          (1) Appropriations made pursuant to Article I of Title Two 
        and subsection (a)(2) of section 221 of Article II of Title Two 
        of the U.S.-FSM Compact and the U.S.-RMI Compact shall be made 
        to the Secretary of the Interior, who shall have the authority 
        necessary to fulfill his responsibilities for monitoring and 
        managing the funds so appropriated consistent with the U.S.-FSM 
        Compact and the U.S.-RMI Compact, including the agreements 
        referred to in section 462(b)(4) of the U.S.-FSM Compact and 
        U.S.-RMI Compact (relating to Fiscal Procedures) and the 
        agreements referred to in section 462(b)(5) of the U.S.-FSM 
        Compact and the U.S.-RMI Compact (regarding the Trust Fund).
          (2) Appropriations made pursuant to subsections (a)(1) and 
        (a)(3) through (6) of section 221 of Article II of Title Two of 
        the U.S.-FSM Compact and subsection (a)(1) and (a)(3) through 
        (5) of the U.S.-RMI Compact shall be made directly to the 
        agencies named in those subsections.
          (3) Appropriations for services and programs referred to in 
        subsection (b) of section 221 of Article II of Title Two of the 
        U.S.-FSM Compact or U.S.-RMI Compact and appropriations for 
        services and programs referred to in sections 105(f) and 108(a) 
        of this joint resolution shall be made to the relevant agencies 
        in accordance with the terms of the appropriations for such 
        services and programs.
          (4) Federal agencies providing programs and services to the 
        Federated States of Micronesia and the Republic of the Marshall 
        Islands shall coordinate with the Secretaries of the Interior 
        and State regarding provision of such programs and services. 
        The Secretaries of the Interior and State shall consult with 
        appropriate officials of the Asian Development Bank and with 
        the Secretary of the Treasury regarding overall economic 
        conditions in the Federated States of Micronesia and the 
        Republic of the Marshall Islands and regarding the activities 
        of other donors of assistance to the Federated States of 
        Micronesia and the Republic of the Marshall Islands.
          (5) United States Government employees in either the 
        Federated States of Micronesia or the Republic of the Marshall 
        Islands are subject to the authority of the United States Chief 
        of Mission, including as elaborated in section 207 of the 
        Foreign Service Act and the President's Letter of Instruction 
        to the United States Chief of Mission and any order or 
        directive of the President in effect from time to time.
          (6)(A) The President is hereby authorized to appoint an 
        Interagency Group on Freely Associated States' Affairs to 
        provide policy guidance and recommendations on implementation 
        of the U.S.-FSM Compact and the U.S.-RMI Compact to Federal 
        departments and agencies.
          (B) It is the sense of Congress that the Secretary of State, 
        the Secretary of Interior, and the Secretary of the Treasury 
        should be represented on the Interagency Group.
          (7)(A)(i) The three United States appointees (United States 
        chair plus two members) to the Joint Economic Management 
        Committee provided for in section 213 of the U.S.-FSM Compact 
        and Article III of the U.S.-FSM Fiscal Procedures Agreement 
        referred to in section 462(b)(4) of the U.S.-FSM Compact shall 
        be United States Government officers or employees.
          (ii) It is the sense of Congress that the appointees should 
        be designated from the Department of State, the Department of 
        the Interior, and the Department of the Treasury.
          (iii) Section 213 of the U.S.-FSM Compact shall be construed 
        to read as though the phrase, ``and on the implementation of 
        economic policy reforms designed to encourage private sector 
        investment,'' were inserted after ``with particular focus on 
        those parts of the plan dealing with the sectors identified in 
        subsection (a) of section 211''.
          (B)(i) The three United States appointees (United States 
        chair plus two members) to the Joint Economic Management and 
        Financial Accountability Committee provided for in section 214 
        of the U.S.-RMI Compact and Article III of the U.S.-RMI Fiscal 
        Procedures Agreement referred to in section 462(b)(4) of the 
        U.S.-RMI Compact shall be United States Government officers or 
        employees.
          (ii) It is the sense of Congress that the appointees should 
        be designated from the Department of State, the Department of 
        the Interior, and the Department of the Treasury.
          (iii) Section 214 of the U.S.-RMI Compact shall be construed 
        to read as though the phrase, ``and on the implementation of 
        economic policy reforms designed to encourage private sector 
        investment,'' were inserted after ``with particular focus on 
        those parts of the framework dealing with the sectors and areas 
        identified in subsection (a) of section 211''.
          (8) It is the sense of Congress that the Secretary of State 
        and the Secretary of the Interior shall assure that there are 
        personnel resources committed in the appropriate numbers and 
        locations to ensure effective oversight of United States 
        financial and program assistance.
          (9) The United States voting members (United States chair 
        plus two or more members) of the Trust Fund Committee appointed 
        by the Government of the United States pursuant to Article 7 of 
        the Trust Fund Agreement implementing section 215 of the U.S.-
        FSM Compact and referred to in section 462(b)(5) of the U.S.-
        FSM Compact and any alternates designated by the Government of 
        the United States shall be United States Government officers or 
        employees. The United States voting members (United States 
        chair plus two or more members) of the Trust Fund Committee 
        appointed by the Government of the United States pursuant to 
        Article 7 of the Trust Fund Agreement implementing section 216 
        of the U.S.-RMI Compact and referred to in section 462(b)(5) of 
        the U.S.-RMI Compact and any alternates designated by the 
        Government of the United States shall be United States 
        Government officers or employees. It is the sense of Congress 
        that the appointees should be designated from the Department of 
        State, the Department of the Interior, and the Department of 
        the Treasury.
          (10) The Trust Fund Committee provided for in Article 7 of 
        the U.S.-FSM Trust Fund Agreement implementing section 215 of 
        the U.S.-FSM Compact shall be a non-profit corporation 
        incorporated under the laws of the District of Columbia. To the 
        extent that any law, rule, regulation or ordinance of the 
        District of Columbia, or of any State or political subdivision 
        thereof in which the Trust Fund Committee is incorporated or 
        doing business, impedes or otherwise interferes with the 
        performance of the functions of the Trust Fund Committee 
        pursuant to this joint resolution, such law, rule, regulation, 
        or ordinance shall be deemed to be preempted by this joint 
        resolution. The Trust Fund Committee provided for in Article 7 
        of the U.S.-RMI Trust Fund Agreement implementing section 216 
        of the U.S.-RMI Compact shall be a non-profit corporation 
        incorporated under the laws of the District of Columbia. To the 
        extent that any law, rule, regulation or ordinance of the 
        District of Columbia, or of any State or political subdivision 
        thereof in which the Trust Fund Committee is incorporated or 
        doing business, impedes or otherwise interferes with the 
        performance of the functions of the Trust Fund Committee 
        pursuant to this joint resolution, such law, rule, regulation, 
        or ordinance shall be deemed to be preempted by this joint 
        resolution.
  (c) Judicial Training.--(1) In addition to amounts provided under 
section 211(a)(4) of the U.S.-FSM Compact and the U.S.-RMI Compact, the 
President shall annually provide $250,000 to the Government of the 
Federated States of Micronesia and $50,000 to the Government of the 
Republic of the Marshall Islands to provide training for judges and 
officials of the judiciary.
  (2) There is hereby authorized and appropriated to the Secretary of 
the Interior, out of any funds in the Treasury not otherwise 
appropriated, to remain available until expended, for each fiscal year 
from 2004 through 2023, $300,000, as adjusted for inflation under 
section 217 of the U.S.-FSM Compact and section 218 of the U.S.-RMI 
Compact, to carry out the purposes of this section.
  (d) Continuing Trust Territory Authorization.--The authorization 
provided by the Act of June 30, 1954, as amended (68 Stat. 330) shall 
remain available after the effective date of the Compact with respect 
to the Federated States of Micronesia and the Republic of the Marshall 
Islands for the following purposes:
          (1) Prior to October 1, 1986, for any purpose authorized by 
        the Compact or the joint resolution of January 14, 1986 (Public 
        Law 99-239).
          (2) Transition purposes, including but not limited to, 
        completion of projects and fulfillment of commitments or 
        obligations; termination of the Trust Territory Government and 
        termination of the High Court; health and education as a result 
        of exceptional circumstances; ex gratia contributions for the 
        populations of Bikini, Enewetak, Rongelap, and Utrik; and 
        technical assistance and training in financial management, 
        program administration, and maintenance of infrastructure, 
        except that, for purposes of an orderly reduction of United 
        States programs and services in the Federated States of 
        Micronesia, the Marshall Islands, and the Republic of Palau, 
        United States programs or services not specifically authorized 
        by the Compact of Free Association or by other provisions of 
        law may continue but, unless reimbursed by the respective 
        freely associated state, not in excess of the following 
        amounts:
                  (A) For fiscal year 1987, an amount not to exceed 75 
                per centum of the total amount appropriated for such 
                programs for fiscal year 1986.
                  (B) For fiscal year 1988, an amount not to exceed 50 
                per centum of the total amount appropriated for such 
                programs for fiscal year 1986.
                  (C) For fiscal year 1989, an amount not to exceed 25 
                per centum of the total amount appropriated for such 
                programs for fiscal year 1986.
  (e) Survivability.--In furtherance of the provisions of Title Four, 
Article V, sections 452 and 453 of the U.S.-FSM Compact and the U.S.-
RMI Compact, any provisions of the U.S.-FSM Compact or the U.S.-RMI 
Compact which remain effective after the termination of the U.S.-FSM 
Compact or U.S.-RMI Compact by the act of any party thereto and which 
are affected in any manner by provisions of this title shall remain 
subject to such provisions.
  (f) Noncompliance Sanctions; Actions Incompatible With United States 
Authority.--The Congress expresses its understanding that the 
Governments of the Federated States of Micronesia and the Republic of 
the Marshall Islands will not act in a manner incompatible with the 
authority and responsibility of the United States for security and 
defense matters in or related to the Federated States of Micronesia or 
the Republic of the Marshall Islands pursuant to the U.S.-FSM Compact 
or the U.S.-RMI Compact, including the agreements referred to in 
sections 462(a)(2) of the U.S.-FSM Compact and 462(a)(5) of the U.S.-
RMI Compact. The Congress further expresses its intention that any such 
act on the part of either such Government will be viewed by the United 
States as a material breach of the U.S.-FSM Compact or U.S.-RMI 
Compact. The Government of the United States reserves the right in the 
event of such a material breach of the U.S.-FSM Compact by the 
Government of the Federated States of Micronesia or the U.S.-RMI 
Compact by the Government of the Republic of the Marshall Islands to 
take action, including (but not limited to) the suspension in whole or 
in part of the obligations of the Government of the United States to 
that Government.
  (g) Continuing Programs and Laws.--
          (1) Federated states of micronesia and republic of the 
        marshall islands.--In addition to the programs and services set 
        forth in section 221 of the Compact, and pursuant to section 
        222 of the Compact, the programs and services of the following 
        agencies shall be made available to the Federated States of 
        Micronesia and to the Republic of the Marshall Islands:
                  (A) The Government of the United States shall 
                continue to make available to eligible institutions in 
                the Federated States of Micronesia and the Republic of 
                the Marshall Islands, and to students enrolled in such 
                eligible institutions and in institutions in the United 
                States and its territories, for fiscal years 2004 
                through 2023, grants under subpart 1 of part A of title 
                IV of the Higher Education Act of 1965 (20 U.S.C. 1070a 
                et seq.) on the same basis that such grants continue to 
                be available to institutions and students in the United 
                States.
                  (B) Except as provided in clause (i), for fiscal 
                years 2004 through 2023, the Governments of the 
                Federated States of Micronesia and the Republic of the 
                Marshall Islands shall not receive grants under any 
                formula-grant program administered by the Secretary of 
                Education. In place of such grants, the Government of 
                the Federated States of Micronesia shall receive, as a 
                supplement to the education sector grant under section 
                211(a)(1), $20,018,514 annually and the Government of 
                the Republic of the Marshall Islands shall receive, as 
                a supplement to the education sector grant under 
                section 211(a)(1), $9,405,335 annually. Both of these 
                supplemental amounts shall be adjusted for inflation 
                under section 217 of the U.S.-FSM Compact and section 
                218 of the U.S.-RMI Compact.
                  (C) The Governments of the Federated States of 
                Micronesia and the Republic of the Marshall Islands 
                shall continue to be eligible for competitive grants 
                administered by the Secretary of Education to the 
                extent that such grants continue to be available to 
                State and local governments in the United States.
                  (D) The Federal Emergency Management Agency, in the 
                following manner: Paragraph (6) of section 221(a) of 
                the U.S.-FSM Compact and paragraph (5) of section 
                221(a) of the U.S.-RMI Compact shall each be construed 
                and applied as if each provision reads as follows: 
                ``The Department of Homeland Security, Federal 
                Emergency Management Agency disaster assistance 
                programs and public assistance programs for public and 
                private non-profit infrastructure and programs provided 
                by the United States Agency for International 
                Development, Office of Foreign Disaster Assistance, at 
                levels equivalent to those available on the day 
                preceding the effective date of the Compacts, to remain 
                available until the later of--
                          (i) the 10-year period beginning on the date 
                        of enactment of the Compacts; or
                          (ii) the date on which the Disaster 
                        Assistance Emergency Fund referred to in 
                        section 211(d) of the U.S.-FSM Compact and 
                        section 211(e) of the U.S.-RMI Compact attains 
                        a balance of $4,000,000.
                  (E) The Legal Services Corporation.
                  (F) The Public Health Service.
                  (G) The Rural Housing Service (formerly, the Farmers 
                Home Administration) in the Marshall Islands and each 
                of the four States of the Federated States of 
                Micronesia. In lieu of continuation of the program in 
                the Federated States of Micronesia, the President may 
                agree to transfer to the Government of the Federated 
                States of Micronesia without cost, the portfolio of the 
                Rural Housing Service applicable to the Federated 
                States of Micronesia and provide such technical 
                assistance in management of the portfolio as may be 
                requested by the Federated States of Micronesia.
          (2) Tort claims.--The provisions of section 178 of the U.S.-
        FSM Compact and the U.S.-RMI Compact regarding settlement and 
        payment of tort claims shall apply to employees of any Federal 
        agency of the Government of the United States (and to any other 
        person employed on behalf of any Federal agency of the 
        Government of the United States on the basis of a contractual, 
        cooperative, or similar agreement) which provides any service 
        or carries out any other function pursuant to or in furtherance 
        of any provisions of the U.S.-FSM Compact or the U.S.-RMI 
        Compact or this joint resolution, except for provisions of 
        Title Three of the Compact and of the subsidiary agreements 
        related to such Title, in such area to which such Agreement 
        formerly applied.
          (3) PCB cleanup.--The programs and services of the 
        Environmental Protection Agency regarding PCBs shall, to the 
        extent applicable, as appropriate, and in accordance with 
        applicable law, be construed to be made available to such 
        islands.
  (h) College of Micronesia.--Until otherwise provided by Act of 
Congress, or until termination of the U.S.-FSM Compact and the U.S.-RMI 
Compact, the College of Micronesia shall retain its status as a land-
grant institution and its eligibility for all benefits and programs 
available to such land-grant institutions.
  (i) Trust Territory Debts to U.S. Federal Agencies.--Neither the 
Government of the Federated States of Micronesia nor the Government of 
the Marshall Islands shall be required to pay to any department, 
agency, independent agency, office, or instrumentality of the United 
States any amounts owed to such department, agency, independent agency, 
office, or instrumentality by the Government of the Trust Territory of 
the Pacific Islands as of the effective date of the Compact. There is 
authorized to be appropriated such sums as may be necessary to carry 
out the purposes of this subsection.
  (j) Technical Assistance.--Technical assistance may be provided 
pursuant to section 224 of the U.S.-FSM Compact or the U.S.-RMI Compact 
by Federal agencies and institutions of the Government of the United 
States to the extent such assistance may be provided to States, 
territories, or units of local government. Such assistance by the 
Forest Service, the Natural Resources Conservation Service, (acting 
through the Resource Convservation and Development Program) the USDA 
Resource Conservation and Development Program, the Fish and Wildlife 
Service, the National Marine Fisheries Service, the United States Coast 
Guard, and the Advisory Council on Historic Preservation, the 
Department of the Interior, and other agencies providing assistance 
under the National Historic Preservation Act (80 Stat. 915; 16 U.S.C. 
470-470t), shall be on a nonreimbursable basis. During the period the 
U.S.-FSM Compact and the U.S.-RMI Compact are in effect, the grant 
programs under the National Historic Preservation Act shall continue to 
apply to the Federated States of Micronesia and the Republic of the 
Marshall Islands in the same manner and to the same extent as prior to 
the approval of the Compact. Any funds provided pursuant to sections 
102(a), 103(a), 103(b), 103(f), 103(g), 103(h), 103(j), 105(c), 105(g), 
105(h), 105(i), 105(j), 105(k), 105(l), and 105(m) of this joint 
resolution shall be in addition to and not charged against any amounts 
to be paid to either the Federated States of Micronesia or the Republic 
of the Marshall Islands pursuant to the U.S.-FSM Compact, the U.S.-RMI 
Compact, or their related subsidiary agreements.
  (k) Prior Service Benefits Program.--Notwithstanding any other 
provision of law, persons who on January 1, 1985, were eligible to 
receive payment under the Prior Service Benefits Program established 
within the Social Security System of the Trust Territory of the Pacific 
Islands because of their services performed for the United States Navy 
or the Government of the Trust Territory of the Pacific Islands prior 
to July 1, 1968, shall continue to receive such payments on and after 
the effective date of the Compact.
  (l) Indefinite Land Use Payments.--There are authorized to be 
appropriated such sums as may be necessary to complete repayment by the 
United States of any debts owed for the use of various lands in the 
Federated States of Micronesia and the Marshall Islands prior to 
January 1, 1985.
  (m) Communicable Disease Control Program.--There are authorized to be 
appropriated for grants to the Government of the Federated States of 
Micronesia and the Government of the Republic of the Marshall Islands, 
such sums as may be necessary for purposes of establishing or 
continuing programs for the control and prevention of communicable 
diseases, including (but not limited to) cholera and Hansen's Disease. 
The Secretary of the Interior shall assist the Government of the 
Federated States of Micronesia and the Government of the Republic of 
the Marshall Islands in designing and implementing such a program.
  (n) User Fees.--Any person in the Federated States of Micronesia or 
the Republic of the Marshall Islands shall be liable for user fees, if 
any, for services provided in the Federated States of Micronesia or the 
Republic of the Marshall Islands by the Government of the United States 
to the same extent as any person in the United States would be liable 
for fees, if any, for such services in the United States.
  (o) Treatment of Judgments of Courts of the Federated States of 
Micronesia, the Republic of the Marshall Islands, and the Republic of 
Palau.--No judgment, whenever issued, of a court of the Federated 
States of Micronesia, the Republic of the Marshall Islands, or the 
Republic of Palau, against the United States, its departments and 
agencies, or officials of the United States or any other individuals 
acting on behalf of the United States within the scope of their 
official duty, shall be honored by the United States, or be subject to 
recognition or enforcement in a court in the United States, unless the 
judgment is consistent with the interpretation by the United States of 
international agreements relevant to the judgment. In determining the 
consistency of a judgment with an international agreement, due regard 
shall be given to assurances made by the Executive Branch to the 
Congress of the United States regarding the proper interpretation of 
the international agreement.
  (p) Inflation Adjustment.--As of Fiscal Year 2015, if United States 
Gross Domestic Product Implicit Price Deflator average for Fiscal Years 
2009 through 2014 is greater than the United States Gross Domestic 
Product Implicit Price Deflator average for Fiscal Years 2004 through 
2008 (as reported in the Survey of Current Business or subsequent 
publication and compiled by the Department of Interior), then section 
217 of the U.S.-FSM Compact and paragraph 5 of Article II of the U.S.-
FSM Fiscal Procedures Agreement and section 218 of the U.S.-RMI Compact 
and paragraph 5 of Article II of the U.S.-RMI Fiscal Procedures 
Agreement shall be construed as if ``the full'' appeared in place of 
``two-thirds of the'' each place those words appear.

SEC. 106. CONSTRUCTION CONTRACT ASSISTANCE.

  (a) Assistance to U.S. Firms.--In order to assist the Governments of 
the Federated States of Micronesia and of the Republic of the Marshall 
Islands through private sector firms which may be awarded contracts for 
construction or major repair of capital infrastructure within the 
Federated States of Micronesia or the Republic of the Marshall Islands, 
the United States shall consult with the Governments of the Federated 
States of Micronesia and the Republic of the Marshall Islands with 
respect to any such contracts, and the United States shall enter into 
agreements with such firms whereby such firms will, consistent with 
applicable requirements of such Governments--
          (1) to the maximum extent possible, employ citizens of the 
        Federated States of Micronesia and the Republic of the Marshall 
        Islands;
          (2) to the extent that necessary skills are not possessed by 
        citizens of the Federated States of Micronesia and the Republic 
        of the Marshall Islands, provide on the job training, with 
        particular emphasis on the development of skills relating to 
        operation of machinery and routine and preventative maintenance 
        of machinery and other facilities; and
          (3) provide specific training or other assistance in order to 
        enable the Government to engage in long-term maintenance of 
        infrastructure.
Assistance by such firms pursuant to this section may not exceed 20 
percent of the amount of the contract and shall be made available only 
to such firms which meet the definition of United States firm under the 
nationality rule for suppliers of services of the Agency for 
International Development (hereafter in this section referred to as 
``United States firms''). There are authorized to be appropriated such 
sums as may be necessary for the purposes of this subsection.
  (b) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to cover any additional 
costs incurred by the Government of the Federated States of Micronesia 
or the Republic of the Marshall Islands if such Governments, pursuant 
to an agreement entered into with the United States, apply a preference 
on the award of contracts to United States firms, provided that the 
amount of such preference does not exceed 10 percent of the amount of 
the lowest qualified bid from a non-United States firm for such 
contract.

SEC. 107. PROHIBITION.

  The provisions of chapter 11 of title 18, United States Code, shall 
apply in full to any individual who has served as the United States 
negotiator of amendments to the Compact or its subsidiary agreements or 
of related agreements or who is or was an officer or employee of the 
Office in the Department of State responsible for negotiating 
amendments to the Compact or its subsidiary agreements or who is or was 
assigned or detailed to that Office or who served on the interagency 
group coordinating United States policy on the Compact negotiations.

SEC. 108. COMPENSATORY ADJUSTMENTS.

  (a) Additional Programs and Services.--In addition to the programs 
and services set forth in section 221 of the U.S.-FSM Compact and the 
U.S.-RMI Compact, and pursuant to section 222 of the U.S.-FSM Compact 
and the U.S.-RMI Compact, the services and programs of the following 
United States agencies shall be made available to the Federated States 
of Micronesia and the Republic of the Marshall Islands: the Small 
Business Administration, Economic Development Administration, and the 
Rural Utilities Services (formerly Rural Electrification 
Administration); the programs and services of the Department of Labor 
under the Workforce Investment Act of 1998; the programs and services 
of the Department of Commerce relating to tourism and to marine 
resource development; and the Federal Deposit Insurance Corporation, 
provided however, that eligibility to qualify for services and programs 
of the Federal Deposit Insurance Corporation, shall cease to apply on 
September 30, 2005. Any institution qualified for Federal Deposit 
Insurance Corporation services and programs on or before September 30, 
2005, shall remain eligible for such programs and services for the term 
and pursuant to such conditions as set forth in the Federal Program and 
Services Agreement described in Section 231 of the U.S.-RMI Compact and 
U.S.-FSM Compact.
  (b) Further Amounts.--
          (1) The joint resolution of January 14, 1986 (Public Law 99-
        239) provided that the governments of the Federated States of 
        Micronesia and the Marshall Islands may submit to Congress 
        reports concerning the overall financial and economic impacts 
        on such areas resulting from the effect of Title IV of that 
        joint resolution upon Title Two of the Compact. There were 
        authorized to be appropriated for fiscal years beginning after 
        September 30, 1990, such amounts as necessary, but not to 
        exceed $40 million for the Federated States of Micronesia and 
        $20 million for the Marshall Islands, as provided in 
        appropriation acts, to further compensate the governments of 
        such islands (in addition to the compensation provided in 
        subsections (a) and (b) of section 111 of the joint resolution 
        of January 14, 1986 (Public Law 99-239) for adverse impacts, if 
        any, on the finances and economies of such areas resulting from 
        the effect of Title IV of that joint resolution upon Title Two 
        of the Compact. The joint resolution of January 14, 1986 
        (Public Law 99-239) further provided that at the end of the 
        initial fifteen-year term of the Compact, should any portion of 
        the total amount of funds authorized in subsection 111 of that 
        resolution not have been appropriated, such amount not yet 
        appropriated may be appropriated, without regard to divisions 
        between amounts authorized in subsection 111 for the Federated 
        States of Micronesia and for the Marshall Islands, based on 
        either or both such government's showing of such adverse 
        impact, if any, as provided in that subsection.
          (2) The governments of the Federated States of Micronesia and 
        the Republic of the Marshall Islands may each submit no more 
        than one report or request for further compensation under 
        section 111 of the joint resolution of January 14, 1986 (Public 
        Law 99-239) and any such report or request must be submitted by 
        September 30, 2009. Only adverse economic effect occurring 
        during the initial fifteen-year term of the Compact may be 
        considered for compensation under section 111 of the joint 
        resolution of January 14, 1986 (Public Law 99-239).

SEC. 109. AUTHORIZATION AND CONTINUING APPROPRIATION.

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

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

  Section 605 of Public Law 107-67 (the Treasury and General Government 
Appropriations Act, 2002; 5 U.S.C. 3101 note) is amended by striking 
``or the Republic of the Philippines,'' in the last sentence and 
inserting the following: ``the Republic of the Philippines, the 
Federated States of Micronesia, the Republic of the Marshall Islands, 
or the Republic of Palau,''.

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

SEC. 201. COMPACTS OF FREE ASSOCIATION, AS AMENDED BETWEEN THE 
                    GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE 
                    GOVERNMENT OF THE FEDERATED STATES OF MICRONESIA 
                    AND BETWEEN THE GOVERNMENT OF THE UNITED STATES OF 
                    AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF THE 
                    MARSHALL ISLANDS.

  (a) Compact of Free Association, as Amended, Between the Government 
of the United States of America and the Government of the Federated 
States of Micronesia.--

                                PREAMBLE

 THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF 
                   THE FEDERATED STATES OF MICRONESIA

  Affirming that their Governments and their relationship as 
Governments are founded upon respect for human rights and fundamental 
freedoms for all, and that the people of the Federated States of 
Micronesia have the right to enjoy self-government; and
  Affirming the common interests of the United States of America and 
the Federated States of Micronesia in creating and maintaining their 
close and mutually beneficial relationship through the free and 
voluntary association of their respective Governments; and
  Affirming the interest of the Government of the United States in 
promoting the economic advancement and budgetary self-reliance of the 
Federated States of Micronesia; and
  Recognizing that their relationship until the entry into force on 
November 3, 1986 of the Compact was based upon the International 
Trusteeship System of the United Nations Charter, and in particular 
Article 76 of the Charter; and that pursuant to Article 76 of the 
Charter, the people of the Federated States of Micronesia have 
progressively developed their institutions of self-government, and that 
in the exercise of their sovereign right to self-determination they, 
through their freely-expressed wishes, have adopted a Constitution 
appropriate to their particular circumstances; and
  Recognizing that the Compact reflected their common desire to 
terminate the Trusteeship and establish a government-to-government 
relationship which was in accordance with the new political status 
based on the freely expressed wishes of the people of the Federated 
States of Micronesia and appropriate to their particular circumstances; 
and
  Recognizing that the people of the Federated States of Micronesia 
have and retain their sovereignty and their sovereign right to self-
determination and the inherent right to adopt and amend their own 
Constitution and form of government and that the approval of the entry 
of the Government of the Federated States of Micronesia into the 
Compact by the people of the Federated States of Micronesia constituted 
an exercise of their sovereign right to self-determination; and
  Recognizing the common desire of the people of the United States and 
the people of the Federated States of Micronesia to maintain their 
close government-to-government relationship, the United States and the 
Federated States of Micronesia:
  NOW, THEREFORE, MUTUALLY AGREE to continue and strengthen their 
relationship of free association by amending the Compact, which 
continues to provide a full measure of self-government for the people 
of the Federated States of Micronesia; and
  FURTHER AGREE that the relationship of free association derives from 
and is as set forth in this Compact, as amended, by the Governments of 
the United States and the Federated States of Micronesia; and that, 
during such relationship of free association, the respective rights and 
responsibilities of the Government of the United States and the 
Government of the Federated States of Micronesia in regard to this 
relationship of free association derive from and are as set forth in 
this Compact, as amended.

                               TITLE ONE

                         GOVERNMENTAL RELATIONS

                               Article I

                            Self-Government

Section 111
  The people of the Federated States of Micronesia, acting through the 
Government established under their Constitution, are self-governing.

                               Article II

                            Foreign Affairs

Section 121
  (a) The Government of the Federated States of Micronesia has the 
capacity to conduct foreign affairs and shall do so in its own name and 
right, except as otherwise provided in this Compact, as amended.
  (b) The foreign affairs capacity of the Government of the Federated 
States of Micronesia includes:
          (1) the conduct of foreign affairs relating to law of the sea 
        and marine resources matters, including the harvesting, 
        conservation, exploration or exploitation of living and non-
        living resources from the sea, seabed or subsoil to the full 
        extent recognized under international law;
          (2) the conduct of its commercial, diplomatic, consular, 
        economic, trade, banking, postal, civil aviation, 
        communications, and cultural relations, including negotiations 
        for the receipt of developmental loans and grants and the 
        conclusion of arrangements with other governments and 
        international and intergovernmental organizations, including 
        any matters specially benefiting its individual citizens.
  (c) The Government of the United States recognizes that the 
Government of the Federated States of Micronesia has the capacity to 
enter into, in its own name and right, treaties and other international 
agreements with governments and regional and international 
organizations.
  (d) In the conduct of its foreign affairs, the Government of the 
Federated States of Micronesia confirms that it shall act in accordance 
with principles of international law and shall settle its international 
disputes by peaceful means.
Section 122
  The Government of the United States shall support applications by the 
Government of the Federated States of Micronesia for membership or 
other participation in regional or international organizations as may 
be mutually agreed.
Section 123
  (a) In recognition of the authority and responsibility of the 
Government of the United States under Title Three, the Government of 
the Federated States of Micronesia shall consult, in the conduct of its 
foreign affairs, with the Government of the United States.
  (b) In recognition of the foreign affairs capacity of the Government 
of the Federated States of Micronesia, the Government of the United 
States, in the conduct of its foreign affairs, shall consult with the 
Government of the Federated States of Micronesia on matters that the 
Government of the United States regards as relating to or affecting the 
Government of the Federated States of Micronesia.
Section 124
  The Government of the United States may assist or act on behalf of 
the Government of the Federated States of Micronesia in the area of 
foreign affairs as may be requested and mutually agreed from time to 
time.The Government of the United States shall not be responsible to 
third parties for the actions of the Government of the Federated States 
of Micronesia undertaken with the assistance or through the agency of 
the Government of the United States pursuant to this section unless 
expressly agreed.
Section 125
  The Government of the United States shall not be responsible for nor 
obligated by any actions taken by the Government of the Federated 
States of Micronesia in the area of foreign affairs, except as may from 
time to time be expressly agreed.
Section 126
  At the request of the Government of the Federated States of 
Micronesia and subject to the consent of the receiving state, the 
Government of the United States shall extend consular assistance on the 
same basis as for citizens of the United States to citizens of the 
Federated States of Micronesia for travel outside the Federated States 
of Micronesia, the United States and its territories and possessions.
Section 127
  Except as otherwise provided in this Compact, as amended, or its 
related agreements, all obligations, responsibilities, rights and 
benefits of the Government of the United States as Administering 
Authority which resulted from the application pursuant to the 
Trusteeship Agreement of any treaty or other international agreement to 
the Trust Territory of the Pacific Islands on November 2, 1986, are, as 
of that date, no longer assumed and enjoyed by the Government of the 
United States.

                              Article III

                             Communications

Section 131
  (a) The Government of the Federated States of Micronesia has full 
authority and responsibility to regulate its domestic and foreign 
communications, and the Government of the United States shall provide 
communications assistance as mutually agreed.
  (b) On May 24, 1993, the Government of the Federated States of 
Micronesia elected to undertake all functions previously performed by 
the Government of the United States with respect to domestic and 
foreign communications, except for those functions set forth in a 
separate agreement entered into pursuant to this section of the 
Compact, as amended.
Section 132
  The Government of the Federated States of Micronesia shall permit the 
Government of the United States to operate telecommunications services 
in the Federated States of Micronesia to the extent necessary to 
fulfill the obligations of the Government of the United States under 
this Compact, as amended, in accordance with the terms of separate 
agreements entered into pursuant to this section of the Compact, as 
amended.

                               Article IV

                              Immigration

Section 141
  (a) In furtherance of the special and unique relationship that exists 
between the United States and the Federated States of Micronesia, under 
the Compact, as amended, any person in the following categories may be 
admitted to lawfully engage in occupations, and establish residence as 
a nonimmigrant in the United States and its territories and possessions 
(the ``United States'') without regard to paragraph (5) or 
(7)(B)(i)(II) of section 212(a) of the Immigration and Nationality Act, 
as amended, 8 U.S.C. 1182(a)(5) or (7)(B)(i)(II):
          (1) a person who, on November 2, 1986, was a citizen of the 
        Trust Territory of the Pacific Islands, as defined in Title 53 
        of the Trust Territory Code in force on January 1, 1979, and 
        has become and remains a citizen of the Federated States of 
        Micronesia;
          (2) a person who acquires the citizenship of the Federated 
        States of Micronesia at birth, on or after the effective date 
        of the Constitution of the Federated States of Micronesia;
          (3) an immediate relative of a person referred to in 
        paragraphs (1) or (2) of this section, provided that such 
        immediate relative is a naturalized citizen of the Federated 
        States of Micronesia who has been an actual resident there for 
        not less than five years after attaining such naturalization 
        and who holds a certificate of actual residence, and further 
        provided, that, in the case of a spouse, such spouse has been 
        married to the person referred to in paragraph (1) or (2) of 
        this section for at least five years, and further provided, 
        that the Government of the United States is satisfied that such 
        naturalized citizen meets the requirement of subsection (b) of 
        section 104 of Public Law 99-239 as it was in effect on the day 
        prior to the effective date of this Compact, as amended;
          (4) a naturalized citizen of the Federated States of 
        Micronesia who was an actual resident there for not less than 
        five years after attaining such naturalization and who 
        satisfied these requirements as of April 30, 2003, who 
        continues to be an actual resident and holds a certificate of 
        actual residence, and whose name is included in a list 
        furnished bythe Government of the Federated States of 
Micronesia to the Government of the United States no later than the 
effective date of the Compact, as amended, in form and content 
acceptable to the Government of the United States, provided, that the 
Government of the United States is satisfied that such naturalized 
citizen meets the requirement of subsection (b) of section 104 of 
Public Law 99-239 as it was in effect on the day prior to the effective 
date of this Compact, as amended; or
          (5) an immediate relative of a citizen of the Federated 
        States of Micronesia, regardless of the immediate relative's 
        country of citizenship or period of residence in the Federated 
        States of Micronesia, if the citizen of the Federated States of 
        Micronesia is serving on active duty in any branch of the 
        United States Armed Forces, or in the active reserves.
  (b) Notwithstanding subsection (a) of this section, a person who is 
coming to the United States pursuant to an adoption outside the United 
States, or for the purpose of adoption in the United States, is 
ineligible for admission under the Compact and the Compact, as amended. 
This subsection shall apply to any person who is or was an applicant 
for admission to the United States on or after March 1, 2003, including 
any applicant for admission in removal proceedings (including appellate 
proceedings) on or after March 1, 2003, regardless of the date such 
proceedings were commenced. This subsection shall have no effect on the 
ability of the Government of the United States or any United States 
State or local government to commence or otherwise take any action 
against any person or entity who has violated any law relating to the 
adoption of any person.
  (c) Notwithstanding subsection (a) of this section, no person who has 
been or is granted citizenship in the Federated States of Micronesia, 
or has been or is issued a Federated States of Micronesia passport 
pursuant to any investment, passport sale, or similar program has been 
or shall be eligible for admission to the United States under the 
Compact or the Compact, as amended.
  (d) A person admitted to the United States under the Compact, or the 
Compact, as amended, shall be considered to have the permission of the 
Government of the United States to accept employment in the United 
States. An unexpired Federated States of Micronesia passport with 
unexpired documentation issued by the Government of the United States 
evidencing admission under the Compact or the Compact, as amended, 
shall be considered to be documentation establishing identity and 
employment authorization under section 274A(b)(1)(B) of the Immigration 
and Nationality Act, as amended, 8 U.S.C. 1324a(b)(1)(B). The 
Government of the United States will take reasonable and appropriate 
steps to implement and publicize this provision, and the Government of 
the Federated States of Micronesia will also take reasonable and 
appropriate steps to publicize this provision.
  (e) For purposes of the Compact and the Compact, as amended:
          (1) the term ``residence'' with respect to a person means the 
        person's principal, actual dwelling place in fact, without 
        regard to intent, as provided in section 101(a)(33) of the 
        Immigration and Nationality Act, as amended, 8 U.S.C. 
        1101(a)(33), and variations of the term ``residence,'' 
        including ``resident'' and ``reside,'' shall be similarly 
        construed;
          (2) the term ``actual residence'' means physical presence in 
        the Federated States of Micronesia during eighty-five percent 
        of the five-year period of residency required by section 
        141(a)(3) and (4);
          (3) the term ``certificate of actual residence'' means a 
        certificate issued to a naturalized citizen by the Government 
        of the Federated States of Micronesia stating that the citizen 
        has complied with the actual residence requirement of section 
        141(a)(3) or (4);
          (4) the term ``nonimmigrant'' means an alien who is not an 
        ``immigrant'' as defined in section 101(a)(15) of such Act, 8 
        U.S.C. 1101(a)(15); and
          (5) the term ``immediate relative'' means a spouse, or 
        unmarried son or unmarried daughter less than 21 years of age.
  (f) The Immigration and Nationality Act, as amended, shall apply to 
any person admitted or seeking admission to the United States (other 
than a United States possession or territory where such Act does not 
apply) under the Compact or the Compact, as amended, and nothing in the 
Compact or the Compact, as amended, shall be construed to limit, 
preclude, or modify the applicability of, with respect to such person:
          (1) any ground of inadmissibility or deportability under such 
        Act (except sections 212(a)(5) and 212(a)(7)(B)(i)(II) of such 
        Act, as provided in subsection (a) of this section), and any 
        defense thereto, provided that, section 237(a)(5) of such Act 
        shall be construed and applied as if it reads as follows: ``any 
        alien who has been admitted under the Compact, or the Compact, 
        as amended, who cannotshow that he or she has sufficient means 
of support in the United States, is deportable'';
          (2) the authority of the Government of the United States 
        under section 214(a)(1) of such Act to provide that admission 
        as a nonimmigrant shall be for such time and under such 
        conditions as the Government of the United States may by 
        regulations prescribe;
          (3) Except for the treatment of certain documentation for 
        purposes of section 274A(b)(1)(B) of such Act as provided by 
        subsection (d) of this section of the Compact, as amended, any 
        requirement under section 274A, including but not limited to 
        section 274A(b)(1)(E);
          (4) Section 643 of the Illegal Immigration Reform and 
        Immigrant Responsibility Act of 1996, Public Law 104-208, and 
        actions taken pursuant to section 643; and
          (5) the authority of the Government of the United States 
        otherwise to administer and enforce the Immigration and 
        Nationality Act, as amended, or other United States law.
  (g) Any authority possessed by the Government of the United States 
under this section of the Compact or the Compact, as amended, may also 
be exercised by the Government of a territory or possession of the 
United States where the Immigration and Nationality Act, as amended, 
does not apply, to the extent such exercise of authority is lawful 
under a statute or regulation of such territory or possession that is 
authorized by the laws of the United States.
  (h) Subsection (a) of this section does not confer on a citizen of 
the Federated States of Micronesia the right to establish the residence 
necessary for naturalization under the Immigration and Nationality Act, 
as amended, or to petition for benefits for alien relatives under that 
Act. Subsection (a) of this section, however, shall not prevent a 
citizen of the Federated States of Micronesia from otherwise acquiring 
such rights or lawful permanent resident alien status in the United 
States.
Section 142
  (a) Any citizen or national of the United States may be admitted, to 
lawfully engage in occupations, and reside in the Federated States of 
Micronesia, subject to the rights of the Government of the Federated 
States of Micronesia to deny entry to or deport any such citizen or 
national as an undesirable alien. Any determination of inadmissibility 
or deportability shall be based on reasonable statutory grounds and 
shall be subject to appropriate administrative and judicial review 
within the Federated States of Micronesia. If a citizen or national of 
the United States is a spouse of a citizen of the Federated States of 
Micronesia, the Government of the Federated States of Micronesia shall 
allow the United States citizen spouse to establish residence. Should 
the Federated States of Micronesia citizen spouse predecease the United 
States citizen spouse during the marriage, the Government of the 
Federated States of Micronesia shall allow the United States citizen 
spouse to continue to reside in the Federated States of Micronesia.
  (b) In enacting any laws or imposing any requirements with respect to 
citizens and nationals of the United States entering the Federated 
States of Micronesia under subsection (a) of this section, including 
any grounds of inadmissibility or deportability, the Government of the 
Federated States of Micronesia shall accord to such citizens and 
nationals of the United States treatment no less favorable than that 
accorded to citizens of other countries.
  (c) Consistent with subsection (a) of this section, with respect to 
citizens and nationals of the United States seeking to engage in 
employment or invest in the Federated States of Micronesia, the 
Government of the Federated States of Micronesia shall adopt 
immigration-related procedures no less favorable than those adopted by 
the Government of the United States with respect to citizens of the 
Federated States of Micronesia seeking employment in the United States.
Section 143
  Any person who relinquishes, or otherwise loses, his United States 
nationality or citizenship, or his Federated States of Micronesia 
citizenship, shall be ineligible to receive the privileges set forth in 
sections 141 and 142. Any such person may apply for admission to the 
United States or the Federated States of Micronesia, as the case may 
be, in accordance with any other applicable laws of the United States 
or the Federated States of Micronesia relating to immigration of aliens 
from other countries. The laws of the Federated States of Micronesia or 
the United States, as the case may be, shall dictate the terms and 
conditions of any such person's stay.

                               Article V

                             Representation

Section 151
  Relations between the Government of the United States and the 
Government of the Federated States of Micronesia shall be conducted in 
accordance with the Vienna Convention on Diplomatic Relations. In 
addition to diplomatic missions and representation, the Governments may 
establish and maintain other offices and designate otherrepresentatives 
on terms and in locations as may be mutually agreed.
Section 152
  (a) Any citizen or national of the United States who, without 
authority of the United States, acts as the agent of the Government of 
the Federated States of Micronesia with regard to matters specified in 
the provisions of the Foreign Agents Registration Act of 1938, as 
amended (22 U.S.C. 611 et seq.), that apply with respect to an agent of 
a foreign principal shall be subject to the requirements of such Act. 
Failure to comply with such requirements shall subject such citizen or 
national to the same penalties and provisions of law as apply in the 
case of the failure of such an agent of a foreign principal to comply 
with such requirements. For purposes of the Foreign Agents Registration 
Act of 1938, the Federated States of Micronesia shall be considered to 
be a foreign country.
  (b) Subsection (a) of this section shall not apply to a citizen or 
national of the United States employed by the Government of the 
Federated States of Micronesia with respect to whom the Government of 
the Federated States of Micronesia from time to time certifies to the 
Government of the United States that such citizen or national is an 
employee of the Federated States of Micronesia whose principal duties 
are other than those matters specified in the Foreign Agents 
Registration Act of 1938, as amended, that apply with respect to an 
agent of a foreign principal. The agency or officer of the United 
States receiving such certifications shall cause them to be filed with 
the Attorney General, who shall maintain a publicly available list of 
the persons so certified.

                               Article VI

                        Environmental Protection

Section 161
  The Governments of the United States and the Federated States of 
Micronesia declare that it is their policy to promote efforts to 
prevent or eliminate damage to the environment and biosphere and to 
enrich understanding of the natural resources of the Federated States 
of Micronesia. In order to carry out this policy, the Government of the 
United States and the Government of the Federated States of Micronesia 
agree to the following mutual and reciprocal undertakings.
  (a) The Government of the United States:
          (1) shall continue to apply the environmental controls in 
        effect on November 2, 1986 to those of its continuing 
        activities subject to section 161(a)(2), unless and until those 
        controls are modified under sections 161(a)(3) and 161(a)(4);
          (2) shall apply the National Environmental Policy Act of 
        1969, 83 Stat. 852, 42 U.S.C. 4321 et seq., to its activities 
        under the Compact, as amended, and its related agreements as if 
        the Federated States of Micronesia were the United States;
          (3) shall comply also, in the conduct of any activity 
        requiring the preparation of an Environmental Impact Statement 
        under section 161(a)(2), with standards substantively similar 
        to those required by the following laws of the United States, 
        taking into account the particular environment of the Federated 
        States of Micronesia: the Endangered Species Act of 1973, as 
        amended, 87 Stat. 884, 16 U.S.C. 1531 et seq.; the Clean Air 
        Act, as amended, 77 Stat. 392, 42 U.S.C. Supp. 7401 et seq.; 
        the Clean Water Act (Federal Water Pollution Control Act), as 
        amended, 86 Stat. 896, 33 U.S.C. 1251 et seq.; Title I of the 
        Marine Protection, Research and Sanctuaries Act of 1972 (the 
        Ocean Dumping Act), 33 U.S.C. 1411 et seq.; the Toxic 
        Substances Control Act, as amended, 15 U.S.C. 2601 et seq.; the 
        Solid Waste Disposal Act, as amended, 42 U.S.C. 6901 et seq.; 
        and such other environmental protection laws of the United 
        States and of the Federated States of Micronesia, as may be 
        mutually agreed from time to time with the Government of the 
        Federated States of Micronesia; and
          (4) shall develop, prior to conducting any activity requiring 
        the preparation of an Environmental Impact Statement under 
        section 161(a)(2), written standards and procedures, as agreed 
        with the Government of the Federated States of Micronesia, to 
        implement the substantive provisions of the laws made 
        applicable to U.S. Government activities in the Federated 
        States of Micronesia, pursuant to section 161(a)(3).
  (b) The Government of the Federated States of Micronesia shall 
continue to develop and implement standards and procedures to protect 
its environment. As a reciprocal obligation to the undertakings of the 
Government of the United States under this Article, the Federated 
States of Micronesia, taking into account its particular environment, 
shall continue to develop and implement standards for environmental 
protection substantively similar to those required of the Government of 
the United States by section 161(a)(3) prior to its conducting 
activities in the Federated States of Micronesia, substantively 
equivalent to activities conducted there by the Government of the 
United States and, as a further reciprocal obligation, shall enforce 
those standards.
  (c) Section 161(a), including any standard or procedure applicable 
thereunder, and section 161(b) may be modified or superseded in whole 
or in part by agreement of the Government of the United States and the 
Government of the Federated States of Micronesia.
  (d) In the event that an Environmental Impact Statement is no longer 
required under the laws of the United States for major Federal actions 
significantly affecting the quality of the human environment, the 
regulatory regime established under sections 161(a)(3) and 161(a)(4) 
shall continue to apply to such activities of the Government of the 
United States until amended by mutual agreement.
  (e) The President of the United States may exempt any of the 
activities of the Government of the United States under this Compact, 
as amended, and its related agreements from any environmental standard 
or procedure which may be applicable under sections 161(a)(3) and 
161(a)(4) if the President determines it to be in the paramount 
interest of the Government of the United States to do so, consistent 
with Title Three of this Compact, as amended, and the obligations of 
the Government of the United States under international law. Prior to 
any decision pursuant to this subsection, the views of the Government 
of the Federated States of Micronesia shall be sought and considered to 
the extent practicable. If thePresident grants such an exemption, to 
the extent practicable, a report with his reasons for granting such 
exemption shall be given promptly to the Government of the Federated 
States of Micronesia.
  (f) The laws of the United States referred to in section 161(a)(3) 
shall apply to the activities of the Government of the United States 
under this Compact, as amended, and its related agreements only to the 
extent provided for in this section.
Section 162
  The Government of the Federated States of Micronesia may bring an 
action for judicial review of any administrative agency action or any 
activity of the Government of the United States pursuant to section 
161(a) for enforcement of the obligations of the Government of the 
United States arising thereunder. The United States District Court for 
the District of Hawaii and the United States District Court for the 
District of Columbia shall have jurisdiction over such action or 
activity, and over actions brought under section 172(b) which relate to 
the activities of the Government of the United States and its officers 
and employees, governed by section 161, provided that:
          (a) Such actions may only be civil actions for any 
        appropriate civil relief other than punitive damages against 
        the Government of the United States or, where required by law, 
        its officers in their official capacity; no criminal actions 
        may arise under this section.
          (b) Actions brought pursuant to this section may be initiated 
        only by the Government of the Federated States of Micronesia.
          (c) Administrative agency actions arising under section 161 
        shall be reviewed pursuant to the standard of judicial review 
        set forth in 5 U.S.C. 706.
          (d) The United States District Court for the District of 
        Hawaii and the United States District Court for the District of 
        Columbia shall have jurisdiction to issue all necessary 
        processes, and the Government of the United States agrees to 
        submit itself to the jurisdiction of the court; decisions of 
        the United States District Court shall be reviewable in the 
        United States Court of Appeals for the Ninth Circuit or the 
        United States Court of Appeals for the District of Columbia, 
        respectively, or in the United States Supreme Court as provided 
        by the laws of the United States.
          (e) The judicial remedy provided for in this section shall be 
        the exclusive remedy for the judicial review or enforcement of 
        the obligations of the Government of the United States under 
        this Article and actions brought under section 172(b) which 
        relate to the activities of the Government of the United States 
        and its officers and employees governed by section 161.
          (f) In actions pursuant to this section, the Government of 
        the Federated States of Micronesia shall be treated as if it 
        were a United States citizen.
Section 163
  (a) For the purpose of gathering data necessary to study the 
environmental effects of activities of the Government of the United 
States subject to the requirements of this Article, the Government of 
the Federated States of Micronesia shall be granted access to 
facilities operated by the Government of the United States in the 
Federated States of Micronesia, to the extent necessary for this 
purpose, except to the extent such access would unreasonably interfere 
with the exercise of the authority and responsibility of the Government 
of the United States under Title Three.
  (b) The Government of the United States, in turn, shall be granted 
access to the Federated States of Micronesia for the purpose of 
gathering data necessary to discharge its obligations under this 
Article, except to the extent such access would unreasonably interfere 
with the exercise of the authority and responsibility of the Government 
of the Federated States of Micronesia under Title One, and to the 
extent necessary for this purpose shall be granted access to documents 
and other information to the same extent similar access is provided the 
Government of the Federated States of Micronesia under the Freedom of 
Information Act, 5 U.S.C. 552.
  (c) The Government of the Federated States of Micronesia shall not 
impede efforts by the Government of the United States to comply with 
applicable standards and procedures.

                              Article VII

                        General Legal Provisions

Section 171
  Except as provided in this Compact, as amended, or its related 
agreements, the application of the laws of the United States to the 
Trust Territory of the Pacific Islands by virtue of the Trusteeship 
Agreement ceased with respect to the Federated States of Micronesia on 
November 3, 1986, the date the Compact went into effect.
Section 172
  (a) Every citizen of the Federated States of Micronesia who is not a 
resident of the United States shall enjoy the rights and remedies under 
the laws of the United States enjoyed by any non-resident alien.
  (b) The Government of the Federated States of Micronesia and every 
citizen of the Federated States of Micronesia shall be considered to be 
a ``person'' within the meaning of the Freedom of Information Act, 5 
U.S.C. 552, and of the judicial review provisions of the Administrative 
Procedure Act, 5 U.S.C. 701-706, except that only the Government of the 
Federated States of Micronesia may seek judicial review under the 
Administrative Procedure Act or judicial enforcement under the Freedom 
of Information Act when such judicial review or enforcement relates to 
the activities of the Government of the United States governed by 
sections 161 and 162.
Section 173
  The Governments of the United States and the Federated States of 
Micronesia agree to adopt and enforce such measures, consistent with 
this Compact, as amended, and its related agreements, as may be 
necessary to protect the personnel, property, installations, services, 
programs and official archives and documents maintained by the 
Government of the United States in the Federated States of Micronesia 
pursuant to this Compact, as amended, and its related agreements and by 
the Government of the Federated States of Micronesia in the United 
States pursuant to this Compact, as amended, and its related 
agreements.
Section 174
  Except as otherwise provided in this Compact, as amended, and its 
related agreements:
          (a) The Government of the Federated States of Micronesia, and 
        its agencies and officials, shall be immune from the 
        jurisdiction of the court of the United States, and the 
        Government of the United States, and its agencies and 
        officials, shall be immune from the jurisdiction of the courts 
        of the Federated States of Micronesia.
          (b) The Government of the United States accepts 
        responsibility for and shall pay:
                  (1) any unpaid money judgment rendered by the High 
                Court of the Trust Territory of the Pacific Islands 
                against the Government of the United States with regard 
                to any cause of action arising as a result of acts or 
                omissions of the Government of the Trust Territory of 
                the Pacific Islands or the Government of the United 
                States prior to November 3, 1986;
                  (2) any claim settled by the claimant and the 
                Government of the Trust Territory of the Pacific 
                Islands but not paid as of the November 3, 1986; and
                  (3) settlement of any administrative claim or of any 
                action before a court of the Trust Territory of the 
                Pacific Islands or the Government of the United States, 
                arising as a result of acts or omissions of the 
                Government of the Trust Territory of the Pacific 
                Islands or the Government of the United States.
          (c) Any claim not referred to in section 174(b) and arising 
        from an act or omission of the Government of the Trust 
        Territory of the Pacific Islands or the Government of the 
        United States prior to the effective date of the Compact shall 
        be adjudicated in the same manner as a claim adjudicated 
        according to section 174(d). In any claim against the 
        Government of the Trust Territory of the Pacific Islands, the 
        Government of the United States shall stand in the place of the 
        Government of the Trust Territory of the Pacific Islands. A 
        judgment on any claim referred to in section 174(b) or this 
        subsection, not otherwise satisfied by the Government of the 
        United States, may be presented for certification to the United 
        States Court of Appeals for the Federal Circuit, or its 
        successor courts, which shall have jurisdiction therefore, 
        notwithstanding the provisions of 28 U.S.C. 1502, and which 
        court's decisions shall be reviewable as provided by the laws 
        of the United States. The United States Court of Appeals for 
        the Federal Circuit shall certify such judgment, and order 
        payment thereof, unless it finds, after a hearing, that such 
        judgment is manifestly erroneous as to law or fact, or 
        manifestly excessive. In either of such cases the United States 
        Court of Appeals for the Federal Circuit shall have 
        jurisdiction to modify such judgment.
          (d) The Government of the Federated States of Micronesia 
        shall not be immune from the jurisdiction of the courts of the 
        United States, and the Government of the United States shall 
        not be immune from the jurisdiction of the courts of the 
        Federated States of Micronesia in any civil case in which an 
        exception to foreign state immunity is set forth in the Foreign 
        Sovereign Immunities Act (28 U.S.C. 1602 et seq.) or its 
        successor statutes.
Section 175
  (a) A separate agreement, which shall come into effect simultaneously 
with this Compact, as amended, and shall have the force of law, shall 
govern mutual assistance and cooperation in law enforcement matters, 
including the pursuit, capture, imprisonment and extradition of 
fugitives from justice and the transfer of prisoners, as well as other 
law enforcement matters. In the United States, the laws of the United 
States governing international extradition, including 18 U.S.C. 3184, 
3186 and 3188-95, shall be applicable to the extradition of fugitives 
under the separate agreement, and the laws of the United States 
governing the transfer of prisoners, including 18 U.S.C. 4100-15, shall 
be applicable to the transfer of prisoners under the separate 
agreement; and
  (b) A separate agreement, which shall come into effect simultaneously 
with this Compact, as amended, and shall have the force of law, shall 
govern requirements relating to labor recruitment practices, including 
registration, reporting, suspension or revocation of authorization to 
recruit persons for employment in the United States, and enforcement 
for violations of such requirements.
Section 176
  The Government of the Federated States of Micronesia confirms that 
final judgments in civil cases rendered by any court of the Trust 
Territory of the Pacific Islands shall continue in full force and 
effect, subject to the constitutional power of the courts of the 
Federated States of Micronesia to grant relief from judgments in 
appropriate cases.
Section 177
  Section 177 of the Compact entered into force with respect to the 
Federated States of Micronesia on November 3, 1986 as follows:
          ``(a) The Government of the United States accepts the 
        responsibility for compensation owing to citizens of the 
        Marshall Islands, or the Federated States of Micronesia, or 
        Palau for loss or damage to property and person of the citizens 
        of the Marshall Islands, or the Federated States of Micronesia, 
        resulting from the nuclear testing program which the Government 
        of the United States conducted in the Northern Marshall Islands 
        between June 30, 1946, and August 18, 1958.
          ``(b) The Government of the United States and the Government 
        of the Marshall Islands shall set forth in a separate agreement 
        provisions for the just and adequate settlement of all such 
        claims which have arisen in regard to the Marshall Islands and 
        its citizens and which have not as yet been compensated or 
        which in the future may arise, for the continued administration 
        by the Government of the United States of direct radiation 
        related medical surveillance and treatment programs and 
        radiological monitoring activities and for such additional 
        programs and activities as may be mutually agreed, and forthe 
assumption by the Government of the Marshall Islands of responsibility 
for enforcement of limitations on the utilization of affected areas 
developed in cooperation with the Government of the United States and 
for the assistance by the Government of the United States in the 
exercise of such responsibility as may be mutually agreed. This 
separate agreement shall come into effect simultaneously with this 
Compact and shall remain in effect in accordance with its own terms.
          ``(c) The Government of the United States shall provide to 
        the Government of the Marshall Islands, on a grant basis, the 
        amount of $150 million to be paid and distributed in accordance 
        with the separate agreement referred to in this Section, and 
        shall provide the services and programs set forth in this 
        separate agreement, the language of which is incorporated into 
        this Compact.''
  The Compact, as amended, makes no changes to, and has no effect upon, 
Section 177 of the Compact, nor does the Compact, as amended, change or 
affect the separate agreement referred to in Section 177 of the Compact 
including Articles IX and X of that separate agreement, and measures 
taken by the parties thereunder.
Section 178
  (a) The Federal agencies of the Government of the United States that 
provide the services and related programs in the Federated States of 
Micronesia pursuant to Title Two are authorized to settle and pay tort 
claims arising in the Federated States of Micronesia from the 
activities of such agencies or from the acts or omissions of the 
employees of such agencies. Except as provided in section 178(b), the 
provisions of 28 U.S.C. 2672 and 31 U.S.C. 1304 shall apply exclusively 
to such administrative settlements and payments.
  (b) Claims under section 178(a) that cannot be settled under section 
178(a) shall be disposed of exclusively in accordance with Article II 
of Title Four. Arbitration awards rendered pursuant to this subsection 
shall be paid out of funds under 31 U.S.C. 1304.
  (c) The Government of the United States and the Government of the 
Federated States of Micronesia shall, in the separate agreement 
referred to in section 231, provide for:
          (1) the administrative settlement of claims referred to in 
        section 178(a), including designation of local agents in each 
        State of the Federated States of Micronesia; such agents to be 
        empowered to accept, investigate and settle such claims, in a 
        timely manner, as provided in such separate agreements; and
          (2) arbitration, referred to in section 178(b), in a timely 
        manner, at a site convenient to the claimant, in the event a 
        claim is not otherwise settled pursuant to section 178(a).
  (d) The provisions of section 174(d) shall not apply to claims 
covered by this section.
  (e) Except as otherwise explicitly provided by law of the United 
States, neither the Government of the United States, its 
instrumentalities, nor any person acting on behalf of the Government of 
the United States, shall be named a party in any action based on, or 
arising out of, the activity or activities of a recipient of any grant 
or other assistance provided by the Government of the United States (or 
the activity or activities of the recipient's agency or any other 
person or entity acting on behalf of the recipient).
Section 179
  (a) The courts of the Federated States of Micronesia shall not 
exercise criminal jurisdiction over the Government of the United 
States, or its instrumentalities.
  (b) The courts of the Federated States of Micronesia shall not 
exercise criminal jurisdiction over any person if the Government of the 
United States provides notification to the Government of the Federated 
States of Micronesia that such person was acting on behalf of the 
Government of the United States, for actions taken in furtherance of 
section 221 or 224 of this amended Compact, or any other provision of 
law authorizing financial, program, or service assistance to the 
Federated States of Micronesia.

                               TITLE TWO

                           ECONOMIC RELATIONS

                               Article I

                            Grant Assistance

Section 211 - Sector Grants
  (a) In order to assist the Government of the Federated States of 
Micronesia in its efforts to promote the economic advancement, 
budgetary self-reliance, and economic self-sufficiency of its people, 
and in recognition of the special relationship that exists between the 
Federated States of Micronesia and the United States, the Government of 
the United States shall provide assistance on a sector grant basis for 
a period of twenty years in the amounts set forth in section 216, 
commencing on the effective date of this Compact, as amended. Such 
grants shall be used for assistance in the sectors of education, health 
care, private sector development, the environment, public sector 
capacity building, and public infrastructure, or for other sectors as 
mutually agreed, with priorities in the education and health care 
sectors. For each year such sector grant assistance is made available, 
the proposed division of this amount among these sectors shall be 
certified to the Government of the United States by the Government of 
the Federated States of Micronesia and shall be subject to the 
concurrence of the Government of the United States. In such case, the 
Government of the United States shall disburse the agreed upon amounts 
and monitor the use of such sector grants in accordance with the 
provisions of this Article and the Agreement Concerning Procedures for 
the Implementation of United States Economic Assistance Provided in the 
Compact, as Amended, of Free Association Between the Government of the 
United States of America and the Government of the Federated States of 
Micronesia (``Fiscal Procedures Agreement'') which shall come into 
effect simultaneously with this Compact, as amended. The provision of 
any United States assistance under the Compact, as amended, the Fiscal 
Procedures Agreement, the Trust Fund Agreement, or any other subsidiary 
agreement to the Compact, as amended, shall constitute ``a particular 
distribution . . . required by the terms or special nature of the 
assistance'' for purposes of Article XII, section 1(b) of the 
Constitution of the Federated States of Micronesia.
          (1) Education.--United States grant assistance shall be made 
        available in accordance with the plan described in subsection 
        (c) of this section to support and improve the educational 
        system of the Federated States of Micronesia and develop the 
        human, financial, and material resources necessary for the 
        Government of the Federated States of Micronesia to perform 
        these services. Emphasis should be placed on advancing a 
        quality basic education system.
          (2) Health.--United States grant assistance shall be made 
        available in accordance with the plan described in subsection 
        (c) of this section to support and improve the delivery of 
        preventive, curative and environmental care and develop the 
        human, financial, and material resources necessary for the 
        Government of the Federated States of Micronesia to perform 
        these services.
          (3) Private sector development.--United States grant 
        assistance shall be made available in accordance with the plan 
        described in subsection (c) of this section to support the 
        efforts of the Government of the Federated States of Micronesia 
        to attract foreign investment and increase indigenous business 
        activity by vitalizing the commercial environment, ensuring 
        fair and equitable application of the law, promoting adherence 
        to core labor standards, and maintaining progress toward 
        privatization of state-owned and partially state-owned 
        enterprises, and engaging in other reforms.
          (4) Capacity building in the public sector.--United States 
        grant assistance shall be made available in accordance with the 
        plan described in subsection (c) of this section to support the 
        efforts of the Government of the Federated States of Micronesia 
        to build effective, accountable and transparent national, 
        state, and local government and other public sector 
        institutions and systems.
          (5) Environment.--United States grant assistance shall be 
        made available in accordance with the plan described in 
        subsection (c) of this section to increase environmental 
        protection; conserve and achieve sustainable use of natural 
        resources; and engage in environmental infrastructure planning, 
        design construction and operation.
          (6) Public infrastructure.--
                  (i) U.S. annual grant assistance shall be made 
                available in accordance with a list of specific 
                projects included in the plan described in subsection 
                (c) of this section to assist the Government of the 
                Federated States of Micronesia in its efforts to 
                provide adequate public infrastructure.
                  (ii) Infrastructure and maintenance Fund.--Five 
                percent of the annual public infrastructure grant made 
                available under paragraph (i) of this subsection shall 
                be set aside, with an equal contribution from the 
                Government of the Federated States of Micronesia, as a 
                contribution to an Infrastructure Maintenance Fund 
                (IMF). Administration of the Infrastructure Maintenance 
                Fund shall be governed by the Fiscal Procedures 
                Agreement.
  (b) Humanitarian Assistance.--Federated States of Micronesia Program. 
In recognition of the special development needs of the Federated States 
of Micronesia, the Government of the United States shall make available 
to the Government of the Federated States of Micronesia, on its request 
and to be deducted from the grant amount made available under 
subsection (a) of this section, a Humanitarian Assistance - Federated 
States of Micronesia (``HAFSM'') Program with emphasis on health, 
education, and infrastructure (including transportation), projects. The 
terms and conditions of the HAFSM shall be set forth in the Agreement 
Regarding the Military Use and Operating Rights of the Government of 
the United States in the Government of the Federated States of 
Micronesia Concluded Pursuant to Sections 321 and 323 of the Compact of 
Free Association, as Amended which shall come into effect 
simultaneously with the amendments to this Compact.
  (c) Development Plan.--The Government of the Federated States of 
Micronesia shall prepare and maintain an official overall development 
plan. The plan shall be strategic in nature, shall be continuously 
reviewed and updated through the annual budget process, and shall make 
projections on a multi-year rolling basis. Each of the sectors named in 
subsection (a) of this section, or other sectors as mutually agreed, 
shall be accorded specific treatment in the plan. Insofar as grants 
funds are involved, the plan shall be subject to the concurrence of the 
Government of the United States.
  (d) Disaster Assistance Emergency Fund.--An amount of two hundred 
thousand dollars ($200,000) shall be provided annually, with an equal 
contribution from the Government of the Federated States of Micronesia, 
as a contribution to a ``Disaster Assistance Emergency Fund (DAEF).'' 
Any funds from the DAEF may be used only for assistance and 
rehabilitation resulting from disasters and emergencies. The funds will 
be accessed upon declaration by the Government of the Federated States 
of Micronesia, with the concurrence of the United States Chief of 
Mission to the Federated States of Micronesia. The Administration of 
the DAEF shall be governed by the Fiscal Procedures Agreement.
Section 212 - Accountability.
  (a) Regulations and policies normally applicable to United States 
financial assistance to its state and local governments, as reflected 
in the Fiscal Procedures Agreement, shall apply to each sector grant 
described in section 211, and to grants administered under section 221 
below, except as modified in the separate agreements referred to in 
section 231 of this Compact, as amended, or by United States law. The 
Government of the United States, after annual consultations with the 
Federated States of Micronesia, may attach reasonable terms and 
conditions, including annual performance indicators that are necessary 
to ensure effective use of United States assistance and reasonable 
progress toward achieving program objectives. The Government of the 
United States may seek appropriate remedies for noncompliance with the 
terms and conditions attached to the assistance, or for failure to 
comply with section 234, including withholding assistance.
  (b) The Government of the United States shall, for each fiscal year 
of the twenty years during which assistance is to be provided on a 
sector grant basis under section 211, grant the Government of the 
Federated States of Micronesia an amount equal to the lesser of (i) one 
half of the reasonable, properly documented cost incurred during each 
fiscal year to conduct the annual audit required under Article VIII (2) 
of the Fiscal Procedures Agreement or (ii) $500,000. Such amount will 
not be adjusted for inflation under section 217 or otherwise.
Section 213 - Joint Economic Management Committee
  The Governments of the United States and the Federated States of 
Micronesia shall establish a Joint Economic Management Committee, 
composed of a U.S. chair, two other members from the Government of the 
United States and two members from the Government of the Federated 
States of Micronesia. The Joint Economic Management Committee shall 
meet at least once each year to review the audits and reports required 
under this Title, evaluate the progress made by the Federated States of 
Micronesia in meeting the objectives identified in its plan described 
in subsection (c) of section 211, with particular focus on those parts 
of the plan dealing with the sectors identified in subsection (a) of 
section 211, identify problems encountered, and recommend ways to 
increase the effectiveness of U.S. assistance made available under this 
Title. The establishment and operations of the JointEconomic Management 
Committee shall be governed by the Fiscal Procedures Agreement.
Section 214 - Annual Report
  The Government of the Federated States of Micronesia shall report 
annually to the President of the United States on the use of United 
States sector grant assistance and other assistance and progress in 
meeting mutually agreed program and economic goals. The Joint Economic 
Management Committee shall review and comment on the report and make 
appropriate recommendations based thereon.
Section 215 - Trust Fund
  (a) The United States shall contribute annually for twenty years from 
the effective date of this Compact, as amended, in the amounts set 
forth in section 216 into a Trust Fund established in accordance with 
the Agreement Between the Government of the United States of America 
and the Government of the Federated States of Micronesia Implementing 
Section 215 and Section 216 of the Compact, as Amended, Regarding a 
Trust Fund (``Trust Fund Agreement''). Upon termination of the annual 
financial assistance under section 211, the proceeds of the fund shall 
thereafter be used for the purposes described in section 211 or as 
otherwise mutually agreed.
  (b) The United States contribution into the Trust Fund described in 
subsection(a) of this section is conditioned on the Government of the 
Federated States of Micronesia contributing to the Trust Fund at least 
$30 million, prior to September 30, 2004. Any funds received by the 
Federated States of Micronesia under section 111 (d) of Public Law 99-
239 (January 14, 1986), or successor provisions, would be contributed 
to the Trust Fund as a Federated States of Micronesia contribution.
  (c) The terms regarding the investment and management of funds and 
use of the income of the Trust Fund shall be set forth in the separate 
Trust Fund Agreement described in subsection (a) of this section. Funds 
derived from United States investment shall not be subject to Federal 
or state taxes in the United States or the Federated States of 
Micronesia. The Trust Fund Agreement shall also provide for annual 
reports to the Government of the United States and to the Government of 
the Federated States of Micronesia. The Trust Fund Agreement shall 
provide for appropriate distributions of trust fund proceeds to the 
Federated States of Micronesia and for appropriate remedies for the 
failure of the Federated States of Micronesia to use income of the 
Trust Fund for the annual grant purposes set forth in section 211. 
These remedies may include the return to the United States of the 
present market value of its contributions to the Trust Fund and the 
present market value of any undistributed income on the contributions 
of the United States. If this Compact, as amended, is terminated, the 
provisions of sections 451 through 453 of this Compact, as amended, 
shall govern treatment of any U.S. contributions to the Trust Fund or 
accrued interest thereon.
Section 216 - Sector Grant Funding and Trust Fund Contributions
  The funds described in sections 211, 212(b) and 215 shall be made 
available as follows:


                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                         Audit Grant
                     Fiscal year                       Annual Grants   Section 212(b)     Trust Fund      Total
                                                        Section 211    (amount up to)    Section 215
----------------------------------------------------------------------------------------------------------------
2004................................................       76.2              .5               16          92.7
2005................................................       76.2              .5               16          92.7
2006................................................       76.2              .5               16          92.7
2007................................................       75.4              .5              16.8         92.7
2008................................................       74.6              .5              17.6         92.7
2009................................................       73.8              .5              18.4         92.7
2010................................................        73               .5              19.2         92.7
2011................................................       72.2              .5               20          92.7
2012................................................       71.4              .5              20.8         92.7
2013................................................       70.6              .5              21.6         92.7
2014................................................       69.8              .5              22.4         92.7
2015................................................        69               .5              23.2         92.7
2016................................................       68.2              .5               24          92.7
2017................................................       67.4              .5              24.8         92.7
2018................................................       66.6              .5              25.6         92.7
2019................................................       65.8              .5              26.4         92.7
2020................................................        65               .5              27.2         92.7
2021................................................       64.2              .5               28          92.7
2022................................................       63.4              .5              28.8         92.7
2023................................................       62.6              .5              29.6         92.7
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Section 217 - Inflation Adjustment
  Except for the amounts provided for audits under section 212(b), the 
amounts stated in this Title shall be adjusted for each United States 
Fiscal Year by the percent that equals two-thirds of the percent change 
in the United States Gross Domestic Product Implicit Price Deflator, or 
5 percent, whichever is less in any one year, using the beginning of 
Fiscal Year 2004 as a base.
Section 218 - Carry-Over of Unused Funds
  If in any year the funds made available by the Government of the 
United States for that year pursuant to this Article are not completely 
obligated by the Government of the Federated States of Micronesia, the 
unobligated balances shall remain available in addition to the funds to 
be provided in subsequent years.
  Article II
  Services and Program Assistance
Section 221
  (a) Services.--The Government of the United States shall make 
available to the Federated States of Micronesia, in accordance with and 
to the extent provided in the Federal Programs and Services Agreement 
referred to in section 231, the services and related programs of:
          (1) the United States Weather Service;
          (2) the United States Postal Service;
          (3) the United States Federal Aviation Administration;
          (4) the United States Department of Transportation;
          (5) the Federal Deposit Insurance Corporation (for the 
        benefit only of the Bank of the Federated States of 
        Micronesia), and
          (6) the Department of Homeland Security, and the United 
        States Agency for International Development, Office of Foreign 
        Disaster Assistance.
Upon the effective date of this Compact, as amended, the United States 
Departments and Agencies named or having responsibility to provide 
these services and related programs shall have the authority to 
implement the relevant provisions of the Federal Programs and Services 
Agreement referred to in section 231.
  (b) Programs.--
          (1) With the exception of the services and programs covered 
        by subsection (a) of this section, and unless the Congress of 
        the United States provides otherwise, the Government of the 
        United States shall make available to the Federated States of 
        Micronesia the services and programs that were available to the 
        Federated States of Micronesia on the effective date of this 
        Compact, as amended, to the extent that such services and 
        programs continue to be available to State and local 
        governments of the United States. As set forth in the Fiscal 
        Procedures Agreement, funds provided under subsection (a) 
ofsection 211 will be considered to be local revenues of the Government 
of the Federated States of Micronesia when used as the local share 
required to obtain Federal programs and services.
          (2) Unless provided otherwise by U.S. law, the services and 
        programs described in paragraph (1) of this subsection shall be 
        extended in accordance with the terms of the Federal Programs 
        and Services Agreement referred to in section 231.
  (c) The Government of the United States shall have and exercise such 
authority as is necessary to carry out its responsibilities under this 
Title and the separate agreements referred to in amended section 231, 
including the authority to monitor and administer all service and 
program assistance provided by the United States to the Federated 
States of Micronesia. The Federal Programs and Services Agreement 
referred to in amended section 231 shall also set forth the extent to 
which services and programs shall be provided to the Federated States 
of Micronesia.
  (d) Except as provided elsewhere in this Compact, as amended, under 
any separate agreement entered into under this Compact, as amended, or 
otherwise under U.S. law, all Federal domestic programs extended to or 
operating in the Federated States of Micronesia shall be subject to all 
applicable criteria, standards, reporting requirements, auditing 
procedures, and other rules and regulations applicable to such programs 
and services when operating in the United States.
  (e) The Government of the United States shall make available to the 
Federated States of Micronesia alternate energy development projects, 
studies, and conservation measures to the extent provided for the 
Freely Associated States in the laws of the United States.
Section 222
  The Government of the United States and the Government of the 
Federated States of Micronesia may agree from time to time to extend to 
the Federated States of Micronesia additional United States grant 
assistance, services and programs, as provided under the laws of the 
United States. Unless inconsistent with such laws, or otherwise 
specifically precluded by the Government of the United States at the 
time such additional grant assistance, services, or programs are 
extended, the Federal Programs and Services Agreement referred to 
section 231 shall apply to any such assistance, services or programs.
Section 223
  The Government of the Federated States of Micronesia shall make 
available to the Government of the United States at no cost such land 
as may be necessary for the operations of the services and programs 
provided pursuant to this Article, and such facilities as are provided 
by the Government of the Federated States of Micronesia at no cost to 
the Government of the United States as of the effective date of this 
Compact, as amended, or as may be mutually agreed thereafter.
Section 224
  The Government of the Federated States of Micronesia may request, 
from time to time, technical assistance from the Federal agencies and 
institutions of the Government of the United States, which are 
authorized to grant such technical assistance in accordance with its 
laws. If technical assistance is granted pursuant to such a request, 
the Government of the United States shall provide the technical 
assistance in a manner which gives priority consideration to the 
Federated States of Micronesia over other recipients not a part of the 
United States, its territories or possessions, and equivalent 
consideration to the Federated States of Micronesia with respect to 
other states in Free Association with the United States. Such 
assistance shall be made available on a reimbursable or non-
reimbursable basis to the extent provided by United States law.

                              Article III

                       Administrative Provisions

Section 231
  The specific nature, extent and contractual arrangements of the 
services and programs provided for in section 221 of this Compact, as 
amended, as well as the legal status of agencies of the Government of 
the United States, their civilian employees and contractors, and the 
dependents of such personnel while present in the Federated States of 
Micronesia, and other arrangements in connection with the assistance, 
services, or programs furnished by the Government of the United States, 
are set forth in a Federal Programs and Services Agreement which shall 
come into effect simultaneously with this Compact, as amended.
Section 232
  The Government of the United States, in consultation with the 
Government of the Federated States of Micronesia, shall determine and 
implement procedures for the periodic audit of all grants and other 
assistance made under Article I of this Title and of all funds expended 
for the services and programs provided under Article II of this Title. 
Further, in accordance with the Fiscal Procedures Agreement described 
in subsection (a) of section 211, the Comptroller General of the United 
States shall have such powers and authorities as described in sections 
102 (c) and 110 (c) of Public Law 99-239, 99 Stat. 1777-78, and 99 
Stat. 1799 (January 14, 1986).
Section 233
  Approval of this Compact, as amended, by the Government of the United 
States, in accordance with its constitutional processes, shall 
constitute a pledge by the United States that the sums and amounts 
specified as sector grants in section 211 of this Compact, as amended, 
shall be appropriated and paid to the Federated States of Micronesia 
for such period as those provisions of this Compact, as amended, remain 
in force, subject to the terms and conditions of this Title and related 
subsidiary agreements.
Section 234
  The Government of the Federated States of Micronesia pledges to 
cooperate with, permit, and assist if reasonably requested, designated 
and authorized representatives of the Government of the United States 
charged with investigating whether Compact funds, or any other 
assistance authorized under this Compact, as amended, have, or are 
being, used for purposes other than those set forth in this Compact, as 
amended, or its subsidiary agreements. In carrying out this 
investigative authority, such United States Government representatives 
may requestthat the Government of the Federated States of Micronesia 
subpoena documents and records and compel testimony in accordance with 
the laws and Constitution of the Federated States of Micronesia. Such 
assistance by the Government of the Federated States of Micronesia to 
the Government of the United States shall not be unreasonably withheld. 
The obligation of the Government of the Federated States of Micronesia 
to fulfill its pledge herein is a condition to its receiving payment of 
such funds or other assistance authorized under this Compact, as 
amended. The Government of the United States shall pay any reasonable 
costs for extraordinary services executed by the Government of the 
Federated States of Micronesia in carrying out the provisions of this 
section.

                               Article IV

                                 Trade

Section 241
  The Federated States of Micronesia is not included in the customs 
territory of the United States.
Section 242
  The President shall proclaim the following tariff treatment for 
articles imported from the Federated States of Micronesia which shall 
apply during the period of effectiveness of this title:
          (a) Unless otherwise excluded, articles imported from the 
        Federated States of Micronesia, subject to the limitations 
        imposed under section 503(b) of title V of the Trade Act of 
        1974 (19 U.S.C. 2463(b)), shall be exempt from duty.
          (b) Only tuna in airtight containers provided for in heading 
        1604.14.22 of the Harmonized Tariff Schedule of the United 
        States that is imported from the Federated States of Micronesia 
        and the Republic of the Marshall Islands during any calendar 
        year not to exceed 10 percent of apparent United States 
        consumption of tuna in airtight containers during the 
        immediately preceding calendar year, as reported by the 
        National Marine Fisheries Service, shall be exempt from duty; 
        but the quantity of tuna given duty-free treatment under this 
        paragraph for any calendar year shall be counted against the 
        aggregated quantity of tuna in airtight containers that is 
        dutiable under rate column numbered 1 of such heading 
        1604.14.22 for that calendar year.
          (c) The duty-free treatment provided under subsection (a) 
        shall not apply to--
                  (1) watches, clocks, and timing apparatus provided 
                for in Chapter 91, excluding heading 9113, of the 
                Harmonized Tariff Schedule of the United States;
                  (2) buttons (whether finished or not finished) 
                provided for in items 9606.21.40 and 9606.29.20 of such 
                Schedule;
                  (3) textile and apparel articles which are subject to 
                textile agreements; and
                  (4) footwear, handbags, luggage, flat goods, work 
                gloves, and leather wearing apparel which were not 
                eligible articles for purposes of title V of the Trade 
                Act of 1974 (19 U.S.C. 2461, et seq.) on April 1, 1984.
          (d) If the cost or value of materials produced in the customs 
        territory of the United States is included with respect to an 
        eligible article which is a product of the Federated States of 
        Micronesia, an amount not to exceed 15 percent of the appraised 
        value of the article at the time it is entered that is 
        attributable to such United States cost or value may be applied 
        for duty assessment purposes toward determining the percentage 
        referred to in section 503(a)(2) of title V of the Trade Act of 
        1974.
Section 243
  Articles imported from the Federated States of Micronesia which are 
not exempt from duty under subsections (a), (b), (c), and (d) of 
section 242 shall be subject to the rates of duty set forth in column 
numbered 1-general of the Harmonized Tariff Schedule of the United 
States (HTSUS).
Section 244
  (a) All products of the United States imported into the Federated 
States of Micronesia shall receive treatment no less favorable than 
that accorded like products of any foreign country with respect to 
customs duties or charges of a similar nature and with respect to laws 
and regulations relating to importation, exportation, taxation, sale, 
distribution, storage or use.
  (b) The provisions of subsection (a) shall not apply to advantages 
accorded by the Federated States of Micronesia by virtue of their full 
membership in the Pacific Island Countries Trade Agreement (PICTA), 
done on August 18, 2001, to those governments listed in Article 26 of 
PICTA, as of the date the Compact, as amended, is signed.
  (c) Prior to entering into consultations on, or concluding, a free 
trade agreement with governments not listed in Article 26 of PICTA, the 
Federated States of Micronesia shall consult with the United States 
regarding whether or how subsection (a) of section 244 shall be 
applied.

                               Article V

                          Finance and Taxation

Section 251
  The currency of the United States is the official circulating legal 
tender of the Federated States of Micronesia. Should the Government of 
the Federated States of Micronesia act to institute another currency, 
the terms of an appropriate currency transitional period shall be as 
agreed with the Government of the United States.
Section 252
  The Government of the Federated States of Micronesia may, with 
respect to United States persons, tax income derived from sources 
within its respective jurisdiction, property situated therein, 
including transfers of such property by gift or at death, and products 
consumed therein, in such manner as the Government of the Federated 
States of Micronesia deems appropriate. The determination of the source 
of any income, or the situs of any property, shall for purposes of this 
Compact be made according to the United States Internal Revenue Code.
Section 253
  A citizen of the Federated States of Micronesia, domiciled therein, 
shall be exempt from estate, gift, and generation-skipping transfer 
taxes imposed by the Government of the United States, provided that 
such citizen ofthe Federated States of Micronesia is neither a citizen 
nor a resident of the United States.
Section 254
  (a) In determining any income tax imposed by the Government of the 
Federated States of Micronesia, the Government of the Federated States 
of Micronesia shall have authority to impose tax upon income derived by 
a resident of the Federated States of Micronesia from sources without 
the Federated States of Micronesia, in the same manner and to the same 
extent as the Government of the Federated States of Micronesia imposes 
tax upon income derived from within its own jurisdiction. If the 
Government of the Federated States of Micronesia exercises such 
authority as provided in this subsection, any individual resident of 
the Federated States of Micronesia who is subject to tax by the 
Government of the United States on income which is also taxed by the 
Government of the Federated States of Micronesia shall be relieved of 
liability to the Government of the United States for the tax which, but 
for this subsection, would otherwise be imposed by the Government of 
the United States on such income. However, the relief from liability to 
the United States Government referred to in the preceding sentence 
means only relief in the form of the foreign tax credit (or deduction 
in lieu thereof) available with respect to the income taxes of a 
possession of the United States, and relief in the form of the 
exclusion under section 911 of the Internal Revenue Code of 1986. For 
purposes of this section, the term ``resident of the Federated States 
of Micronesia'' shall be deemed to include any person who was 
physically present in the Federated States of Micronesia for a period 
of 183 or more days during any taxable year.
  (b) If the Government of the Federated States of Micronesia subjects 
income to taxation substantially similar to that imposed by the Trust 
Territory Code in effect on January 1, 1980, such Government shall be 
deemed to have exercised the authority described in section 254(a).
Section 255
  For purposes of section 274(h)(3)(A) of the United States Internal 
Revenue Code of 1986, the term ``North American Area'' shall include 
the Federated States of Micronesia.

                              TITLE THREE

                     SECURITY AND DEFENSE RELATIONS

                               Article I

                      Authority and Responsibility

Section 311
  (a) The Government of the United States has full authority and 
responsibility for security and defense matters in or relating to the 
Federated States of Micronesia.
  (b) This authority and responsibility includes:
          (1) the obligation to defend the Federated States of 
        Micronesia and its people from attack or threats thereof as the 
        United States and its citizens are defended;
          (2) the option to foreclose access to or use of the Federated 
        States of Micronesia by military personnel or for the military 
        purposes of any third country; and
          (3) the option to establish and use military areas and 
        facilities in the Federated States of Micronesia, subject to 
        the terms of the separate agreements referred to in sections 
        321 and 323.
  (c) The Government of the United States confirms that it shall act in 
accordance with the principles of international law and the Charter of 
the United Nations in the exercise of this authority and 
responsibility.
Section 312
  Subject to the terms of any agreements negotiated in accordance with 
sections 321 and 323, the Government of the United States may conduct 
within the lands, waters and airspace of the Federated States of 
Micronesia the activities and operations necessary for the exercise of 
its authority and responsibility under this Title.
Section 313
  (a) The Government of the Federated States of Micronesia shall 
refrain from actions that the Government of the United States 
determines, after appropriate consultation with that Government, to be 
incompatible with its authority and responsibility for security and 
defense matters in or relating to the Federated States of Micronesia.
  (b) The consultations referred to in this section shall be conducted 
expeditiously at senior levels of the two Governments, and the 
subsequent determination by the Government of the United States 
referred to in this section shall be made only at senior interagency 
levels of the Government of the United States.
  (c) The Government of the Federated States of Micronesia shall be 
afforded, on an expeditious basis, an opportunity to raise its concerns 
with the United States Secretary of State personally and the United 
States Secretary of Defense personally regarding any determination made 
in accordance with this section.
Section 314
  (a) Unless otherwise agreed, the Government of the United States 
shall not, in the Federated States of Micronesia:
          (1) test by detonation or dispose of any nuclear weapon, nor 
        test, dispose of, or discharge any toxic chemical or biological 
        weapon; or
          (2) test, dispose of, or discharge any other radioactive, 
        toxic chemical or biological materials in an amount or manner 
        which would be hazardous to public health or safety.
  (b) Unless otherwise agreed, other than for transit or overflight 
purposes or during time of a national emergency declared by the 
President of the United States, a state of war declared by the Congress 
of the United States or as necessary to defend against an actual or 
impending armed attack on the United States, the Federated States of 
Micronesia or the Republic of the Marshall Islands, the Government of 
the United States shall not store in the Federated States of Micronesia 
or the Republic of the Marshall Islands any toxic chemical weapon, nor 
any radioactive materials nor any toxic chemical materials intended for 
weapons use.
  (c) Radioactive, toxic chemical, or biological materials not intended 
for weapons use shall not be affected by section 314(b).
  (d) No material or substance referred to in this section shall be 
stored in the Federated States of Micronesia except in an amount and 
manner which would not be hazardous to public health or safety. In 
determining what shall be an amount or manner which would be hazardous 
to public health or safety under this section, the Government of the 
United States shall comply with any applicable mutual agreement, 
international guidelines accepted by the Government of the United 
States, and the laws of the United States and their implementing 
regulations.
  (e) Any exercise of the exemption authority set forth in section 
161(e) shall have no effect on the obligations of the Government of the 
United States under this section or on the application of this 
subsection.
  (f) The provisions of this section shall apply in the areas in which 
the Government of the Federated States of Micronesia exercises 
jurisdiction over the living resources of the seabed, subsoil or water 
column adjacent to its coasts.
Section 315
  The Government of the United States may invite members of the armed 
forces of other countries to use military areas and facilities in the 
Federated States of Micronesia, in conjunction with and under the 
control of United States Armed Forces. Use by units of the armed forces 
of other countries of such military areas and facilities, other than 
for transit and overflight purposes, shall be subject to consultation 
with and, in the case of major units, approval of the Government of the 
Federated States of Micronesia.
Section 316
  The authority and responsibility of the Government of the United 
States under this Title may not be transferred or otherwise assigned.

                               Article II

                Defense Facilities and Operating Rights

Section 321
  (a) Specific arrangements for the establishment and use by the 
Government of the United States of military areas and facilities in the 
Federated States of Micronesia are set forth in separate agreements, 
which shall remain in effect in accordance with the terms of such 
agreements.
  (b) If, in the exercise of its authority and responsibility under 
this Title, the Government of the United States requires the use of 
areas within the Federated States of Micronesia in addition to those 
for which specific arrangements are concluded pursuant to section 
321(a), it may request the Government of the Federated States of 
Micronesia to satisfy those requirements through leases or other 
arrangements. The Government of the Federated States of Micronesia 
shall sympathetically consider any such request and shall establish 
suitable procedures to discuss it with and provide a prompt response to 
the Government of the United States.
  (c) The Government of the United States recognizes and respects the 
scarcity and special importance of land in the Federated States of 
Micronesia. In making any requests pursuant to section 321(b), the 
Government of the United States shall follow the policy of requesting 
the minimum area necessary to accomplish the required security and 
defense purpose, of requesting only the minimum interest in real 
property necessary to support such purpose, and of requesting first to 
satisfy its requirement through public real property, where available, 
rather than through private real property.
Section 322
  The Government of the United States shall provide and maintain fixed 
and floating aids to navigation in the Federated States of Micronesia 
at least to the extent necessary for the exercise of its authority and 
responsibility under this Title.
Section 323
  The military operating rights of the Government of the United States 
and the legal status and contractual arrangements of the United States 
Armed Forces, their members, and associated civilians, while present in 
the Federated States of Micronesia are set forth in separate 
agreements, which shall remain in effect in accordance with the terms 
of such agreements.

                              Article III

         Defense Treaties and International Security Agreements

Section 331
  Subject to the terms of this Compact, as amended, and its related 
agreements, the Government of the United States, exclusively, has 
assumed and enjoys, as to the Federated States of Micronesia, all 
obligations, responsibilities, rights and benefits of:
  (a) Any defense treaty or other international security agreement 
applied by the Government of the United States as Administering 
Authority of the Trust Territory of the Pacific Islands as of November 
2, 1986.
  (b) Any defense treaty or other international security agreement to 
which the Government of the United States is or may become a party 
which it determines to be applicable in the Federated States of 
Micronesia. Such a determination by the Government of the United States 
shall be preceded by appropriate consultation with the Government of 
the Federated States of Micronesia.

                               Article IV

              Service in Armed Forces of the United States

Section 341
  Any person entitled to the privileges set forth in Section 141 (with 
the exception of any person described in section 141(a)(5) who is not a 
citizen of the Federated States of Micronesia) shall be eligible to 
volunteer for service in the Armed Forces of the United States, but 
shall not be subject to involuntary induction into military service of 
the United States as long as such person has resided in the United 
States for a period of less than one year, provided that no time shall 
count towards this one year while a person admitted to the United 
States under the Compact, or the Compact, as amended, is engaged in 
full-time study in the United States. Any person described in section 
141(a)(5) who is not a citizen of the Federated States of Micronesia 
shall be subject to United States laws relating to selective service.
Section 342
  The Government of the United States shall have enrolled, at any one 
time, at least one qualified student from the Federated States of 
Micronesia, as may be nominated by the Government of the Federated 
States of Micronesia, in each of:
  (a) The United States Coast Guard Academy pursuant to 14 U.S.C. 195.
  (b) The United States Merchant Marine Academy pursuant to 46 U.S.C. 
1295(b)(6), provided that the provisions of 46 U.S.C. 1295b(b)(6)(C) 
shall not apply to the enrollment of students pursuant to section 
342(b) of this Compact, as amended.

                               Article V

                           General Provisions

Section 351
  (a) The Government of the United States and the Government of the 
Federated States of Micronesia shall continue to maintain a Joint 
Committee empowered to consider disputes arising under the 
implementation of this Title and its related agreements.
  (b) The membership of the Joint Committee shall comprise selected 
senior officials of the two Governments. The senior United States 
military commander in the Pacific area shall be the senior United 
States member of the Joint Committee. For the meetings of the Joint 
Committee, each of the two Governments may designate additional or 
alternate representatives as appropriate for the subject matter under 
consideration.
  (c) Unless otherwise mutually agreed, the Joint Committee shall meet 
annually at a time and place to be designated, after appropriate 
consultation, by the Government of the United States. The Joint 
Committee also shall meet promptly upon request of either of its 
members. The Joint Committee shall follow such procedures, including 
the establishment of functional subcommittees, as the members may from 
time to time agree. Upon notification by the Government of the United 
States, the Joint Committee of the United States and the Federated 
States of Micronesia shall meet promptly in a combined session with the 
Joint Committee established and maintained by the Government of the 
United States and the Republic of the Marshall Islands to consider 
matters within the jurisdiction of the two Joint Committees.
  (d) Unresolved issues in the Joint Committee shall be referred to the 
Governments for resolution, and the Government of the Federated States 
of Micronesia shall be afforded, on an expeditious basis, an 
opportunity to raise its concerns with the United States Secretary of 
Defense personally regarding any unresolved issue which threatens its 
continued association with the Government of the United States.
Section 352
  In the exercise of its authority and responsibility under Title 
Three, the Government of the United States shall accord due respect to 
the authority and responsibility of the Government of the Federated 
States of Micronesia under Titles One, Two and Four and to the 
responsibility of the Government of the Federated States of Micronesia 
to assure the well-being of its people.
Section 353
  (a) The Government of the United States shall not include the 
Government of the Federated States of Micronesia as a named party to a 
formal declaration of war, without that Government's consent.
  (b) Absent such consent, this Compact, as amended, is without 
prejudice, on the ground of belligerence or the existence of a state of 
war, to any claims for damages which are advanced by the citizens, 
nationals or Government of the Federated States of Micronesia, which 
arise out of armed conflict subsequent to November 3, 1986, and which 
are:
          (1) petitions to the Government of the United States for 
        redress; or
          (2) claims in any manner against the government, citizens, 
        nationals or entities of any third country.
  (c) Petitions under section 353(b)(1) shall be treated as if they 
were made by citizens of the United States.
Section 354
  (a) The Government of the United States and the Government of the 
Federated States of Micronesia are jointly committed to continue their 
security and defense relations, as set forth in this Title. 
Accordingly, it is the intention of the two countries that the 
provisions of thisTitle shall remain binding as long as this Compact, 
as amended, remains in effect, and thereafter as mutually agreed, 
unless earlier terminated by mutual agreement pursuant to section 441, 
or amended pursuant to Article III of Title Four. If at any time the 
Government of the United States, or the Government of the Federated 
States of Micronesia, acting unilaterally, terminates this Title, such 
unilateral termination shall be considered to be termination of the 
entire Compact, in which case the provisions of section 442 and 452 (in 
the case of termination by the Government of the United States) or 
sections 443 and 453 (in the case of termination by the Government of 
the Federated States of Micronesia), with the exception of paragraph 
(3) of subsection (a) of section 452 or paragraph (3) of subsection (a) 
of section 453, as the case may be, shall apply.
  (b) The Government of the United States recognizes, in view of the 
special relationship between the Government of the United States and 
the Government of the Federated States of Micronesia, and in view of 
the existence of the separate agreement regarding mutual security 
concluded with the Government of the Federated States of Micronesia 
pursuant to sections 321 and 323, that, even if this Title should 
terminate, any attack on the Federated States of Micronesia during the 
period in which such separate agreement is in effect, would constitute 
a threat to the peace and security of the entire region and a danger to 
the United States. In the event of such an attack, the Government of 
the United States would take action to meet the danger to the United 
States and to the Federated States of Micronesia in accordance with its 
constitutional processes.
  (c) As reflected in Article 21(1)(b) of the Trust Fund Agreement, the 
Government of the United States and the Government of the Federated 
States of Micronesia further recognize, in view of the special 
relationship between their countries, that even if this Title should 
terminate, the Government of the Federated States of Micronesia shall 
refrain from actions which the Government of the United States 
determines, after appropriate consultation with that Government, to be 
incompatible with its authority and responsibility for security and 
defense matters in or relating to the Federated States of Micronesia or 
the Republic of the Marshall Islands.

                               TITLE FOUR

                           GENERAL PROVISIONS

                               Article I

                      Approval and Effective Date

Section 411
  Pursuant to section 432 of the Compact and subject to subsection (e) 
of section 461 of the Compact, as amended, the Compact, as amended, 
shall come into effect upon mutual agreement between the Government of 
the United States and the Government of the Federated States of 
Micronesia subsequent to completion of the following:
          (a) Approval by the Government of the Federated States of 
        Micronesia in accordance with its constitutional processes.
          (b) Approval by the Government of the United States in 
        accordance with its constitutional processes.

                               Article II

                   Conference and Dispute Resolution

Section 421
  The Government of the United States shall confer promptly at the 
request of the Government of the Federated States of Micronesia and 
that Government shall confer promptly at the request of the Government 
of the United States on matters relating to the provisions of this 
Compact, as amended, or of its related agreements.
Section 422
  In the event the Government of the United States or the Government of 
the Federated States of Micronesia, after conferring pursuant to 
section 421, determines that there is a dispute and gives written 
notice thereof, the two Governments shall make a good faith effort to 
resolve the dispute between themselves.
Section 423
  If a dispute between the Government of the United States and the 
Government of the Federated States of Micronesia cannot be resolved 
within 90 days of written notification in the manner provided in 
section 422, either party to the dispute may refer it to arbitration in 
accordance with section 424.
Section 424
  Should a dispute be referred to arbitration as provided for in 
section 423, an Arbitration Board shall be established for the purpose 
of hearing the dispute and rendering a decision which shall be binding 
upon the two parties to the dispute unless the two parties mutually 
agree that the decision shall be advisory. Arbitration shall occur 
according to the following terms:
    (a) An Arbitration Board shall consist of a Chairman and two other 
members, each of whom shall be a citizen of a party to the dispute. 
Each of the two Governments which is a party to the dispute shall 
appoint one member to the Arbitration Board. If either party to the 
dispute does not fulfill the appointment requirements of this section 
within 30 days of referral of the dispute to arbitration pursuant to 
section 423, its member on the Arbitration Board shall be selected from 
its own standing list by the other party to the dispute. Each 
Government shall maintain a standing list of 10 candidates. The parties 
to the dispute shall jointly appoint a Chairman within 15 days after 
selection of the other members of the Arbitration Board. Failing 
agreement on a Chairman, the Chairman shall be chosen by lot from the 
standing lists of the parties to the dispute within 5 days after such 
failure.
    (b) Unless otherwise provided in this Compact, as amended, or its 
related agreements, the Arbitration Board shall have jurisdiction to 
hear and render its final determination on all disputes arising 
exclusively under Articles I, II, III, IV and V of Title One, Title 
Two, Title Four, and their related agreements.
    (c) Each member of the Arbitration Board shall have one vote. Each 
decision of the Arbitration Board shall be reached by majority vote.
    (d) In determining any legal issue, the Arbitration Board may have 
reference to international law and, in such reference, shall apply as 
guidelines the provisions setforth in Article 38 of the Statute of the 
International Court of Justice.
  (e) The Arbitration Board shall adopt such rules for its proceedings 
as it may deem appropriate and necessary, but such rules shall not 
contravene the provisions of this Compact, as amended. Unless the 
parties provide otherwise by mutual agreement, the Arbitration Board 
shall endeavor to render its decision within 30 days after the 
conclusion of arguments. The Arbitration Board shall make findings of 
fact and conclusions of law and its members may issue dissenting or 
individual opinions. Except as may be otherwise decided by the 
Arbitration Board, one-half of all costs of the arbitration shall be 
borne by the Government of the United States and the remainder shall be 
borne by the Government of the Federated States of Micronesia.

                              Article III

                               Amendment

Section 431
  The provisions of this Compact, as amended, may be further amended by 
mutual agreement of the Government of the United States and the 
Government of the Federated States of Micronesia, in accordance with 
their respective constitutional processes.

                               Article IV

                              Termination

Section 441
  This Compact, as amended, may be terminated by mutual agreement of 
the Government of the Federated States of Micronesia and the Government 
of the United States, in accordance with their respective 
constitutional processes. Such mutual termination of this Compact, as 
amended, shall be without prejudice to the continued application of 
section 451 of this Compact, as amended, and the provisions of the 
Compact, as amended, set forth therein.
Section 442
  Subject to section 452, this Compact, as amended, may be terminated 
by the Government of the United States in accordance with its 
constitutional processes. Such termination shall be effective on the 
date specified in the notice of termination by the Government of the 
United States but not earlier than six months following delivery of 
such notice. The time specified in the notice of termination may be 
extended. Such termination of this Compact, as amended, shall be 
without prejudice to the continued application of section 452 of this 
Compact, as amended, and the provisions of the Compact, as amended, set 
forth therein.
Section 443
  This Compact, as amended, shall be terminated by the Government of 
the Federated States of Micronesia, pursuant to its constitutional 
processes, subject to section 453 if the people represented by that 
Government vote in a plebiscite to terminate the Compact, as amended, 
or by another process permitted by the FSM constitution and mutually 
agreed between the Governments of the United States and the Federated 
States of Micronesia. The Government of the Federated States of 
Micronesia shall notify the Government of the United States of its 
intention to call such a plebiscite, or to pursue another mutually 
agreed and constitutional process, which plebiscite or process shall 
take place not earlier than three months after delivery of such notice. 
The plebiscite or other process shall be administered by the Government 
of the Federated States of Micronesia in accordance with its 
constitutional and legislative processes. If a majority of the valid 
ballots cast in the plebiscite or other process favors termination, the 
Government of the Federated States of Micronesia shall, upon 
certification of the results of the plebiscite or other process, give 
notice of termination to the Government of the United States, such 
termination to be effective on the date specified in such notice but 
not earlier than three months following the date of delivery of such 
notice. The time specified in the notice of termination may be 
extended.

                               Article V

                             Survivability

Section 451
  (a) Should termination occur pursuant to section 441, economic and 
other assistance by the Government of the United States shall continue 
only if and as mutually agreed by the Governments of the United States 
and the Federated States of Micronesia, and in accordance with the 
parties' respective constitutional processes.
  (b) In view of the special relationship of the United States and the 
Federated States of Micronesia, as reflected in subsections (b) and (c) 
of section 354 of this Compact, as amended, and the separate agreement 
entered into consistent with those subsections, if termination occurs 
pursuant to section 441 prior to the twentieth anniversary of the 
effective date of this Compact, as amended, the United States shall 
continue to make contributions to the Trust Fund described in section 
215 of this Compact, as amended.
  (c) In view of the special relationship of the United States and the 
Federated States of Micronesia described in subsection (b) of this 
section, if termination occurs pursuant to section 441 following the 
twentieth anniversary of the effective date of this Compact, as 
amended, the Federated States of Micronesia shall be entitled to 
receive proceeds from the Trust Fund described in section 215 of this 
Compact, as amended, in the manner described in those provisions and 
the Trust Fund Agreement governing the distribution of such proceeds.
Section 452
  (a) Should termination occur pursuant to section 442 prior to the 
twentieth anniversary of the effective date of this Compact, as 
amended, the following provisions of this Compact, as amended, shall 
remain in full force and effect until the twentieth anniversary of the 
effective date of this Compact, as amended, and thereafter as mutually 
agreed:
          (1) Article VI and sections 172, 173, 176 and 177 of Title 
        One;
          (2) Sections 232 and 234 of Title Two;
          (3) Title Three; and
          (4) Articles II, III, V and VI of Title Four.
  (b) Should termination occur pursuant to section 442 before the 
twentieth anniversary of the effective date of the Compact, as amended:
          (1) Except as provided in paragraph (2) of this subsection 
        and subsection (c) of this section, economic and other 
        assistance by the United States shall continue only if and as 
        mutually agreed by theGovernments of the United States and the 
Federated States of Micronesia.
          (2) In view of the special relationship of the United States 
        and the Federated States of Micronesia, as reflected in 
        subsections (b) and (c) of section 354 of this Compact, as 
        amended, and the separate agreement regarding mutual security, 
        and the Trust Fund Agreement, the United States shall continue 
        to make contributions to the Trust Fund described in section 
        215 of this Compact, as amended, in the manner described in the 
        Trust Fund Agreement.
  (c) In view of the special relationship of the United States and the 
Federated States of Micronesia, as reflected in subsections 354(b) and 
(c) of this Compact, as amended, and the separate agreement regarding 
mutual security, and the Trust Fund Agreement, if termination occurs 
pursuant to section 442 following the twentieth anniversary of the 
effective date of this Compact, as amended, the Federated States of 
Micronesia shall continue to be eligible to receive proceeds from the 
Trust Fund described in section 215 of this Compact, as amended, in the 
manner described in those provisions and the Trust Fund Agreement.
Section 453
  (a) Should termination occur pursuant to section 443 prior to the 
twentieth anniversary of the effective date of this Compact, as 
amended, the following provisions of this Compact, as amended, shall 
remain in full force and effect until the twentieth anniversary of the 
effective date of this Compact, as amended, and thereafter as mutually 
agreed:
          (1) Article VI and sections 172, 173, 176 and 177 of Title 
        One;
          (2) Sections 232 and 234 of Title Two;
          (3) Title Three; and
          (4) Articles II, III, V and VI of Title Four.
  (b) Upon receipt of notice of termination pursuant to section 443, 
the Government of the United States and the Government of the Federated 
States of Micronesia shall promptly consult with regard to their future 
relationship. Except as provided in subsection (c) and (d) of this 
section, these consultations shall determine the level of economic and 
other assistance, if any, which the Government of the United States 
shall provide to the Government of the Federated States of Micronesia 
for the period ending on the twentieth anniversary of the effective 
date of this Compact, as amended, and for any period thereafter, if 
mutually agreed.
  (c) In view of the special relationship of the United States and the 
Federated States of Micronesia, as reflected in subsections 354(b) and 
(c) of this Compact, as amended, and the separate agreement regarding 
mutual security, and the Trust Fund Agreement, if termination occurs 
pursuant to section 443 prior to the twentieth anniversary of the 
effective date of this Compact, as amended, the United States shall 
continue to make contributions to the Trust Fund described in section 
215 of this Compact, as amended, in the manner described in the Trust 
Fund Agreement.
  (d) In view of the special relationship of the United States and the 
Federated States of Micronesia, as reflected in subsections 354(b) and 
(c) of this Compact, as amended, and the separate agreement regarding 
mutual security, and the Trust Fund Agreement, if termination occurs 
pursuant to section 443 following the twentieth anniversary of the 
effective date of this Compact, as amended, the Federated States of 
Micronesia shall continue to be eligible to receive proceeds from the 
Trust Fund described in section 215 of this Compact, as amended, in the 
manner described in those provisions and the Trust Fund Agreement.
Section 454
  Notwithstanding any other provision of this Compact, as amended:
          (a) The Government of the United States reaffirms its 
        continuing interest in promoting the economic advancement and 
        budgetary self-reliance of the people of the Federated States 
        of Micronesia.
          (b) The separate agreements referred to in Article II of 
        Title Three shall remain in effect in accordance with their 
        terms.

                               Article VI

                          Definition of Terms

Section 461
  For the purpose of this Compact, as amended, only, and without 
prejudice to the views of the Government of the United States or the 
Government of the Federated States of Micronesia as to the nature and 
extent of the jurisdiction of either of them under international law, 
the following terms shall have the following meanings:
          (a) ``Trust Territory of the Pacific Islands'' means the area 
        established in the Trusteeship Agreement consisting of the 
        former administrative districts of Kosrae, Yap, Ponape, the 
        Marshall Islands and Truk as described in Title One, Trust 
        Territory Code, section 1, in force on January 1, 1979. This 
        term does not include the area of Palau or the Northern Mariana 
        Islands.
          (b) ``Trusteeship Agreement'' means the agreement setting 
        forth the terms of trusteeship for the Trust Territory of the 
        Pacific Islands, approved by the Security Council of the United 
        Nations April 2, 1947, and by the United States July 18, 1947, 
        entered into force July 18, 1947, 61 Stat. 3301, T.I.A.S. 1665, 
        8 U.N.T.S. 189.
           (c) ``The Federated States of Micronesia'' and ``the 
        Republic of the Marshall Islands'' are used in a geographic 
        sense and include the land and water areas to the outer limits 
        of the territorial sea and the air space above such areas as 
        now or hereafter recognized by the Government of the United 
        States.
          (d) ``Compact'' means the Compact of Free Association Between 
        the United States and the Federated States of Micronesia and 
        the Marshall Islands, that was approved by the United States 
        Congress in section 201 of Public Law 99-239 (Jan. 14, 1986) 
        and went into effect with respect to the Federated States of 
        Micronesia on November 3, 1986.
          (e) ``Compact, as amended'' means the Compact of Free 
        Association Between the United States and the Federated States 
        of Micronesia, as amended. The effective date of the Compact, 
        as amended, shall be on a date to be determined by the 
        Presidentof the United States, and agreed to by the Government 
of the Federated States of Micronesia, following formal approval of the 
Compact, as amended, in accordance with section 411 of this Compact, as 
amended.
          (f) ``Government of the Federated States of Micronesia'' 
        means the Government established and organized by the 
        Constitution of the Federated States of Micronesia including 
        all the political subdivisions and entities comprising that 
        Government.
          (g) ``Government of the Republic of the Marshall Islands'' 
        means the Government established and organized by the 
        Constitution of the Republic of the Marshall Islands including 
        all the political subdivisions and entities comprising that 
        Government.
          (h) The following terms shall be defined consistent with the 
        1998 Edition of the Radio Regulations of the International 
        Telecommunications Union as follows:
                  (1) ``Radiocommunication'' means telecommunication by 
                means of radio waves.
                  (2) ``Station'' means one or more transmitters or 
                receivers or a combination of transmitters and 
                receivers, including the accessory equipment, necessary 
                at one location for carrying on a radiocommunication 
                service, or the radio astronomy service.
                  (3) ``Broadcasting Service'' means a 
                radiocommunication service in which the transmissions 
                are intended for direct reception by the general 
                public. This service may include sound transmissions, 
                television transmissions or other types of 
                transmission.
                  (4) ``Broadcasting Station'' means a station in the 
                broadcasting service.
                  (5) ``Assignment (of a radio frequency or radio 
                frequency channel)'' means an authorization given by an 
                administration for a radio station to use a radio 
                frequency or radio frequency channel under specified 
                conditions.
                  (6) ``Telecommunication'' means any transmission, 
                emission or reception of signs, signals, writings, 
                images and sounds or intelligence of any nature by 
                wire, radio, optical or other electromagnetic systems.
          (i) ``Military Areas and Facilities'' means those areas and 
        facilities in the Federated States of Micronesia reserved or 
        acquired by the Government of the Federated States of 
        Micronesia for use by the Government of the United States, as 
        set forth in the separate agreements referred to in section 
        321.
          (j) ``Tariff Schedules of the United States'' means the 
        Tariff Schedules of the United States as amended from time to 
        time and as promulgated pursuant to United States law and 
        includes the Tariff Schedules of the United States Annotated 
        (TSUSA), as amended.
          (k) ``Vienna Convention on Diplomatic Relations'' means the 
        Vienna Convention on Diplomatic Relations, done April 18, 1961, 
        23 U.S.T. 3227, T.I.A.S. 7502, 500 U.N.T.S. 95.
Section 462
  (a) The Government of the United States and the Government of the 
Federated States of Micronesia previously have concluded agreements 
pursuant to the Compact, which shall remain in effect and shall survive 
in accordance with their terms, as follows:
          (1) Agreement Concluded Pursuant to Section 234 of the 
        Compact;
          (2) Agreement Between the Government of the United States and 
        the Government of the Federated States of Micronesia Regarding 
        Friendship, Cooperation and Mutual Security Concluded Pursuant 
        to Sections 321 and 323 of the Compact of Free Association; and
          (3) Agreement between the Government of the United States of 
        America and the Federated States of Micronesia Regarding 
        Aspects of the Marine Sovereignty and Jurisdiction of the 
        Federated States of Micronesia.
  (b) The Government of the United States and the Government of the 
Federated States of Micronesia shall conclude prior to the date of 
submission of this Compact, as amended, to the legislatures of the two 
countries, the following related agreements which shall come into 
effect on the effective date of this Compact, as amended, and shall 
survive in accordance with their terms, as follows:
          (1) Federal Programs and Services Agreement Between the 
        Government of the United States of America and the Government 
        of the Federated States of Micronesia Concluded Pursuant to 
        Article III of Title One, Article II of Title Two (including 
        Section 222), and Section 231 of the Compact of Free 
        Association, as amended which includes:
                  (i) Postal Services and Related Programs;
                  (ii) Weather Services and Related Programs;
                  (iii) Civil Aviation Safety Service and Related 
                Programs;
                  (iv) Civil Aviation Economic Services and Related 
                Programs;
                  (v) United States Disaster Preparedness and Response 
                Services and Related Programs;
                  (vi) Federal Deposit Insurance Corporation Services 
                and Related Programs; and
                  (vii) Telecommunications Services and Related 
                Programs.
          (2) Agreement Between the Government of the United States of 
        America and the Government of the Federated States of 
        Micronesia on Extradition, Mutual Assistance in Law Enforcement 
        Matters and Penal Sanctions Concluded Pursuant to Section 
        175(a) of the Compact of Free Association, as amended;
          (3) Agreement Between the Government of the United States of 
        America and the Government of the Federated States of 
        Micronesia on Labor Recruitment Concluded Pursuant to Section 
        175(b) of the Compact of Free Association, as amended;
          (4) Agreement Concerning Procedures for the Implementation of 
        United States Economic Assistance Provided in the Compact of 
        Free Association,as Amended, of Free Association Between the 
Government of the United States of America and Government of the 
Federated States of Micronesia;
          (5) Agreement Between the Government of the United States of 
        America and the Government of the Federated States of 
        Micronesia Implementing Section 215 and Section 216 of the 
        Compact, as Amended, Regarding a Trust Fund;
          (6) Agreement Regarding the Military Use and Operating Rights 
        of the Government of the United States in the Federated States 
        of Micronesia Concluded Pursuant to Sections 211(b), 321 and 
        323 of the Compact of Free Association, as Amended; and the
          (7) Status of Forces Agreement Between the Government of the 
        United States of America and the Government of the Federated 
        States of Micronesia Concluded Pursuant to Section 323 of the 
        Compact of Free Association, as Amended.
Section 463
  (a) Except as set forth in subsection (b) of this section, any 
reference in this Compact, as amended, to a provision of the United 
States Code or the Statutes at Large of the United States constitutes 
the incorporation of the language of such provision into this Compact, 
as amended, as such provision was in force on the effective date of 
this Compact, as amended.
  (b) Any reference in Articles IV and Article VI of Title One and 
Sections 174, 175, 178 and 342 to a provision of the United States Code 
or the Statutes at Large of the United States or to the Privacy Act, 
the Freedom of Information Act, the Administrative Procedure Act or the 
Immigration and Nationality Act constitutes the incorporation of the 
language of such provision into this Compact, as amended, as such 
provision was in force on the effective date of this Compact, as 
amended, or as it may be amended thereafter on a non-discriminatory 
basis according to the constitutional processes of the United States.

                              Article VII

                         Concluding Provisions

Section 471
  Both the Government of the United States and the Government of the 
Federated States of Micronesia shall take all necessary steps, of a 
general or particular character, to ensure, no later than the entry 
into force date of this Compact, as amended, the conformity of its 
laws, regulations and administrative procedures with the provisions of 
this Compact, as amended, or in the case of subsection (d) of section 
141, as soon as reasonably possible thereafter.
Section 472
  This Compact, as amended, may be accepted, by signature or otherwise, 
by the Government of the United States and the Government of the 
Federated States of Micronesia.
  IN WITNESS WHEREOF, the undersigned, duly authorized, have signed 
this Compact of Free Association, as amended, which shall enter into 
force upon the exchange of diplomatic notes by which the Government of 
the United States of America and the Government of the Federated States 
of Micronesia inform each other about the fulfillment of their 
respective requirements for entry into force.
  DONE at Pohnpei, Federated States of Micronesia, in duplicate, this 
fourteenth (14) day of May, 2003, each text being equally authentic.

Signed (May 14, 2003)               Signed (May 14, 2003)
For the Government of the           For the Government of the
United States of America:           Federated States of
                                    Micronesia:

  (b) Compact of Free Association, as Amended, Between the Government 
of the United States of America and the Government of the Republic of 
the Marshall Islands

                                PREAMBLE

 THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF 
                  THE REPUBLIC OF THE MARSHALL ISLANDS

  Affirming that their Governments and their relationship as 
Governments are founded upon respect for human rights and fundamental 
freedoms for all, and that the people of the Republic of the Marshall 
Islands have the right to enjoy self-government; and
  Affirming the common interests of the United States of America and 
the Republic of the Marshall Islands in creating and maintaining their 
close and mutually beneficial relationship through the free and 
voluntary association of their respective Governments; and
  Affirming the interest of the Government of the United States in 
promoting the economic advancement and budgetary self-reliance of the 
Republic of the Marshall Islands; and
  Recognizing that their relationship until the entry into force on 
October 21, 1986 of the Compact was based upon the International 
Trusteeship System of the United Nations Charter, and in particular 
Article 76 of the Charter; and that pursuant to Article 76 of the 
Charter, the people of the Republic of the Marshall Islands have 
progressively developed their institutions of self-government, and that 
in the exercise of their sovereign right to self-determination they, 
through their freely-expressed wishes, have adopted a Constitution 
appropriate to their particular circumstances; and
  Recognizing that the Compact reflected their common desire to 
terminate the Trusteeship and establish a government-to-government 
relationship which was in accordance with the new political status 
based on the freely expressed wishes of the people of the Republic of 
the Marshall Islands and appropriate to their particular circumstances; 
and
  Recognizing that the people of the Republic of the Marshall Islands 
have and retain their sovereignty and their sovereign right to self-
determination and the inherent right to adopt and amend their own 
Constitution and form of government and that the approval of the entry 
of the Government of the Republic of the Marshall Islands into the 
Compact by the people of the Republic of the Marshall Islands 
constituted an exercise of their sovereign right to self-determination; 
and
  Recognizing the common desire of the people of the United States and 
the people of the Republic of the Marshall Islands to maintain their 
close government-to-government relationship, the United States and the 
Republic of the Marshall Islands:
  NOW, THEREFORE, MUTUALLY AGREE to continue and strengthen their 
relationship of free association by amending the Compact, which 
continues to provide a full measure of self-government for the people 
of the Republic of the Marshall Islands; and
  FURTHER AGREE that the relationship of free association derives from 
and is as set forth in this Compact, as amended, by the Governments of 
the United States and the Republic of the Marshall Islands; and that, 
during such relationship of free association, the respective rights and 
responsibilities of the Government of the United States and the 
Government of the Republic of the Marshall Islands in regard to this 
relationship of free association derive from and are as set forth in 
this Compact, as amended.

                               TITLE ONE

                         GOVERNMENTAL RELATIONS

                               Article I

                            Self-Government

Section 111
  The people of the Republic of the Marshall Islands, acting through 
the Government established under their Constitution, are self-
governing.

                               Article II

                            Foreign Affairs

Section 121
  (a) The Government of the Republic of the Marshall Islands has the 
capacity to conduct foreign affairs and shall do so in its own name and 
right, except as otherwise provided in this Compact, as amended.
  (b) The foreign affairs capacity of the Government of the Republic of 
the Marshall Islands includes:
          (1) the conduct of foreign affairs relating to law of the sea 
        and marine resources matters, including the harvesting, 
        conservation, exploration or exploitation of living and non-
        living resources from the sea, seabed or subsoil to the full 
        extent recognized under international law;
          (2) the conduct of its commercial, diplomatic, consular, 
        economic, trade, banking, postal, civil aviation, 
        communications, and cultural relations, including negotiations 
        for the receipt of developmental loans and grants and the 
        conclusion of arrangements with other governments and 
        international and intergovernmental organizations, including 
        any matters specially benefiting its individual citizens.
  (c) The Government of the United States recognizes that the 
Government of the Republic of the Marshall Islands has the capacity to 
enter into, in its own name and right, treaties and other international 
agreements with governments and regional and international 
organizations.
  (d) In the conduct of its foreign affairs, the Government of the 
Republic of the Marshall Islands confirms that it shall act in 
accordance with principles of international law and shall settle its 
international disputes by peaceful means.
Section 122
  The Government of the United States shall support applications by the 
Government of the Republic of the Marshall Islands for membership or 
other participation in regional or international organizations as may 
be mutually agreed.
Section 123
  (a) In recognition of the authority and responsibility of the 
Government of the United States under Title Three, the Government of 
the Republic of the Marshall Islands shall consult, in the conduct of 
its foreign affairs, with the Government of the United States.
  (b) In recognition of the foreign affairs capacity of the Government 
of the Republic of the Marshall Islands, the Government of the United 
States, in the conduct of its foreign affairs, shall consult with the 
Government of the Republic of the Marshall Islands on matters that the 
Government of the United States regards as relating to or affecting the 
Government of the Republic of the Marshall Islands.
Section 124
  The Government of the United States may assist or act on behalf of 
the Government of the Republic of the Marshall Islands in the area of 
foreign affairs as may be requested and mutually agreed from time to 
time. The Government of the United States shall not be responsible to 
third parties for the actions of the Government of the Republic of the 
Marshall Islands undertaken with the assistance or through the agency 
of the Government of the United States pursuant to this section unless 
expressly agreed.
Section 125
  The Government of the United States shall not be responsible for nor 
obligated by any actions taken by the Government of the Republic of the 
Marshall Islands in the area of foreign affairs, except as may from 
time to time be expressly agreed.
Section 126
  At the request of the Government of the Republic of the Marshall 
Islands and subject to the consent of the receiving state, the 
Government of the United States shall extend consular assistance on the 
same basis as for citizens of the United States to citizens of the 
Republic of the Marshall Islands for travel outside the Republic of the 
Marshall Islands, the United States and its territories and 
possessions.
Section 127
  Except as otherwise provided in this Compact, as amended, or its 
related agreements, all obligations, responsibilities, rights and 
benefits of the Government of the United States as Administering 
Authority which resulted from the application pursuant to the 
Trusteeship Agreement of any treaty or other international agreement to 
the Trust Territory of the Pacific Islands on October 20, 1986, are, as 
of that date, no longer assumed and enjoyed by the Government of the 
United States.

                              Article III

                             Communications

Section 131
  (a) The Government of the Republic of the Marshall Islands has full 
authority and responsibility to regulate its domestic and foreign 
communications, and the Government of the United States shall provide 
communications assistance as mutually agreed.
  (b) The Government of the Republic of the Marshall Islands has 
elected to undertake all functions previously performed by the 
Government of the United States withrespect to domestic and foreign 
communications, except for those functions set forth in a separate 
agreement entered into pursuant to this section of the Compact, as 
amended.
Section 132
  The Government of the Republic of the Marshall Islands shall permit 
the Government of the United States to operate telecommunications 
services in the Republic of the Marshall Islands to the extent 
necessary to fulfill the obligations of the Government of the United 
States under this Compact, as amended, in accordance with the terms of 
separate agreements entered into pursuant to this section of the 
Compact, as amended.

                               Article IV

                              Immigration

Section 141
  (a) In furtherance of the special and unique relationship that exists 
between the United States and the Republic of the Marshall Islands, 
under the Compact, as amended, any person in the following categories 
may be admitted to lawfully engage in occupations, and establish 
residence as a nonimmigrant in the United States and its territories 
and possessions (the ``United States'') without regard to paragraphs 
(5) or (7)(B)(i)(II) of section 212(a) of the Immigration and 
Nationality Act, as amended, 8 U.S.C. 1182(a)(5) or (7)(B)(i)(II):
          (1) a person who, on October 21, 1986, was a citizen of the 
        Trust Territory of the Pacific Islands, as defined in Title 53 
        of the Trust Territory Code in force on January 1, 1979, and 
        has become and remains a citizen of the Republic of the 
        Marshall Islands;
          (2) a person who acquires the citizenship of the Republic of 
        the Marshall Islands at birth, on or after the effective date 
        of the Constitution of the Republic of the Marshall Islands;
          (3) an immediate relative of a person referred to in 
        paragraphs (1) or (2) of this section, provided that such 
        immediate relative is a naturalized citizen of the Republic of 
        the Marshall Islands who has been an actual resident there for 
        not less than five years after attaining such naturalization 
        and who holds a certificate of actual residence, and further 
        provided, that, in the case of a spouse, such spouse has been 
        married to the person referred to in paragraph (1) or (2) of 
        this section for at least five years, and further provided, 
        that the Government of the United States is satisfied that such 
        naturalized citizen meets the requirement of subsection (b) of 
        section 104 of Public Law 99-239 as it was in effect on the day 
        prior to the effective date of this Compact, as amended;
          (4) a naturalized citizen of the Republic of the Marshall 
        Islands who was an actual resident there for not less than five 
        years after attaining such naturalization and who satisfied 
        these requirements as of April 30, 2003, who continues to be an 
        actual resident and holds a certificate of actual residence, 
        and whose name is included in a list furnished by the 
        Government of the Republic of the Marshall Islands to the 
        Government of the United States no later than the effective 
        date of the Compact, as amended, in form and content acceptable 
        to the Government of the United States, provided, that the 
        Government of the United States is satisfied that such 
        naturalized citizen meets the requirement of subsection (b) of 
        section 104 of Public Law 99-239 as it was in effect on the day 
        prior to the effective date of this Compact, as amended; or
          (5) an immediate relative of a citizen of the Republic of the 
        Marshall Islands, regardless of the immediate relative's 
        country of citizenship or period of residence in the Republic 
        of the Marshall Islands, if the citizen of the Republic of the 
        Marshall Islands is serving on active duty in any branch of the 
        United States Armed Forces, or in the active reserves.
  (b) Notwithstanding subsection (a) of this section, a person who is 
coming to the United States pursuant to an adoption outside the United 
States, or for the purpose of adoption in the United States, is 
ineligible for admission under the Compact and the Compact, as amended. 
This subsection shall apply to any person who is or was an applicant 
for admission to the United States on or after March 1, 2003, including 
any applicant for admission in removal proceedings (including appellate 
proceedings) on or after March 1, 2003, regardless of the date such 
proceedings were commenced. This subsection shall have no effect on the 
ability of the Government of the United States or any United States 
State or local government to commence or otherwise take any action 
against any person or entity who has violated any law relating to the 
adoption of any person.
  (c) Notwithstanding subsection (a) of this section, no person who has 
been or is granted citizenship in the Republic of the Marshall Islands, 
or has been or is issued a Republic of the Marshall Islands passport 
pursuant to any investment, passport sale, or similar program has been 
or shall be eligible for admission to the United States under the 
Compact or the Compact, as amended.
  (d) A person admitted to the United States under the Compact, or the 
Compact, as amended, shall be considered to have the permission of the 
Government of the United States to accept employment in the United 
States. An unexpired Republic of the Marshall Islands passport with 
unexpired documentation issued by the Government of the United States 
evidencing admission under the Compact or the Compact, as amended, 
shall be considered to be documentation establishing identity and 
employment authorization under section 274A(b)(1)(B) of the Immigration 
and Nationality Act, as amended, 8 U.S.C. 1324a(b)(1)(B). The 
Government of the United States will take reasonable and appropriate 
steps to implement and publicize this provision, and the Government of 
the Republic of the Marshall Islands will also take reasonable and 
appropriate steps to publicize this provision.
  (e) For purposes of the Compact and the Compact, as amended,
          (1) the term ``residence'' with respect to a person means the 
        person's principal, actual dwelling place in fact, without 
        regard to intent, as provided in section 101(a)(33) of the 
        Immigration and Nationality Act, as amended, 8 U.S.C. 
        1101(a)(33), and variations of the term ``residence,'' 
        including``resident'' and ``reside,'' shall be similarly 
construed;
          (2) the term ``actual residence'' means physical presence in 
        the Republic of the Marshall Islands during eighty-five percent 
        of the five-year period of residency required by section 
        141(a)(3) and (4);
          (3) the term ``certificate of actual residence'' means a 
        certificate issued to a naturalized citizen by the Government 
        of the Republic of the Marshall Islands stating that the 
        citizen has complied with the actual residence requirement of 
        section 141(a)(3) or (4);
          (4) the term ``nonimmigrant'' means an alien who is not an 
        ``immigrant'' as defined in section 101(a)(15) of such Act, 8 
        U.S.C. 1101(a)(15); and
          (5) the term ``immediate relative'' means a spouse, or 
        unmarried son or unmarried daughter less than 21 years of age.
  (f) The Immigration and Nationality Act, as amended, shall apply to 
any person admitted or seeking admission to the United States (other 
than a United States possession or territory where such Act does not 
apply) under the Compact or the Compact, as amended, and nothing in the 
Compact or the Compact, as amended, shall be construed to limit, 
preclude, or modify the applicability of, with respect to such person:
          (1) any ground of inadmissibility or deportability under such 
        Act (except sections 212(a)(5) and 212(a)(7)(B)(i)(II) of such 
        Act, as provided in subsection (a) of this section), and any 
        defense thereto, provided that, section 237(a)(5) of such Act 
        shall be construed and applied as if it reads as follows: ``any 
        alien who has been admitted under the Compact, or the Compact, 
        as amended, who cannot show that he or she has sufficient means 
        of support in the United States, is deportable;''
          (2) the authority of the Government of the United States 
        under section 214(a)(1) of such Act to provide that admission 
        as a nonimmigrant shall be for such time and under such 
        conditions as the Government of the United States may by 
        regulations prescribe;
          (3) except for the treatment of certain documentation for 
        purposes of section 274A(b)(1)(B) of such Act as provided by 
        subsection (d) of this section of the Compact, as amended, any 
        requirement under section 274A, including but not limited to 
        section 274A(b)(1)(E);
          (4) section 643 of the Illegal Immigration Reform and 
        Immigrant Responsibility Act of 1996, Public Law 104-208, and 
        actions taken pursuant to section 643; and
          (5) the authority of the Government of the United States 
        otherwise to administer and enforce the Immigration and 
        Nationality Act, as amended, or other United States law.
  (g) Any authority possessed by the Government of the United States 
under this section of the Compact or the Compact, as amended, may also 
be exercised by the Government of a territory or possession of the 
United States where the Immigration and Nationality Act, as amended, 
does not apply, to the extent such exercise of authority is lawful 
under a statute or regulation of such territory or possession that is 
authorized by the laws of the United States.
  (h) Subsection (a) of this section does not confer on a citizen of 
the Republic of the Marshall Islands the right to establish the 
residence necessary for naturalization under the Immigration and 
Nationality Act, as amended, or to petition for benefits for alien 
relatives under that Act. Subsection (a) of this section, however, 
shall not prevent a citizen of the Republic of the Marshall Islands 
from otherwise acquiring such rights or lawful permanent resident alien 
status in the United States.
Section 142
  (a) Any citizen or national of the United States may be admitted to 
lawfully engage in occupations, and reside in the Republic of the 
Marshall Islands, subject to the rights of the Government of the 
Republic of the Marshall Islands to deny entry to or deport any such 
citizen or national as an undesirable alien. Any determination of 
inadmissibility or deportability shall be based on reasonable statutory 
grounds and shall be subject to appropriate administrative and judicial 
review within the Republic of the Marshall Islands. If a citizen or 
national of the United States is a spouse of a citizen of the Republic 
of the Marshall Islands, the Government of the Republic of the Marshall 
Islands shall allow the United States citizen spouse to establish 
residence. Should the Republic of the Marshall Islands citizen spouse 
predecease the United States citizen spouse during the marriage, the 
Government of the Republic of the Marshall Islands shall allow the 
United States citizen spouse to continue to reside in the Republic of 
the Marshall Islands.
  (b) In enacting any laws or imposing any requirements with respect to 
citizens and nationals of the United States entering the Republic of 
the Marshall Islands under subsection (a) of this section, including 
any grounds of inadmissibility or deportability, the Government of the 
Republic of the Marshall Islands shall accord to such citizens and 
nationals of the United States treatment no less favorable than that 
accorded to citizens of other countries.
  (c) Consistent with subsection (a) of this section, with respect to 
citizens and nationals of the United States seeking to engage in 
employment or invest in the Republic of the Marshall Islands, the 
Government of the Republic of the Marshall Islands shall adopt 
immigration-related procedures no less favorable than those adopted by 
the Government of the United States with respect to citizens of the 
Republic of the Marshall Islands seeking employment in the United 
States.
Section 143
  Any person who relinquishes, or otherwise loses, his United States 
nationality or citizenship, or his Republic of the Marshall Islands 
citizenship, shall be ineligible to receive the privileges set forth in 
sections 141 and 142. Any such person may apply for admission to the 
United States or the Republic of the Marshall Islands, as the case may 
be, in accordance with any other applicable laws of the United States 
or the Republic of the Marshall Islands relating to immigration of 
aliens from other countries. The laws of the Republic of the Marshall 
Islands or the UnitedStates, as the case may be, shall dictate the 
terms and conditions of any such person's stay.

                               Article V

                             Representation

Section 151
  Relations between the Government of the United States and the 
Government of the Republic of the Marshall Islands shall be conducted 
in accordance with the Vienna Convention on Diplomatic Relations. In 
addition to diplomatic missions and representation, the Governments may 
establish and maintain other offices and designate other 
representatives on terms and in locations as may be mutually agreed.
Section 152
  (a) Any citizen or national of the United States who, without 
authority of the United States, acts as the agent of the Government of 
the Republic of the Marshall Islands with regard to matters specified 
in the provisions of the Foreign Agents Registration Act of 1938, as 
amended (22 U.S.C. 611 et seq.), that apply with respect to an agent of 
a foreign principal shall be subject to the requirements of such Act. 
Failure to comply with such requirements shall subject such citizen or 
national to the same penalties and provisions of law as apply in the 
case of the failure of such an agent of a foreign principal to comply 
with such requirements. For purposes of the Foreign Agents Registration 
Act of 1938, the Republic of the Marshall Islands shall be considered 
to be a foreign country.
  (b) Subsection (a) of this section shall not apply to a citizen or 
national of the United States employed by the Government of the 
Republic of the Marshall Islands with respect to whom the Government of 
the Republic of the Marshall Islands from time to time certifies to the 
Government of the United States that such citizen or national is an 
employee of the Republic of the Marshall Islands whose principal duties 
are other than those matters specified in the Foreign Agents 
Registration Act of 1938, as amended, that apply with respect to an 
agent of a foreign principal. The agency or officer of the United 
States receiving such certifications shall cause them to be filed with 
the Attorney General, who shall maintain a publicly available list of 
the persons so certified.

                               Article VI

                        Environmental Protection

Section 161
  The Governments of the United States and the Republic of the Marshall 
Islands declare that it is their policy to promote efforts to prevent 
or eliminate damage to the environment and biosphere and to enrich 
understanding of the natural resources of the Republic of the Marshall 
Islands. In order to carry out this policy, the Government of the 
United States and the Government of the Republic of the Marshall 
Islands agree to the following mutual and reciprocal undertakings:
          (a) The Government of the United States:
                  (1) shall, for its activities controlled by the U.S. 
                Army at Kwajalein Atoll and in the Mid-Atoll Corridor 
                and for U.S. Army Kwajalein Atoll activities in the 
                Republic of the Marshall Islands, continue to apply the 
                Environmental Standards and Procedures for United 
                States Army Kwajalein Atoll Activities in the Republic 
                of the Marshall Islands, unless and until those 
                Standards or Procedures are modified by mutual 
                agreement of the Governments of the United States and 
                the Republic of the Marshall Islands;
                  (2) shall apply the National Environmental Policy Act 
                of 1969, 83 Stat. 852, 42 U.S.C. 4321 et seq., to its 
                activities under the Compact, as amended, and its 
                related agreements as if the Republic of the Marshall 
                Islands were the United States;
                  (3) in the conduct of any activity not described in 
                section 161(a)(1) requiring the preparation of an 
                Environmental Impact Statement under section 161(a)(2), 
                shall comply with standards substantively similar to 
                those required by the following laws of the United 
                States, taking into account the particular environment 
                of the Republic of the Marshall Islands; the Endangered 
                Species Act of 1973, as amended, 16 U.S.C. 1531 et 
                seq.; the Clean Air Act, as amended, 42 U.S.C. 7401 et 
                seq.; the Clean Water Act (Federal Water Pollution 
                Control Act), as amended, 33 U.S.C. 1251 et seq.; Title 
                I of the Marine Protection, Research and Sanctuaries 
                Act of 1972 (the Ocean Dumping Act), 33 U.S.C. 1411 et 
                seq.; the Toxic Substances Control Act, as amended, 15 
                U.S.C. 2601 et seq.; the Solid Waste Disposal Act, as 
                amended, 42 U.S.C. 6901 et seq.; and such other 
                environmental protection laws of the United States and 
                the Republic of the Marshall Islands as may be agreed 
                from time to time with the Government of the Republic 
                of the Marshall Islands;
                  (4) shall, prior to conducting any activity not 
                described in section 161(a)(1) requiring the 
                preparation of an Environmental Impact Statement under 
                section 161(a)(2), develop, as agreed with the 
                Government of the Republic of the Marshall Islands, 
                written environmental standards and procedures to 
                implement the substantive provisions of the laws made 
                applicable to U.S. Government activities in the 
                Republic of the Marshall Islands, pursuant to section 
                161(a)(3).
          (b) The Government of the Republic of the Marshall Islands 
        shall continue to develop and implement standards and 
        procedures to protect its environment. As a reciprocal 
        obligation to the undertakings of the Government of the United 
        States under this Article, the Republic of the Marshall 
        Islands, taking into account its particular environment, shall 
        continue to develop and implement standards for environmental 
        protection substantively similar to those required of the 
        Government of the United States by section 161(a)(3) prior to 
        its conducting activities in the Republic of the Marshall 
        Islands, substantively equivalent to activities conducted there 
        by the Government of the United States and, as a further 
        reciprocal obligation, shall enforce those standards.
          (c) Section 161(a), including any standard or procedure 
        applicable thereunder, and section 161(b) may be modified or 
        superseded in whole or in part by agreement of the Government 
        of the United States and the Government of the Republic of the 
        Marshall Islands.
          (d) In the event that an Environmental Impact Statement is no 
        longer required under the laws of the United States for major 
        Federal actions significantly affecting the quality of the 
        human environment, the regulatory regime established under 
        sections 161(a)(3) and 161(a)(4) shall continue to apply to 
        such activities of the Government of the United States until 
        amended by mutual agreement.
          (e) The President of the United States may exempt any of the 
        activities of the Government of the United States under this 
        Compact, as amended, and its related agreements from any 
        environmental standard or procedure which may be applicable 
        under sections 161(a)(3) and 161(a)(4) if the President 
        determines it to be in the paramount interest of the Government 
        of the United States to do so, consistent with Title Three of 
        this Compact, as amended, and the obligations of the Government 
        of the United States under international law. Prior to any 
        decision pursuant to this subsection, the views of the 
        Government of the Republic of the Marshall Islands shall be 
        sought and considered to the extent practicable. If the 
        President grants such an exemption, to the extent practicable, 
        a report with his reasons for granting such exemption shall be 
        given promptly to the Government of the Republic of the 
        Marshall Islands.
          (f) The laws of the United States referred to in section 
        161(a)(3) shall apply to the activities of the Government of 
        the United States under this Compact, as amended, and its 
        related agreements only to the extent provided for in this 
        section.
Section 162
  The Government of the Republic of the Marshall Islands may bring an 
action for judicial review of any administrative agency action or any 
activity of the Government of the United States pursuant to section 
161(a) for enforcement of the obligations of the Government of the 
United States arising thereunder. The United States District Court for 
the District of Hawaii and the United States District Court for the 
District of Columbia shall have jurisdiction over such action or 
activity, and over actions brought under section 172(b) which relate to 
the activities of the Government of the United States and its officers 
and employees, governed by section 161, provided that:
          (a) Such actions may only be civil actions for any 
        appropriate civil relief other than punitive damages against 
        the Government of the United States or, where required by law, 
        its officers in their official capacity; no criminal actions 
        may arise under this section.
          (b) Actions brought pursuant to this section may be initiated 
        only by the Government of the Republic of the Marshall Islands.
          (c) Administrative agency actions arising under section 161 
        shall be reviewed pursuant to the standard of judicial review 
        set forth in 5 U.S.C. 706.
          (d) The United States District Court for the District of 
        Hawaii and the United States District Court for the District of 
        Columbia shall have jurisdiction to issue all necessary 
        processes, and the Government of the United States agrees to 
        submit itself to the jurisdiction of the court; decisions of 
        the United States District Court shall be reviewable in the 
        United States Court of Appeals for the Ninth Circuit or the 
        United States Court of Appeals for the District of Columbia, 
        respectively, or in the United States Supreme Court as provided 
        by the laws of the United States.
          (e) The judicial remedy provided for in this section shall be 
        the exclusive remedy for the judicial review or enforcement of 
        the obligations of the Government of the United States under 
        this Article and actions brought under section 172(b), which 
        relate to the activities of the Government of the United States 
        and its officers and employees governed by section 161.
          (f) In actions pursuant to this section, the Government of 
        the Republic of the Marshall Islands shall be treated as if it 
        were a United States citizen.
Section 163
  (a) For the purpose of gathering data necessary to study the 
environmental effects of activities of the Government of the United 
States subject to the requirements of this Article, the Government of 
the Republic of the Marshall Islands shall be granted access to 
facilities operated by the Government of the United States in the 
Republic of the Marshall Islands, to the extent necessary for this 
purpose, except to the extent such access would unreasonably interfere 
with the exercise of the authority and responsibility of the Government 
of the United States under Title Three.
  (b) The Government of the United States, in turn, shall be granted 
access to the Republic of the Marshall Islands for the purpose of 
gathering data necessary to discharge its obligations under this 
Article, except to the extent such access would unreasonably interfere 
with the exercise of the authority and responsibility of the Government 
of the Republic of the Marshall Islands under Title One, and to the 
extent necessary for this purpose shall be granted access to documents 
and other information to the same extent similar access is provided the 
Government of the Republic of the Marshall Islands under the Freedom of 
Information Act, 5 U.S.C. 552.
  (c) The Government of the Republic of the Marshall Islands shall not 
impede efforts by the Government of the United States to comply with 
applicable standards and procedures.

                              Article VII

                        General Legal Provisions

Section 171
  Except as provided in this Compact, as amended, or its related 
agreements, the application of the laws of the United States to the 
Trust Territory of the Pacific Islands by virtue of the Trusteeship 
Agreement ceased with respect to the Marshall Islands on October 21, 
1986, the date the Compact went into effect.
Section 172
  (a) Every citizen of the Republic of the Marshall Islands who is not 
a resident of the United States shall enjoy the rights and remedies 
under the laws of the United States enjoyed by any non-resident alien.
  (b) The Government of the Republic of the Marshall Islands and every 
citizen of the Republic of the Marshall Islands shall be considered to 
be a ``person'' within the meaning of the Freedom of Information Act, 5 
U.S.C. 552, and of the judicial review provisions of the Administrative 
Procedure Act, 5 U.S.C. 701-706, except that only the Government of the 
Republic of the Marshall Islands may seek judicial review under the 
Administrative Procedure Act or judicial enforcement under the Freedom 
of Information Act when such judicial review or enforcement relates to 
the activities of the Government of the United States governed by 
sections 161 and 162.
Section 173
  The Governments of the United States and the Republic of the Marshall 
Islands agree to adopt and enforce such measures, consistent with this 
Compact, as amended, and its related agreements, as may be necessary to 
protect the personnel, property, installations, services, programs and 
official archives and documents maintained by the Government of the 
United States in the Republic of the Marshall Islands pursuant to this 
Compact, as amended, and its related agreements and by the Government 
of the Republic of the Marshall Islands in the United States pursuant 
to this Compact, Compact, as amended, and its related agreements.
Section 174
  Except as otherwise provided in this Compact, as amended, and its 
related agreements:
          (a) The Government of the Republic of the Marshall Islands, 
        and its agencies and officials, shall be immune from the 
        jurisdiction of the court of the United States, and the 
        Government of the United States, and its agencies and 
        officials, shall be immune from the jurisdiction of the courts 
        of the Republic of the Marshall Islands.
          (b) The Government of the United States accepts 
        responsibility for and shall pay:
                  (1) any unpaid money judgment rendered by the High 
                Court of the Trust Territory of the Pacific Islands 
                against the Government of the United States with regard 
                to any cause of action arising as a result of acts or 
                omissions of the Government of the Trust Territory of 
                the Pacific Islands or the Government of the United 
                States prior to October 21, 1986;
                  (2) any claim settled by the claimant and the 
                Government of the Trust Territory of the Pacific 
                Islands but not paid as of the October 21, 1986; and
                  (3) settlement of any administrative claim or of any 
                action before a court of the Trust Territory of the 
                Pacific Islands or the Government of the United States, 
                arising as a result of acts or omissions of the 
                Government of the Trust Territory of the Pacific 
                Islands or the Government of the United States.
          (c) Any claim not referred to in section 174(b) and arising 
        from an act or omission of the Government of the Trust 
        Territory of the Pacific Islands or the Government of the 
        United States prior to the effective date of the Compact shall 
        be adjudicated in the same manner as a claim adjudicated 
        according to section 174(d). In any claim against the 
        Government of the Trust Territory of the Pacific Islands, the 
        Government of the United States shall stand in the place of the 
        Government of the Trust Territory of the Pacific Islands. A 
        judgment on any claim referred to in section 174(b) or this 
        subsection, not otherwise satisfied by the Government of the 
        United States, may be presented for certification to the United 
        States Court of Appeals for the Federal Circuit, or its 
        successor courts, which shall have jurisdiction therefore, 
        notwithstanding the provisions of 28 U.S.C. 1502, and which 
        court's decisions shall be reviewable as provided by the laws 
        of the United States. The United States Court of Appeals for 
        the Federal Circuit shall certify such judgment, and order 
        payment thereof, unless it finds, after a hearing, that such 
        judgment is manifestly erroneous as to law or fact, or 
        manifestly excessive. In either of such cases the United States 
        Court of Appeals for the Federal Circuit shall have 
        jurisdiction to modify such judgment.
          (d) The Government of the Republic of the Marshall Islands 
        shall not be immune from the jurisdiction of the courts of the 
        United States, and the Government of the United States shall 
        not be immune from the jurisdiction of the courts of the 
        Republic of the Marshall Islands in any civil case in which an 
        exception to foreign state immunity is set forth in the Foreign 
        Sovereign Immunities Act (28 U.S.C. 1602 et seq.) or its 
        successor statutes.
Section 175
  (a) A separate agreement, which shall come into effect simultaneously 
with this Compact, as amended, andshall have the force of law, shall 
govern mutual assistance and cooperation in law enforcement matters, 
including the pursuit, capture, imprisonment and extradition of 
fugitives from justice and the transfer of prisoners, as well as other 
law enforcement matters. In the United States, the laws of the United 
States governing international extradition, including 18 U.S.C. 3184, 
3186, and 3188-95, shall be applicable to the extradition of fugitives 
under the separate agreement, and the laws of the United States 
governing the transfer of prisoners, including 18 U.S.C. 4100-15, shall 
be applicable to the transfer of prisoners under the separate 
agreement; and
  (b) A separate agreement, which shall come into effect simultaneously 
with this Compact, as amended, and shall have the force of law, shall 
govern requirements relating to labor recruitment practices, including 
registration, reporting, suspension or revocation of authorization to 
recruit persons for employment in the United States, and enforcement 
for violations of such requirements.
Section 176
  The Government of the Republic of the Marshall Islands confirms that 
final judgments in civil cases rendered by any court of the Trust 
Territory of the Pacific Islands shall continue in full force and 
effect, subject to the constitutional power of the courts of the 
Republic of the Marshall Islands to grant relief from judgments in 
appropriate cases.
Section 177
  Section 177 of the Compact entered into force with respect to the 
Marshall Islands on October 21, 1986 as follows:
          ``(a) The Government of the United States accepts the 
        responsibility for compensation owing to citizens of the 
        Marshall Islands, or the Federated States of Micronesia, (or 
        Palau) for loss or damage to property and person of the 
        citizens of the Marshall Islands, or the Federated States of 
        Micronesia, resulting from the nuclear testing program which 
        the Government of the United States conducted in the Northern 
        Marshall Islands between June 30, 1946, and August 18, 1958.
          (b) The Government of the United States and the Government of 
        the Marshall Islands shall set forth in a separate agreement 
        provisions for the just and adequate settlement of all such 
        claims which have arisen in regard to the Marshall Islands and 
        its citizens and which have not as yet been compensated or 
        which in the future may arise, for the continued administration 
        by the Government of the United States of direct radiation 
        related medical surveillance and treatment programs and 
        radiological monitoring activities and for such additional 
        programs and activities as may be mutually agreed, and for the 
        assumption by the Government of the Marshall Islands of 
        responsibility for enforcement of limitations on the 
        utilization of affected areas developed in cooperation with the 
        Government of the United States and for the assistance by the 
        Government of the United States in the exercise of such 
        responsibility as may be mutually agreed. This separate 
        agreement shall come into effect simultaneously with this 
        Compact and shall remain in effect in accordance with its own 
        terms.
          (c) The Government of the United States shall provide to the 
        Government of the Marshall Islands, on a grant basis, the 
        amount of $150 million to be paid and distributed in accordance 
        with the separate agreement referred to in this Section, and 
        shall provide the services and programs set forth in this 
        separate agreement, the language of which is incorporated into 
        this Compact.''
The Compact, as amended, makes no changes to, and has no effect upon, 
Section 177 of the Compact, nor does the Compact, as amended, change or 
affect the separate agreement referred to in Section 177 of the Compact 
including Articles IX and X of that separate agreement, and measures 
taken by the parties thereunder.
Section 178
  (a) The Federal agencies of the Government of the United States that 
provide services and related programs in the Republic of the Marshall 
Islands pursuant to Title Two are authorized to settle and pay tort 
claims arising in the Republic of the Marshall Islands from the 
activities of such agencies or from the acts or omissions of the 
employees of such agencies. Except as provided in section 178(b), the 
provisions of 28 U.S.C. 2672 and 31 U.S.C. 1304 shall apply exclusively 
to such administrative settlements and payments.
  (b) Claims under section 178(a) that cannot be settled under section 
178(a) shall be disposed of exclusively in accordance with Article II 
of Title Four. Arbitration awards rendered pursuant to this subsection 
shall be paid out of funds under 31 U.S.C. 1304.
  (c) The Government of the United States and the Government of the 
Republic of the Marshall Islands shall, in the separate agreement 
referred to in section 231, provide for:
          (1) the administrative settlement of claims referred to in 
        section 178(a), including designation of local agents in each 
        State of the Republic of the Marshall Islands; such agents to 
        be empowered to accept, investigate and settle such claims, in 
        a timely manner, as provided in such separate agreements; and
          (2) arbitration, referred to in section 178(b), in a timely 
        manner, at a site convenient to the claimant, in the event a 
        claim is not otherwise settled pursuant to section 178(a).
  (d) The provisions of section 174(d) shall not apply to claims 
covered by this section.
  (e) Except as otherwise explicitly provided by law of the United 
States, this Compact, as amended, or its related agreements, neither 
the Government of the United States, its instrumentalities, nor any 
person acting on behalf of the Government of the United States, shall 
be named a party in any action based on, or arising out of, the 
activity or activities of a recipient of any grant or other assistance 
provided by the Government of the United States (or the activity or 
activities of the recipient's agency or any other person or entity 
acting on behalf of the recipient).
Section 179
  (a) The courts of the Republic of the Marshall Islands shall not 
exercise criminal jurisdiction over the Government of the United 
States, or its instrumentalities.
  (b) The courts of the Republic of the Marshall Islands shall not 
exercise criminal jurisdiction over any person if the Government of the 
United States provides notification to the Government of the Republic 
of the Marshall Islands that such person was acting on behalf of the 
Government of the United States, for actions taken in furtherance of 
section 221 or 224 of this amended Compact, or any other provision of 
law authorizing financial, program, or service assistance to the 
Republic of the Marshall Islands.

                               TITLE TWO

                           ECONOMIC RELATIONS

                               Article I

                            Grant Assistance

Section 211 - Annual Grant Assistance
  (a) In order to assist the Government of the Republic of the Marshall 
Islands in its efforts to promote the economic advancement and 
budgetary self-reliance of its people, and in recognition of the 
special relationship that exists between the Republic of the Marshall 
Islands and the United States, the Government of the United States 
shall provide assistance on a grant basis for a period of twenty years 
in the amounts set forth in section 217, commencing on the effective 
date of this Compact, as amended. Such grants shall be used for 
assistance in education, health care, the environment, public sector 
capacity building, and private sector development, or for other areas 
as mutually agreed, with priorities in the education and health care 
sectors. Consistent with the medium-term budget and investment 
framework described in subsection (f) of this section, the proposed 
division of this amount among the identified areas shall require the 
concurrence of both the Government of the United States and the 
Government of the Republic of the Marshall Islands, through the Joint 
Economic Management and Financial Accountability Committee described in 
section 214. The Government of the United States shall disburse the 
grant assistance and monitor the use of such grant assistance in 
accordance with the provisions of this Article and an Agreement 
Concerning Procedures for the Implementation of United States Economic 
Assistance Provided in the Compact, as Amended, of Free Association 
Between the Government of the United States of America and the 
Government of the Republic of the Marshall Islands (``Fiscal Procedures 
Agreement'') which shall come into effect simultaneously with this 
Compact, as amended.
          (1) Education.--United States grant assistance shall be made 
        available in accordance with the strategic framework described 
        in subsection (f) of this section to support and improve the 
        educational system of the Republic of the Marshall Islands and 
        develop the human, financial, and material resources necessary 
        for the Republic of the Marshall Islands to perform these 
        services. Emphasis should be placed on advancing a quality 
        basic education system.
          (2) Health.--United States grant assistance shall be made 
        available in accordance with the strategic framework described 
        in subsection (f) of this section to support and improve the 
        delivery of preventive, curative and environmental care and 
        develop the human, financial, and material resources necessary 
        for the Republic of the Marshall Islands to perform these 
        services.
          (3) Private sector development.--United States grant 
        assistance shall be made available in accordance with the 
        strategic framework described in subsection (f) of this section 
        to support the efforts of the Republic of the Marshall Islands 
        to attract foreign investment and increase indigenous business 
        activity by vitalizing the commercial environment, ensuring 
        fair and equitable application of the law, promoting adherence 
        to core labor standards, maintaining progress toward 
        privatization of state-owned and partially state-owned 
        enterprises, and engaging in other reforms.
          (4) Capacity building in the public sector.--United States 
        grant assistance shall be made available in accordance with the 
        strategic framework described in subsection (f) of this section 
        to support the efforts of the Republic of the Marshall Islands 
        to build effective, accountable and transparent national and 
        local government and other public sector institutions and 
        systems.
          (5) Environment.--United States grant assistance shall be 
        made available in accordance with the strategic framework 
        described in subsection (f) of this section to increase 
        environmental protection; establish and manage conservation 
        areas; engage in environmental infrastructure planning, design 
        construction and operation; and to involve the citizens of the 
        Republic of the Marshall Islands in the process of conserving 
        their country's natural resources.
  (b) Kwajalein Atoll.--
          (1) Of the total grant assistance made available under 
        subsection (a) of this section, the amount specified herein 
        shall be allocated annually from fiscal year 2004 through 
        fiscal year 2023 (and thereafter in accordance with the 
        Agreement between the Government of the United States and the 
        Government of the Republic of the Marshall Islands Regarding 
        Military Use and Operating Rights) to advance the objectives 
        and specific priorities set forth in subsections (a) and (d) of 
        this section and the Fiscal Procedures Agreement, to address 
        the special needs of the community at Ebeye, Kwajalein Atoll 
        and other Marshallese communities within Kwajalein Atoll. This 
        United States grant assistance shall be made available, in 
        accordance with the medium-term budget and investment framework 
        described in subsection (f) of this section, to support and 
        improve the infrastructure and delivery of services and develop 
        the human and material resources necessary for the Republic of 
        the Marshall Islands to carry out its responsibility to 
        maintain such infrastructure and deliver such services. The 
        amount of this assistance shall be $3,100,000, with an 
        inflation adjustment as provided in section 218, from fiscal 
        year 2004 through fiscal year 2013 and the fiscal year 2013 
        level of funding, with an inflation adjustment as provided in 
        section 218, will be increased by $2 million for fiscal year 
        2014. The fiscal year 2014 level of funding, with an inflation 
        adjustment as provided in section 218, will be made available 
        from fiscal year2015 through fiscal year 2023 (and thereafter 
as noted above).
          (2) The Government of the United States shall also provide to 
        the Government of the Republic of the Marshall Islands, in 
        conjunction with section 321(a) of this Compact, as amended, an 
        annual payment from fiscal year 2004 through fiscal year 2023 
        (and thereafter in accordance with the Agreement between the 
        Government of the United States and the Government of the 
        Republic of the Marshall Islands Regarding Military Use and 
        Operating Rights) of $1.9 million. This grant assistance will 
        be subject to the Fiscal Procedures Agreement and will be 
        adjusted for inflation under section 218 and used to address 
        the special needs of the community at Ebeye, Kwajalein Atoll 
        and other Marshallese communities within Kwajalein Atoll with 
        emphasis on the Kwajalein landowners, as described in the 
        Fiscal Procedures Agreement.
          (3) Of the total grant assistance made available under 
        subsection (a) of this section, and in conjunction with section 
        321(a) of the Compact, as amended, $200,000, with an inflation 
        adjustment as provided in section 218, shall be allocated 
        annually from fiscal year 2004 through fiscal year 2023 (and 
        thereafter as provided in the Agreement between the Government 
        of the United States and the Government of the Republic of the 
        Marshall Islands Regarding Military Use and Operating Rights) 
        for a grant to support increased participation of the 
        Government of the Republic of the Marshall Islands 
        Environmental Protection Authority in the annual U.S. Army 
        Kwajalein Atoll Environmental Standards Survey and to promote a 
        greater Government of the Republic of the Marshall Islands 
        capacity for independent analysis of the Survey's findings and 
        conclusions.
  (c) Humanitarian Assistance-Republic of the Marshall Islands 
Program.--In recognition of the special development needs of the 
Republic of the Marshall Islands, the Government of the United States 
shall make available to the Government of the Republic of the Marshall 
Islands, on its request and to be deducted from the grant amount made 
available under subsection (a) of this section, a Humanitarian 
Assistance - Republic of the Marshall Islands (``HARMI'') Program with 
emphasis on health, education, and infrastructure (including 
transportation), projects and such other projects as mutually agreed. 
The terms and conditions of the HARMI shall be set forth in the 
Agreement Regarding the Military Use and Operating Rights of the 
Government of the United States in the Republic of the Marshall Islands 
Concluded Pursuant to Sections 321 and 323 of the Compact of Free 
Association, as Amended, which shall come into effect simultaneously 
with the amendments to this Compact.
  (d) Public Infrastructure.--
          (1) Unless otherwise agreed, not less than 30 percent and not 
        more than 50 percent of U.S. annual grant assistance provided 
        under this section shall be made available in accordance with a 
        list of specific projects included in the infrastructure 
        improvement and maintenance plan prepared by the Government of 
        the Republic of the Marshall Islands as part of the strategic 
        framework described in subsection (f) of this section.
          (2) Infrastructure Maintenance Fund.--Five percent of the 
        annual public infrastructure grant made available under 
        paragraph (1) of this subsection shall be set aside, with an 
        equal contribution from the Government of the Republic of the 
        Marshall Islands, as a contribution to an Infrastructure 
        Maintenance Fund. Administration of the Infrastructure 
        Maintenance Fund shall be governed by the Fiscal Procedures 
        Agreement.
  (e) Disaster Assistance Emergency Fund.--Of the total grant 
assistance made available under subsection (a) of this section, an 
amount of two hundred thousand dollars ($200,000) shall be provided 
annually, with an equal contribution from the Government of the 
Republic of the Marshall Islands, as a contribution to a Disaster 
Assistance Emergency Fund (``DAEF''). Any funds from the DAEF may be 
used only for assistance and rehabilitation resulting from disasters 
and emergencies. The funds will be accessed upon declaration of a State 
of Emergency by the Government of the Republic of the Marshall Islands, 
with the concurrence of the United States Chief of Mission to the 
Republic of the Marshall Islands. Administration of the DAEF shall be 
governed by the Fiscal Procedures Agreement.
  (f) Budget and Investment Framework.--The Government of the Republic 
of the Marshall Islands shall prepare and maintain an official medium-
term budget and investment framework. The framework shall be strategic 
in nature, shall be continuously reviewed and updated through the 
annual budget process, and shall make projections on a multi-year 
rolling basis. Each of the sectors and areas named in subsections (a), 
(b), and (d) of this section, or other sectors and areas as mutually 
agreed, shall be accorded specific treatment in the framework. Those 
portions of the framework that contemplate the use of United States 
grant funds shall require the concurrence of both the Government of the 
United States and the Government of the Republic of the Marshall 
Islands.
Section 212 - Kwajalein Impact and Use
  The Government of the United States shall provide to the Government 
of the Republic of the Marshall Islands in conjunction with section 
321(a) of the Compact, as amended, and the agreement between the 
Government of the United States and the Government of the Republic of 
the Marshall Islands regarding military use and operating rights, a 
payment in fiscal year 2004 of $15,000,000, with no adjustment for 
inflation. In fiscal year 2005 and through fiscal year 2013, the annual 
payment will be the fiscal year 2004 amount ($15,000,000) with an 
inflation adjustment as provided under section 218. In fiscal year 
2014, the annual payment will be $18,000,000 (with no adjustment for 
inflation) or the fiscal year 2013 amount with an inflation adjustment 
under section 218, whichever is greater. For fiscal year 2015 through 
fiscal year 2023 (and thereafter in accordance with the Agreement 
between the Government of the United States and the Government of the 
Republic of the Marshall Islands Regarding Military Use and Operating 
Rights) the annual payment will bethe fiscal year 2014 amount, with an 
inflation adjustment as provided under section 218.
Section 213 - Accountability
  (a) Regulations and policies normally applicable to United States 
financial assistance to its state and local governments, as set forth 
in the Fiscal Procedures Agreement, shall apply to each grant described 
in section 211, and to grants administered under section 221 below, 
except as modified in the separate agreements referred to in section 
231 of this Compact, as amended, or by U.S. law. As set forth in the 
Fiscal Procedures Agreement, reasonable terms and conditions, including 
annual performance indicators that are necessary to ensure effective 
use of United States assistance and reasonable progress toward 
achieving program objectives may be attached. In addition, the United 
States may seek appropriate remedies for noncompliance with the terms 
and conditions attached to the assistance, or for failure to comply 
with section 234, including withholding assistance.
  (b) The Government of the United States shall, for each fiscal year 
of the twenty years during which assistance is to be provided on a 
sector grant basis under section 211 (a), grant the Government of the 
Republic of the Marshall Islands an amount equal to the lesser of (i) 
one half of the reasonable, properly documented cost incurred during 
such fiscal year to conduct the annual audit required under Article 
VIII (2) of the Fiscal Procedures Agreement or (ii) $500,000. Such 
amount will not be adjusted for inflation under section 218 or 
otherwise.
Section 214 - Joint Economic Management and Financial Accountability 
Committee
  The Governments of the United States and the Republic of the Marshall 
Islands shall establish a Joint Economic Management and Financial 
Accountability Committee, composed of a U.S. chair, two other members 
from the Government of the United States and two members from the 
Government of the Republic of the Marshall Islands. The Joint Economic 
Management and Financial Accountability Committee shall meet at least 
once each year to review the audits and reports required under this 
Title and the Fiscal Procedures Agreement, evaluate the progress made 
by the Republic of the Marshall Islands in meeting the objectives 
identified in its framework described in subsection (f) of section 211, 
with particular focus on those parts of the framework dealing with the 
sectors and areas identified in subsection (a) of section 211, identify 
problems encountered, and recommend ways to increase the effectiveness 
of U.S. assistance made available under this Title. The establishment 
and operations of the Joint Economic Management and Financial 
Accountability Committee shall be governed by the Fiscal Procedures 
Agreement.
Section 215 - Annual Report
  The Government of the Republic of the Marshall Islands shall report 
annually to the President of the United States on the use of United 
States sector grant assistance and other assistance and progress in 
meeting mutually agreed program and economic goals. The Joint Economic 
Management and Financial Accountability Committee shall review and 
comment on the report and make appropriate recommendations based 
thereon.
Section 216 - Trust Fund
  (a) The United States shall contribute annually for twenty years from 
the effective date of the Compact, as amended, in the amounts set forth 
in section 217 into a trust fund established in accordance with the 
Agreement Between the Government of the United States of America and 
the Government of the Republic of the Marshall Islands Implementing 
Section 216 and Section 217 of the Compact, as Amended, Regarding a 
Trust Fund (``Trust Fund Agreement''), which shall come into effect 
simultaneously with this Compact, as amended. Upon termination of the 
annual grant assistance under section 211 (a), (d) and (e), the 
earnings of the fund shall thereafter be used for the purposes 
described in section 211 or as otherwise mutually agreed.
  (b) The United States contribution into the Trust Fund described in 
subsection (a) of this section is conditioned on the Government of the 
Republic of the Marshall Islands contributing to the Trust Fund at 
least $25,000,000, on the effective date of the Trust Fund Agreement or 
on October 1, 2003, whichever is later, $2,500,000 prior to October 1, 
2004, and $2,500,000 prior to October 1, 2005. Any funds received by 
the Republic of the Marshall Islands under section 111(d) of Public Law 
99-239 (January 14, 1986), or successor provisions, would be 
contributed to the Trust Fund as a Republic of the Marshall Islands' 
contribution.
  (c) The terms regarding the investment and management of funds and 
use of the income of the Trust Fund shall be governed by the Trust Fund 
Agreement. Funds derived from United States investment shall not be 
subject to Federal or state taxes in the United States or any taxes in 
the Republic of the Marshall Islands. The Trust Fund Agreement shall 
also provide for annual reports to the Government of the United States 
and to the Government of the Republic of the Marshall Islands. The 
Trust Fund Agreement shall provide for appropriate distributions of 
trust fund proceeds to the Republic of the Marshall Islands and for 
appropriate remedies for the failure of the Republic of the Marshall 
Islands to use income of the Trust Fund for the annual grant purposes 
set forth in section 211. These remedies may include the return to the 
United States of the present market value of its contributions to the 
Trust Fund and the present market value of any undistributed income on 
the contributions of the United States. If this Compact, as amended, is 
terminated, the provisions of sections 451-453 of the Compact, as 
amended, and the Trust Fund Agreement shall govern treatment of any 
U.S. contributions to the Trust Fund or accrued income thereon.
Section 217 - Annual Grant Funding and Trust Fund Contributions
  The funds described in sections 211, 212, 213(b), and 216 shall be 
made available as follows:


                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                          Trust Fund       Kwajalein
             Fiscal year               Annual Grants     Audit Grant     Section 216     Impact Section   Total
                                        Section 211    Section 213(b)       (a&c;)             212
----------------------------------------------------------------------------------------------------------------
2004................................       35.2              .5               7               15.0         57.7
2005................................       34.7              .5              7.5              15.0         57.7
2006................................       34.2              .5               8               15.0         57.7
2007................................       33.7              .5              8.5              15.0         57.7
2008................................       33.2              .5               9               15.0         57.7
2009................................       32.7              .5              9.5              15.0         57.7
2010................................       32.2              .5               10              15.0         57.7
2011................................       31.7              .5              10.5             15.0         57.7
2012................................       31.2              .5               11              15.0         57.7
2013................................       30.7              .5              11.5             15.0         57.7
2014................................       32.2              .5               12              18.0         62.7
2015................................       31.7              .5              12.5             18.0         62.7
2016................................       31.2              .5               13              18.0         62.7
2017................................       30.7              .5              13.5             18.0         62.7
2018................................       30.2              .5               14              18.0         62.7
2019................................       29.7              .5              14.5             18.0         62.7
2020................................       29.2              .5               15              18.0         62.7
2021................................       28.7              .5              15.5             18.0         62.7
2022................................       28.2              .5               16              18.0         62.7
2023................................       27.7              .5              16.5             18.0         62.7
----------------------------------------------------------------------------------------------------------------

Section 218 - Inflation Adjustment
  Except as otherwise provided, the amounts stated in this Title shall 
be adjusted for each United States Fiscal Year by the percent that 
equals two-thirds of the percent change in the United States Gross 
Domestic Product Implicit Price Deflator, or 5 percent, whichever is 
less in any one year, using the beginning of Fiscal Year 2004 as a 
base.
Section 219 - Carry-Over of Unused Funds
  If in any year the funds made available by the Government of the 
United States for that year pursuant to this Article are not completely 
obligated by the Government of the Republic of the Marshall Islands, 
the unobligated balances shall remain available in addition to the 
funds to be provided in subsequent years.

                               Article II

                    Services and Program Assistance

Section 221
  (a) Services.--The Government of the United States shall make 
available to the Republic of the Marshall Islands, in accordance with 
and to the extent provided in the Federal Programs and Services 
Agreement referred to in Section 231, the services and related programs 
of:
          (1) the United States Weather Service;
          (2) the United States Postal Service;
          (3) the United States Federal Aviation Administration;
          (4) the United States Department of Transportation; and
          (5) the Department of Homeland Security, and the United 
        States Agency for International Development, Office of Foreign 
        Disaster Assistance.
Upon the effective date of this Compact, as amended, the United States 
Departments and Agencies named or having responsibility to provide 
these services and related programs shall have the authority to 
implement the relevant provisions of the Federal Programs and Services 
Agreement referred to in section 231.
  (b) Programs.--
          (1) Other than the services and programs covered by 
        subsection (a) of this section, and to the extent authorized by 
        the Congress of the United States, the Government of the United 
        States shall make available to the Republic of the Marshall 
        Islands the services and programs that were available to the 
        Republic of the Marshall Islands on the effective date of this 
        Compact, as amended, to the extent that such services and 
        programs continue to be available to State and local 
        governments of the United States. As set forth in the Fiscal 
        Procedures Agreement, funds provided under subsection (a) of 
        section 211 shall be considered to be local revenues of the 
        Government of the Republic of the Marshall Islands when used as 
        the local share required to obtain Federal programs and 
        services.
          (2) Unless provided otherwise by U.S. law, the services and 
        programs described in paragraph (1) of this subsection shall be 
        extended in accordance with the terms of the Federal Programs 
        and Services Agreement.
  (c) The Government of the United States shall have and exercise such 
authority as is necessary to carry out its responsibilities under this 
Title and the Federal Programs and Services Agreement, including the 
authority to monitor and administer all service and program assistance 
provided by the United States to the Republic of the Marshall Islands. 
The Federal Programs and Services Agreement shall also set forth the 
extent to which services and programs shall be provided to the Republic 
of the Marshall Islands.
  (d) Except as provided elsewhere in this Compact, as amended, under 
any separate agreement entered into under this Compact, as amended, or 
otherwise under U.S. law, all Federal domestic programs extended to or 
operating in the Republic of the Marshall Islands shall be subject to 
all applicable criteria, standards, reporting requirements, auditing 
procedures, and other rules and regulations applicable to such programs 
and services when operating in the United States.
  (e) The Government of the United States shall make available to the 
Republic of the Marshall Islands alternate energy development projects, 
studies, and conservation measures to the extent provided for the 
Freely Associated States in the laws of the United States.
Section 222
  The Government of the United States and the Government of the 
Republic of the Marshall Islands may agree from time to time to extend 
to the Republic of the Marshall Islands additional United States grant 
assistance, services and programs, as provided under the laws of the 
United States. Unless inconsistent with such laws, or otherwise 
specifically precluded by the Government of the United States at the 
time such additional grant assistance, services, or programs are 
extended, the Federal Programs and Services Agreement shall apply to 
any such assistance, services or programs.
Section 223
  The Government of the Republic of the Marshall Islands shall make 
available to the Government of the United States at no cost such land 
as may be necessary for the operations of the services and programs 
provided pursuant to this Article, and such facilities as are provided 
by the Government of the Republic of the Marshall Islands at no cost to 
the Government of the United States as of the effective date of this 
Compact, as amended, or as may be mutually agreed thereafter.
Section 224
  The Government of the Republic of the Marshall Islands may request, 
from the time to time, technical assistance from the Federal agencies 
and institutions of the Government of the United States, which are 
authorized to grant such technical assistance in accordance with its 
laws. If technical assistance is granted pursuant to such a request, 
the Government of the United States shall provide the technical 
assistance in a manner which gives priority consideration to the 
Republic of the Marshall Islands over other recipients not a part of 
the United States, its territories or possessions, and equivalent 
consideration to the Republic of the Marshall Islands with respect to 
other states in Free Association with the United States. Such 
assistance shall be made available on a reimbursable or non-
reimbursable basis to the extent provided by United States law.

                              Article III

                       Administrative Provisions

Section 231
  The specific nature, extent and contractual arrangements of the 
services and programs provided for in section 221 of this Compact, as 
amended, as well as the legal status of agencies of the Government of 
the United States, their civilian employees and contractors, and the 
dependents of such personnel while present in the Republic of the 
Marshall Islands, and other arrangements in connection with the 
assistance, services, or programs furnished by the Government of the 
United States, are set forth in a Federal Programs and Services 
Agreement which shall come into effect simultaneously with this 
Compact, as amended.
Section 232
  The Government of the United States, in consultation with the 
Government of the Republic of the Marshall Islands, shall determine and 
implement procedures for the periodic audit of all grants and other 
assistance made under Article I of this Title and of all funds expended 
for the services and programs provided under Article II of this Title. 
Further, in accordance with the Fiscal Procedures Agreement described 
in subsection (a) of section 211, the Comptroller General of the United 
States shall have such powers and authorities as described in sections 
103(m) and 110(c) of Public Law 99-239, 99 Stat. 1777-78, and 99 Stat. 
1799 (January 14, 1986).
Section 233
  Approval of this Compact, as amended, by the Government of the United 
States, in accordance with its constitutional processes, shall 
constitute a pledge by the United States that the sums and amounts 
specified as grants in section 211 of this Compact, as amended, shall 
be appropriated and paid to the Republic of the Marshall Islands for 
such period as those provisions of this Compact, as amended, remain in 
force, provided that the Republic of the Marshall Islands complies with 
the terms and conditions of this Title and related subsidiary 
agreements.
Section 234
  The Government of the Republic of the Marshall Islands pledges to 
cooperate with, permit, and assist if reasonably requested, designated 
and authorized representatives of the Government of the United States 
charged with investigating whether Compact funds, or any other 
assistance authorized under this Compact, as amended, have, or are 
being, used for purposes other than those set forth in this Compact, as 
amended, or its subsidiary agreements. In carrying out this 
investigative authority, such United States Government representatives 
may request that the Government of the Republic of the Marshall Islands 
subpoena documents and records and compel testimony in accordance with 
the laws and Constitution of the Republic of the Marshall Islands. Such 
assistance by the Government of the Republic of the Marshall Islands to 
the Government of the United States shall not be unreasonably withheld. 
The obligation of the Government of the Marshall Islands to fulfill its 
pledge herein is a condition to its receiving payment of such funds or 
other assistance authorized under this Compact, as amended. The 
Government of the United States shall pay any reasonable costs for 
extraordinary services executed by the Government of the Marshall 
Islands in carrying out the provisions of this section.

                               Article IV

                                 Trade

Section 241
  The Republic of the Marshall Islands is not included in the customs 
territory of the United States.
Section 242
  The President shall proclaim the following tariff treatment for 
articles imported from the Republic of the Marshall Islands which shall 
apply during the period of effectiveness of this title:
          (a) Unless otherwise excluded, articles imported from the 
        Republic of the Marshall Islands, subject to the limitations 
        imposed under section 503(b) of title V of the Trade Act of 
        1974 (19 U.S.C. 2463(b)), shall be exempt from duty.
          (b) Only tuna in airtight containers provided for in heading 
        1604.14.22 of the Harmonized Tariff Schedule of the United 
        States that is imported from the Republic of the Marshall 
        Islands and the Federated States of Micronesia during any 
        calendar year not to exceed 10 percent of apparent United 
        States consumption of tuna in airtight containers during the 
        immediately preceding calendar year, as reported by the 
        National Marine Fisheries Service, shall be exempt from duty; 
        but the quantity of tuna given duty-free treatment under this 
        paragraph for any calendar year shall be counted against the 
        aggregated quantity of tuna in airtight containers that is 
        dutiable under rate column numbered 1 of such heading 
        1604.14.22 for that calendar year.
          (c) The duty-free treatment provided under subsection (a) 
        shall not apply to:
                  (1) watches, clocks, and timing apparatus provided 
                for in Chapter 91, excluding heading 9113, of the 
                Harmonized Tariff Schedule of the United States;
                  (2) buttons (whether finished or not finished) 
                provided for in items 9606.21.40 and 9606.29.20 of such 
                Schedule;
                  (3) textile and apparel articles which are subject to 
                textile agreements; and
                  (4) footwear, handbags, luggage, flat goods, work 
                gloves, and leather wearing apparel which were not 
                eligible articles for purposes of title V of the Trade 
                Act of 1974 (19 U.S.C. 2461, et seq.) on April 1, 1984.
          (d) If the cost or value of materials produced in the customs 
        territory of the United States is included with respect to an 
        eligible article which is a product of the Republic of the 
        Marshall Islands, an amount not to exceed 15 percent of the 
        appraised value of the article at the time it is entered that 
        is attributable to such United States cost or value may be 
        applied for duty assessment purposes toward determining the 
        percentage referred to in section 503(a)(2) of title V of the 
        Trade Act of 1974.
Section 243
  Articles imported from the Republic of the Marshall Islands which are 
not exempt from duty under subsections (a), (b), (c), and
  (d) of section 242 shall be subject to the rates of duty set forth in 
column numbered 1-general of the Harmonized Tariff Schedule of the 
United States (HTSUS).
Section 244
  (a) All products of the United States imported into the Republic of 
the Marshall Islands shall receive treatment no less favorable than 
that accorded like products of any foreign country with respect to 
customs duties or charges of a similar nature and with respect to laws 
and regulations relating to importation, exportation, taxation, sale, 
distribution, storage or use.
  (b) The provisions of subsection (a) shall not apply to advantages 
accorded by the Republic of the Marshall Islands by virtue of their 
full membership in the Pacific Island Countries Trade Agreement 
(PICTA), done on August, 18, 2001, to those governments listed in 
Article 26 of PICTA, as of the date the Compact, as amended, is signed.
  (c) Prior to entering into consultations on, or concluding, a free 
trade agreement with governments not listed in Article 26 of PICTA, the 
Republic of the Marshall Islands shall consult with the United States 
regarding whether or how subsection (a) of section 244 shall be 
applied.

                               Article V

                          Finance and Taxation

Section 251
  The currency of the United States is the official circulating legal 
tender of the Republic of the Marshall Islands. Should the Government 
of the Republic of the Marshall Islands act to institute another 
currency, the terms of an appropriate currency transitional period 
shall be as agreed with the Government of the United States.
Section 252
  The Government of the Republic of the Marshall Islands may, with 
respect to United States persons, tax income derived from sources 
within its respective jurisdiction, property situated therein, 
including transfers of such property by gift or at death, and products 
consumed therein, in such manner as the Government of the Republic of 
the Marshall Islands deems appropriate. The determination of the source 
of any income, or the situs of any property, shall for purposes of this 
Compact, as amended, be made according to the United States Internal 
Revenue Code.
Section 253
  A citizen of the Republic of the Marshall Islands, domiciled therein, 
shall be exempt from estate, gift, and generation-skipping transfer 
taxes imposed by the Government of the United States, provided that 
such citizen of the Republic of the Marshall Islands is neither a 
citizen nor a resident of the United States.
Section 254
  (a) In determining any income tax imposed by the Government of the 
Republic of the Marshall Islands, the Government of the Republic of the 
Marshall Islands shall have authority to impose tax upon income derived 
by a resident of the Republic of the Marshall Islands from sources 
without the Republic of the Marshall Islands, in the same manner and to 
the same extent as the Government of the Republic of the Marshall 
Islands imposes tax upon income derived from within its own 
jurisdiction. If the Government of the Republic of the Marshall Islands 
exercises such authority as provided in this subsection, any individual 
resident of the Republic of the Marshall Islands who is subject to tax 
by the Government of the United States on income which is also taxed by 
the Government of the Republic of the Marshall Islands shall be 
relieved of liability to the Government of the United States for the 
tax which, but for this subsection, would otherwise be imposed by the 
Government of the United States on such income. However, the relief 
from liability to the United States Government referred to in the 
preceding sentence means only relief in the form of the foreign tax 
credit (or deduction in lieu thereof) available with respect to the 
income taxes of a possession of the United States, and relief in the 
form of the exclusion under section 911 of the Internal Revenue Code of 
1986. For purposes of this section, the term ``resident of the Republic 
of the Marshall Islands'' shall be deemed to include any person who was 
physically present in the Republic of the Marshall Islands for a period 
of 183 or more days during any taxable year.
  (b) If the Government of the Republic of the Marshall Islands 
subjects income to taxation substantially similar to that which was 
imposed by the Trust Territory Code in effect on January 1, 1980, such 
Government shall be deemed to have exercised the authority described in 
section 254(a).
Section 255
  For purposes of section 274(h)(3)(A) of the U.S. Internal Revenue 
Code of 1986, the term ``North American Area'' shall include the 
Republic of the Marshall Islands.

                              TITLE THREE

                     SECURITY AND DEFENSE RELATIONS

                               Article I

                      Authority and Responsibility

Section 311
  (a) The Government of the United States has full authority and 
responsibility for security and defense matters in or relating to the 
Republic of the Marshall Islands.
  (b) This authority and responsibility includes:
          (1) the obligation to defend the Republic of the Marshall 
        Islands and its people from attack or threats thereof as the 
        United States and its citizens are defended;
          (2) the option to foreclose access to or use of the Republic 
        of the Marshall Islands by military personnel or for the 
        military purposes of any third country; and
          (3) the option to establish and use military areas and 
        facilities in the Republic of the Marshall Islands, subject to 
        the terms of the separate agreements referred to in sections 
        321 and 323.
  (c) The Government of the United States confirms that it shall act in 
accordance with the principles of international law and the Charter of 
the United Nations in the exercise of this authority and 
responsibility.
Section 312
  Subject to the terms of any agreements negotiated in accordance with 
sections 321 and 323, the Government of the United States may conduct 
within the lands, waters and airspace of the Republic of the Marshall 
Islands the activities and operations necessary for the exercise of its 
authority and responsibility under this Title.
Section 313
  (a) The Government of the Republic of the Marshall Islands shall 
refrain from actions that the Government of the United States 
determines, after appropriate consultation with that Government, to be 
incompatible with its authority and responsibility for security and 
defense matters in or relating to the Republic of the Marshall Islands.
  (b) The consultations referred to in this section shall be conducted 
expeditiously at senior levels of the two Governments, and the 
subsequent determination by the Government of the United States 
referred to in this section shall be made only at senior interagency 
levels of the Government of the United States.
  (c) The Government of the Republic of the Marshall Islands shall be 
afforded, on an expeditious basis, an opportunity to raise its concerns 
with the United States Secretary of State personally and the United 
States Secretary of Defense personally regarding any determination made 
in accordance with this section.
Section 314
  (a) Unless otherwise agreed, the Government of the United States 
shall not, in the Republic of the Marshall Islands:
          (1) test by detonation or dispose of any nuclear weapon, nor 
        test, dispose of, or discharge any toxic chemical or biological 
        weapon; or
          (2) test, dispose of, or discharge any other radioactive, 
        toxic chemical or biological materials in an amount or manner 
        that would be hazardous to public health or safety.
  (b) Unless otherwise agreed, other than for transit or overflight 
purposes or during time of a national emergency declared by the 
President of the United States, a state of war declared by the Congress 
of the United States or as necessary to defend against an actual or 
impending armed attack on the United States, the Republic of the 
Marshall Islands or the Federated States of Micronesia, the Government 
of the United States shall not store in the Republic of the Marshall 
Islands or the Federated States of Micronesia any toxic chemical 
weapon, nor any radioactive materials nor any toxic chemical materials 
intended for weapons use.
  (c) Radioactive, toxic chemical, or biological materials not intended 
for weapons use shall not be affected by section 314(b).
  (d) No material or substance referred to in this section shall be 
stored in the Republic of the Marshall Islands except in an amount and 
manner which would not be hazardous to public health or safety. In 
determining what shall be an amount or manner which would be hazardous 
to public health or safety under this section, the Government of the 
United States shall comply with any applicable mutual agreement, 
international guidelines accepted by the Government of the United 
States, and the laws of the United States and their implementing 
regulations.
  (e) Any exercise of the exemption authority set forth in section 
161(e) shall have no effect on the obligations of the Government of the 
United States under this section or on the application of this 
subsection.
  (f) The provisions of this section shall apply in the areas in which 
the Government of the Republic of the Marshall Islands exercises 
jurisdiction over the living resources of the seabed, subsoil or water 
column adjacent to its coasts.
Section 315
  The Government of the United States may invite members of the armed 
forces of other countries to use military areas and facilities in the 
Republic of the Marshall Islands, in conjunction with and under the 
control of United States Armed Forces. Use by units of the armed forces 
of other countries of such military areas and facilities, other than 
for transit and overflight purposes, shall be subject to consultation 
with and, in the case of major units, approval of the Government of the 
Republic of the Marshall Islands.
Section 316
  The authority and responsibility of the Government of the United 
States under this Title may not be transferred or otherwise assigned.

                               Article II

                Defense Facilities and Operating Rights

Section 321
  (a) Specific arrangements for the establishment and use by the 
Government of the United States of military areas and facilities in the 
Republic of the Marshall Islands are set forth in separate agreements, 
which shall remain in effect in accordance with the terms of such 
agreements.
  (b) If, in the exercise of its authority and responsibility under 
this Title, the Government of the United States requires the use of 
areas within the Republic of the Marshall Islands in addition to those 
for which specific arrangements are concluded pursuant to section 
321(a), it may request the Government of the Republic of the Marshall 
Islands to satisfy those requirements through leases or other 
arrangements. The Government of the Republic of the Marshall Islands 
shall sympathetically consider any such request and shall establish 
suitable procedures to discuss it with and provide a prompt response to 
the Government of the United States.
  (c) The Government of the United States recognizes and respects the 
scarcity and special importance of land in the Republic of the Marshall 
Islands. In making any requests pursuant to section 321(b), the 
Government of the United States shall follow the policy of requesting 
the minimum area necessary to accomplish the required security and 
defense purpose, of requesting only the minimum interest in real 
property necessary to support such purpose, and of requesting first to 
satisfy its requirement through public real property, where available, 
rather than through private real property.
Section 322
  The Government of the United States shall provide and maintain fixed 
and floating aids to navigation in the Republic of the Marshall Islands 
at least to the extent necessary for the exercise of its authority and 
responsibility under this Title.
Section 323
  The military operating rights of the Government of the United States 
and the legal status and contractual arrangements of the United States 
Armed Forces, their members, and associated civilians, while present in 
the Republic of the Marshall Islands are set forth in separate 
agreements, which shall remain in effect in accordance with the terms 
of such agreements.

                              Article III

         Defense Treaties and International Security Agreements

Section 331
  Subject to the terms of this Compact, as amended, and its related 
agreements, the Government of the United States, exclusively, has 
assumed and enjoys, as to the Republic of the Marshall Islands, all 
obligations, responsibilities, rights and benefits of:
          (a) Any defense treaty or other international security 
        agreement applied by the Government of the United States as 
        Administering Authority of the Trust Territory of the Pacific 
        Islands as of October 20, 1986.
          (b) Any defense treaty or other international security 
        agreement to which the Government of the United States is or 
        may become a party which it determines to be applicable in the 
        Republic of the Marshall Islands. Such a determination by the 
        Government of the United States shall be preceded by 
        appropriate consultation with the Government of the Republic of 
        the Marshall Islands.

                               Article IV

              Service in Armed Forces of the United States

Section 341
  Any person entitled to the privileges set forth in Section 141 (with 
the exception of any person described in section 141(a)(5) who is not a 
citizen of the Republic of the Marshall Islands) shall be eligible to 
volunteer for service in the Armed Forces of the United States, but 
shall not be subject to involuntary induction into military service of 
the United States as long as such person has resided in the United 
States for a period of less than one year, provided that no time shall 
count towards this one year while a person admitted to the United 
States under the Compact, or the Compact, as amended, is engaged in 
full-time study in the United States. Any person described in section 
141(a)(5) who is not a citizen of the Republic of the Marshall Islands 
shall be subject to United States laws relating to selective service.
Section 342
  The Government of the United States shall have enrolled, at any one 
time, at least one qualified student from the Republic of the Marshall 
Islands, as may be nominated by the Government of the Republic of the 
Marshall Islands, in each of:
          (a) The United States Coast Guard Academy pursuant to 14 
        U.S.C. 195.
          (b) The United States Merchant Marine Academy pursuant to 46 
        U.S.C. 1295(b)(6), provided that the provisions of 46 U.S.C. 
        1295b(b)(6)(C) shall not apply to the enrollment of students 
        pursuant to section 342(b) of this Compact, as amended.

                               Article V

                           General Provisions

Section 351
  (a) The Government of the United States and the Government of the 
Republic of the Marshall Islands shall continue to maintain a Joint 
Committee empowered to consider disputes arising under the 
implementation of this Title and its related agreements.
  (b) The membership of the Joint Committee shall comprise selected 
senior officials of the two Governments. The senior United States 
military commander in the Pacific area shall be the senior United 
States member of the Joint Committee. For the meetings of the Joint 
Committee, each of the two Governments may designate additional or 
alternate representatives as appropriate for the subject matter under 
consideration.
  (c) Unless otherwise mutually agreed, the Joint Committee shall meet 
annually at a time and place to be designated, after appropriate 
consultation, by the Government of the United States. The Joint 
Committee also shall meet promptly upon request of either of its 
members. The Joint Committee shall follow such procedures, including 
the establishment of functional subcommittees, as the members may from 
time to time agree. Upon notification by the Government of the United 
States, the Joint Committee of the United States and the Republic of 
the Marshall Islands shall meet promptly in a combined session with the 
Joint Committee established and maintained by the Government of the 
United States and the Government of the Federated States of Micronesia 
to consider matters within the jurisdiction of the two Joint 
Committees.
  (d) Unresolved issues in the Joint Committee shall be referred to the 
Governments for resolution, and the Government of the Republic of the 
Marshall Islands shall be afforded, on an expeditious basis, an 
opportunity to raise its concerns with the United States Secretary of 
Defense personally regarding any unresolved issue which threatens its 
continued association with the Government of the United States.
Section 352
  In the exercise of its authority and responsibility under Title 
Three, the Government of the United States shall accord due respect to 
the authority and responsibility of the Government of the Republic of 
the Marshall Islands under Titles One, Two and Four and to the 
responsibility of the Government of the Republic of the Marshall 
Islands to assure the well-being of its people.
Section 353
  (a) The Government of the United States shall not include the 
Government of the Republic of the Marshall Islands as a named party to 
a formal declaration of war, without that Government's consent.
  (b) Absent such consent, this Compact, as amended, is without 
prejudice, on the ground of belligerence or the existence of a state of 
war, to any claims for damages which are advanced by the citizens, 
nationals or Government of the Republic of the Marshall Islands, which 
arise out of armed conflict subsequent to October 21, 1986, and which 
are:
          (5) petitions to the Government of the United States for 
        redress; or
          (6) claims in any manner against the government, citizens, 
        nationals or entities of any third country.
  (c) Petitions under section 353(b)(1) shall be treated as if they 
were made by citizens of the United States.
Section 354
  (a) The Government of the United States and the Government of the 
Republic of the Marshall Islands are jointly committed to continue 
their security and defense relations, as set forth in this Title. 
Accordingly, it is the intention of the two countries that the 
provisions of this Title shall remain binding as long as this Compact, 
as amended, remains in effect, and thereafter as mutually agreed, 
unless earlier terminated by mutual agreement pursuant to section 441, 
or amended pursuant to Article III of Title Four. If at any time the 
Government of the United States, or the Government of the Republic of 
the Marshall Islands, acting unilaterally, terminates this Title, such 
unilateral termination shall be considered to be termination of the 
entire Compact, as amended, in which case the provisions of section 442 
and 452 (in the case of termination by the Government of the United 
States) or sections 443 and 453 (in the case of termination by the 
Government of the Republic of the Marshall Islands), with the exception 
of paragraph (3) of subsection (a) of section 452 or paragraph (3) of 
subsection (a) of section 453, as the case may be, shall apply.
  (b) The Government of the United States recognizes, in view of the 
special relationship between the Government of the United States and 
the Government of the Republic of the Marshall Islands, and in view of 
the existence of the separate agreement regarding mutual security 
concluded with the Government of the Republic of the Marshall Islands 
pursuant to sections 321 and 323, that, even if this Title should 
terminate, any attack on the Republic of the Marshall Islands during 
the period in which such separate agreement is in effect, would 
constitute a threat to the peace and security of the entire region and 
a danger to the United States. In the event of such an attack, the 
Government of the United States would take action to meet the danger to 
the United States and to the Republic of the Marshall Islands in 
accordance with its constitutional processes.
  (c) As reflected in Article 21(1)(b) of the Trust Fund Agreement, the 
Government of the United States and the Government of the Republic of 
the Marshall Islands further recognize, in view of the special 
relationship between their countries, that even if this Title should 
terminate, the Government of Republic of the Marshall Islands shall 
refrain from actions which the Government of the United States 
determines, after appropriate consultation with that Government, to be 
incompatible with its authority and responsibility for security and 
defense matters in or relating to the Republic of the Marshall Islands 
or the Federated States of Micronesia.

                               TITLE FOUR

                           GENERAL PROVISIONS

                               Article I

                      Approval and Effective Date

Section 411
  Pursuant to section 432 of the Compact and subject to subsection (e) 
of section 461 of the Compact, as amended, the Compact, as amended, 
shall come into effect upon mutual agreement between the Government of 
the United States and the Government of the Republic of the Marshall 
Islands subsequent to completion of the following:
          (a) Approval by the Government of the Republic of the 
        Marshall Islands in accordance with its constitutional 
        processes.
          (b) Approval by the Government of the United States in 
        accordance with its constitutional processes.

                               Article II

                   Conference and Dispute Resolution

Section 421
  The Government of the United States shall confer promptly at the 
request of the Government of the Republic of the Marshall Islands and 
that Government shall confer promptly at the request of the Government 
of the United States on matters relating to the provisions of this 
Compact, as amended, or of its related agreements.
Section 422
  In the event the Government of the United States or the Government of 
the Republic of the Marshall Islands, after conferring pursuant to 
section 421, determines that there is a dispute and gives written 
notice thereof, the two Governments shall make a good faith effort to 
resolve the dispute between themselves.
Section 423
  If a dispute between the Government of the United States and the 
Government of the Republic of the Marshall Islands cannot be resolved 
within 90 days of written notification in the manner provided in 
section 422, either party to the dispute may refer it to arbitration in 
accordance with section 424.
Section 424
  Should a dispute be referred to arbitration as provided for in 
section 423, an Arbitration Board shall be established for the purpose 
of hearing the dispute and rendering a decision which shall be binding 
upon the two parties to the dispute unless the two parties mutually 
agree that the decision shall be advisory. Arbitration shall occur 
according to the following terms:
          (a) An Arbitration Board shall consist of a Chairman and two 
        other members, each of whom shall be a citizen of a party to 
        the dispute. Each of the two Governments that is a party to the 
        dispute shall appoint one member to the Arbitration Board. If 
        either party to the dispute does not fulfill the appointment 
        requirements of this section within 30 days of referral of the 
        dispute to arbitration pursuant to section 423, its member on 
        the Arbitration Board shall be selected from its own standing 
        list by the other party to the dispute. Each Government shall 
        maintain a standing list of 10 candidates. The parties to the 
        dispute shall jointly appoint a Chairman within 15 days after 
        selection of the other members of the Arbitration Board. 
        Failing agreement on a Chairman, the Chairman shall be chosen 
        by lot from the standing lists of the parties to the dispute 
        within 5 days after such failure.
          (b) Unless otherwise provided in this Compact, as amended, or 
        its related agreements, the Arbitration Board shall have 
        jurisdiction to hear and render its final determination on all 
        disputes arising exclusively under Articles I, II, III, IV and 
        V of TitleOne, Title Two, Title Four, and their related 
agreements.
          (c) Each member of the Arbitration Board shall have one vote. 
        Each decision of the Arbitration Board shall be reached by 
        majority vote.
          (d) In determining any legal issue, the Arbitration Board may 
        have reference to international law and, in such reference, 
        shall apply as guidelines the provisions set forth in Article 
        38 of the Statute of the International Court of Justice.
          (e) The Arbitration Board shall adopt such rules for its 
        proceedings as it may deem appropriate and necessary, but such 
        rules shall not contravene the provisions of this Compact, as 
        amended. Unless the parties provide otherwise by mutual 
        agreement, the Arbitration Board shall endeavor to render its 
        decision within 30 days after the conclusion of arguments. The 
        Arbitration Board shall make findings of fact and conclusions 
        of law and its members may issue dissenting or individual 
        opinions. Except as may be otherwise decided by the Arbitration 
        Board, one-half of all costs of the arbitration shall be borne 
        by the Government of the United States and the remainder shall 
        be borne by the Government of the Republic of the Marshall 
        Islands.

                              Article III

                               Amendment

Section 431
  The provisions of this Compact, as amended, may be further amended by 
mutual agreement of the Government of the United States and the 
Government of the Republic of the Marshall Islands, in accordance with 
their respective constitutional processes.

                               Article IV

                              Termination

Section 441
  This Compact, as amended, may be terminated by mutual agreement of 
the Government of the Republic of the Marshall Islands and the 
Government of the United States, in accordance with their respective 
constitutional processes. Such mutual termination of this Compact, as 
amended, shall be without prejudice to the continued application of 
section 451 of this Compact, as amended, and the provisions of the 
Compact, as amended, set forth therein.
Section 442
  Subject to section 452, this Compact, as amended, may be terminated 
by the Government of the United States in accordance with its 
constitutional processes. Such termination shall be effective on the 
date specified in the notice of termination by the Government of the 
United States but not earlier than six months following delivery of 
such notice. The time specified in the notice of termination may be 
extended. Such termination of this Compact, as amended, shall be 
without prejudice to the continued application of section 452 of this 
Compact, as amended, and the provisions of the Compact, as amended, set 
forth therein.
Section 443
  This Compact, as amended, shall be terminated by the Government of 
the Republic of the Marshall Islands, pursuant to its constitutional 
processes, subject to section 453 if the people represented by that 
Government vote in a plebiscite to terminate the Compact. The 
Government of the Republic of the Marshall Islands shall notify the 
Government of the United States of its intention to call such a 
plebiscite, which shall take place not earlier than three months after 
delivery of such notice. The plebiscite shall be administered by the 
Government of the Republic of the Marshall Islands in accordance with 
its constitutional and legislative processes, but the Government of the 
United States may send its own observers and invite observers from a 
mutually agreed party. If a majority of the valid ballots cast in the 
plebiscite favors termination, the Government of the Republic of the 
Marshall Islands shall, upon certification of the results of the 
plebiscite, give notice of termination to the Government of the United 
States, such termination to be effective on the date specified in such 
notice but not earlier than three months following the date of delivery 
of such notice. The time specified in the notice of termination may be 
extended.

                               Article V

                             Survivability

Section 451
  (a) Should termination occur pursuant to section 441, economic and 
other assistance by the Government of the United States shall continue 
only if and as mutually agreed by the Governments of the United States 
and the Republic of the Marshall Islands, and in accordance with the 
countries' respective constitutional processes.
  (b) In view of the special relationship of the United States and the 
Republic of the Marshall Islands, as reflected in subsections (b) and 
(c) of section 354 of this Compact, as amended, and the separate 
agreement entered into consistent with those subsections, if 
termination occurs pursuant to section 441 prior to the twentieth 
anniversary of the effective date of this Compact, as amended, the 
United States shall continue to make contributions to the Trust Fund 
described in section 216 of this Compact, as amended.
  (c) In view of the special relationship of the United States and the 
Republic of the Marshall Islands described in subsection (b) of this 
section, if termination occurs pursuant to section 441 following the 
twentieth anniversary of the effective date of this Compact, as 
amended, the Republic of the Marshall Islands shall be entitled to 
receive proceeds from the Trust Fund described in section 216 of this 
Compact, as amended, in the manner described in those provisions and 
the Trust Fund Agreement.
Section 452
  (a) Should termination occur pursuant to section 442 prior to the 
twentieth anniversary of the effective date of this Compact, as 
amended, the following provisions of this amended Compact shall remain 
in full force and effect until the twentieth anniversary of the 
effective date of this Compact, as amended, and thereafter as mutually 
agreed:
          (1) Article VI and sections 172, 173, 176 and 177 of Title 
        One;
          (2) Article One and sections 232 and 234 of Title Two;
          (3) Title Three; and
          (4) Articles II, III, V and VI of Title Four.
  (b) Should termination occur pursuant to section 442 before the 
twentieth anniversary of the effective date of this Compact, as 
amended:
          (1) Except as provided in paragraph (2) of this subsection 
        and subsection (c) of this section, economic and other 
        assistance by the United States shall continue only if and as 
        mutually agreed by the Governments of the United States and the 
        Republic of the Marshall Islands.
          (2) In view of the special relationship of the United States 
        and the Republic of the Marshall Islands, as reflected in 
        subsections (b) and (c) of section 354 of this Compact, as 
        amended, and the separate agreement regarding mutual security, 
        and the Trust Fund Agreement, the United States shall continue 
        to make contributions to the Trust Fund described in section 
        216 of this Compact, as amended, in the manner described in the 
        Trust Fund Agreement.
  (c) In view of the special relationship of the United States and the 
Republic of the Marshall Islands, as reflected in subsections 354(b) 
and (c) of this Compact, as amended, and the separate agreement 
regarding mutual security, and the Trust Fund Agreement, if termination 
occurs pursuant to section 442 following the twentieth anniversary of 
the effective date of this Compact, as amended, the Republic of the 
Marshall Islands shall continue to be eligible to receive proceeds from 
the Trust Fund described in section 216 of this Compact, as amended, in 
the manner described in those provisions and the Trust Fund Agreement.
Section 453
  (a) Should termination occur pursuant to section 443 prior to the 
twentieth anniversary of the effective date of this Compact, as 
amended, the following provisions of this Compact, as amended, shall 
remain in full force and effect until the twentieth anniversary of the 
effective date of this Compact, as amended, and thereafter as mutually 
agreed:
          (1) Article VI and sections 172, 173, 176 and 177 of Title 
        One;
          (2) Sections 232 and 234 of Title Two;
          (3) Title Three; and
          (4) Articles II, III, V and VI of Title Four.
  (b) Upon receipt of notice of termination pursuant to section 443, 
the Government of the United States and the Government of the Republic 
of the Marshall Islands shall promptly consult with regard to their 
future relationship. Except as provided in subsections (c) and (d) of 
this section, these consultations shall determine the level of economic 
and other assistance, if any, which the Government of the United States 
shall provide to the Government of the Republic of the Marshall Islands 
for the period ending on the twentieth anniversary of the effective 
date of this Compact, as amended, and for any period thereafter, if 
mutually agreed.
  (c) In view of the special relationship of the United States and the 
Republic of the Marshall Islands, as reflected in subsections 354(b) 
and (c) of this Compact, as amended, and the separate agreement 
regarding mutual security, and the Trust Fund Agreement, if termination 
occurs pursuant to section 443 prior to the twentieth anniversary of 
the effective date of this Compact, as amended, the United States shall 
continue to make contributions to the Trust Fund described in section 
216 of this Compact, as amended.
  (d) In view of the special relationship of the United States and the 
Republic of the Marshall Islands, as reflected in subsections 354(b) 
and (c) of this Compact, as amended, and the separate agreement 
regarding mutual security, and the Trust Fund Agreement, if termination 
occurs pursuant to section 443 following the twentieth anniversary of 
the effective date of this Compact, as amended, the Republic of the 
Marshall Islands shall continue to be eligible to receive proceeds from 
the Trust Fund described in section 216 of this Compact, as amended, in 
the manner described in those provisions and the Trust Fund Agreement.
Section 454
  Notwithstanding any other provision of this Compact, as amended:
          (a) The Government of the United States reaffirms its 
        continuing interest in promoting the economic advancement and 
        budgetary self-reliance of the people of the Republic of the 
        Marshall Islands.
          (b) The separate agreements referred to in Article II of 
        Title Three shall remain in effect in accordance with their 
        terms.

                               Article VI

                          Definition of Terms

Section 461
  For the purpose of this Compact, as amended, only, and without 
prejudice to the views of the Government of the United States or the 
Government of the Republic of the Marshall Islands as to the nature and 
extent of the jurisdiction of either of them under international law, 
the following terms shall have the following meanings:
          (a) ``Trust Territory of the Pacific Islands'' means the area 
        established in the Trusteeship Agreement consisting of the 
        former administrative districts of Kosrae, Yap, Ponape, the 
        Marshall Islands and Truk as described in Title One, Trust 
        Territory Code, section 1, in force on January 1,1979. This 
term does not include the area of Palau or the Northern Mariana 
Islands.
          (b) ``Trusteeship Agreement'' means the agreement setting 
        forth the terms of trusteeship for the Trust Territory of the 
        Pacific Islands, approved by the Security Council of the United 
        Nations April 2, 1947, and by the United States July 18, 1947, 
        entered into force July 18, 1947, 61 Stat. 3301, T.I.A.S. 1665, 
        8 U.N.T.S. 189.
          (c) ``The Republic of the Marshall Islands'' and ``the 
        Federated States of Micronesia'' are used in a geographic sense 
        and include the land and water areas to the outer limits of the 
        territorial sea and the air space above such areas as now or 
        hereafter recognized by the Government of the United States.
          (d) ``Compact'' means the Compact of Free Association Between 
        the United States and the Federated States of Micronesia and 
        the Marshall Islands, that was approved by the United States 
        Congress in section 201 of Public Law 99-239 (Jan. 14, 1986) 
        and went into effect with respect to the Republic of the 
        Marshall Islands on October 21, 1986.
          (e) ``Compact, as amended'' means the Compact of Free 
        Association Between the United States and the Republic of the 
        Marshall Islands, as amended. The effective date of the 
        Compact, as amended, shall be on a date to be determined by the 
        President of the United States, and agreed to by the Government 
        of the Republic of the Marshall Islands, following formal 
        approval of the Compact, as amended, in accordance with section 
        411 of this Compact, as amended.
          (f) ``Government of the Republic of the Marshall Islands'' 
        means the Government established and organized by the 
        Constitution of the Republic of the Marshall Islands including 
        all the political subdivisions and entities comprising that 
        Government.
          (g) ``Government of the Federated States of Micronesia'' 
        means the Government established and organized by the 
        Constitution of the Federated States of Micronesia including 
        all the political subdivisions and entities comprising that 
        Government.
          (h) The following terms shall be defined consistent with the 
        1978 Edition of the Radio Regulations of the International 
        Telecommunications as follows:
                  (1) ``Radiocommunication'' means telecommunication by 
                means of radio waves.
                  (2) ``Station'' means one or more transmitters or 
                receivers or a combination of transmitters and 
                receivers, including the accessory equipment, necessary 
                at one location for carrying on a radiocommunication 
                service, or the radio astronomy service.
                  (3) ``Broadcasting Service'' means a 
                radiocommunication service in which the transmissions 
                are intended for direct reception by the general 
                public. This service may include sound transmissions, 
                television transmissions or other types of 
                transmission.
                  (4) ``Broadcasting Station'' means a station in the 
                broadcasting service.
                  (5) ``Assignment (of a radio frequency or radio 
                frequency channel)'' means an authorization given by an 
                administration for a radio station to use a radio 
                frequency or radio frequency channel under specified 
                conditions.
                  (6) ``Telecommunication'' means any transmission, 
                emission or reception of signs, signals, writings, 
                images and sounds or intelligence of any nature by 
                wire, radio, optical or other electromagnetic systems.
          (i) ``Military Areas and Facilities'' means those areas and 
        facilities in the Republic of the Marshall Islands reserved or 
        acquired by the Government of the Republic of the Marshall 
        Islands for use by the Government of the United States, as set 
        forth in the separate agreements referred to in section 321.
          (j) ``Tariff Schedules of the United States'' means the 
        Tariff Schedules of the United States as amended from time to 
        time and as promulgated pursuant to United States law and 
        includes the Tariff Schedules of the United States Annotated 
        (TSUSA), as amended.
          (k) ``Vienna Convention on Diplomatic Relations'' means the 
        Vienna Convention on Diplomatic Relations, done April 18, 1961, 
        23 U.S.T. 3227, T.I.A.S. 7502, 500 U.N.T.S. 95.
Section 462
  (a) The Government of the United States and the Government of the 
Republic of the Marshall Islands previously have concluded agreements, 
which shall remain in effect and shall survive in accordance with their 
terms, as follows:
          (1) Agreement Between the Government of the United States and 
        the Government of the Marshall Islands for the Implementation 
        of Section 177 of the Compact of Free Association;
          (2) Agreement Between the Government of the United States and 
        the Government of the Marshall Islands by Persons Displaced as 
        a Result of the United States Nuclear Testing Program in the 
        Marshall Islands;
          (3) Agreement Between the Government of the United States and 
        the Government of the Marshall Islands Regarding the 
        Resettlement of Enjebi Island;
          (4) Agreement Concluded Pursuant to Section 234 of the 
        Compact; and
          (5) Agreement Between the Government of the United States and 
        the Government of the Marshall Islands Regarding Mutual 
        Security Concluded Pursuant to Sections 321 and 323 of the 
        Compact of Free Association.
  (b) The Government of the United States and the Government of the 
Republic of the Marshall Islands shall conclude prior to the date of 
submission of this Compact to the legislatures of the two countries, 
the following related agreements which shall come into effect on the 
effective date of this Compact, as amended, and shall survive in 
accordance with their terms, as follows:
          (1) Federal Programs and Services Agreement Between the 
        Government of the United States of America and the Government 
        of the Republic of the Marshall Islands Concluded Pursuant to 
        Article IIIof Title One, Article II of Title Two (including 
Section 222), and Section 231 of the Compact of Free Association, as 
Amended, which include:
                  (i) Postal Services and Related Programs;
                  (ii) Weather Services and Related Programs;
                  (iii) Civil Aviation Safety Service and Related 
                Programs;
                  (iv) Civil Aviation Economic Services and Related 
                Programs;
                  (v) United States Disaster Preparedness and Response 
                Services and Related Programs; and
                  (vi) Telecommunications Services and Related 
                Programs.
          (2) Agreement Between the Government of the United States of 
        America and the Government of the Republic of the Marshall 
        Islands on Extradition, Mutual Assistance in Law Enforcement 
        Matters and Penal Sanctions Concluded Pursuant to Section 175 
        (a) of the Compact of Free Association, as Amended;
          (3) Agreement Between the Government of the United States of 
        America and the Government of the Republic of the Marshall 
        Islands on Labor Recruitment Concluded Pursuant to Section 175 
        (b) of the Compact of Free Association, as Amended;
          (4) Agreement Concerning Procedures for the Implementation of 
        United States Economic Assistance Provided in the Compact, as 
        Amended, of Free Association Between the Government of the 
        United States of America and the Government of the Republic of 
        the Marshall Islands;
          (5) Agreement Between the Government of the United States of 
        America and the Government of the Republic of the Marshall 
        Islands Implementing Section 216 and Section 217 of the 
        Compact, as Amended, Regarding a Trust Fund;
          (6) Agreement Regarding the Military Use and Operating Rights 
        of the Government of the United States in the Republic of the 
        Marshall Islands Concluded Pursuant to Sections 321 and 323 of 
        the Compact of Free Association, as Amended; and,
          (7) Status of Forces Agreement Between the Government of the 
        United States of America and the Government of the Republic of 
        the Marshall Islands Concluded Pursuant to Section 323 of the 
        Compact of Free Association, as Amended.
Section 463
  (a) Except as set forth in subsection (b) of this section, any 
reference in this Compact, as amended, to a provision of the United 
States Code or the Statutes at Large of the United States constitutes 
the incorporation of the language of such provision into this Compact, 
as amended, as such provision was in force on the effective date of 
this Compact, as amended.
  (b) Any reference in Article IV and VI of Title One, and Sections 
174, 175, 178 and 342 to a provision of the United States Code or the 
Statutes at Large of the United States or to the Privacy Act, the 
Freedom of Information Act, the Administrative Procedure Act or the 
Immigration and Nationality Act constitutes the incorporation of the 
language of such provision into this Compact, as amended, as such 
provision was in force on the effective date of this Compact, as 
amended, or as it may be amended thereafter on a non-discriminatory 
basis according to the constitutional processes of the United States.

                              Article VII

                         Concluding Provisions

Section 471
  Both the Government of the United States and the Government of the 
Republic of the Marshall Islands shall take all necessary steps, of a 
general or particular character, to ensure, no later than the entry 
into force date of this Compact, as amended, the conformity of its 
laws, regulations and administrative procedures with the provisions of 
this Compact, as amended, or, in the case of subsection (d) of section 
141, as soon as reasonably possible thereafter.
Section 472
  This Compact, as amended, may be accepted, by signature or otherwise, 
by the Government of the United States and the Government of the 
Republic of the Marshall Islands.
  IN WITNESS WHEREOF, the undersigned, duly authorized, have signed 
this Compact of Free Association, as amended, which shall enter into 
force upon the exchange of diplomatic notes by which the Government of 
the United States of America and the Government of the Republic of the 
Marshall Islands inform each other about the fulfillment of their 
respective requirements for entry into force.
  DONE at Majuro, Republic of the Marshall Islands, in duplicate, this 
thirtieth (30) day of April, 2003, each text being equally authentic.

                          Purpose of the Bill

    The purpose of H.J. Res. 63 is to approve the ``Compact of 
Free Association, as amended between the Government of the 
United States of America and the Government of the Federated 
States of Micronesia,'' and the ``Compact of Free Association, 
as amended between the Government of the United States of 
America and the Government of the Republic of the Marshall 
Islands,'' and otherwise to amend Public Law 99-239, and to 
appropriate for the purposes of amended Public Law 99-239 for 
fiscal years ending on or before September 30, 2023, and for 
other purposes.

                  Background and Need for Legislation

    On June 27, 2003, the U.S. State Department and Department 
of the Interior sent to Congress the negotiated product that is 
to be considered as the reauthorization of the Compacts of Free 
Association (Compacts) with the Federated States of Micronesia 
(FSM) and the Republic of the Marshall Island (RMI). Title II 
of the current Compacts, implemented in Public Law 99-239, 
provides U.S. economic assistance in the forms of grants and 
program assistance, and is set to expire on September 30, 2003. 
The proposal submitted to Congress amends the current Compacts 
to provide for an additional 20 years of economic assistance to 
the RMI and FSM.
    Located in the Western Pacific Ocean, the RMI and the FSM 
were former districts of the U.S.-administered United Nations 
Trust Territory established in 1947. Their geographic location 
played an important strategic role in the wake of World War II 
and throughout the Cold War era. In addition, between 1946 
through 1958, atolls located within the Marshall Islands were 
used as sites for the U.S. nuclear testing program. A total of 
66 nuclear detonations occurred, including ``Castle Bravo,'' 
the largest U.S. nuclear test ever exploded.
    In 1986, the Marshall Islands and Micronesia became Freely 
Associated States (FAS) under Compacts of Free Association with 
the U.S. The Compacts fulfilled the U.S. obligation to U.N. 
mandated Trust Territories, ``to promote the development of the 
inhabitants of the trust territories toward self-government or 
independence as may be appropriate to the particular 
circumstances of the trust territory and its peoples, and the 
freely expressed wishes of the peoples concerned.''
    The Compacts, which are extremely similar to treaties, are 
the basis of the relationship between the U.S. and these 
countries. U.S. State Department officials have stated that 
agreement on continued U.S. economic assistance is important 
for the renewal of the Compact's defense provisions, and would 
provide a positive context for the exercise of U.S. defense 
rights and facilitate the advancement of U.S. interests.
    In general, the Compacts have four goals: (1) to continue 
economic assistance while encouraging self-reliance; (2) to 
continue our defense relationship, which includes a 50-year 
lease extension for access to Kwajalein (the U.S. Anti-
Ballistic Missile testing facility located in the RMI); (3) to 
strengthen immigration provisions; and (4) to provide mandatory 
impact assistance to affected U.S. jurisdictions in response to 
FAS migration. The Compacts as negotiated between the United 
States, the FSM, and the RMI follows a course that would 
preserve the existing defense and security relationship between 
the United States and each of these countries. The United 
States obligations to defend the islands and the right to deny 
military access to other nations continue indefinitely through 
a related agreement.
    The House Resources Committee shares jurisdiction with the 
House Committee on International Relations over Title II 
(economic development) of the Compacts. The purpose of Title II 
is to assist the Governments of the FSM and RMI in their 
efforts to advance economic self-sufficiency. The State 
Department's Office of Compact Negotiations has negotiated with 
the FSM and the RMI to extend both program and grant assistance 
to their countries until 2023. After such date, the 
Administration has proposed termination of the annual mandatory 
financial assistance. To partially offset this termination, the 
United States, in addition to extending program and grant 
assistance throughout the new Compact period, will also 
establish trust funds for each country to generate annual 
earnings beyond 2023. The initial contribution to each trust 
fund will be made by the RMI and the FSM. Thereafter, 
continuing annual U.S. contributions to the trust funds will be 
equal to the annual reduction in grant assistance to each 
country. Other important provisions in H.J. Res. 63 include 
changes to immigration standards and establishing joint 
economic management teams to promote economic growth in the FSM 
and RMI.

                            Committee Action

    H.J. Res. 63 was introduced on July 8, 2003, by Congressman 
James A. Leach (R-IA), by request. The bill was referred to the 
Committee on International Relations and additionally to the 
Committee on Resources. On July 10, 2003, the Full Committee 
held a hearing on the bill. On September 4, 2003, the Full 
Resources Committee met to consider the bill. Chairman Richard 
W. Pombo (R-CA) offered an amendment in the nature of a 
substitute that added and continued eligibility for crucial 
Federal Emergency Management Agency funding, increased 
``Compact impact'' funding, protected important education 
programs, and provided for stronger health care options for 
patients and providers, as well as other provisions. The 
amendment was adopted by voice vote. The bill, as amended, was 
then ordered favorably reported to the House of Representatives 
by voice vote.

                      Section-by-Section Analysis


                                PREAMBLE

    The Preamble has been updated to reflect that the Compact, 
as amended, now consists of two separate Compacts with the 
Republic of the Marshall Islands and the Federated States of 
Micronesia. As amended, it also provides for more historical 
context, stating what goals have been accomplished since the 
original Compact of Free Association.

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

Section 101. Approval of U.S.-FSM Compact of Free Association and U.S.-
        RMI Compact of Free Association

    Subsection (a) notes the existence of a separate Compact, 
as amended, between the United States and the Federated States 
of Micronesia.
    Subsection (b) notes the existence of a separate Compact, 
as amended, between the United States and the Republic of the 
Marshall Islands.
    Subsection (c) defines and updates terms of reference to 
reflect the existence of the two separate Compacts referred to 
above and to provide definitions for the terms ``subsidiary'' 
or ``separate agreements.''
    Subsection (d) requires that any changes or amendments to 
either of the two Compacts, or to certain subsidiary agreements 
(or portions), be approved through an Act of Congress.
    Subsection (e) states that the one trilateral subsidiary 
agreement that is not being amended (relating to the transfer 
of title of U.S. Government property situated in the former 
Trust Territory of the Pacific Islands) shall be deemed 
bilateral, reflecting the newly separate Compacts.
    Subsection (f) provides generally that (except for those 
agreements identified in section 101(d), which require an Act 
of Congress for modification) no changes to any subsidiary 
agreement may be made without prior notification and 
explanation to both Houses of Congress.

Section 102. Agreements with Federated States of Micronesia

    Subsection (a) provides generally for law enforcement 
technical and training assistance to the FSM.
    Subsection (b) provides the Comptroller General with 
authority to audit assistance provided by the United States to 
the FSM under the amended Compacts, and requires the FSM to 
cooperate with the Comptroller General in conducting such 
audits. As amended the subsection also ensures that all 
relevant audit documentation is preserved for a sufficient 
amount of time.

Section 103. Agreements with and other provisions related to the 
        Republic of the Marshall Islands

    Subsection (a) provides generally for technical and 
training assistance to the RMI in the area of law enforcement.
    Subsection (b) repeats the language from Public Law 99-239 
(regarding assurances that Bikini residents will have access to 
lands on Ejit Island until Bikini--the site of past U.S. 
nuclear tests--is restored and habitable), but adds a new 
paragraph noting that the United States and the RMI entered 
into an agreement in furtherance of paragraphs (1) through (3) 
of this subsection on July 21, 1986. The Committee also 
understands the relevance of the language that previous to the 
amendments stated that ``nothing in this subsection creates any 
rights or obligations beyond those provided for in the original 
enacted version of Public Law 99-239.''
    Subsection (c) as amended places emphasis on United States 
policy to ensure payments are made in accordance with the land 
use agreement from October 1982 on Kwajalein. The subsection 
also creates an escrow account where payments above the 
original land use agreement amount are held in an interest 
bearing account until a new land use agreement specifically 
amending the October 1982 agreement is signed.
    Subsection (d) repeats the language from Public Law 99-239 
regarding U.S. payment of nuclear claims compensation.
    Subsection (e) repeats the language from Public Law 99-239 
regarding compensation to Bikini, Enewetak, Rongelap, and Utrik 
atolls for nuclear test effects.
    Subsection (f) repeats Congress's intent that Section 177 
of the original Compact and the separate agreement entered into 
thereunder constitute a full and final settlement of all 
nuclear compensation claims (described in articles X and XI of 
that separate agreement). The Committee also understands the 
relevance of the language that previous to the amendments 
stated that ``nothing in this subsection creates any rights or 
obligations beyond those provided for in the original enacted 
version of Public Law 99-239.''
    Subsection (g) repeats and updates the language from Public 
Law 99-239 regarding health care and agricultural programs for 
certain populations affected by U.S. nuclear tests. The 
Committee also understands the relevance of the language that 
previous to the amendments stated that ``nothing in this 
subsection creates any rights or obligations beyond those 
provided for in the original enacted version of Public Law 99-
239.'' The subsection also makes payments for the planting and 
agricultural maintenance program on Enewetak.
    Subsection (h) repeats the language of Public Law 99-239 
regarding restoring the habitability of Rongelap. The Committee 
also understands the relevance of the language that previous to 
the amendments stated that ``nothing in this subsection creates 
any rights or obligations beyond those provided for in the 
original enacted version of Public Law 99-239.''
    Subsection (i) deals with the Four Atoll Health Care 
Program, repeating the language of Public Law 99-239 regarding 
the administration of certain health care funds for Bikini, 
Enewetak, Rongelap, and Utrik. The Committee also understands 
the relevance of the language that previous to the amendments 
stated that ``nothing in this subsection creates any rights or 
obligations beyond those provided for in the original enacted 
version of Public Law 99-239.''
    Subsection (j) deals with the Enjebi Community Trust Fund, 
repeating the language of Public Law 99-239 regarding the 
creation and administration of that fund. The Committee also 
understands the relevance of the language that previous to the 
amendments stated that ``nothing in this subsection creates any 
rights or obligations beyond those provided for in the original 
enacted version of Public Law 99-239.''
    Subsection (k) deals with the cleanup of Bikini Atoll, 
repeating and updating the language of Public Law 99-239. The 
Committee also understands the relevance of the language 
thatprevious to the amendments stated that ``nothing in this subsection 
creates any rights or obligations beyond those provided for in the 
original enacted version of Public Law 99-239.''
    Subsection (l) generally provides the Comptroller General 
with authority to audit all grants, program assistance, and 
other assistance provided by the United States to the RMI under 
the amended Compact, and requires the RMI to cooperate with the 
Comptroller General in conducting such audits.

Section 104. Interpretation of and United States policy regarding U.S.-
        FSM Compact and U.S.-RMI Compact

    Subsection (a) notes and affirms the parties' commitment to 
democratic government and respect for human rights. It has been 
updated to reflect the existence of the two separate amended 
Compacts, but is otherwise unchanged from the original statute.
    Subsection (b)(1) places restrictions on the admission of 
certain naturalized citizens of the FSM and the RMI into the 
United States under the Compact. While generally similar to the 
original statute, it contains updated citations to reflect the 
restrictions on the admission of most naturalized citizens of 
the FSM and the RMI found in section 141 of the amended 
Compacts.
    Subsection (b)(2) directs that $250,000 of the Compact 
grant funds for each country be used for the development of 
machine-readable and secure FSM and RMI passports.
    Subsection (b)(3) provides generally that the FSM and the 
RMI shall share information the United States Government deems 
necessary to enforce the criminal and security-related 
provisions of the Immigration and Nationality Act, as amended.
    Subsection (b)(4) contains a clarification relating to the 
proper implementation of sections 141(a)(3) and (4) of the 
amended Compacts (regarding the grandfathering of certain 
naturalized citizens into the special immigration status 
enjoyed by FSM and RMI citizens).
    Subsection (c) generally repeats the language of Section 
104(c) of the original statute, which endorses FSM and RMI 
restrictions on the permanent sale of land to non-citizens of 
those countries.
    Subsection (d) generally repeats the language of Section 
104(d) of the original statute, which recognizes FSM and RMI 
prohibitions on certain forms of nuclear and toxic waste 
disposal in their countries.
    Subsection (e) deals with certain adverse effects of 
migration (from the RMI, FSM, and Palau to the U.S.) on the 
State of Hawaii, Guam, the Commonwealth of the Northern Mariana 
Islands (CNMI), and American Samoa. As amended, the subsection 
provides for reports to be sent to the President regarding past 
debts due to the impact of the migration of FAS citizens. The 
President then reports to Congress and can take actions to 
address these debts. In granting authority to the President to 
reduce, in whole or in part, amounts owed by the Government of 
Guam and the Government of CNMI, this Committee believes that 
funding made available in Guam as a result of a debt being 
altered could be helpful to the eventual privatization of the 
Guam Telephone Authority (GTA). The Committee believes that 
privatization of the phone authority, which is the last 
government-owned telephone authority in the nation, would bring 
significant benefits to the island of Guam.
    This subsection authorizes and appropriates $30 million, as 
amended, in Compact impact funding per fiscal year from Fiscal 
Year 2004 through 2023, allocates it to those U.S. 
jurisdictions by formula, places limitations on the use of any 
such funding, and requires periodic enumerations of FSM, RMI, 
and Palau citizens within those four affected jurisdictions. 
For purposes of this section, the term ``adverse consequences'' 
shall include, but not be limited to, unpaid health costs 
related to indigent qualified nonimmigrants at public and 
private hospitals or health facilities; educational costs 
related to the numbers of qualified nonimmigrant students based 
on an average per-pupil cost enrolled in the public school 
systems; social costs related to law enforcement and 
incarceration of qualified nonimmigrants; and unpaid costs 
related to providing housing to indigent qualified 
nonimmigrants.
    The subsection also provides for reimbursement of medical 
referral debts, requires use of Department of Defense medical 
facilities on a space available and reimbursable basis, and 
brings back the National Health Service Corps to the FAS as was 
in Public Law 99-239.
    Subsection (f) is a new section which states the Sense of 
Congress that 30 percent of the grant assistance would be best 
utilized to fund public infrastructure improvements.
    Subsection (g) repeats section 104(g) of Public Law 99-239, 
reaffirming that the U.S. is not responsible for foreign debt 
contracted by the FSM or RMI.
    Subsection (h) is a new section which provides for 
Presidential reviews and reports to Congress after the fifth 
and fifteenth years of the enacted legislation. The Committee 
notes that trust funds established for the RMI and FSM, 
pursuant to the amended Compact should receive consideration to 
be included within a report or review to evaluate trust fund 
contributions, current performance and future speculation. The 
subsection also provides for reports to be submitted to 
Congress three years after enactment and every five years after 
that date by the Comptroller General on multiple facets, 
including implementation and economic progress.
    Subsection (i) is a new section which provides for 
Congressional notification on regulations regarding 
immigration.

Section 105. Supplemental provisions

    Subsection (a) generally repeats Section 105(a) of the 
original statute, that all U.S. federal programs and services 
extended to the FSM and RMI remain subject to the same 
criteria, standards, audits, and rules as in the U.S.
    Subsection (b)(1) specifies that appropriations made 
pursuant to article I of title two (which includes the major 
financial sector grants) and Section 221(a)(2) of the amended 
Compacts (regarding U.S. Postal Service), are to be made to the 
Secretary of the Interior.
    Subsection (b)(2) specifies that certain appropriations 
made for services and programs provided to the FSM and RMI by 
the U.S. Weather Service, Federal Aviation Administration, 
Department of Transportation, Federal Deposit Insurance 
Corporation, Federal Emergency Management Agency, and U.S. 
Agency for International Development/Office of Foreign Disaster 
Assistance, shall be made directly to those agencies.
    Subsection (b)(3) specifies that appropriations made for 
certain other federal services and programs (including the 
Legal Services Corporation, Public Health Service, and Rural 
Housing Service) shall be made to the relevant agencies in 
accordance with the terms of any appropriations for such 
services and programs.
    Subsection (b)(4) requires all federal agencies providing 
program and service assistance to the FSM or the RMI to consult 
and coordinate with the Secretaries of State and the Interior 
regarding the provision of any such assistance.
    Subsection (b)(5) provides that U.S. Government employees 
in either the FSM or the RMI are subject to the authority of 
the United States Chief of Mission.
    Subsection (b)(6) authorizes the appointment of an 
Interagency Group on Freely Associated States' Affairs to 
provide policy guidance to the U.S. Government.
    Subsection (b)(7) specifies that the three U.S. appointees 
to the Joint Economic Management Committees provided for in 
each of the amended Compacts and Fiscal Procedures Agreements 
shall be U.S. Government officers or employees.
    Subsection (b)(8) specifies that the United States voting 
members of the Trust Fund Committees appointed by the U.S. 
Government shall be U.S. Government officers or employees.
    Subsection (b)(9) specifies that the Trust Fund Committees 
provided for in the amended Compacts and Trust Fund Agreements 
shall be non-profit corporations incorporated under the laws of 
the District of Columbia.
    Subsection (c) is a new section which provides a total of 
$300,000 for the FSM and RMI for training of judges and 
officials of the judiciary.
    Subsection (d) repeats the content of Section 105(c) of the 
original statute, which deals with any continuing 
authorizations from the Trust Territory period.
    Subsection (e) provides for the survivability of certain 
provisions of this joint resolution (such as those regarding 
audits) even if the amended Compacts are terminated.
    Subsection (f) states that actions by the FSM or RMI that 
are incompatible with U.S. defense authorities and 
responsibilities toward those countries will constitute a 
material breach of the respective Compact.
    Subsection (g) states in paragraph (1) that certain 
programs and services (from the Legal Services Corporation, 
Public Health Service, and Rural Housing Service) be made 
available to the FSM and the RMI, pursuant to Section 222 of 
the amended Compacts. The subsection provides eligibility for 
the FSM and RMI for the Pell Grant program and eliminates 
eligibility for other programs administered by the Department 
of Education and instead provides payments to the FSM and RMI. 
These payments provide assistance to administer their 
educational programs as they see most beneficial. The 
subsection continues eligibility for competitive grants. The 
subsection also creates a new Federal Emergency Management 
Agency (FEMA) interplay where the Disaster Assistance Emergency 
Fund will be able to accrue funding. After 10 years or when 
this fund reaches a certain level, the FEMA programs for public 
infrastructure will remain in the FSM and RMI. Paragraph (2) 
applies the tort claims provisions of the amended Compacts to 
U.S. Government employees and contractors. Paragraph (3) 
continues eligibility for Environmental Protection Agency 
programs for PCB cleanup.
    Subsection (h) provides that the College of Micronesia 
shall retain its status as a land-grant institution until 
otherwise provided by Congress or until termination of the 
amended Compact.
    Subsection (i) absolves the Governments of the FSM and the 
RMI from payment of certain debts of the former Trust Territory 
Government to U.S. federal agencies.
    Subsection (j) continues the authorization for certain U.S. 
federal agencies to provide technical assistance at the request 
of the FSM and RMI.
    Subsection (k) authorizes continued payments to persons who 
were eligible to receive payment under the Prior Service 
Benefits Program established during the Trust Territory period 
(due to pre-1968 service for the U.S. Navy or Trust Territory 
Government).
    Subsection (l) repeats the language of the original statute 
authorizing certain sums to complete repayment by the United 
States of debts owed for use of various land in the FSM and the 
RMI prior to January 1, 1985.
    Subsection (m) authorizes grants for the purposes of 
dealing with communicable diseases in the FSM and RMI.
    Subsection (n) requires payment of standard user fees for 
services provided by the United States to persons in the FSM 
and the RMI.
    Subsection (o) provides that no judgment of an FSM, RMI, or 
Palau court against the United States or its instrumentalities 
shall be honored by the U.S., unless the judgment is consistent 
with the U.S. interpretation of international agreements 
relevant to the judgment. In making such adetermination, due 
deference shall be given to assurances made by the Executive Branch to 
Congress regarding proper interpretation of any such international 
agreement.
    Subsection (p) states if the United States Gross Domestic 
Product Implicit Price Deflator in the second five years of the 
enacted legislation is higher than the United States Gross 
Domestic Product Implicit Price Deflator for first five years 
of the enacted legislation, the relevant grant funding in the 
Fiscal Procedures Agreements for the FSM and RMI will receive 
full inflation from the fiscal year 2015 forward.

Section 106. Construction and contract assistance

    This section authorizes assistance to U.S. firms who may be 
awarded construction contracts within the FSM or RMI to help 
them employ and train citizens of the FSM and RMI to the extent 
possible.

Section 107. Prohibition

    This section states that the portions of the U.S. Code 
dealing with criminal bribery and conflict of interest apply in 
full to U.S. employees involved in the Compact negotiations.

Section 108. Compensatory adjustments

    Subsection (a) authorizes the provision of certain federal 
programs and services (Small Business Administration, Economic 
Development Administration, Rural Utilities Services, 
Department of Labor/Workforce Investment Act, and Department of 
Commerce/tourism and marine resource programs) to the FSM and 
the RMI.
    The subsection also provides eligibility to qualify for 
Federal Deposit Insurance Corporation (FDIC) services, and this 
option will no longer apply on and after September 30, 2005. At 
this time the Committee continues to work with the relevant 
agency on this FDIC component, with the understanding that the 
FSM and RMI have differing relationships with the FDIC and this 
issue may need to be further evaluated.
    Subsection (b) authorizes the payment, upon an adequate 
showing, of certain sums to the FSM and the RMI as compensation 
for the effects, if any, during the first 15 years following 
the effective date of the original Compact, of certain 
Congressional clarifications regarding trade and taxation 
enacted by the Congress in Public Law 99-239. The countries 
must submit any such request by September 30, 2009.

Section 109. Authorization and continuing appropriation

    This section authorizes and appropriates, through fiscal 
year 2023 (September 30, 2023), the sums required for grant, 
trust fund, and Kwajalein payments under the amended Compacts.

Section 110. Payment of citizens of the Federated States of Micronesia, 
        the Republic of the Marshall Islands, and the Republic of Palau 
        Employed by the Government of the United States in the 
        Continental United States

    This section exempts citizens of the FSM, RMI, and Palau 
from the general rule of Section 605 of Public Law 107-67 that 
U.S. Government employees posted within the continental U.S. 
should be U.S. citizens (or someone who owes allegiance to the 
U.S. or falls within other defined groups).

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

    Title II reproduces the amended Compacts between the U.S. 
and the Federated States of Micronesia [Section 201(a)] and the 
Republic of the Marshall Islands [Section 201(b)], which are 
discussed below.
    Subsection 201(a). The Preamble has been updated to reflect 
that the Federated States of Micronesia (FSM) is a sovereign 
country (not a Trust Territory), that the amended Compacts are 
now separate (one each with the FSM and RMI), and the term 
``self-sufficiency'' has been replaced by ``budgetary self-
reliance'' to reflect the objective that the FSM end its 
reliance on U.S. financial assistance and obtain revenues from 
other legitimate sources.

                   TITLE ONE--GOVERNMENTAL RELATIONS

Article I--Self Government

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

Article II--Foreign Affairs

    Section 121 affirms the capacity of the Government of the 
FSM to conduct foreign affairs.
    Section 122 states that the U.S. will support FSM 
membership in international organizations.
    Section 123 states that the U.S. and FSM will consult with 
each other regarding foreign affairs.
    Section 124 states that the U.S. may assist the FSM with 
foreign affairs when requested and mutually agreed.
    Section 125 states that the U.S. cannot be obligated by the 
FSM's conduct of foreign affairs unless expressly agreed.
    Section 126 makes available U.S. consular services to FSM 
citizens traveling outside the FSM.
    Section 127 states that except as agreed in the amended 
Compact and related agreements, the rights and obligations of 
the U.S. as Administering Authority of the Trust Territory of 
the Pacific Islands ended on November 2, 1986.

Article III--Communications

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

Article IV--Immigration

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

Article V--Representation

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

Article VI--Environmental Protection

    Subsection 161(a) declares the policy of the parties to 
prevent damage to the environment, and commits the U.S. to 
conducting its activities in accord with certain environmental 
standards similar to those in effect in the U.S.
    Subsection 161(b) commits the FSM to continuing to develop, 
implement, and enforce environmental standards similar to those 
required of the U.S. in the previous subsection.
    Subsection 161(c) states that the parties may modify the 
environmental obligations of the previous two subsections by 
mutual agreement.
    Subsection 161(d) states that in the event that U.S. law no 
longer requires Environmental Impact Statements, the 
obligations of Section 161(a) will continue to require them 
until the parties mutually agree otherwise.
    Subsection 161(e) states that the President of the U.S. may 
exempt any U.S. Government activities from the environmental 
standards of Section 161(a)(3)-(4) if it is in the ``paramount 
interest'' of the U.S. Government to do so, after considering 
the views of the FSM and explaining the reasons for the 
exemption, to the extent practicable.
    Subsection 161(f) states that the laws of the U.S. referred 
to in Section 161(a)(3) apply to U.S. activities under the 
Compact only to the extent provided in Section 161.
    Section 162 states that the FSM may bring an action for 
judicial review of U.S. Government environmental activities 
pursuant to Section 161(a) only in the U.S. District Court for 
Hawaii or the U.S. District Court for the District of Columbia, 
and subject to certain conditions.
    Section 163 states that the U.S. and the FSM shall have 
access to each other's facilities to the extent necessary to 
gather information to carry out article VI, so long as it does 
not unreasonably interfere with the other's exercise of its 
authorities and responsibilities.

Article VII--General Legal Provisions

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

                     TITLE TWO--ECONOMIC RELATIONS

Article I--Grant Assistance

    Subsection 211(a) states that the U.S. shall provide 20 
years of annual sectoral grant assistance to the FSM in the 
priority sectors of education and health care, as well as in 
private sector development, the environment, public sector 
capacity building, public infrastructure, and other sectors as 
mutually agreed. The sector grants will be made available in 
accordance with mutually agreed sector development plans, and 
will be subject to monitoring according to the Fiscal 
Procedures Agreement between the parties.
    Subsection 211(b) makes available a ``Humanitarian 
Assistance-FSM'' (HAFSM) program at the request of the FSM, 
designed to extend targeted health, education, and 
infrastructure assistance. HAFSM costs will be deducted from 
the annual grant provided under Section 211(a), and the terms 
of the program will be governed by the separate Military Use 
and Operating Rights agreement.
    Subsection 211(c) requires the FSM to prepare, maintain, 
and update a strategic development plan that specifically 
addresses the sectors identified in Section 211(a) and requires 
the concurrence of the U.S. (insofar as U.S. grant funds are 
involved).
    Subsection 211(d) provides that $200,000 per year shall be 
provided, with a matching contribution from the FSM, to a 
Disaster Assistance Emergency Fund, which may be used only for 
assistance and rehabilitation needs resulting from officially 
declared disasters or emergencies, and which shall be governed 
by the Fiscal Procedures Agreement.
    Section 212 states that, as reflected in the Fiscal 
Procedures Agreement, sector grants and U.S. programs and 
services shall be subject to regulations and policies normally 
applicable to U.S. assistance to State and local governments. 
The U.S. may condition such assistance on performance 
indicators, and may seek remedies for noncompliance, including 
withholding assistance. Subsection (b) states that the U.S., as 
part of its grant assistance, grant the FSM either one half of 
the cost of the annual audit, or $500,000, whichever is less.
    Section 213 states that the U.S. and the FSM shall 
establish a Joint Economic Management Committee (comprised of a 
U.S. chairman, 2 U.S. members, and 2 FSM members) governed by 
the Fiscal Procedures Agreement. The Committee will review the 
audits, reports, and progress toward plan objectives, and 
recommend ways to increase effectiveness.
    Section 214 states that the FSM shall report annually to 
the U.S. on its use of U.S. grant assistance and progress 
toward economic goals.
    Section 215 states that the U.S. shall provide 20 years of 
annual contributions to a trust fund (governed by the separate 
Trust Fund Agreement) the proceeds of which may be used at the 
end of those 20 years for the purposes described in Section 
211, or as mutually agreed. The U.S. contribution is 
conditioned on the FSM having already contributed $30 million 
to the fund by September 30, 2004.
    Section 216 sets forth the amounts of U.S. sector grants 
and trust fund contributions for each of the 20 years of 
assistance. The combined amount for each year is $92.7 million.
    Section 217 states that the grant and trust fund 
contributions for each fiscal year shall be adjusted by two 
thirds the amount of the U.S. GDP Implicit Price Deflator or 5 
percent, whichever is less.
    Section 218 states that unobligated balances from any year 
shall remain available to the FSM in future years.

Article II--Services and Program Assistance

    Subsection 221(a) states that the U.S. shall make available 
to the FSM (to the extent provided in the Federal Programs and 
Services Agreement) the services and related programs of: (1) 
U.S. Weather Service; (2) U.S. Postal Service; (3) Federal 
Aviation Administration; (4) U.S. Department of Transportation; 
(5) Federal Deposit Insurance Corporation; and (6) Federal 
Emergency Management Agency; and (7) U.S. Agency for 
International Development/Office of Foreign Disaster 
Assistance.
    Subsection 221(b) states that, with the exception of those 
services covered by Section 221(a), the U.S. shall (unless 
Congress provides otherwise) make available to the FSM the 
services and programs that were available to the FSM on the 
effective date of the amended Compact, to the extent that such 
services are available to U.S. State and local governments.
    Subsection 221(c) states that the U.S. has the authority to 
monitor and administer all service and program assistance to 
the FSM.
    Subsection 221(d) states that, except as otherwise 
provided, federal programs and services extended to the FSM 
shall be subject to the same standards and rules applicable to 
such programs in the U.S.
    Subsection 221(e) states that the U.S. shall make available 
to the FSM, to the extent provided in U.S. law, alternate 
energy development projects and conservation measures.
    Section 222 states that the U.S. and the FSM may agree to 
extend additional U.S. grant assistance to the FSM, which shall 
be governed by the Federal Programs and Services Agreement.
    Section 223 states that the FSM shall make available at no 
charge to the U.S. whatever land is necessary for such service 
and program assistance, and whatever facilities are currently 
provided at no cost to the U.S., or may be mutually agreed in 
the future.
    Section 224 states that the FSM may request technical 
assistance from U.S. federal agencies that, if provided, would 
give priority consideration to the FSM over other non-U.S. 
recipients.

Article III--Administrative Provisions

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

Article IV--Trade

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

Article V--Finance and Taxation

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

              TITLE THREE--SECURITY AND DEFENSE RELATIONS

Article I--Authority and Responsibility

    Section 311 states that the U.S. has full authority and 
responsibility for defense matters in or relating to the FSM, 
including: the obligation to defend the FSM; the option to 
foreclose military access to the FSM to any third country 
(a.k.a. ``strategic denial''); and the option to establish 
military facilities in the FSM.
    Section 312 states that the U.S. may conduct necessary 
military operations in FSM lands, waters, and airspace.
    Section 313 states that the FSM shall refrain from actions 
that the U.S., after consultation, deems incompatible with U.S. 
defense authorities and responsibilities (a.k.a. ``defense 
veto'').
    Section 314 states that unless otherwise agreed, the U.S. 
shall not test, dispose of, or store (outside of a time of 
emergency or war) any nuclear, chemical, or biological weapon 
in the FSM.
    Section 315 states that the U.S. may invite other 
countries' armed forces (under the control of U.S. forces) to 
use military facilities in the FSM. Such use is subject to 
consultation with and (in the case of major units) approval of 
the FSM.
    Section 316 states that the U.S. may not transfer or assign 
its authority or responsibility under this title.

Article II--Defense Facilities and Operating Rights

    Section 321 states that specific arrangements for 
establishment of U.S. military facilities in the FSM are set 
forth in a separate agreement. The U.S. may request to lease 
additional areas within FSM. The FSM will consider such 
requests sympathetically, and the U.S. will respect the 
scarcity of land in the FSM.
    Section 322 states that the U.S. will provide and maintain 
certain fixed and floating navigational aids in the FSM.
    Section 323 states that U.S. military operating rights and 
the status of U.S. forces in the FSM are set forth in separate 
agreements.

Article III--Defense Treaties and International Security Agreements

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

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

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

Article V--General Provisions

    Section 351 states that the U.S. and the FSM will continue 
to maintain a Joint Committee of senior officials to consider 
disputes arising under the Security title of the Compact, which 
will meet annually or upon request of either country.
    Section 352 states that in exercising its authority under 
this title, the U.S. shall accord due respect to the authority 
and responsibility of the FSM to assure the well-being of its 
people.
    Section 353 states that the U.S. will not name the FSM as a 
party to a declaration of war without the FSM's consent. 
Without such consent, the Compact will not prejudice any FSM 
petitions for redress from the US or claims against third 
countries arising out of armed conflict.
    Subsection 354(a) states that the security provisions of 
title three shall remain binding for the duration of the 
Compact, and thereafter as mutually agreed. If either the U.S. 
or the FSM unilaterally terminates this title, it will be 
considered a termination of the entire Compact (as provided in 
articles IV and V of title four)
    Subsection 354(b) states that even if this security title 
should terminate, any attack on the FSM during the period in 
which the separate Military Use and Operating Rights agreement 
is in effect will result in the U.S. taking action to meet the 
danger to the U.S. and the FSM.
    Subsection 354(c) states that even if this security title 
should terminate, the FSM shall refrain from acts which the 
U.S. determines to be incompatible with its authority and 
responsibility for security and defense matters relating to the 
FSM and RMI (i.e., the ``defense veto'' continues).

                     TITLE FOUR--GENERAL PROVISIONS

Article I--Approval and Effective Date

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

Article II--Conference and Dispute Resolution

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

Article III--Amendment

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

Article IV--Termination

    Section 441 states that the amended Compact may be 
terminated by mutual agreement of the parties, in which case 
Section 451 will apply.
    Section 442 states that the amended Compact may be 
terminated by the U.S., in which case Section 452 will apply. 
Such termination shall be effective not earlier than 6 months 
following delivery of the notice of termination.
    Section 443 states that the amended Compact may be 
terminated by the FSM if the FSM people vote for termination in 
a plebiscite, or by some other mutually agreed process, in 
which case Section 453 will apply. Such termination shall be 
effective not earlier than 3 months following notice to the 
U.S. of the plebiscite vote for termination.

Article V--Survivability

    Subsection 451(a) states that should the parties mutually 
terminate the Compact, U.S. economic and other assistance to 
the FSM shall continue only by mutual agreement.
    Subsection 451(b) states that in the event of mutual 
termination prior to the 20th anniversary of the amended 
Compact, the U.S. will continue to make its contributions to 
the FSM Trust Fund so long as the U.S. continues to enjoy the 
right of strategic denial and the defense veto (under Section 
354(c) and the separate mutual security agreement).
    Subsection 451(c) states that in the event of mutual 
termination after the 20th anniversary of the amended Compact, 
the FSM will be entitled to receive proceeds from its Trust 
Fund as described in Section 215 and the Trust Fund Agreement.
    Subsection 452(a) describes the Compact provisions that 
survive if the U.S. terminates the amended Compact before its 
20th anniversary (including certain provisions regarding: 
environmental protection, grant audits and fund misuse 
investigations, security and defense relations, and dispute 
resolution). Those provisions remain in effect until the 20th 
anniversary, and thereafter as mutually agreed.
    Subsection 452(b) states that if the U.S. terminates the 
amended Compact before its 20th anniversary, economic and other 
assistance will continue only by mutual agreement, except that 
the U.S. will continue to make its contributions to the FSM 
Trust Fund so long as the U.S. continues to enjoy the right of 
strategic denial and the defense veto (under Section 354(c) and 
the separate mutual security agreement).
    Subsection 452(c) states that if the U.S. terminates the 
amended Compact after its 20th anniversary, the FSM will be 
entitled to receive proceeds from its Trust Fund as described 
in Section 215 and the Trust Fund Agreement.
    Subsection 453(a) describes the Compact provisions that 
survive if the FSM terminates the amended Compact before its 
20th anniversary (including certain provisions 
regarding:environmental protection, grant audits and fund misuse 
investigations, security and defense relations, and dispute 
resolution). Those provisions remain in effect until the 20th 
anniversary, and thereafter as mutually agreed.
    Subsection 453(b) states that in the event of FSM 
termination, there shall be prompt consultations between the 
countries regarding their future relationship to determine the 
level of future U.S. assistance, if any, other than what is 
provided in subsections (c) and (d) of this section.
    Subsection 453(c) states that if the FSM terminates the 
amended Compact before its 20th anniversary, the U.S. will 
continue to make its contributions to the FSM Trust Fund so 
long as the U.S. continues to enjoy the right of strategic 
denial and the defense veto (under Section 354(c) and the 
separate mutual security agreement).
    Subsection 453(d) states that if the FSM terminates the 
amended Compact after its 20th anniversary, the FSM will be 
entitled to receive proceeds from its Trust Fund as described 
in Section 215 and the Trust Fund Agreement.
    Section 454 states that notwithstanding any other provision 
of the amended Compact: (1) the U.S. reaffirms its interest in 
promoting the economic advancement of the FSM; and (2) the 
separate Military Use and Operating Rights Agreement and Status 
of Forces Agreement shall remain in effect in accordance with 
their terms.

Article VI--Definition of Terms

    Section 461 sets forth definitions for a number of terms 
used in the amended Compact.
    Subsection 462(a) lists the separate agreements that will 
remain in effect under the amended Compact, including: (1) the 
trilateral agreement on transfer of Trust Territory property; 
(2) the Friendship, Cooperation, and Mutual Security Agreement; 
and (3) the Maritime Sovereignty and Jurisdiction Agreement.
    Subsection 462(b) lists the separate agreements that will 
go into effect under the amended Compact, including: (1) the 
Federal Programs and Services Agreement; (2) the Extradition, 
Mutual Assistance in Law Enforcement, and Penal Sanctions 
Agreement; (3) the Labor Recruitment Agreement (implementing 
Section 175(b)); (4) the Fiscal Procedures Agreement; (5) the 
Trust Fund Agreement; (6) the Military Use and Operating Rights 
Agreement; and (7) the Status of Forces Agreement.
    Section 463 clarifies that certain references in the 
amended Compact to various U.S. laws constitutes the 
incorporation of the applicable language of those laws into the 
amended Compact.

Article VII--Concluding Provisions

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

           *       *       *       *       *       *       *

    Subsection 201(b). The Preamble has been updated to reflect 
that the Republic of the Marshall Islands (RMI) is a sovereign 
country (not a Trust Territory), that the amended Compacts are 
now separate (one each with the RMI and the FSM), and the term 
``self-sufficiency'' has been replaced by ``budgetary self-
reliance'' to reflect the objective that the RMI end its 
reliance on U.S. financial assistance and obtain revenues from 
other legitimate sources.

                   TITLE ONE--GOVERNMENTAL RELATIONS

Article I--Self-Government

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

Article II--Foreign Affairs

    Section 121 affirms the capacity of the Government of the 
RMI to conduct foreign affairs.
    Section 122 states that the U.S. will support RMI 
membership in international organizations.
    Section 123 states that the U.S. and RMI will consult with 
each other regarding foreign affairs.
    Section 124 states that the U.S. may assist the RMI with 
foreign affairs when requested and mutually agreed.
    Section 125 states that the U.S. cannot be obligated by the 
RMI's conduct of foreign affairs unless expressly agreed.
    Section 126 makes available U.S. consular services to RMI 
citizens traveling outside the RMI.
    Section 127 states that except as agreed in the amended 
Compact and related agreements, the rights and obligations of 
the U.S. as Administering Authority of the Trust Territory of 
the Pacific Islands ended on October 20, 1986.

Article III--Communications

    Section 131 states that the RMI has authority to regulate 
its communications, and notes that the RMI assumed 
telecommunications functions previously performed by the U.S., 
except as otherwise provided.

Article IV--Immigration

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

Article V--Representation

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

Article VI--Environmental Protection

    Subsection 161(a) declares the policy of the parties to 
prevent damage to the environment, and commits the U.S. to 
conducting its activities in accord with certain environmental 
standards similar to those in effect in the U.S.
    Subsection 161(b) commits the RMI to continuing to develop, 
implement, and enforce environmental standards similar to those 
required of the U.S. in the previous subsection.
    Subsection 161(c) states that the parties may modify the 
environmental obligations of the previous two subsections by 
mutual agreement.
    Subsection 161(d) states that in the event that U.S. law no 
longer requires Environmental Impact Statements, the 
obligations of Section 161(a) will continue to require them 
until the parties mutually agree otherwise.
    Subsection 161(e) states that the President of the U.S. may 
exempt any U.S. Government activities from the environmental 
standards of Section 161(a)(3)-(4) if it is in the ``paramount 
interest'' of the U.S. Government to do so, after considering 
the views of the RMI and explaining the reasons for the 
exemption, to the extent practicable.
    Subsection 161(f) states that the laws of the U.S. referred 
to in Section 161(a)(3) apply to U.S. activities under the 
Compact only to the extent provided in Section 161.
    Section 162 states that the RMI may bring an action for 
judicial review of U.S. Government environmental activities 
pursuant to Section 161(a) only in the U.S. District Court for 
Hawaii or the U.S. District Court for the District of Columbia, 
and subject to certain conditions.
    Section 163 states that the U.S. and the RMI shall have 
access to each other's facilities to the extent necessary to 
gather information to carry out article VI, so long as it does 
not unreasonably interfere with the other's exercise of its 
authorities and responsibilities.

Article VII--General Legal Provisions

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

                     TITLE TWO--ECONOMIC RELATIONS

Article I--Grant Assistance

    Subsection 211(a) states that the U.S. shall provide 20 
years of annual grant assistance to the RMI in the areas of 
education, health care, the environment, public sector capacity 
building, and private sector development, and other areas as 
mutually agreed. The sector grants will be made available in 
accordance with mutually agreed sector development plans, and 
will be subject to monitoring according to the Fiscal 
Procedures Agreement between the parties.
    Subsection 211(b)(1) states that of the total grant 
assistance made available to the RMI, a specified amount shall 
be used to address the special needs (including infrastructure 
and services delivery) of the population at Ebeye and other 
Marshallese communities within Kwajalein Atoll. That annual 
amount shall be $3.1 million (with an inflation adjustment) 
through Fiscal Year 2013, and shall be increased by an 
additional $2 million (with an inflation adjustment) for Fiscal 
Years 2014 through 2023, and thereafter in accordance with the 
Military Use and Operating Rights Agreement.
    Subsection 211(b)(2) states that in addition to the 211(a) 
money earmarked in the subsection above, the U.S. will provide 
an additional $1.9 million per year (with an inflation 
adjustment and subject to the Fiscal Procedures Agreement) for 
those special needs, from Fiscal Year 2004 through Fiscal year 
2023 (and thereafter in accordance with the Military Use and 
Operating Rights Agreement).
    Subsection 211(b)(3) states that of the total 211(a) annual 
grant assistance, $200,000 (with an inflation adjustment) shall 
be allocated for increasing the RMI's participation in and 
ability to analyze the annual U.S. Army Kwajalein Atoll 
Environmental Standards Survey.
    Subsection 211(c) makes available a ``Humanitarian 
Assistance RMI'' (HARMI) program at the request of the RMI, 
designed to extend targeted health, education, and 
infrastructure assistance. HARMI costs will be deducted from 
the annual grant provided under Section 211(a), and the terms 
of the program will be governed by the separate Military Use 
and Operating Rights agreement.
    Subsection 211(d) states that unless otherwise agreed, 
between 30 and 50 percent of U.S. annual grant assistance shall 
be made available for infrastructure improvement and 
maintenance. Five percent of that amount shall be set aside, 
with an equal RMI contribution, for an infrastructure 
maintenance fund.
    Subsection 211(e) provides that $200,000 per year of the 
grant assistance in Section 211(a) shall be provided, with a 
matching contribution from the RMI, for a Disaster Assistance 
Emergency Fund, which may be used only for assistance and 
rehabilitation needs resulting from officiallydeclared 
disasters or emergencies, and which shall be governed by the Fiscal 
Procedures Agreement.
    Subsection 211(f) requires the RMI to prepare, maintain, 
and update a strategic, medium term budget and investment 
framework that specifically addresses the sectors and areas 
identified in Section 211(a) and requires the concurrence of 
the U.S. (insofar as U.S. grant funds are involved).
    Section 212 states that in connection with its military use 
of Kwajalein Atoll, the U.S. shall provide to the RMI an annual 
payment of $15 million (with an inflation adjustment) from 
Fiscal Year 2004 through Fiscal Year 2013. From Fiscal Year 
2014 through Fiscal Year 2023 the annual payment will be either 
the 2013 amount or $18 million, whichever is greater (also with 
an annual inflation adjustment).
    Section 213 states that, as reflected in the Fiscal 
Procedures Agreement, sector grants and U.S. programs and 
services shall be subject to regulations and policies normally 
applicable to U.S. assistance to State and local governments. 
The U.S. may condition such assistance on performance 
indicators, and may seek remedies for noncompliance, including 
withholding assistance. Section 212(b) states that the U.S., as 
part of its grant assistance, will grant the RMI either one-
half of the cost of the annual audit, or $500,000, whichever is 
less.
    Section 214 states that the U.S. and the RMI shall 
establish a Joint Economic Management and Financial 
Accountability Committee (comprised of a U.S. chairman, 2 U.S. 
members, and 2 RMI members) governed by the Fiscal Procedures 
Agreement. The Committee will review the audits, reports, and 
progress toward plan objectives, and recommend ways to increase 
effectiveness.
    Section 215 states that the RMI shall report annually to 
the U.S. on its use of U.S. grant assistance and progress 
toward economic goals.
    Section 216 states that the U.S. shall provide 20 years of 
annual contributions to a trust fund (governed by the separate 
Trust Fund Agreement) the proceeds of which may be used at the 
end of those 20 years for the purposes described in Section 
211, or as mutually agreed. The U.S. contribution is 
conditioned on the RMI contributing $25 million to the fund by 
September 30, 2003, an additional $2.5 million by October 1, 
2004, and an additional $2.5 million by October 1, 2005.
    Section 217 sets forth the amounts of U.S. grant assistance 
and trust fund contributions for each of the 20 years of 
assistance. The combined amount is $57.7 million annually from 
Fiscal Year 2004 through Fiscal Year 2013, and $62.7 million 
annually from Fiscal Year 2014 through Fiscal Year 2023.
    Section 218 states that the grant and trust fund 
contributions for each fiscal year shall be adjusted by two-
thirds the amount of the U.S. GDP Implicit Price Deflator, or 5 
percent, whichever is less.
    Section 219 states that unobligated balances from any year 
shall remain available to the RMI in future years.

Article II--Services and Program Assistance

    Subsection 221(a) states that the U.S. shall make available 
to the RMI (to the extent provided in the Federal Programs and 
Services Agreement) the services and related programs of: (1) 
U.S. Weather Service; (2) U.S. Postal Service; (3) Federal 
Aviation Administration; (4) U.S. Department of Transportation; 
and (5) the Department of Homeland Security; and (7) U.S. 
Agency for International Development/Office of Foreign Disaster 
Assistance.
    Subsection 221(b) states that, with the exception of those 
services covered by Section 221(a), the U.S. shall (unless 
Congress provides otherwise) make available to the RMI the 
services and programs that were available to the RMI on the 
effective date of the amended Compact, to the extent that such 
services are available to U.S. State and local governments.
    Subsection 221(c) states that the U.S. has the authority to 
monitor and administer all service and program assistance to 
the RMI.
    Subsection 221(d) states that, except as otherwise 
provided, federal programs and services extended to the RMI 
shall be subject to the same standards and rules applicable to 
such programs in the U.S.
    Subsection 221(e) states that the U.S. shall make available 
to the RMI, to the extent provided in U.S. law, alternate 
energy development projects and conservation measures.
    Section 222 states that the U.S. and the RMI may agree to 
extend additional U.S. grant assistance to the RMI, which shall 
be governed by the Federal Programs and Services Agreement.
    Section 223 states that the RMI shall make available at no 
charge to the U.S. whatever land is necessary for such service 
and program assistance, and whatever facilities are currently 
provided at no cost to the U.S., or may be mutually agreed in 
the future.
    Section 224 states that the RMI may request technical 
assistance from U.S. federal agencies that, if provided, would 
give priority consideration to the RMI over other non-U.S. 
recipients.

Article III--Administrative Provisions

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

Article IV--Trade

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

Article V--Finance and Taxation

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

              TITLE THREE--SECURITY AND DEFENSE RELATIONS

Article I--Authority and Responsibility

    Section 311 states that the U.S. has full authority and 
responsibility for defense matters in or relating to the RMI, 
including: the obligation to defend the RMI; the option to 
foreclose military access to the RMI to any third country 
(a.k.a. ``strategic denial''); and the option to establish 
military facilities in the RMI.
    Section 312 states that the U.S. may conduct necessary 
military operations in RMI lands, waters, and airspace.
    Section 313 states that the RMI shall refrain from actions 
that the U.S., after consultation, deems incompatible with U.S. 
defense authorities and responsibilities (a.k.a. ``defense 
veto'').
    Section 314 states that unless otherwise agreed, the U.S. 
shall not test, dispose of, or store (outside of a time of 
emergency or war) any nuclear, chemical, or biological weapon 
in the RMI.
    Section 315 states that the U.S. may invite other 
countries' armed forces (under the control of U.S. forces) to 
use military facilities in the RMI. Such use is subject to 
consultation with and (in the case of major units) approval of 
the RMI.
    Section 316 states that the U.S. may not transfer or assign 
its authority or responsibility under this title.

Article II--Defense Facilities and Operating Rights

    Section 321 states that specific arrangements for 
establishment of U.S. military facilities in the RMI are set 
forth in a separate agreement. The U.S. may request to lease 
additional areas within RMI. The RMI will consider such 
requests sympathetically, and the U.S. will respect the 
scarcity of land in the RMI.
    Section 322 states that the U.S. will provide and maintain 
certain fixed and floating navigational aids in the RMI.
    Section 323 states that U.S. military operating rights and 
the status of U.S. forces in the RMI are set forth in separate 
agreements.

Article III--Defense Treaties and International Security Agreements

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

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

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

Article V--General Provisions

    Section 351 states that the U.S. and the RMI will continue 
to maintain a Joint Committee of senior officials to consider 
disputes arising under the Security title of the Compact, which 
will meet annually or upon request of either country.
    Section 352 states that in exercising its authority under 
this title, the U.S. shall accord due respect to the authority 
and responsibility of the RMI to assure the well-being of its 
people.
    Section 353 states that the U.S. will not name the RMI as a 
party to a declaration of war without the RMI's consent. 
Without such consent, the Compact will not prejudice any RMI 
petitions for redress from the US or claims against third 
countries arising out of armed conflict.
    Subsection 354(a) states that the security provisions of 
title three shall remain binding for the duration of the 
Compact, and thereafter as mutually agreed. If either the U.S. 
or the RMI unilaterally terminates this title, it will be 
considered a termination of the entire Compact (as provided in 
articles IV and V of title four).
    Subsection 354(b) states that even if this security title 
should terminate, any attack on the RMI during the period in 
which the separate Military Use and Operating Rights agreement 
is in effect will result in the U.S. taking action to meet the 
danger to the U.S. and the RMI.
    Subsection 354(c) states that even if this security title 
should terminate, the RMI shall refrain from acts which the 
U.S. determines to be incompatible with its authority and 
responsibility for security and defense matters relating to the 
RMI and FSM (i.e., the ``defense veto'' continues).

                     TITLE FOUR--GENERAL PROVISIONS

Article I--Approval and Effective Date

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

Article II--Conference and Dispute Resolution

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

Article III--Amendment

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

Article IV--Termination

    Section 441 states that the amended Compact may be 
terminated by mutual agreement of the parties, in which case 
Section 451 will apply.
    Section 442 states that the amended Compact may be 
terminated by the U.S., in which case Section 452 will apply. 
Such termination shall be effective not earlier than 6 months 
following delivery of the notice of termination.
    Section 443 states that the amended Compact may be 
terminated by the RMI if the RMI people vote for termination in 
a plebiscite, or by some other mutually agreed process, in 
which case Section 453 will apply. Such termination shall be 
effective not earlier than 3 months following notice to the 
U.S. of the plebiscite vote for termination.

Article V--Survivability

    Subsection 451(a) states that should the parties mutually 
terminate the Compact, U.S. economic and other assistance to 
the RMI shall continue only by mutual agreement.
    Subsection 451(b) states that in the event of mutual 
termination prior to the 20th anniversary of the amended 
Compact, the U.S. will continue to make its contributions to 
the RMI Trust Fund solong as the U.S. continues to enjoy the 
right of strategic denial and the defense veto (under Section 354(c) 
and the separate mutual security agreement).
    Subsection 451(c) states that in the event of mutual 
termination after the 20th anniversary of the amended Compact, 
the RMI will be entitled to receive proceeds from its Trust 
Fund as described in Section 215 and the Trust Fund Agreement.
    Subsection 452(a) describes the Compact provisions that 
survive if the U.S. terminates the amended Compact before its 
20th anniversary (including certain provisions regarding: 
environmental protection, grant audits and fund misuse 
investigations, security and defense relations, and dispute 
resolution). Those provisions remain in effect until the 20th 
anniversary, and thereafter as mutually agreed.
    Subsection 452(b) states that if the U.S. terminates the 
amended Compact before its 20th anniversary, economic and other 
assistance will continue only by mutual agreement, except that 
the U.S. will continue to make its contributions to the RMI 
Trust Fund so long as the U.S. continues to enjoy the right of 
strategic denial and the defense veto (under Section 354(c) and 
the separate mutual security agreement).
    Subsection 452(c) states that if the U.S. terminates the 
amended Compact after its 20th anniversary, the RMI will be 
entitled to receive proceeds from its Trust Fund as described 
in Section 215 and the Trust Fund Agreement.
    Subsection 453(a) describes the Compact provisions that 
survive if the RMI terminates the amended Compact before its 
20th anniversary (including certain provisions regarding: 
environmental protection, grant audits and fund misuse 
investigations, security and defense relations, and dispute 
resolution). Those provisions remain in effect until the 20th 
anniversary, and thereafter as mutually agreed.
    Subsection 453(b) states that in the event of RMI 
termination, there shall be prompt consultations between the 
countries regarding their future relationship to determine the 
level of future U.S. assistance, if any, other than what is 
provided in subsections (c) and (d) of this section.
    Subsection 453(c) states that if the RMI terminates the 
amended Compact before its 20th anniversary, the U.S. will 
continue to make its contributions to the RMI Trust Fund so 
long as the U.S. continues to enjoy the right of strategic 
denial and the defense veto (under Section 354(c) and the 
separate mutual security agreement).
    Subsection 453(d) states that if the RMI terminates the 
amended Compact after its 20th anniversary, the RMI will be 
entitled to receive proceeds from its Trust Fund as described 
in Section 215 and the Trust Fund Agreement.
    Section 454 states that notwithstanding any other provision 
of the amended Compact: (1) the U.S. reaffirms its interest in 
promoting the economic advancement of the RMI; and (2) the 
separate Military Use and Operating Rights Agreement and Status 
of Forces Agreement shall remain in effect in accordance with 
their terms.

Article VI--Definition of Terms

    Section 461 sets forth definitions for a number of terms 
used in the amended Compact.
    Subsection 462(a) lists the separate agreements that will 
remain in effect under the amended Compact, including: (1) the 
trilateral agreement on transfer of Trust Territory property; 
(2) the Friendship, Cooperation, and Mutual Security Agreement; 
and (3) the Maritime Sovereignty and Jurisdiction Agreement.
    Subsection 462(b) lists the separate agreements that will 
go into effect under the amended Compact, including: (1) the 
Federal Programs and Services Agreement; (2) the Extradition, 
Mutual Assistance in Law Enforcement, and Penal Sanctions 
Agreement; (3) the Labor Recruitment Agreement (implementing 
Section 175(b)); (4) the Fiscal Procedures Agreement; (5) the 
Trust Fund Agreement; (6) the Military Use and Operating Rights 
Agreement; and (7) the Status of Forces Agreement.
    Section 463 clarifies that certain references in the 
amended Compact to various U.S. laws constitutes the 
incorporation of the applicable language of those laws into the 
amended Compact.

Article VII--Concluding Provisions

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

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                  Federal Advisory Committee Statement

    The functions of the proposed advisory committee authorized 
in the bill are not currently being nor could they be performed 
by one or more agencies, an advisory committee already in 
existence or by enlarging the mandate of an existing advisory 
committee.

                   Constitutional Authority Statement

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(3)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974. The Committee has requested 
but not received a cost estimate from the Congressional Budget 
Office at the time the report was filed. Based on discussions 
with the relevant budget analyst, the Committee believes that 
enactment of this bill would result in approximately $400 
million in spending subject to appropriation over the next 10 
fiscal years and $680 million (plus an unspecified amount of 
loan forgiveness) in direct spending over the next 10 fiscal 
years.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, credit 
authority, or an increase or decrease in revenues or tax 
expenditures. The bill will result in approximately $680 
million in direct spending over the next 10 fiscal years.
    3. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to approve the ``Compact of Free 
Association, as amended between the Government of the United 
States of America and the Government of the Federated States of 
Micronesia,'' and the ``Compact of Free Association, as amended 
between the Government of the United States of America and the 
Government of the Republic of the Marshall Islands,'' and 
otherwise to amend Public Law 99-239, and to appropriate for 
the purposes of amended Public Law 99-239 for fiscal years 
ending on or before September 30, 2023, and for other purposes.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has requested but not received a cost 
estimate for this bill from the Director of the Congressional 
Budget Office.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates as defined under 
Public Law 104-4.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

SECTION 605 OF THE TREASURY AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 
                                  2002


                          (Public Law 107-67)

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


                        Committee Correspondence

                          House of Representatives,
                           Committee on Financial Services,
                                Washington, DC, September 11, 2003.
Hon. Richard W. Pombo,
Chairman, Committee on Resources, Longworth House Office Building, 
        Washington, DC.
    Dear Chairman Pombo: On September 4, 2003, the Committee on 
Resources ordered reported H.J. Res. 63, the Compact of Free 
Association Amendments Act of 2003, with an amendment. As you 
know, the amendment agreed to by the Committee on Resources 
contains matters which fall within the jurisdiction of the 
Committee on Financial Services pursuant to the Committee's 
jurisdiction under Rule X of the Rules of the House of 
Representatives over banks and banking.
    Of particular interest is section 108 of the joint 
resolution which includes language regarding the continuing 
eligibility in the Marshall Islands of certain financial 
institutions for Federal deposit insurance. As you are aware, 
the Federal Deposit Insurance Corporation has raised concerns 
about this provision, and its possible implications for the 
safety and soundness practices of the FDIC.
    After conversations between our respective staffs, and your 
commitment not to support inclusion of the aforementioned 
provision in the version of the bill that comes to the floor, I 
recognize the need to move this legislation expeditiously and 
will waive consideration of the bill by the Financial Services 
Committee. By agreeing to waive its consideration of the bill, 
the Financial Services Committee does not waive its 
jurisdiction over H.J. Res. 63. In addition, the Committee on 
Financial Services reserves its authority to seek conferees on 
any provisions of the bill that are within the Financial 
Services Committee's jurisdiction during any House-Senate 
conference that may be convened on this legislation.
    I request that you include this letter and your response as 
part of your committee's report on the bill and the 
Congressional Record during consideration of the legislation on 
the House floor.
    Thank you for your attention to these matters.
            Sincerely,
                                          Michael G. Oxley,
                                                          Chairman.
                                ------                                

                          House of Representatives,
                                    Committee on Resources,
                                Washington, DC, September 10, 2003.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services, Rayburn House Office 
        Building, Washington, DC.
    Dear Mr. Chairman: Thank you for your letter regarding H.J. 
Res. 63, to approve the ``Compact of Free Association, as 
amended between the Government of the United States of America 
and the Government of the Federated States of Micronesia,'' and 
the ``Compact of Free Association, as amended between the 
Government of the United States of America and the Government 
of the Republic of the Marshall Islands,'' and otherwise to 
amend Public Law 99-239, and to appropriate for the purposes of 
amended Public Law 99-239 for fiscal years ending on or before 
September 30, 2023, and for other purposes. This resolution was 
referred primarily to the Committee on International Relations 
(which filed its report on the bill 4 September 2003) and 
additionally to the Committee on Resources. Our referral (and a 
sequential referral to the Committee on the Judiciary) expires 
on 15 September 2003.
    I agree that the amendment in the nature of a substitute to 
this bill which was adopted by the Committee on Resources on 4 
September 2003, does contain matters within your Committee's 
jurisdiction, including a portion of section 108 of the 
amendment. Unfortunately, the Federal Deposit Insurance 
Corporation informed us of its concerns too late for us to make 
any changes at the markup, but my staff pledged to work with 
the agency before the bill is brought to the Floor to address 
any concerns it might have. I make that same pledge to you as I 
work with Chairman Hyde of the Committee on International 
Relations and Congressman Leach (the author of the bill) to 
develop a suitable text for consideration by the House of 
Representatives. I will ask that the portion of section 108 of 
the Resources amendment in the nature of a substitute 
referencing the Federal Deposit Insurance Corporation not be 
included in this text.
    I also agree that by not seeking a sequential referral of 
H.J. Res. 63, the Committee on Financial Services has not 
waived any jurisdiction over the resolution. In addition, if 
provisions affecting your jurisdiction remain in the bill after 
its consideration by the House of Representatives, I would 
support your request to have the Committee on Financial 
Services represented on any House-Senate conference on the 
bill. Finally, I would be pleased to include your letter and my 
response in the Committee on Resources' report on H.J. Res. 63.
    Thank you for your cooperation in this matter, and I look 
forward to working with you again on matters of mutual 
interest.
            Sincerely,
                                          Richard W. Pombo,
                                                          Chairman.