Congressional Record, Volume 157 Issue 23 (Monday, February 14, 2011)

[Congressional Record Volume 157, Number 23 (Monday, February 14, 2011)]
[Senate]
[Pages S684-S696]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. UDALL of Colorado (for himself and Mr. Bennett ):
S. 327. A bill to name the Department of Veterans Affairs telehealth
clinic in Craig, Colorado, as the ``Major William Edward Adams
Department of Veterans Affairs Clinic''; to the Committee on Veterans'
Affairs.
Mr. UDALL of Colorado. Mr. President, I rise to urge my colleagues to
support legislation I am introducing today to name the Veterans
Telehealth Clinic in Craig, Colorado, after Medal of Honor recipient
Major William E. Adams. I am pleased that Senator Bennet will join with
me in introducing this bill.
Our bill isn't the first effort to honor Major Adams. My good friend
Congressman John Salazar introduced this legislation last year in the
House of Representatives with the support of the entire Colorado
delegation. I would like to see this bill through to passage in this
Congress in part to honor John and his efforts to commemorate the
heroism of Major Adams and to get the VA clinic established in
northwest Colorado.
I'd also like to honor Larry Neu, a local business owner and Veterans
of Foreign Wars Post 4265 quartermaster, who has been the architect of
efforts to commemorate Major Adams. With Larry's leadership and the
help of other Craig residents, the Colorado state legislature passed a
resolution renaming part of Colorado Highway 13 the ``Maj. William
Adams Medal of Honor Highway.'' I know he worked closely with
Congressman Salazar in the last Congress to develop the legislation I
am introducing today.
Above all, this bill is intended to honor Major William Adams himself
and his ``conspicuous gallantry and intrepidity at the risk of his life
above and beyond the call of duty.''
A resident of Craig, Major Adams served and lost his life in the
Vietnam War. He was awarded the Medal of Honor posthumously, after
distinguishing himself while serving as an Army helicopter pilot. In
May 1971, he volunteered to fly a lightly armed helicopter in an
attempt to evacuate three seriously wounded soldiers from a small base
that was under attack. He made the decision with full knowledge that
numerous antiaircraft weapons were positioned around the base and that
the clear weather would make him visible to enemy gunners. As he
approached the base, the enemy gunners opened fire, but he continued
his approach, directing the attacks of supporting gunships while
maintaining control of the helicopter he was flying. He picked up the
wounded soldiers, but his aircraft was then struck and damaged by enemy
anti-aircraft fire and crashed.
I was pleased to learn that many of his family members attended the
ceremony in November dedicating part of Colorado Highway 13 to Major
Adams. I want to pay tribute today to his wife Sandra and his daughter
Jean, both Colorado residents, and his son, Col. John Adams, an
intelligence officer in the Marine Corps, recently back from
Afghanistan. I hope this bill serves to reinforce what they already
know--that Major Adams is a real hero to this county, to Colorado and
to Craig. He is part of a special class of American heroes who will
forever be remembered for their service and sacrifice. His story will
continue inspiring generations to come, while reminding us all about
the contributions and sacrifices of America's greatest.
I have introduced this legislation not only to recognize the
sacrifice of Major Adams, but also to recognize the service of our
Vietnam veterans and especially all veterans in Northwest Colorado. The
Telehealth Clinic in Craig is on track to have nearly 1700 visits from
area veterans this year, and I will always fight to make sure our
veterans get the health care they earned and deserve.
As Larry Neu said about Major Adams, ``The man made the ultimate
sacrifice for his country--he should not be forgotten.'' Passage of
this bill will help us remember Major Adams and so many other brave
veterans who have sacrificed their lives for our country. I urge my
colleagues to support this legislation and to continue to support our
dedicated men and women in uniform.
______

By Mr. HATCH (for himself and Mr. Roberts):
S. 332. A bill to promote the enforcement of immigration laws and for
other purposes; to the Committee on the Judiciary.
Mr. HATCH. Mr. President, I rise today to reintroduce the
Strengthening Our Commitment to Legal Immigration and America's
Security Act. There is little doubt that our immigration system is
broken and needs reform. Yet, we can make progress by starting with the
laws that already exist. The proposed legislation would enhance our
core immigration and enforcement laws for both legal and illegal
immigrants.

[[Page S685]]

When I first introduced my bill last September, I mentioned that it
represents countless hours of conversation and feedback from my
constituents. This bill is a common-sense approach on how best to
enforce and tighten-up our immigration laws.
Of course, securing the actual physical border should remain our top
priority. However, we cannot ignore the residual problems caused by a
porous border. The weakness of a porous border has been experienced by
communities across the country--draining all facets of local resources,
including public safety, welfare programs, and medical assistance.
By no means is the proposed legislation intended to be a
comprehensive immigration reform bill. Rather, it is focused on
enforcement and accountability of existing immigration laws and
programs. There is much that remains to be done before we can tackle
comprehensive immigration reform. But this bill is the next step toward
strengthening our immigration laws.
The Strengthening Our Commitment to Legal Immigration and America's
Security Act will curb identity theft and techniques that have been
exploited by the illegal alien community; stop the abuse by this
administration from granting mass parole or deferral to illegal aliens;
help prevent Mexican drug cartels from growing marijuana in our
national parks and on our public lands; and prevent so-called sanctuary
cities by requiring law enforcement agencies that are selected and
enrolled in the 287(g) and Secure Communities programs to fully comply
with the established requirements.
There is a need for accurate accounting to track the flow of federal
and state welfare dollars given to illegal aliens and ensure that U.S.
citizens are the first to receive Federal health benefits.
Additionally, my bill would rectify a gaping hole in our visa system by
requiring the Department of Homeland Security to create a mandatory
visa exit procedure that would track the departure of our foreign
visitors to the United States; provide that gang members will be
ineligible to receive a visa for travel to our country; and direct the
State Department to examine the Diversity Visa program, which in the
past has been wrought with fraud and abuse.
I do not think anyone could disagree with the substance of the
Strengthening Our Commitment to Legal Immigration and America's
Security Act. It touches on some of the more overlooked, but critical
areas of our broken immigration system. Moreover, I believe these steps
can be enacted in a bipartisan fashion without creating a host of new
programs and revenue streams. I encourage my colleagues to work with me
to move this bill forward.
______

By Mrs. FEINSTEIN (for herself and Mr. Nelson of Florida):
S. 338. A bill to prohibit royalty incentives for deepwater drilling,
and for other purposes; to the Committee on Energy and Natural
Resources.
Mrs. FEINSTEIN. Mr. President, I rise today to introduce the
Deepwater Drilling Royalty Relief Prohibition Act.
The purpose of this bill is to ensure that taxpayer dollars are not
used to incentivize the dangerous and often dirty business of offshore
drilling in deep waters.
Over the past two decades, Congress has established a number of
royalty-relief programs to encourage domestic exploration and
production in deep waters. This may have made sense in times when oil
prices were too low to provide energy companies with an incentive to
drill in difficult places. It may have made sense before we were ready
to deploy large scale renewable energy production.
But it no longer makes sense today.
The Deepwater Horizon catastrophe showed that safety and response
technologies are not sufficient in deep waters. The President's
National Oil Spill Commission pointed out that while offshore oil and
gas will remain part of the nation's energy portfolio for years to
come, we need to ``begin a transition to a cleaner, more energy-
efficient future.'' I agree.
I believe that taxpayer-funded incentives should go to clean,
renewable energy, not deepwater oil drilling. It's time that we roll-
back incentives for the riskiest, least environmentally friendly non-
renewable energy production.
The disastrous impacts of the Deepwater Horizon explosion illustrate
the enormous environmental and safety risks of offshore drilling--
particularly in deep waters. 11 people died and 17 others were injured
when the Deepwater Horizon caught fire. Oil and gas rushed into the
Gulf of Mexico for 87 days before the well was finally plugged. The
scope of the disaster was tremendous.
Oil slicks spread across the Gulf of Mexico, pelicans and other
wildlife struggled to free themselves from crude oil, tar balls spoiled
the pristine white sand beaches of Florida, wetlands were coated with
toxic sludge, more than \1/3\ of Federal waters in the Gulf were closed
to fishing, and oyster beds could take years to recover, the plumes of
underwater oil may have created zones of toxicity or low oxygen for
aquatic life, and the response techniques, such as the use of
dispersants, may have their own toxic consequences to both wildlife and
the spill response workers.
The impacts of an oil spill are so dramatic and devastating, it seems
clear to me that this is not an area in which we should be subsidizing
development.
Things have not improved much since the oil spill in 1969 off the
California Coast near Santa Barbara. Like the Deepwater Horizon
disaster, the Santa Barbara spill was caused by a natural gas blowout
when pressure in the drill hole fluctuated. It was successfully plugged
with mud and cement after 11 and a half days, but oil and gas continued
to seep for months. The Santa Barbara spill was devastating, but it was
a tiny fraction of the size of the Deepwater Horizon spill.
Technology 40 years ago was not good enough to prevent a disaster. We
discovered last summer that today's technology is no better at
preventing well-head blowouts.
The Deepwater Horizon drill rig was less than 10 years old when it
exploded. A similar accident that caused the 2009 spill in the Montara
oil and gas field in the Timor Sea--one of the worst in Australia's
history--was even newer, designed and built in 2007. That spill
continued unchecked for 74 days.
The failures that led to these catastrophes were human and
technological. While measures are being put in place to remedy these
deficiencies, the risks remain high and the potential damage immense.
In deep waters, the risks are higher and the scope of the damage even
greater.
Drilling in deep waters is not the type of activity that tax-payer
dollars should subsidize.
Drilling in deep water presents even more challenges than drilling in
shallow water or on shore. This was demonstrated during the Deepwater
Horizon disaster.
Methane hydrate crystals form when methane gas mixes with pressurized
cold ocean waters--and the likelihood of these crystals forming
increases dramatically at a depth of about 400 meters.
These crystals interfere with response and containment technologies.
They formed in the cofferdam dome that was lowered onto the gushing oil
in the Gulf, which failed to stop the oil in the early days of the
spill. And when a remotely operated underwater vehicle bumped the
valves in the ``top hat'' device, the containment cap had to be removed
and slowly replaced to prevent formation of these crystals again.
In order to drill at deeper depths, many technical difficulties must
be overcome.
The ocean currents on the surface and in the water column exert
torque pressure on the pipes and cables, which are longer and heavier.
The water temperature decreases closer to the sea floor, but the
earth's core temperature increases the deeper the well--sometimes
reaching temperatures in excess of 350 degrees Fahrenheit.
The ocean pressure increases dramatically at depth, but the pressure
in a well can exceed 10,000 pounds per square inch.
Drills must be able to pass through tar and salts, and the well bores
must remain intact.
The volume of drilling mud and fluids is greater, the weight of the
cables heavier, and many technical procedures can only be accomplished
with the use of remotely operated vehicles thousands of feet below the
surface.

[[Page S686]]

American taxpayers should not forego revenue in order to incentivize
offshore drilling. It is not good environmental policy, and it's not
good energy policy either.
We need to move to cleaner renewable fuels.
I believe that global warming is the biggest environmental crisis we
face--and the biggest culprit of global warming is manmade emissions
produced by the combustion of fossil fuels like oil and coal.
Taxpayer funded incentives should not finance production of fossil
fuels--particularly in places where the production itself poses
potential devastation. Instead, incentives should be used to develop
and deploy clean energy technologies like wind and solar.
I have worked with my colleagues on a number of legislative
initiatives designed to reduce greenhouse gas emissions, increase
energy efficiency and incentivize the use of renewable energy.
One of our biggest victories was the enactment of the aggressive fuel
economy law, called the Ten in Ten Fuel Economy Act, which was passed
by Congress and signed into law by then-President Bush in the 110th
Congress. This law, which I authored with Senator Snowe, will improve
fuel economy standards for passenger vehicles at the maximum feasible
rate.
The good news is that the Administration has taken the framework of
this law and implemented aggressive standards that require raising
fleetwide fuel economy to 35.5 mpg in 2016--a 40 percent increase above
today's standard.
The other positive development is that the domestic renewable energy
industry has grown dramatically over the last few years. In 2009, the
United States added more new capacity to produce renewable electricity
than it did to produce electricity from natural gas, oil, and coal
combined. A great deal of this growth can be attributed to government
renewable energy incentives. That is where public investment in energy
development should go.
It is clear that the clean energy sector is the next frontier in jobs
creation.
We need to ensure that developers can access financing to launch
wind, solar and geothermal projects, so that they can put people to
work. Programs like Treasury Grant Program have been very successful in
encouraging private investment in this sector. So far, the program has
helped to bring more than 1,880 renewable energy projects online.
The program, however, is set to expire at the end of this year if we
don't act. I'm working on legislation that will extend and expand this
successful program.
All told, these types of measures are helping to foster the
incentives that will push the United States to adopt a cleaner energy
future, and to move away from fossil fuels.
Let me make one final point very clear: I don't believe oil companies
need taxpayer dollars to help them out. They are already reaping record
profits.
In 2009, the top 10 U.S. oil companies' combined revenues were almost
$850 billion. And while all results are not yet in on 2010, it is clear
that oil companies did even better last year.
Exxon Mobil reported $30 billion in profit, up 57 percent from 2009.
Shell reported $19 billion in profit, up 90 percent from 2009.
Conoco Phillips raked in $11.4 billion in profit during 2010, a
whopping 159 percent increase over its 2009 profits.
Yet we continue to use taxpayer dollars to add to their bottom line.
This is unacceptable.
Oil reserves are a public resource. When a private company profits
from those public resources, American taxpayers should also benefit.
I urge my colleagues to support this legislation and ensure that
royalties owed to the taxpayers are not waived to incentivize risky
off-shore drilling. In these critical economic times, every cent of the
people's money should be spent wisely.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 338

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Deepwater Drilling Royalty
Relief Prohibition Act''.

SEC. 2. PROHIBITION ON ROYALTY INCENTIVES FOR DEEPWATER
DRILLING.

(a) In General.--Notwithstanding any other provision of
law, the Secretary of the Interior shall not issue any oil or
gas lease sale under the Outer Continental Shelf Lands Act
(43 U.S.C. 1331 et seq.) with royalty-based incentives in any
tract located in water depths of 400 meters or more on the
outer Continental Shelf.
(b) Royalty Relief for Deep Water Production.--Section 345
of the Energy Policy Act of 2005 (42 U.S.C. 15905) is
repealed.
(c) Royalty Relief.--Section 8(a)(3) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)) is amended
by adding at the end the following:
``(D) Prohibition.--Notwithstanding subparagraphs (A)
through (C) or any other provision of law, the Secretary
shall not reduce or eliminate any royalty or net profit share
for any lease or unit located in water depths of 400 meters
or more on the outer Continental Shelf.''.
(d) Application.--This section and the amendments made by
this section--
(1) apply beginning with the first lease sale held on or
after the date of enactment of this Act for which a final
notice of sale has not been published as of that date; and
(2) do not apply to a lease in effect on the date of
enactment of this Act.
______

By Mr. BAUCUS (for himself and Mr. Tester):
S. 339. A bill to amend the Internal Revenue Code of 1986 to make
permanent the special rule for contributions of qualified conservation
contributions; to the Committee on Finance.
Mr. BAUCUS. Mr. President, I rise today to introduce the Rural
Heritage Conservation Extension Act.
In the last few months, our nation has engaged in a discourse about
responsibility. No one can deny that our job is to promote the
protection of American interests and investment in our future. I am
introducing this bill today, because we have a responsibility to
protect one of our country's most precious resources: our land.
When I visit with ranchers and farmers across my home state of
Montana, it's clear to me they want to preserve open space on their
land for their kids and grandkids. Together with Montana farmers and
ranchers and the Montana Land Reliance, which is dedicated to
protecting agricultural production, we've come up with a commonsense
proposal. This is a plan we developed together based on teamwork and
our common goal to leave our land in better shape than we found it for
future generations.
As we all know, we are losing precious agricultural and ranch lands
at a record pace. But our soil is worth more more than just the
nutritious foods and natural resources it produces. When we lose our
land, we lose the natural habitat of our wildlife and open spaces for
our communities. It is our job to protect the land for future
generations and to support the farmers, ranchers and other landowners
who rely on it to make a living.
Many Montana farmers and ranchers are land rich, but cash poor. These
landowners make a modest living off the land and, in this economy, need
the right tools to move toward conservation.
That is why Congress provides targeted income tax relief to small
farmers and ranchers who wish make a charitable contribution of
qualified conservation easements. This allows eligible farmers and
ranchers to increase the deduction they can take for charitable
contributions of qualified conservation easements. The provision allows
farmers and ranchers to do this by increasing the current adjusted
gross income limitations from 50 percent to 100 percent and extending
the carryover period from five to 15 years. In the case of all
landowners, the AGI limitation was raised from 30 percent to 50
percent. This provision will expire at the end of this year. It is time
to make this provision permanent--and that is what our Rural Heritage
Conservation Extension Act will do.
Conservation easements sometimes take years to work out. These tax
breaks are meant to streamline the process and help those folks who
struggle with cash flow but believe in the value of conserving our
agricultural lands for future generations.
Conversation easements continue to be an effective land management
tool in Montana, and across the country. We currently have over two
million acres covered by conservation easements. To some, that may seem
like a

[[Page S687]]

large amount, but, in Montana, those easements are only 2.1 percent of
the total State land area. Montana has begun to recognize the
importance of using conservation easements to preserve our lands. I
believe that now is the time for our state, and the entire country to
do even more.
It is time to say, ``We believe in the environment. We believe that
landowners should be able to afford to choose conservation over
development.'' Let us remove the uncertainty and build on the success
of what we have already begun to do. Let's pass the Rural Heritage
Conservation Extension Act.
______

By Mr. BAUCUS:
S. 340. An original bill to amend the Internal Revenue Code of 1986
to extend the funding and expenditure authority of the Airport and
Airway Trust Fund, and for other purposes; from the Committee on
Finance; placed on the calendar.
Mr. HATCH. Mr. President, today Chairman Baucus filed an original
bill and an amendment to the Federal Aviation Administration, FAA, bill
currently being considered by the Senate. Both of these items are
identical. They reflect the revenue title to the FAA bill that was
reported by the Finance Committee last Tuesday. I am hopeful that this
heralds the passage of long-term FAA reauthorization and represents a
break with our ongoing pattern of funding the FAA with short-term
extensions of current law.
In most respects the Finance Committee product reflects the FAA bill
that was passed unanimously last year with 93 votes. However, there is
a very important difference. Thanks to an amendment filed by Senator
Coburn, who is a new member of the Finance Committee, only 90 percent
of forecasted revenues to the Airport and Airway Trust Fund for a given
year will be spent. Over the past several years the uncommitted cash
balance remaining in the trust fund has steadily decreased because
actual revenues have fallen short of forecast revenues. Since
recipients of trust fund revenues expect to be paid in real dollars and
not forecasted dollars, it makes sense to make sure the trust fund
contains actual dollars. By allowing only 90 percent of forecast trust
fund revenues to be spent, we are putting in place a 10 percent cushion
to guard against the frequent occurrence that actual trust fund
revenues will fall short of projected revenues.
The Finance Committee product also increases the amount general
aviation and fractional aircraft will pay for each gallon of jet fuel
they use. These increases will impact neither commercial airlines nor
passengers of commercial airlines. The cost of fuel for commercial
aviation is not changed at all by the Finance Committee product. What
makes the increases of the costs borne by the general aviation and
fractional communities unique is that both groups are active supporters
of these increases. As these letters explain, the increases in the cost
of jet fuel are supported because the proceeds will help our airport
and airway system transition to the Next Generation Air Transportation
System, or NextGen. NextGen is the satellite-based air traffic control
system that is slated to replace our current radar-based system. The
transition to NextGen is expected to reduce inefficiencies within and
enhance the benefits of our airport and airway system.
In closing, I want to thank Chairman Baucus and the other Members of
the Finance Committee for their work on the revenue title to the FAA
bill, and I hope for the rapid completion of FAA reauthorization.
Mr. President, I ask unanimous consent that letters of support be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

General Aviation

Manufacturers Association,

Washington, DC, January 31, 2011.
Hon. Max Baucus,
Chairman, Senate Finance Committee, Dirksen Senate Office
Building, Washington, DC.
Hon. Orrin Hatch,
Ranking Member, Senate Finance Committee, Dirksen Senate
Office Building, Washington, DC.
Dear Chairman Baucus and Senator Hatch: On behalf of the
seventy members of the General Aviation Manufacturers
Association (GAMA), I am writing in strong support of the tax
title to the ``FAA Air Transportation Modernization and
Safety Improvement Act'' which will be considered by the
Senate this week.
As you know, this legislation is identical to the FAA
reauthorization bill that passed in the Senate last year. The
tax title of the bill, which was drafted by the Finance
Committee, includes an increase in the excise tax on jet-fuel
used in general aviation operations. The funding raised by
this fuel tax increase will be placed in an account within
the Airport and Airway Trust Fund to help fund air traffic
control modernization programs.
In previous Congresses, our members have supported the fuel
tax increase included in the bill because we strongly support
modernization and are willing to pay more to help complete
it. We believe that the Finance Committee has examined this
issue thoroughly and that its actions will help move the bill
quickly through Congress and put us on the right path towards
modernization.
In conclusion, we support the tax title to the FAA
reauthorization bill and thank the committee for being
receptive to our views during this process. We look forward
to working with you as the bill proceeds through Congress.
Sincerely,
Peter J. Bunce,
President & CEO.
____

National Air

Transportation Association,

Alexandria, VA, February 3, 2011.
Hon. Max Baucus,
Chairman, Senate Committee on Finance, U.S. Senate, Dirksen
Senate Office Building, Washington, DC.
Hon. Orrin Hatch,
Ranking Member, Senate Committee on Finance, U.S. Senate,
Dirksen Senate Office Building, Washington, DC.
Dear Chairman Baucus and Ranking Member Hatch: The National
Air Transportation Association (NATA), the voice of aviation
business, is the public policy group representing the
interests of aviation businesses before the Congress, federal
agencies and state governments. NATA's 2,000 member companies
own, operate and service aircraft. These companies provide
for the needs of the traveling public by offering services
and products to aircraft operators and others such as fuel
sales, aircraft maintenance, parts sales, storage, rental,
airline servicing, flight training, Part 135 on-demand air
charter, fractional aircraft program management and scheduled
commuter operations in smaller aircraft. NATA members are a
vital link in the aviation industry providing services to the
general public, airlines, general aviation and the military.
On behalf of NATA, I write in support of the tax title to
S. 223, the FAA Air Transportation Modernization and Safety
Improvement Act, which would increase the tax on general
aviation jet fuel. A reasonable tax increase allows general
aviation operators to provide more revenue to the Airport and
Airways Trust Fund (trust fund). General aviation fuels have
not had a substantial tax increase in over 15 years and,
despite the recent downturn in the economy, we believe the
current system of aviation excise taxes has proven to be a
stable and efficient source of revenue for the trust fund as
opposed to another funding mechanism that has been proposed
in the past few years.
As you know, passage of Federal Aviation Administration
reauthorization legislation will provide much needed funding
for the trust funds while ensuring that our national airspace
system remains safe and efficient and creating and
maintaining valuable jobs in the United States. Investments
to our aviation infrastructure will allow the modernization
of the Next Generation Air Transportation System to expand as
efficiently as possible.
We support a tax increase on general aviation fuels to
finance the trust fund in a manner that has proven successful
since its creation. Thank you for your attention to this
important matter.
Sincerely,
James K. Coyne,
President.
____

aircraft Owners

and Pilots Association,

Washington, DC, February 4, 2011.
Hon. Max Baucus,
Chairman, Senate Finance Committee, U.S. Senate, Washington,
DC.
Hon. Orrin Hatch,
Ranking Member, Senate Finance Committee, U.S. Senate,
Washington, DC.
Dear Chairman Baucus and Ranking Member Hatch: In
anticipation of Senate action on S. 223, legislation to
reauthorize the Federal Aviation Administration (FAA), I am
writing to reiterate our support for the previously agreed to
tax increases in general aviation fuel taxes.
The stability and certainty that an FAA reauthorization
bill provides is vital for federal investments in safety,
modernizing the air traffic control system, FAA operations,
airport improvements and aviation research efforts.

[[Page S688]]

AOPA has consistently supported using the time-tested
system of passenger transportation and aviation fuel taxes in
combination with general fund tax revenues to support the FAA
and the aviation system. We have consistently supported a 25
percent increase in aviation gasoline and a 65 percent tax
increase on non-commercial jet fuel in lieu of user fees to
generate additional revenue to the Aviation Trust Fund for
air traffic control modernization.
Even though economic times are extremely difficult, AOPA
members continue to support the agreed-to increases in
general aviation fuel taxes and we support the inclusion of
this funding mechanism in the Senate FAA Reauthorization
Bill.
Thank you for your consideration of our views. We look
forward to working with you to complete the FAA
Reauthorization Bill.
Sincerely,
Craig L. Fuller,
President and CEO.
____

National Business

Aviation Associations,

February 4, 2011.
Hon. Max Baucus,
Chairman, Committee on Finance, Hart Senate Office Building,
Washington, DC.
Dear Chairman Baucus: The National Business Aviation
Association (NBAA) strongly supports passage of legislation
to reauthorize the Federal Aviation Administration, and urges
the U.S. Senate to expeditiously approve this critical
legislation.
Aviation, including business aviation, is a vital link in
our transportation system and powerful engine for job
creation and economic growth. Ensuring that the United States
has the largest, safest, and most efficient air
transportation system is clearly in our country's interest
and should be a national imperative.
NBAA represents approximately 8,000 companies that rely on
general aviation aircraft to help them survive and compete in
the marketplace. Eighty-five percent of our members are small
and mid-size businesses, many of whom operate to and from
small towns and rural communities with little or no
commercial airline service.
This legislation will greatly facilitate and accelerate the
transformation of our air traffic control system to the Next
Generation Air Traffic Control System--NextGen. As you know,
NextGen will increase the capacity and enhance the safety of
our air traffic control system. It will also reduce
aviation's environmental impact.
The legislation will provide much needed long-term
direction and stability to the Federal Aviation
Administration. The bill will enable the agency to do the
critical long-range planning, and make the long-range
investments in airport infrastructure and technology that are
needed to modernize and expand the system. The time to enact
a strong multi-year reauthorization bill is now.
The reauthorization bill helps fund the transformation to
NextGen in part through an increase in the general aviation
fuel tax. While no industry wants to pay additional taxes,
particularly during these very challenging times, NBAA
supports the fuel tax increase contained in this bill because
we believe that the rapid transformation to NextGen is
critically important to the vitality of the U.S. aviation
system.
We urge the Senate to expedite consideration of the FAA
reauthorization bill. It is important that we finalize this
legislation that will undoubtedly enhance safety, reduce
emissions, expand the system and ensure that the U.S. will
continue to lead the world in aviation technology.
Sincerely,
Ed Bolen.
____

NETJETS

Columbus, OH, February 7, 2011.
Hon. Max Baucus,
Chairman, Senate Committee on Finance, U.S. Senate, Dirksen
Senate Office Building, Washington, DC.
Hon. Charles Grassley,
Ranking Member, Senate Committee on Finance, U.S. Senate,
Dirksen Senate Office Building, Washington, DC.
Dear Chairman Baucus and Ranking Member Grassley: As a
leading fractional ownership program management company here
in the United States, I write today in support of language
included within S. 223, the Federal Aviation Administration
(FAA) Air Transportation Modernization and Safety Improvement
Act, that provides for a minor change in the tax code to
ensure that operations of aircraft in fractional ownership
programs are taxed as general aviation.
The FAA has determined that fractionally-owned aircraft
operations are in fact private. However, the Internal Revenue
Service continues to tax the operations of such aircraft as
if they are commercial. The IRS made this tax determination
when the concept of fractional ownership was very new, and
before the FAA had completed its analysis and issued
regulations that classify fractionally-owned aircraft as non-
commercial general aviation.
To remedy this situation, we request your support for
language contained within S. 223 to also be included within
the House FAA reauthorization bill. Specifically, Section 805
of S. 223, entitled, ``Treatment of Fractional Ownership
Operations,'' would ensure that all fractionally-owned
aircraft operations are taxed as non-commercial general
aviation.
We strongly support Section 805 of S. 223 and request your
assistance to secure this language within the House FAA
Reauthorization bill. Thank you for your attention to this
important issue.
Sincerely,
Jordan B. Hansell
President.
______

By Mr. BINGAMAN (for himself and Ms. Murkowski) (by request):
S. 342. A bill to provide supplemental ex gratia compensation to the
Republic of the Marshall Islands for impacts of the nuclear testing
programs of the United States, and for other purposes; to the Committee
on Energy and Natural Resources.
Mr. BINGAMAN. Mr. President, today, I join the Ranking Member of the
Committee on Energy and Natural Resources, Senator Murkowski, in
reintroducing The Republic of the Marshall Islands Supplemental Nuclear
Compensation Act at the request of the President of the Marshall
Islands, the Honorable Jurelang Zedkaia.
This legislation tracks S. 1756, a bill that was introduced in the
110th Congress at the request of then-President of the Republic of the
Marshall Islands, Kessai Note, and that was ordered reported from the
Committee on Energy and Natural Resources, on September 11, 2008. The
bill was reintroduced in the 111th Congress as S. 2941 at the request
of President Zedkaia, and it was again reported from the Committee, on
August 5, 2010. Unfortunately, there was insufficient time before
adjournment for floor consideration and to identify an offset for the
bill's CBO-estimated cost of $58 million. It is my hope that the 112th
Congress will move promptly to consider this bill, find any necessary
offset, and enact this legislation as a part of our Nation's continuing
engagement with the Marshall Islands to address the damage and injuries
that resulted from the nuclear weapons testing program.
The need for consideration of this bill is clear--to monitor and, as
appropriate, update our Nation's continuing response to the
consequences of the nuclear weapons testing program conducted in the
Marshall Islands in the 1940s and 50s.
For a period of 12 years, the United States detonated nuclear bombs
in the Northern Marshall Islands that caused substantial damage and
injury. In 1986, with the negotiation of the compact of Free
Association between the United States and the Republic of the Marshall
Islands and its approval by Public Law 99-239, the United States
``accept[ed] the responsibility for compensation owing to citizens of
the Marshall Islands . . . for loss or damage to property and person of
the citizens of the Marshall Islands . . . resulting from the testing
program . . .''. The compact and other U.S. laws established programs
designed and intended to provide compensation and to respond to the
consequences of the nuclear tests.
First, Section 177 of the compact provided a $150 million grant to
the Marshall Islands for the settlement of all claims arising from the
nuclear testing program through the establishment of the Nuclear Claims
Tribunal, including $2 million annually for the so-called ``Four Atoll
Health Care Program'' to provide supplemental health care services to
those communities most affected by the tests and funding for a
nationwide radiological survey. The subsidiary agreement implementing
Section 177 further provided that the Marshall Islands could seek
additional funds from Congress through a so-called ``changed
circumstances'' petition, if ``injuries render the provisions of this
Agreement manifestly inadequate.'' Finally, Section 105(c) of the law
approving the compact authorized additional appropriations for ``health
and education as a result of exceptional circumstances,'' and
authorized ex gratia contributions for the affected populations of the
northern atolls of Bikini, Enewetak, Rongelap, and Utrik.
Second, in response to the nuclear tests, Congress funded the
Department of Energy's Marshall Islands Program to continually monitor
residual radiation in the environment, research strategies for
mitigating radiation effects, and to support mitigation and
resettlement efforts. This DOE program also monitors and provides
health care to members of the Rongelap and Utrik communities who were
seriously exposed to radiation fallout from the ``Castle Bravo'' test
which took place in 1954 and contaminated the inhabited islands
downwind.

[[Page S689]]

Third, in 2001, Congress enacted the Energy Employees Occupational
Illness Compensation Program, EEOICPA, to provide compensation for DOE
and DOE-contractor employees who were associated with the Nation's
nuclear weapons program. The legislative history for the program
indicates that workers hired from the local population at the Marshall
Islands Test Site were intended to be covered. However, islanders who
applied for compensation from EEOICPA had their claims denied because
they were not U.S. citizens.
The purpose of this legislation is to make appropriate amendments to
programs and activities to meet our continuing responsibility to
address the consequences of the nuclear testing program. Accordingly,
this bill would expand the scope of these existing programs: the Four
Atoll Health Care Program; the DOE Marshall Islands Program; and the
U.S. Department of Labor's Energy Employees Occupational Illness
Compensation Program. The bill would also provide for an assessment and
report by the National Academy of Sciences on the health impacts of the
nuclear testing program in the Marshall Islands.
However, there is recent information regarding the health impacts of
the testing program which may meet the objectives of this section. Last
year, the August issue of Health Physics published a series of peer-
reviewed papers on the radiation doses and cancer risks in the Marshall
Islands from U.S. nuclear weapons tests. These papers grew out of a
request from the Committee on Energy and Natural Resources to the
National Cancer Institute for their expert opinion of the health
effects of the testing program. I anticipate a presentation of the
conclusion of these papers when a hearing is held on this bill.
For more information on this legislation, I recommend review of
previous Committee hearings, S. Hrg. 109-178 and S. Hrg. 110-243, and
last year's Committee report on S. 2941, S. Rpt 111-268. I look forward
to continue working with President Zedkaia, the RMI Ambassador to the
United States, Banny Debrum, officials at the U.S. Departments of
State, Energy, and the Interior, and my colleagues on the Committee in
considering this legislation as a part of our continuing response to
this tragic legacy of the nuclear testing program in the Pacific.
Mr. President, I ask unanimous consent that the bill and a letter of
support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 342

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Republic of the Marshall
Islands Supplemental Nuclear Compensation Act of 2011''.

SEC. 2. CONTINUED MONITORING ON RUNIT ISLAND.

Section 103(f)(1) of the Compact of Free Association
Amendments Act of 2003 (48 U.S.C. 1921b(f)(1)) is amended--
(1) by striking ``Notwithstanding'' and inserting the
following:
``(A) In general.--Notwithstanding''; and
(2) by adding at the end the following:
``(B) Continued monitoring on runit island.--
``(i) Cactus crater containment and groundwater
monitoring.--Effective beginning January 1, 2008, the
Secretary of Energy shall, as a part of the Marshall Islands
program conducted under subparagraph (A), periodically (but
not less frequently than every 4 years) conduct--

``(I) a visual study of the concrete exterior of the Cactus
Crater containment structure on Runit Island; and
``(II) a radiochemical analysis of the groundwater
surrounding and in the Cactus Crater containment structure on
Runit Island.

``(ii) Report.--The Secretary shall submit to the Committee
on Energy and Natural Resources of the Senate, and the
Committee on Natural Resources of the House of
Representatives, a report that contains--

``(I) a description of--

``(aa) the results of each visual survey conducted under
clause (i)(I); and
``(bb) the results of the radiochemical analysis conducted
under clause (i)(II); and

``(II) a determination on whether the surveys and analyses
indicate any significant change in the health risks to the
people of Enewetak from the contaminants within the Cactus
Crater containment structure.

``(iii) Funding for groundwater monitoring.--The Secretary
of the Interior shall make available to the Department of
Energy, Marshall Islands Program, from funds available for
the Technical Assistance Program of the Office of Insular
Affairs, the amounts necessary to conduct the radiochemical
analysis of groundwater under clause(i)(II).''.

SEC. 3. CLARIFICATION OF ELIGIBILITY UNDER ENERGY EMPLOYEES
OCCUPATIONAL ILLNESS COMPENSATION PROGRAM ACT
OF 2000.

(a) Definitions for Program Administration.--Section 3621
of the Energy Employees Occupational Illness Compensation
Program Act of 2000 (42 U.S.C. 7384l) is amended by adding at
the end the following:
``(18) The terms `covered employee', `atomic weapons
employee', and `Department of Energy contractor employee' (as
defined in paragraphs (1), (3), and (11), respectively)
include a citizen or national of the Republic of the Marshall
Islands or the Federated States of Micronesia who is
otherwise covered by that paragraph.''.
(b) Definition of Covered DOE Contractor Employee.--Section
3671(1) of the Energy Employees Occupational Illness
Compensation Program Act of 2000 (42 U.S.C. 7385s(1)) is
amended by inserting before the period at the end the
following: ``, including a citizen or national of the
Republic of the Marshall Islands or the Federated States of
Micronesia who is otherwise covered by this paragraph''.
(c) Offset of Benefits With Respect to the Compact of Free
Association.--Subtitle C of the Energy Employees Occupational
Illness Compensation Program Act of 2000 (42 U.S.C. 7385 et
seq.) is amended by inserting after section 3653 (42 U.S.C.
7385j-2) the following:

``SEC. 3654. OFFSET OF BENEFITS WITH RESPECT TO THE COMPACT
OF FREE ASSOCIATION.

``An individual who has been awarded compensation under
this title, and who has also received compensation benefits
under the Compact of Free Association between the United
States and the Republic of the Marshall Islands (48 U.S.C.
1681 et seq.) (referred to in this section as the `Compact of
Free Association'), by reason of the same illness, shall
receive the compensation awarded under this title reduced by
the amount of any compensation benefits received under the
Compact of Free Association, other than medical benefits and
benefits for vocational rehabilitation that the individual
received by reason of the illness, after deducting the
reasonable costs (as determined by the Secretary) of
obtaining those benefits under the Compact of Free
Association.''.

SEC. 4. SUPPLEMENTAL HEALTH CARE GRANT.

Section 103(h) of the Compact of Free Association
Amendments Act of 2003 (48 U.S.C. 1921b(h)) is amended by
adding at the end the following:
``(4) Supplemental health care grant.--
``(A) In general.--In addition to amounts provided under
section 211 of the U.S.-RMI Compact (48 U.S.C. 1921 note),
the Secretary of the Interior shall provide to the Republic
of the Marshall Islands an annual supplemental health care
grant in the amount made available under subparagraph (D)--
``(i)(I) to provide enhanced primary health care, with an
emphasis on providing regular screenings for radiogenic
illnesses by upgrading existing services or by providing
quarterly medical field team visits, as appropriate, in each
of Enewetak, Bikini, Rongelap, Utrik, Ailuk, Mejit, Likiep,
Wotho, Wotje, and Ujelang Atolls, which were affected by the
nuclear testing program of the United States; and
``(II) to enhance the capabilities of the Marshall Islands
to provide secondary treatment for radiogenic illness; and
``(ii) to construct and operate a whole-body counting
facility on Utrik Atoll.
``(B) Conditions on health care grants.--To ensure the
effective use of grants funds under clause (i) of
subparagraph (A), the Secretary of the Interior, after
consultation with the Republic of the Marshall Islands, may
establish additional conditions on the provision of grants
under that clause.
``(C) Memorandum of agreement.--To meet the objectives of
clause (ii) of subparagraph (A), the Secretary of the
Interior, the Secretary of Energy, and the Government of the
Republic of the Marshall Islands shall enter into a
memorandum of agreement setting forth the terms, conditions,
and respective responsibilities of the parties to the
memorandum of agreement in carrying out that clause.
``(D) Funding.--As authorized by section 105(c), there is
appropriated to the Secretary of the Interior, out of funds
in the Treasury not otherwise appropriated, to carry out this
paragraph $4,500,000 for each of fiscal years 2009 through
2023, as adjusted for inflation in accordance with section
218 of the U.S.-RMI Compact, to remain available until
expended.''.

SEC. 5. ASSESSMENT OF HEALTH CARE NEEDS OF THE MARSHALL
ISLANDS.

(a) In General.--The Secretary of the Interior shall enter
into an agreement with the National Academy of Sciences under
which the National Academy of Sciences shall conduct an
assessment of the health impacts of the United States nuclear
testing program conducted in the Republic of the Marshall
Islands on the residents of the Republic of the Marshall
Islands.
(b) Report.--On completion of the assessment under
subsection (a), the National Academy of Sciences shall submit
to Congress, the Secretary, the Committee on Energy and
Natural Resources of the Senate, and the Committee on Natural
Resources of

[[Page S690]]

the House of Representatives, a report on the results of the
assessment.
(c) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.

Republic of the Marshall Islands,

January 10, 2011.
Hon. Jeff Bingaman,
Chairman, Senate Committee on Energy and Natural Resources,
Washington, DC.
Dear Chairman Bingaman: I write to you on behalf of the
Marshallese people to renew our mutual efforts to address the
continuing consequences of the U.S. Nuclear Testing Program
in the Marshall Islands.
First, I would also like to take this opportunity to thank
you for your efforts in twice introducing Republic of the
Marshall Islands Supplemental Nuclear Compensation
legislation in both 2007 and 2010. I would also like to take
this opportunity to thank the Committee for approving S. 2941
last year subsequent to a hearing held on May 19, 2010.
Your understanding and efforts over the past several years
to move these difficult issues forward and address them in a
substantive and meaningful manner is most appreciated by my
Government and the Marshallese people. In this respect, I
strongly believe that the substituted version of S. 2941 as
approved by your Committee constituted real and substantive
progress in addressing outstanding nuclear related issues.
Understanding that S. 2941 expired without further action
at the close of 2010, I would once again respectfully request
that legislation be introduced in the United States Senate to
deal with the enduring consequences of the nuclear testing
program in the Marshall Islands.
My Government submitted a Petition to the United States
Congress in respect to Article IX of the Section 177
Agreement concerning ``Changed Circumstances'' in September,
2000. While my Government believes that we have firmly
established that ``changed circumstances'' exist within the
meaning of Article IX, we wish to focus our efforts on coming
to a resolution and implementing measures that produce
results in addressing the health, safety and damages caused
by the nuclear testing program.
Senate Bill No. 2941, as approved by the Committee,
represented a serious and substantive effort to deal with the
consequences of the nuclear testing program since the Section
177 Agreement went into effect almost 25 years ago.
Accordingly, I would like to review some specific measures
for inclusion in the legislation, which I believe will
address outstanding concerns and issues.
The provisions contained in Section 4 of the substituted
version of S. 1756 and S. 2941 approved by the Committee in
2010 that provided the sum of $4.5 million annually plus
adjustment for inflation as a continuing appropriation
through FY 2023 to address radiogenic illnesses and the
nuclear related health care needs of Bikini, Enewetak,
Rongelap, Utrik, Ailuk, Mejit, Likiep, Wotho, and Wotje, is
acceptable to my Government.
We support the addition of persons who were citizens of the
Trust Territory of the Pacific Islands for inclusion for
eligibility in the Energy Employees Occupational Illness
Compensation Program Act of 2000. There are many Marshallese
who worked at Department of Energy sites in the RMI in the
same manner as their U.S. citizen co-workers, yet have never
received the health care and other benefits of this program.
We also support provision in the legislation for the pro-
active and ongoing monitoring of the integrity of the Runit
Dome at Enewetak Atoll. This is an issue that has long been
of concern to the people of Enewetak who live, fish and
harvest food in the immediate area.
Any legislation addressing the consequences of the nuclear
testing program would not be complete without consideration
of the awards made by the Marshall Islands Nuclear Claims
Tribunal. Absent from S. 1756 or S. 2941 was any reference to
the decisions and awards made by the Tribunal. The
administrative and adjudicative processes of the Tribunal
over the past 20 years are an important mutually agreed-to
component of the Section 177 Agreement and its implementation
to resolve claims for damage to person and property arising
as a result of the nuclear testing program. We cannot simply
ignore the Tribunal's work and awards that it has made. The
RMI has presented a Report on this subject prepared by former
United States Attorney General Richard Thornburgh in January
2003; however, issues and concerns apparently continue. We
should move forward and resolve any remaining issues and
concerns regarding the Tribunal and its work.
We look forward to working with you and your staff to
address the issues I have raised in this letter and to move
forward on finally addressing the consequences of the nuclear
testing program. We remain hopeful as the 112th U.S. Congress
begins, this important legislation can be enacted into law to
provide badly needed help and assistance to the Marshallese
people who have suffered so much.
Finally, I would like to wish you and your staff a Happy
and Healthy New Year and, once again, thank you for all of
your help.
Sincerely,
Jurelang Zedkaia,
President.
______

By Mr. BINGAMAN (for himself and Ms. Murkowski):
S. 343. A bill to amend Title I of PL 99-658 regarding the Compact of
Free Association between the Government of the United States of America
and the Government of Palau, to approve the results of the 15-year
review of the Compact, including the Agreement Between the Government
of the United States of America and the Government of the Republic of
Palau. Following the Compact of Free Association Section 432 Review,
and to appropriate funds for the purposes of the amended PL 99-658 for
fiscal years ending on or before September 30, 2024, to carry out the
agreements resulting from that review; to the Committee on Energy and
Natural Resources.
Mr. BINGAMAN. Mr. President, I am pleased to join with my colleague
and the Ranking Member of the Committee on Energy and Natural
Resources, Lisa Murkowski, in introducing legislation to strengthen the
relationship between the United States and the Republic of Palau--one
of our closest and most reliable allies. This legislation, if enacted,
would implement the recommendations of the 15-year review called for
under the Compact of Free Association between our two nations.
Palau is one of the world's smallest nations, located in the western
Pacific about 800 miles south of Guam and 500 miles east of the
Philippines. It has a total land area of 177 square miles with a
population of about 21,000. The close ties between the U.S. and Palau
date from World War II, when Japanese forces were defeated in the
Battle of Peleliu. In 1947, the islands became a District in the United
Nations Trust Territory of the Pacific Islands. The United States was
appointed Administrating Authority of the Trust Territory with the
responsibility to promote economic and political development. Because
of the United States' strategic interest in this region, the Trust
Territory was established as the only U.N. ``Strategic'' Trust under
the authority of the U.N. Security Council, as opposed to the U.N.
General Assembly.
In the 1970s, talks on future political status were undertaken with
the United States. The Northern Mariana Islands voted to become a U.S.
territory, and the districts of Palau and the Marshall Islands chose to
separate from the remaining Trust Territory districts. In 1982, Palau
signed a 50-year Compact of Free Association that was approved by the
U.S. in 1986, P.L. 99-658. The Compact went into effect on October 1,
1994, and the U.N. Trusteeship was subsequently terminated, making
Palau a sovereign, self-governing state in free association with the
United States. The U.S. entered into similar Compacts of Free
Association with the Marshall Islands and the remaining districts of
the Trust Territory, now known as the Federated States of Micronesia,
in 1986, P.L. 99-239.
The U.S.-Palau Compact consists of four parts:

Title One, ``Government Relations,'' provides for
government-to-government relations including the privilege
for Palau citizens to enter the U.S. to work and reside as
non-immigrants, and for U.S. citizens to do the same in
Palau.
Title Two, ``Economic Relations,'' provided for a total of
$560 million in U.S. assistance from fiscal year 1995-2009,
including operational support of about $13 million annually,
$149 million for road construction, and $70 million for
capitalization of a Trust Fund to provide funds after the end
of direct U.S. financial assistance.
Title Three, ``Security and Defense Relations,'' closed
Palauan territory to the military forces of any nation except
the U.S., so-called ``Strategic Denial,'' and provides that
the U.S. may establish defense sites, although none exist at
this time or are planned.
Title Four, ``General Provisions,'' among other things,
Section 432 requires that there be a formal bilateral review
of the relationship on the 15th, 30th and 40th anniversaries
of the compact's entry into force, and that both parties
commit themselves to take specific actions based on the
conclusions of the review.

The U.S. and Palau completed this formal 15th anniversary review and,
on September 10, 2010, signed an agreement setting forth amendments to
the compact based on the conclusions and recommendation of the review.
The bill being introduced today would approve this agreement and its
appendices and incorporate them into the law which originally
established the compact.
First, the legislation would extend financial assistance for another
14-year

[[Page S691]]

term, until 2024, for operations, construction, maintenance and trust
fund contributions totaling $229 million, or an average of $16.4
million annually. This is a substantial reduction from the average of
$37.3 million annually that was provided in the first 15-year term.
Second, the legislation significantly enhances accountability of U.S.
financial assistance by requiring Palau to undertake financial and
management reforms, and the U.S. is authorized to withhold funds if the
U.S. determines that Palau ``has not made significant progress in
implementing meaningful reforms.'' Third, the bill would require any
Palauan entering the U.S. to have a Palau passport. This would be the
same requirement that was imposed on citizens of Micronesia and the
Marshall Islands when their compacts were reviewed and amended in 2003.
I believe this Agreement and legislation reaffirm and strengthen the
special ties between the U.S. and Palau. Together we will continue our
commitment to regional security. The United States will continue to be
responsible for the security and defense of Palau, and the U.S. is
honored to have the continued service of the men and women of Palau in
the U.S. armed services. Strategic denial and the associated base
rights provided for under the compact were originally designed to
counter the Cold War threat in the Pacific. While the Cold War has
ended, the U.S. will continue to face new challenges in the region.
Another indicator of the close relationship between the U.S. and
Palau is evidenced by comparing votes in the United Nations. Palau and
the U.S. vote together consistently. The most recent issue of the State
Department's report, ``Voting Practices in the United Nations 2009,''
shows that Palau's voting coincidence with the United States in 2009 on
12 important issues was 100 percent. This is the highest voting
coincidence of any country and indicates that Palau is a trusted and
reliable ally at the U.N.
In 2003, the U.S. determined that a number of Chinese Uighurs who had
been arrested in the war on terrorism and were sent to Guantanamo were
not terrorists. The Bush Administration sought new homes for them,
knowing that they would likely be persecuted if they were returned to
China. Plans to send them to a Uighur community in Virginia were
dropped because of Congressional opposition. Nearly every nation in the
world was asked to assist in their resettlement, but Palau was the
first to agree. Six Uighurs were resettled there. Palau has taken more
detainees from Guantanamo than any other nation except Albania not
counting those who were repatriated to their home countries.
It is important to note that this legislation is time-sensitive. The
first 15-year term of compact financial assistance ended with fiscal
year 2009. Fiscal Year 2010 funding for Palau was provided through
enactment of a 1-year extension in the fiscal year 2010 Omnibus
Appropriations bill, and the first few months of fiscal year 2011
funding is made available by the recent continuing resolutions. It is
important that the next CR include continued financial support for
Palau through the end of this fiscal year, to allow time for Congress
to consider and pass this legislation. I understand that the
administration's fiscal year 2012 budget will assume enactment of the
bill before October 1, leaving the Congress a relatively short period
of time to do its work.
I look forward to working with Ranking Member Murkowski and our
colleagues on the Committee in moving this bill promptly. I anticipate
reaching out to our colleagues on the Foreign Relations and Armed
Services Committees because of the important role Palau plays in U.S.
foreign and defense policy. Finally, I look forward to working with
officials in the administration and in Palau who conducted the compact
Review and concluded this important Agreement. I urge my colleagues to
join with me and Senator Murkowski in approving this agreement and
assuring the continued strength of this historic partnership.
Mr. President, I ask unanimous consent that the text of the bill and
a letter of support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 343

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, Title I
of PL 99-658 is hereby amended by inserting a new section 105
as follows:

``SEC. 105. RESULTS OF COMPACT REVIEW.

``(a) The Agreement between the Government of the United
States of America and the Government of the Republic of Palau
Following the Compact of Free Association Section 432 Review
set forth in subsection (b) of this section, is hereby
approved.
``(b)

``AGREEMENT BETWEEN THE

GOVERNMENT OF THE

UNITED STATES OF AMERICA

AND THE

GOVERNMENT OF THE REPUBLIC OF PALAU

FOLLOWING THE COMPACT OF FREE ASSOCIATION

SECTION 432 REVIEW

``In recognition of the ties that were developed between the
United States of America and Palau during World War Two, and
the subsequent half century of United States administration
of Palau and the continuing close relationship between the
Governments of the United States and Palau under the Compact
of Free Association (`Compact'), following the fifteenth
anniversary review of the relationship conducted pursuant to
Section 432 of the Compact (which provides: `Upon the
fifteenth and thirtieth and fortieth anniversaries of the
effective date of this Compact, the Government of the United
States and the Government of Palau shall formally review the
terms of this Compact and its related agreements 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
Palau and its progress in meeting the development objectives
set forth in the plan referred to in Section 231(a). The
governments commit themselves to take specific measures in
relation to the findings of conclusions resulting from the
review. Any alteration to the terms of this Compact or its
related agreements shall be made by mutual agreement, the
terms of this Compact and its related agreements shall remain
in force until otherwise amended or terminated pursuant to
Title Four of this Compact'), and in light of the desire of
the United States of America and the Republic of Palau to
deepen their relationship, now, therefore, the Government of
the United States of America and the Government of the
Republic of Palau agree as follows:
``1. Compact Section 211(f) Fund

``The Government of the United States of America (the
`Government of the United States') shall contribute $30.25
million to the Fund referred to in Section 211(f) of the
Compact in accordance with the following schedule: $3 million
annually for ten years beginning with Fiscal Year 2013
through Fiscal Year 2022, and $250,000 in Fiscal Year 2023.
``2. Infrastructure Maintenance Fund

``(a) The Government of the United States shall provide a
grant of $2 million annually from the beginning of Fiscal
Year 2011 through Fiscal Year 2024 to create a trust fund
(the `Infrastructure Maintenance Fund') to be used for the
routine and periodic maintenance of major capital improvement
projects financed by funds provided by the United States. The
Government of the Republic of Palau (the `Government of
Palau') will match the contributions made by the United
States by making contributions of $150,000 to the
Infrastructure Maintenance Fund on a quarterly basis from the
beginning of Fiscal Year 2011 through Fiscal Year 2024.
Implementation of this subsection shall be carried out in
accordance with the provisions of Appendix A to this
Agreement.

``(b) The $3 million owed to the Government of the United
States under paragraph 3(d) of Article V of the Agreement
Concerning Special Programs Related to the Entry Into Force
of the Compact of Free Association Between the Government of
the United States and the Government of the Republic of Palau
(the Guam Accords) done at Guam, May 26, 1989, plus
accumulated interest, shall be paid into the Infrastructure
Maintenance Fund. The $3 million shall remain in the
Infrastructure Maintenance Fund and not be expended for any
purpose. All past and future income generated by the $3
million shall be used exclusively for the routine maintenance
of the Compact Road provided by the United States under
Section 212 of the Compact.
``3. Fiscal Consolidation Fund

``The Government of the United States shall provide the
Government of Palau $5 million in Fiscal Year 2011 and $5
million in Fiscal Year 2012 for deposit in an interest
bearing account to be used to reduce government payment
arrears of Palau. Implementation of this section shall be
carried out in accordance with the provisions of Appendix B
to this Agreement.
``4. Direct Economic Assistance

``(a) In addition to the $13.25 million in economic
assistance provided to the Government of Palau by the
Government of the United States in Fiscal Year 2010, and
unless otherwise specified in this Agreement or in an
Appendix to this Agreement, the Government of the United
States shall provide the

[[Page S692]]

Government of Palau $107.5 million in economic assistance as
follows: $13 million in Fiscal Year 2011; $12.75 million in
Fiscal Year 2012; $12.5 million in Fiscal Year 2013; $12
million in Fiscal Year 2014; $11.5 million in Fiscal Year
2015; $10 million in Fiscal Year 2016; $8.5 million in Fiscal
Year 2017; $7.25 million in Fiscal Year 2018; $6 million in
Fiscal Year 2019; $5 million in Fiscal Year 2020; $4 million
in Fiscal Year 2021; $3 million in Fiscal Year 2022; and $2
million in Fiscal Year 2023. The funds provided in any fiscal
year under this subsection shall be provided in four (4)
quarterly payments (30 percent) in the first quarter, 30
percent in the second quarter, 20 percent in the third
quarter, and 20 percent in the fourth quarter) unless
otherwise specified in this Agreement or in an Appendix to
this Agreement.

``(b) Notwithstanding the provisions of Compact section
211(f) and the Agreement Between the Government of the United
States and the Government of Palau Regarding Economic
Assistance Concluded Pursuant to Section 211(f) of the
Compact of Free Association, with respect to Fiscal Years
2011 through Fiscal Year 2023 and except as otherwise agreed
by the Government of the United States and the Government of
Palau, the Government of Palau agrees not to exceed the
following distributions from the Section 211(f) Fund: $5
million annually beginning in Fiscal Year 2011 through Fiscal
Year 2013; $5.25 million in Fiscal Year 2014; $5.5 million in
Fiscal Year 2015; $6.75 million in Fiscal Year 2016; $8
million in Fiscal Year 2017; $9 million in Fiscal Year 2018;
$10 million in Fiscal Year 2019; $10.5 million in Fiscal Year
2020; $11 million in Fiscal Year 2021; $12 million in Fiscal
Year 2022; and $13 million in Fiscal Year 2023.

``(c) No portion of the funds provided to the Government of
Palau under this section, including the funds distributed
from the Section 211(f) Fund, shall be used, directly or
indirectly, to fund state block grants, or the activities of
the Office of the President of Palau, of the Olbiil Era
Kelulau (the Palau National Congress), or of the Palau
Judiciary. Annually, $15 million of the funds provided to the
Government of Palau under this section, including the funds
distributed from the Section 211(f) Fund, shall be used
exclusively for purposes related to education, health, and
the administration of justice and public safety, recognizing
that these funds are subject to the provisions of subsection
4(h) herein.

``(d) In order to increase the long term economic stability
of Palau and to maximize the benefits of the economic
assistance provided by the Government of the United States,
the Government of Palau shall undertake economic,
legislative, financial, and management reforms, and shall
give due consideration to reforms such as those described in
the International Monetary Fund's (IMF) Country Report No.
08/162, Republic of Palau: Selected Issues and Statistical
Appendix, (May 2008), and the Asian Development Bank's (ADB)
Strategy and Program Assessment, Palau: Policies for
Sustainable Growth, A Private Sector Assessment (July 2007)
and any other similar subsequent and future reports and
recommendations issued by the IMF, the ADB, and other
credible institutions, organizations or professional firms.
To the extent that anticipated fiscal and economic reforms
require substantial financial resources to design, implement,
or mitigate negative impacts, the Government of Palau may
propose and the two governments may agree to the use of
additional funds from the Section 211(f) Fund, provided that
the two governments agree in writing that the additional
withdrawals from the Section 211(f) Fund will not impair the
ability of the fund to provide $15 million annually from
Fiscal Year 2024 through Fiscal Year 2044, and that the
proposed reforms are a necessary and prudent use of the
funds. Government to government communications shall be
through diplomatic channels.

``(e) The Government of the United States and the Government
of Palau shall establish, effective on the day this Agreement
enters into force, an Advisory Group on Economic Reform (the
`Advisory Group'). The purpose of the Advisory Group is to
contribute to the long-term economic sustainability of Palau
by recommending economic, financial, and management reforms.
The Advisory Group shall be composed of five (5) members, two
(2) of whom shall be designated by the President of Palau and
two (2) of whom shall be designated by the Government of the
United States, the fifth of whom shall be chosen by the
Government of the United States from a list of not fewer than
three (3) persons not residents of Palau submitted by the
President of Palau. In the event the Government of the United
States rejects the persons enumerated in the list submitted
by the President of Palau, then the fifth member shall be
chosen by the President of Palau from a list of not fewer
than three (3) persons submitted by the Government of the
United States. In making their designations, the President
and the Government of the United States shall give
consideration to the mix of expertise that would be most
beneficial to the work of the Advisory Group. The Advisory
Group will be chaired by a member chosen by the members from
among their number. Its meetings will be held once a year in
Palau and once a year in Hawaii, unless otherwise agreed by
the members. Each government shall provide the necessary
support for its designated representatives on the Advisory
Group. Support for the fifth member shall be borne by the
government that recommended the member. Unless otherwise
agreed by the two governments the Advisory Group shall
terminate at the end of Fiscal Year 2023.

``(f) The Advisory Group shall recommend economic, financial
and management reforms and the schedule on which the reforms
should be implemented. The Advisory Group shall report
annually not less than thirty (30) days prior to the annual
bilateral economic consultations to be held on or about June
1 every year on the Government of Palau's progress in
implementing reforms recommended by the Advisory Group or
other reforms taken by the Government of Palau. The two
governments are committed to these annual economic
consultations being meaningful, substantive, and
comprehensive.

``(g) The Government of Palau's progress in achieving reforms
shall be reviewed at the annual bilateral economic
consultations. Examples of significant progress in a fiscal
year would be, but are not limited to: meaningful
improvements in fiscal management, including the elimination
and prevention of operating deficits; a meaningful reduction
in the national operating budget from the previous fiscal
year; a meaningful reduction in the number of government
employees from the level the previous fiscal year; a
meaningful reduction in the annual amount of the national
operating budget dedicated to government salaries from the
previous fiscal year; demonstrable reduction of government
subsidization of utilities, and meaningful tax reform.

``(h) If the Government of' the United States determines
after the annual bilateral economic consultations that the
Government of Palau has not made significant progress in
implementing meaningful reforms, then, after direct
consultation with the President of Palau, the Government of
the United States may, after ninety (90) days notice to the
Government of Palau, delay payment of economic assistance
under this section. The Government of the United States shall
determine the amount of the economic assistance to be
delayed. Any assistance delayed shall be held and released
when the Government of the United States determines that
Palau has made sufficient progress on the reforms.
``5. Infrastructure Projects

``The Government of the United States shall provide grants
totaling $40 million to the Government of Palau as follows:
$8 million annually in Fiscal Years 2011 through Fiscal Year
2013; $6 million in Fiscal Year 2014; and $5 million annually
in Fiscal Years 2015 and 2016; towards one or more mutually
agreed infrastructure projects in accordance with the
provisions of Appendix C to this Agreement.
``6. Reporting and Auditing

``Palau shall resolve all deficiencies in the Annual Single
Audit such that by 2018 no deficiency or recommendation dates
from before Fiscal Year 2016. By the first day of the fourth
quarter of each fiscal year or as soon as practicable
thereafter, in the annual report it submits under Section
231(b) of the Compact, the Government of Palau shall report
on the status and use of all funds provided under this
Agreement. The status and use of all funds provided under
this Agreement shall also be discussed in the annual
bilateral economic consultations. The financial information
relating to this funding shall conform to the standards of
the Government Accounting Standards Board. All funds provided
under this Agreement shall be subject to a financial and
compliance audit and other requirements in accordance with
the provisions of Appendix D to this Agreement.
``7. Federal Programs and Services

``The Government of the United States shall make available to
Palau through Fiscal Year 2024, in accordance with and to the
extent provided through amendments to the Federal Programs
and Services Agreement Concluded Pursuant to Article II of
Title Two and Section 232 of the Compact of Free Association,
signed at Palau on January 10, 1986, the services and related
programs covered in that agreement as amended herein. The
amendments to that agreement constitute Appendix E to this
Agreement.
``8. Telecommunication Services

``The Agreement Regarding the Provision of Telecommunication
Services by the Government of the United States to Palau
Concluded Pursuant to Section 131 of the Compact of Free
Association, signed at Koror, Republic of Palau, January 10,
1986 and the Agreement Regarding the Operation of
Telecommunication Services of the Government of the United
States in Palau Concluded Pursuant to Section 132 of the
Compact of Free Association, signed at Koror, Republic of
Palau, January 10, 1986 are amended and these amended
agreements constitute Appendix F to this Agreement.
``9. Passport Requirement

``Section 141 of Article IV of Title One of the Compact shall
be construed and applied as if it read as follows:

`Section 141
`(a) Any person in the following categories may be admitted
to, lawfully engage in occupations, and establish residence
as a noninimigrant in the United States and its territories
and possessions without regard to paragraphs (5) or
(7)(B)(i)(II) of section 212(a) of the Immigration and
Nationality Act, 8 U.S.C. Sec. 1182(a)(5) or
(a)(7)(B)(i)(II), provided that the passport presented to
satisfy section 212(a)(7)(B)(i)(I) of such Act is a valid
unexpired machine-readable passport that

[[Page S693]]

satisfies the internationally accepted standard for machine
readability:
`(1) a person who, on September 30, 1994, 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 Palau;
`(2) a person who acquires the citizenship of Palau, at
birth, on or after the effective date of the Constitution of
Palau; or
`(3) a naturalized citizen of Palau, who has been an actual
resident of Palau for not less than five years after
attaining such naturalization and who holds a certificate of
actual residence.

`Such persons shall be considered to have the permission of
the Secretary of Homeland Security of the United States to
accept employment in the United States.
`(b) The right of such persons to establish habitual
residence in a territory or possession of the United States
may, however, be subjected to non-discriminatory limitations
provided for:
`(1) in statutes or regulations of the United States; or
`(2) in those statutes or regulations of the territory or
possession concerned which are authorized by the laws of the
United States.
`(c) Section 141(a) does not confer on a citizen of Palau
the right to establish the residence necessary for
naturalization under the Immigration and Nationality Act, or
to petition for benefits for alien relatives under that Act.
Section 141(a), however, shall not prevent a citizen of Palau
from otherwise acquiring such rights or lawful permanent
resident alien status in the United States.'.
``10. Effective Date, Amendment, and Duration
``(a) This Agreement, including its Appendices, shall enter
into force on the date of the last note of an exchange of
diplomatic notes by which the Government of the United States
and the Government of Palau inform each other that all
internal procedures necessary for its entry into force have
been fulfilled.
``(b) This Agreement may be amended at any time by the
mutual written consent of the Government of the United States
and the Government of Palau.
``(c) This Agreement shall remain in full force and effect
until terminated by mutual written consent, or until
termination of the Compact, whichever occurs first.

IN WITNESS WHEREOF, the undersigned, duly authorized by their
respective Governments, have signed this Agreement.

DONE AT Honolulu, Hawaii, USA, in duplicate, this 3rd day of
September 2010, in the English language.

FOR THE GOVERNMENT FOR THE GOVERNMENT
OF THE UNITED STATES OF AMERICA: OF THE REPUBLIC OF PALAU:
...................................
...................................
...................................
Frankie A. Reed Johnson Toribiong
[Title] [Title]

``APPENDIX A--INFRASTRUCTURE MAINTENANCE FUND

``1. Subject to the terms of this Appendix, the Government
of the United States shall provide the grants specified in
section 2(a) of the Agreement between the United States of
America and the Government of the Republic of Palau following
the Compact of Free Association Section 432 Review (the
`Agreement') to which this document is an appendix.
``2. If, in a given Fiscal Year, the Government of Palau
does not make the contributions agreed to in section 2(a) of
the Agreement, economic assistance funds to be provided to
Palau in the following fiscal year under section 4 of the
Agreement will be redirected to the Infrastructure
Maintenance Fund to make up the contributions owed by the
Government of Palau.
``3. Grant funds from the Government of the United States
and Government of Palau contributions to the Infrastructure
Maintenance Fund shall be deposited in an account established
by the Government of Palau. Fiscal control and accounting
procedures shall be sufficient to permit the preparation of
required reports and to permit the tracing of funds to a
level of expenditure adequate to establish that such funds
have been used in compliance with this Appendix.
``4. Palau shall report, at the annual bilateral economic
consultations, the sources of its contributions to the
Infrastructure Maintenance Fund.
``5. The Infrastructure Maintenance Fund, and any interest
accruing thereon, is to be used by the Government of Palau
for the maintenance of United States financed capital
improvement projects such as the road system (Compact Road)
provided by the United States under Section 212 of the
Compact and the capital improvements provided by the United
States to the Airai International Airport. The Government of
Palau may request in writing the use of the Infrastructure
Maintenance Fund for maintenance of U.S, financed capital
improvement projects other than these two, such as the U.S.-
financed capital improvements reflected in the Palau national
hospital and schools. The Government of the United States
shall give due consideration to any such request and shall
endeavor to make a determination within sixty (60) days of
receipt of the request. Although the primary purpose of the
Infrastructure Maintenance Fund is to provide for routine and
periodic maintenance, it may be used, when mutually agreed
upon in writing, to mitigate damage and make emergency
repairs to capital improvement projects funded by the United
States.
``6. The Government of Palau shall identify to the
Government of the United States the Government of Palau
official and office responsible for maintenance of the
infrastructure with Fund monies. The official shall be
responsible for activities necessary to plan and implement
annual programs of maintenance of the Compact Road and the
International Airport at Airai, and all other public
infrastructure. The official shall be responsible for keeping
each facility as nearly as possible in its original condition
as constructed. The official shall develop an annual
maintenance plan and related budget for reactive, preventive,
repetitive, non-recurrent, and emergency-generated
maintenance of the infrastructure specified in paragraph 5
and for all other public infrastructure. The plan will
include descriptions and schedules of planned activities and
shall identify the related costs. The plan for the
infrastructure specified in paragraph 5 shall be submitted to
the Government of the United States for its approval no less
than sixty (60) days prior to the beginning of each fiscal
year.
``7. The Government of the United States will base its
approval or disapproval of the plan for the infrastructure
specified in paragraph 5 on its consideration of the
effectiveness of the plan within the bounds of annual
resources. Approval by the Government of the United States
will be in the form of an annual grant which incorporates the
approved maintenance plan and budget. Acceptance of the grant
by the Government of the Republic of Palau will obligate the
Government of Palau to the implementation of the annual
maintenance plan and budget for the infrastructure specified
in paragraph 5.
``8. The grant, annual maintenance plan, and budget for the
infrastructure specified in paragraph 5 may be amended by
written mutual agreement.
``9. Use of the Fund monies shall be subject to 43 Code of
Federal Regulations 12 and all other applicable laws and
regulations governing the use of grant funds provided by the
Government of the United States. These funds may not be used
for any purpose other than that for which they are offered.
``10. Any grant funds remaining unexpended at the end of a
fiscal year shall remain in the Infrastructure Maintenance
Fund and may be included in subsequent annual maintenance
plans and budgets.
``11. Reporting Requirements:
``(a) A Standard Form SF 425 (or successor form) and a
narrative project status report shall be submitted quarterly.
``(b) Reports are due within thirty (30) days of the end of
each quarter. Final reports are due ninety (90) days after
the expiration or termination of the award.
``(c) All required plans and reports must be submitted to
the U.S. Department of the Interior Office of Insular Affairs
grant manager for the grant.

``APPENDIX B--FISCAL CONSOLIDATION FUND

``1. Subject to the terms of this Appendix, the Government
of the United States shall provide the Government of Palau
the amounts specified in section 3 of the Agreement of the
United States of America and the Government of the Republic
of Palau following the Compact of Free Association Section
432 Review (the `Agreement') to which this document is an
appendix. Until disbursed, these funds will be deposited in
an interest bearing account and the interest generated shall
also be used to reduce Palau's government payment arrears in
accordance with the provisions of this Appendix.
``2. The purpose of these funds is to allow the Government
of Palau to discharge the level of debts accumulated prior to
September 30, 2009. None of the principal or interest accrued
on these funds may be disbursed to discharge a debt until the
governments agree upon a specific list of debts to be paid
with each annual contribution. The funds may not be used to
pay off debt owed to another government, to pay an
international organization, or to pay off debts which are the
subject of current or pending litigation. Unless agreed to in
writing by the Government of the United States, the funds may
not be used to pay any entity owned or controlled by any
member of the government, elected or appointed; to pay any
entity owned or controlled by any member of the immediate
family of any member of the government; to pay any entity
from which a member of the government derives income; or to
pay any creditor if the creditor owes money to the Government
of Palau unless arrangements are made immediately to offset
amounts owed to the Government of

[[Page S694]]

Palau from the funds made available to the creditor. Debts
owed to U.S. creditors must receive priority. All debts to be
paid with these funds must be properly documented as
legitimate debts of the Republic of Palau using generally
accepted accounting principles. The total amount of the debt
to be paid shall not exceed the general fund deficit
established by the Single Audit Report as of September 30,
2009.
``3. The Government of Palau shall report quarterly to the
Government of the United States on the use of these funds
until they are expended and, until expended, the status and
use of these funds shall be a regular agenda item for annual
bilateral economic consultations to be held around June 1 of
every year. If eligible debts do not amount to $10 million,
upon the request of the Government of Palau, the funds
remaining after payment of the eligible debts shall be added
to the amounts provided for infrastructure projects in
section 5 of the Agreement.

``APPENDIX C--INFRASTRUCTURE PROJECTS

``1. Subject to the terms of this Appendix, the Government
of the United States shall provide grants towards one or more
mutually agreed infrastructure projects as specified in
section 5 of the Agreement of the United States of America
and the Government of the Republic of Palau following the
Compact of Free Association Section 432 Review (the
`Agreement') to which this document is an appendix. These
infrastructure grants shall be subject to 43 Code of Federal
Regulations 12 and all other applicable laws and regulations
governing the use of grant funds provided by the Government
of the United States. Grant funds may not be used for any
purpose other than that for which they are offered.
``2. Payment of grant funds shall be made as reimbursement
of actual or accrued expenditures, using a format provided by
the Government of the United States or as mutually agreed.
``3. Prior to requesting reimbursement or payment, the
Government of Palau shall, as applicable, provide the
following documentation to the Government of the United
States:
``(a) Evidence of title, leasehold agreement, or other
legal authority for use of the land upon which the capital
improvement project(s) is (are) to be constructed.
``(b) A detailed project budget for each infrastructure
project. The budget shall include a breakdown of costs (in-
house and contract) for planning, engineering and design,
real estate, supervision and administration, construction,
and construction management and inspection. The Government of
Palau and the Government of the United States shall mutually
agree to the format of this submission.
``(c) A scope of work that describes the work to be
performed and the schedule from planning through completion
of construction. A certified professional engineer or
architect shall sign both the scope of work and budget for
each construction project.
``4. Prior to disbursing funds requested to reimburse for
actual project construction, the Government of the United
States may review construction plans and specifications, any
revised detailed cost estimate, and a detailed construction
schedule.
``5. All grant monies shall remain available until
expended, unless otherwise provided in this Appendix.
``6. Failure to comply with objectives, terms and
conditions, or reporting requirements may result in the
suspension of grant payments until the deficiency is
corrected.
``7. Reporting Requirements:
``(a) A Standard Form SF 425 (or successor form) and a
narrative project status report shall be submitted quarterly.
``(b) Reports are due within thirty (30) days of the end of
each quarter. Final reports are due ninety (90) days after
the expiration or termination of the award.
``(c) All required documents and reports must be submitted
to the U.S. Department of the Interior Office of Insular
Affairs grant manager for the grant.

``APPENDIX D--AUDIT STANDARDS AND RESPONSIBILITIES

``1. The Government of Palau shall perform a financial and
compliance audit, within the meaning of the Single Audit Act,
as amended (31 U.S.C. 7501 et seq.), of the uses of the
funding provided pursuant to the Agreement Between the
Government of the United States of America and the Government
of the Republic of Palau following the Compact of Free
Association Section 432 Review (the `Agreement') for each
fiscal year during which the Agreement is in effect. The
results of these Audits shall be available not later than the
beginning of the fourth fiscal quarter following the end of
the fiscal year under review, as required by the Single Audit
Act. The costs of these audits are to be borne by the
Government of Palau, and may be a recognized expense to funds
provided under section 4 of the Agreement. If the Government
of the Republic of Palau does not endeavor to perform a
Single Audit in any given fiscal year, economic assistance
funds to be provided to Palau in the following fiscal year
under section 4 of the Agreement shall be redirected to pay
for the required Single Audit.
``2. In conducting the audits required under this Appendix,
the auditors shall take into account relevant laws and
regulations of the United States and Palau, including U.S.
laws and regulations on the conduct of audits, and Palauan
laws and regulations which relate in a material, substantial
or direct way to financial statements and operations of the
Government of Palau.
``3. The authority of the Government of the United States
set forth this Appendix shall continue for at least three (3)
years after the last Grant or element of assistance by the
Government of the United States under this Agreement has been
provided and expended.
``4. Audit officials or agents of the Government of the
United States may perform audits on the use of all funding
provided pursuant to this Agreement, including grants and
other assistance provided to the Government of Palau. The
Government of the United States is responsible for all costs
attendant to the discharge of this authority.
``5. Audit officials from the Government of the United
States are the officials and employees of the Government of
the United States who are responsible for the discharge of
its audit responsibilities, including those of the
Comptroller General of the United States and any Inspector
General of an agency of the Government of the United States
with programs operating in or otherwise serving the Republic
of Palau. While present in the Republic of Palau for the
purposes of this Appendix, audit officials from the
Government of the United States 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, and other audit officials from
the Government of the United States, 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 Palau.
``6. Audit officials from the Government of the United
States shall provide the Government of Palau with advance
notice of the specific dates and nature of their visits prior
to entering the Republic of Palau and shall show verifiable
identification to officials of the Government of Palau when
seeking access to records. In the performance of their
responsibilities under this Agreement, audit officials from
the Government of the United States shall have due regard for
the laws of the Republic of Palau and the duties and
responsibilities of the officials of the Government of Palau.
Officials of the Government of Palau shall cooperate fully to
the extent practicable with the United States audit officials
to enable the full discharge of their responsibilities.
``7. The Comptroller General of the United States, and
officials of the United States Government Accountability
Office acting on his or her behalf, shall have coextensive
authority with the executive branch of the Government of the
United States as provided by this Appendix. The audit
officials from the executive branch of the Government of the
United States shall avoid duplication between their audit
programs and those of the United States Government
Accountability Office. The Government of Palau shall
cooperate fully to the extent practicable with the
Comptroller General of the United States in the conduct of
such Audits as the Comptroller General of the United States
determines necessary in accordance with this Appendix to
enable the full discharge of his responsibilities.
``8. The Government of Palau shall provide audit officials
from the Government of the United States with access, without
cost and during normal working hours, to all records,
documents, working papers, automated data, and files which
are relevant to the uses of funding received pursuant to the
Agreement by the Government of Palau. To the extent that such
information is contained in confidential official documents,
the Government of Palau shall undertake to extract
information that is not of a confidential nature and make it
available to the audit officials from the Government of the
United States in the same manner as other relevant
information or to provide such information from other
sources.
``9. In order to reduce the level of interference in the
daily operation of the activities of the Government of Palau,
audit officials from the Government of the United States
shall, to the extent practicable, inform the Government of
Palau of their need for information, including the type of
information and its relation to their annual audit schedule.
To the extent practicable, the Government of Palau shall make
available the information requested by audit officials from
the Government of the United States relevant to Audits and
available in a manner consistent with generally accepted
accounting procedures that allows for the distinction of the
Grants, assistance, and payments provided by the Government
of the United States from any other funds of the Government
of Palau. Such information shall be used and returned as
quickly as accurate audit testing and surveying allow.

[[Page S695]]

``10. The Government of Palau shall maintain records,
documents, working papers, automated data, files, and other
information regarding each such Grant or other assistance for
at least three (3) years after such Grant or assistance was
provided.
``11. Audit organizations and officials from the Government
of the United States, including the Comptroller General of
the United States and his duly authorized representatives,
shall provide the Government of Palau with at least thirty
(30) days to review and comment on draft audit reports prior
to the release of the reports. The comments of the Government
of Palau shall be included, in full, in the final audit
reports. Should a draft audit report be revised based on the
comments of the Government of Palau, the Government of Palau
shall have an additional period to review and comment on the
report prior to its release.''.
(c) The amendments to the Compact subsidiary agreements
referenced in sections 7 and 8 of the Agreement set forth in
section 105(b) above are hereby consented to (except for the
extension of Article X of the Federal Programs and Services
Agreement Concluded Pursuant to Article II of Title Two and
Section 232 of the Compact of Free Association).
(d) There are authorized and appropriated to the Department
of the Interior, out of any funds in the Treasury not
otherwise appropriated, to remain available until expended,
such sums as are necessary to carry out the purposes of
sections 1, 2(a), 3, 4(a), and 5 of the Agreement set forth
in section 105(b) above.
(e) If this section 105 and the Agreement set forth in
section 105(b) above become effective during fiscal year
2011, and if between September 30, 2010, and the date the
Agreement set forth in section 105(b) becomes effective, the
Government of Palau withdraws more than $5,000,000 from the
trust fund established under section 211(f) of the U.S.-Palau
Compact, amounts payable under sections 1, 2(a), 3, and 4(a)
of the Agreement set forth in section 105(b) above, shall be
withheld from the Government of Palau until Palau has
reimbursed the trust fund for the amount, above $5,000,000,
withdrawn.
(f) There are authorized to be appropriated to the
Departments, agencies, and instrumentalities named in
paragraphs 1, 3, and 4 of section 221(a) of the U.S.-Palau
Compact, and their successor Departments, agencies, and
instrumentalities, such sums as are necessary to carry out
the purposes of those paragraphs, to remain available until
expended.
(g) There are authorized to be appropriated to the
Department of the Interior $1.5 million annually for 14
years--Fiscal Year 2011 through Fiscal Year 2024--to
subsidize United States Postal Service (USPS) postal services
provided to Palau, the Republic of the Marshall Islands, and
the Federated States of Micronesia, to remain available until
expended.
(h) Section 105(f)(1)(B)(ix) of the Compact of Free
Association Amendments Act of 2003 (48 U.S.C.
1921d(f)(1)(B)(ix)) shall be applied by substituting ``2024''
for ``2009.''
____

January 14, 2011.
Hon. Joseph R. Biden, Jr.,
President of the Senate,
Washington, DC.
Dear Mr. President: Enclosed is a draft bill to amend Title
I of Pub. L. No. 99-658, 100 Stat. 3672 (Nov. 14, 1986),
regarding the Compact of Free Association between the
Government of the United States of America and the Government
of Palau. The draft bill would approve the results of the 15-
year review of the Compact, including the Agreement Between
the Government of the United States of America and the
Government of the Republic of Palau following the Compact of
Free Association Section 432 Review (the Agreement), and
appropriate funds to the Department of the Interior for the
purposes of the amended Pub. L. No. 99-658 for fiscal years
ending on or before September 30, 2024, to carry out the
agreements resulting from that review. We strongly urge that
the draft bill be introduced, referred appropriately, and
enacted at the earliest opportunity.
Section 432 of the Compact of Free Association between the
Government of the United States of America and the Government
of Palau (Compact) provides for the two governments formally
to review the Compact upon the fifteenth anniversary of its
effective date--October 1, 2009. The two governments
concluded this review with the signing of the Agreement on
September 3, 2010.
The proposed legislation would amend Pub. L. No. 99-658,
the legislation that approved the Compact, to add a section
to approve and implement the results of the 15-year review.
In particular, the proposed legislation would provide $215.75
million beginning in fiscal year 2011 through fiscal year
2024 to be administered by the Department of the Interior.
Over this 14-year period, $30.25 million would supplement the
fund already provided in section 211(f) of the Compact;
$107.5 million would be in direct economic assistance to
assist Palau in transitioning to the level of assistance that
will be provided exclusively by the section 211(f) fund after
fiscal year 2024; $40 million would be for infrastructure
projects; $28 million would be for maintenance of major
infrastructure already provided to Palau (the Compact road
and improvements to Palau's international airport); and $10
million would enable fiscal consolidation.
Under the Agreement, Palau is to undertake economic,
legislative, financial, and management reforms; economic
assistance may be withheld in the absence of significant
progress in implementing meaningful reforms. In addition to
providing economic assistance and requiring reform, the
Agreement would require citizens of Palau entering the United
States to have a passport.
Direct economic assistance is scheduled to end after the
expiration of the Continuing Appropriations Act, 2011 (Pub.
L. No. 111-242), which is currently March 4, 2011. To ensure
continuity of financial assistance for Palau, we are eager to
provide Congress whatever information and assistance is
necessary to secure early passage of the proposed
legislation.
The Statutory Pay-As-You-Go (PAYGO) Act of 2010 provides
that revenue and direct spending legislation cannot, in the
aggregate, increase the on-budget deficit. If such
legislation increases the on-budget deficit and that increase
is not offset by the end of the Congressional session, a
sequestration must be ordered. This draft bill would increase
mandatory outlays and the on-budget deficit as shown below:

FISCAL YEARS
[$ Millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Deficit Impact.................................................. 28 28 26 23 22 20 14 12 11 10 194
--------------------------------------------------------------------------------------------------------------------------------------------------------

This proposal would increase direct spending, and it is
therefore subject to the Statutory PAYGO Act and should be
considered in conjunction with all other proposals that are
subject to the Act.
Enactment of the draft bill would protect United States
interests and promote the continued mutual well being of our
two countries. Palau is one of our nation's closest and most
reliable allies. The legislation will support U.S. national
security interests in an important part of the western
Pacific where U.S. influence is being challenged. The Office
of Management and Budget has advised that enactment of the
draft bill would be in accord with the program of the
President.
Sincerely,
David J. Hayes,
Deputy Secretary of the Interior.
James B. Steinbeg,
Deputy Secretary of State.
______

By Mr. REID (for himself, Ms. Stabenow, and Mr. Tester):
S. 344. A bill to amend title 10, United States Code, to permit
certain retired members of the uniformed services who have a service-
connected disability to receive both disability compensation from the
Department of Veterans Affairs for their disability and either retired
pay by reason of their years of military service or Combat-Related
Special Compensation, and for other purposes; to the Committee on Armed
Services.
Mr. REID. Mr. President, I rise today on behalf of our nation's
veterans to once again discuss the unjust and outdated policy of
failing to give our veterans their full earned military retirement
benefits and veterans disability compensation. Full payment of
retirement and disability benefits, known as ``concurrent receipt,'' is
an issue that I have ardently supported for more than 10 years now.
In the past, veterans were prevented from receiving the full pay and
benefits they had earned. The law required that military retired pay be
reduced dollar-for-dollar by the amount of any VA disability
compensation received. Many Senators have joined me in fighting this
policy and we have made some progress on behalf of our nation's
veterans.
In 2003, Congress passed legislation which allowed disabled retired
veterans with at least a 50 percent disability rating to become
eligible for full concurrent receipt benefits by 2013. Then in 2004,
the 10-year phase-in period was eliminated for veterans with 100
percent service-related disability. These are significant victories
that put hundreds of thousands of veterans on track to receiving both
their retirement and disability benefits, but many more are

[[Page S696]]

still affected by the unjust denial of concurrent receipt.
For me, this is a simple matter of fairness. There is no reason to
deny a veteran who has served his country honorably the right to the
full value of their retirement pay simply because his service also
caused him to become disabled. Unfortunately, that is exactly what the
current law does. This legislation will put an end to it.
It is not a partisan issue. Our nation has been at war for almost a
decade, and our soldiers have performed with unmatched honor and
courage in difficult theatres of war. Our utmost duty as lawmakers
should be to ensure that the brave men and women in the United States
Armed Forces receive the benefits they have earned.
Today I reintroduce this legislation which will eliminate all
restrictions to concurrent receipt. We must take action now, and
support our veterans who have given so much to this grateful nation.
This is the right thing to do.
I hope my Senate colleagues will join me in supporting this bill.
These veterans have faced arbitrary discrimination long enough.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 344

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Retired Pay Restoration Act
of 2011''.

SEC. 2. ELIGIBILITY FOR PAYMENT OF BOTH RETIRED PAY AND
VETERANS' DISABILITY COMPENSATION FOR CERTAIN
MILITARY RETIREES WITH COMPENSABLE SERVICE-
CONNECTED DISABILITIES.

(a) Extension of Concurrent Receipt Authority to Retirees
With Service-Connected Disabilities Rated Less Than 50
Percent.--
(1) Repeal of 50 percent requirement.--Section 1414 of
title 10, United States Code, is amended by striking
paragraph (2) of subsection (a).
(2) Computation.--Paragraph (1) of subsection (c) of such
section is amended by adding at the end the following new
subparagraph:
``(G) For a month for which the retiree receives veterans'
disability compensation for a disability rated as 40 percent
or less or has a service-connected disability rated as zero
percent, $0.''.
(b) Clerical Amendments.--
(1) The heading of section 1414 of such title is amended to
read as follows:

``Sec. 1414. Members eligible for retired pay who are also
eligible for veterans' disability compensation: concurrent
payment of retired pay and disability compensation''.

(2) The item relating to such section in the table of
sections at the beginning of chapter 71 of such title is
amended to read as follows:

``1414. Members eligible for retired pay who are also eligible for
veterans' disability compensation: concurrent payment of
retired pay and disability compensation.''.

(c) Effective Date.--The amendments made by this section
shall take effect on January 1, 2012, and shall apply to
payments for months beginning on or after that date.

SEC. 3. COORDINATION OF SERVICE ELIGIBILITY FOR COMBAT-
RELATED SPECIAL COMPENSATION AND CONCURRENT
RECEIPT.

(a) Amendments To Standardize Similar Provisions.--
(1) Qualified retirees.--Subsection (a) of section 1414 of
title 10, United States Code, as amended by section 2(a), is
amended--
(A) by striking ``a member or'' and all that follows
through ``retiree')'' and inserting ``a qualified retiree'';
and
(B) by adding at the end the following new paragraph:
``(2) Qualified retirees.--For purposes of this section, a
qualified retiree, with respect to any month, is a member or
former member of the uniformed services who--
``(A) is entitled to retired pay (other by reason of
section 12731b of this title); and
``(B) is also entitled for that month to veterans'
disability compensation.''.
(2) Disability retirees.--Paragraph (2) of subsection (b)
of section 1414 of such title is amended to read as follows:
``(2) Special rule for retirees with fewer than 20 years of
service.--The retired pay of a qualified retiree who is
retired under chapter 61 of this title with fewer than 20
years of creditable service is subject to reduction by the
lesser of--
``(A) the amount of the reduction under sections 5304 and
5305 of title 38; or
``(B) the amount (if any) by which the amount of the
member's retired pay under such chapter exceeds the amount
equal to 2\1/2\ percent of the member's years of creditable
service multiplied by the member's retired pay base under
section 1406(b)(1) or 1407 of this title, whichever is
applicable to the member.''.
(b) Effective Date.--The amendments made by this section
shall take effect on January 1, 2012, and shall apply to
payments for months beginning on or after that date.

SEC. 4. CLARIFICATION OF COMPUTATION OF COMBAT-RELATED
SPECIAL COMPENSATION FOR CHAPTER 61 DISABILITY
RETIREES.

(a) In General.--Section 1413a(b)(3) of title 10, United
States Code, is amended by striking ``shall be reduced by the
amount (if any) by which the amount of the member's retired
pay under chapter 61 of this title exceeds'' both places it
appears and inserting ``may not, when combined with the
amount of retired pay payable to the retiree after any such
reduction under sections 5304 and 5305 of title 38, cause the
total of such combined payment to exceed''.
(b) Effective Date.--The amendments made by this section
shall take effect on January 1, 2012, and shall apply to
payments for months beginning on or after that date.

____________________