[Congressional Record Volume 159, Number 94 (Thursday, June 27, 2013)]
[Senate]
[Pages S5504-S5506]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (by request):
  S. 1268. A bill to approve an agreement between the United States and 
the Republic of Palau; to the Committee on Energy and Natural 
Resources.
  Mr. WYDEN. Mr. President, I am pleased to introduce 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.
  The Committee on Energy and Natural Resources will be holding a 
hearing on insular issues on Thursday, July 11, and it is my intention 
to add this bill to the agenda for that hearing.
  Palau is located in the western Pacific about 800 miles south of Guam 
and 500 miles east of the Philippines. The close ties between the U.S. 
and Palau date from World War II, when Japanese forces were defeated in 
the Battle of Peleliu with a loss of nearly 2,000 U.S. marines. 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 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 Compact provides the U.S. with 
the ability to deny the use of Palauan territory to the military forces 
of other nations, and to establish military bases in Palau, should the 
need arise. These security provisions are described by the 
administration as ``vital'' to U.S. regional security and diplomatic 
interests.
  The U.S. and Palau completed a formal review of the Compact in 2010 
and, on September 10, 2010, signed an agreement with amendments to the 
Compact based on the conclusions and recommendation of the review. The 
bill

[[Page S5505]]

being introduced today would approve this agreement and its appendices 
and incorporate them into the law which established the Compact.
  First, the legislation would extend and phase-out annual financial 
assistance over 11 years, through 2024, for operations, construction, 
maintenance and trust fund contributions totaling $165 million, or an 
average of $15 million annually. Second, the legislation significantly 
enhances accountability of U.S. financial assistance by requiring Palau 
to undertake financial and management 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.
  This agreement and legislation reaffirms and strengthens 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. continues to face new challenges in the region.
  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 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 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. 1268

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

     SECTION 1. APPROVAL OF THE AGREEMENT BETWEEN THE UNITED 
                   STATES AND THE REPUBLIC OF PALAU.

       (a) Definitions.--In this section:
       (1) Agreement.--The term ``Agreement'' means the Agreement 
     and appendices signed by the United States and the Republic 
     of Palau on September 3, 2010.
       (2) Compact of free association.--The term ``Compact of 
     Free Association'' means the Compact of Free Association 
     between the Government of the United States of America and 
     the Government of Palau (48 U.S.C. 1931 note; Public Law 99-
     658).
       (b) Results of Compact Review.--
       (1) In general.--Title I of Public Law 99-658 (48 U.S.C. 
     1931 et seq.) is amended by adding at the end the following:

     ``SEC. 105. RESULTS OF COMPACT REVIEW.

       ``(a) In General.--The Agreement and appendices signed by 
     the United States and the Republic of Palau on September 3, 
     2010 (referred to in this section as the `Agreement'), in 
     connection with section 432 of the Compact of Free 
     Association between the Government of the United States of 
     America and the Government of Palau (48 U.S.C. 1931 note; 
     Public Law 99-658) (referred to in this section as the 
     `Compact of Free Association'), are approved--
       ``(1) except for the extension of article X of the 
     Agreement Regarding Federal Programs and Services, and 
     Concluded Pursuant to article II of title II and section 232 
     of the Compact of Free Association; and
       ``(2) subject to the provisions of this section.
       ``(b) Withholding of Funds.--If the Republic of Palau 
     withdraws more than $5,000,000 from the trust fund 
     established under section 211(f) of the Compact of Free 
     Association in any of fiscal years 2011, 2012, or 2013, 
     amounts payable under sections 1, 2(a), 3, and 4(a), of the 
     Agreement shall be withheld from the Republic of Palau until 
     the date on which the Republic of Palau reimburses the trust 
     fund for the total amounts withdrawn that exceeded $5,000,000 
     in any of those fiscal years.
       ``(c) Funding for Certain Provisions Under Section 105 of 
     Compact of Free Association.--Within 30 days of enactment of 
     this section, out of any funds in the Treasury not otherwise 
     appropriated, the Secretary of the Treasury shall transfer to 
     the Secretary of the Interior such sums as are necessary for 
     the Secretary of the Interior to implement sections 1, 2(a), 
     3, 4(a), and 5 of the Agreement, which sums shall remain 
     available until expended without any further appropriation.
       ``(d) Authorizations of Appropriations.--There are 
     authorized to be appropriated--
       ``(1) to the Secretary of the Interior to subsidize postal 
     services provided by the United States Postal Service to the 
     Republic of Palau, the Republic of the Marshall Islands, and 
     the Federated States of Micronesia $1,500,000 for each of 
     fiscal years 2014 through 2024, to remain available until 
     expended.
       ``(2) to the head of each Federal entity described in 
     paragraphs (1), (3), and (4) of section 221(a) of the Compact 
     of Free Association (including the successor of each Federal 
     entity) to carry out the responsibilities of the Federal 
     entity under section 221(a) of the Compact of Free 
     Association such sums as are necessary, to remain available 
     until expended.''.
       (2) Offset.--Section 3 of the Act of June 30, 1954 (68 
     Stat. 330, 82 Stat. 1213, chapter 423), is repealed.
       (c) Payment Schedule; Withholding of Funds; Funding.--
       (1) Compact section 211(f) fund.--Section 1 of the 
     Agreement shall be construed as though the section reads as 
     follows:

     ``SECTION 1. COMPACT SECTION 211(F) FUND.

       ``The Government of the United States of America (the 
     `Government of the United States') shall contribute 
     $30,250,000 to the Fund referred to in section 211(f) of the 
     Compact in accordance with the following schedule--
       ``(1) $11,000,000 in fiscal year 2014;
       ``(2) $3,000,000 in each of fiscal years 2015 through 2017;
       ``(3) $2,000,000 in each of fiscal years 2018 through 2022; 
     and
       ``(4) $250,000 in fiscal year 2023.''.
       (2) Infrastructure maintenance fund.--Subsection (a) of 
     section 2 of the Agreement shall be construed as though the 
     subsection reads as follows:
       ``(a) The Government of the United States shall provide a 
     grant of $6,912,000 for fiscal year 2014 and a grant of 
     $2,000,000 annually from the beginning of fiscal year 2015 
     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 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 
     2014 through fiscal year 2024. Implementation of this 
     subsection shall be carried out in accordance with the 
     provisions of Appendix A to this Agreement.''.
       (3) Fiscal consolidation fund.--Section 3 of the Agreement 
     shall be construed as though the section reads as follows:

     ``SEC. 3. FISCAL CONSOLIDATION FUND.

       ``The Government of the United States shall provide the 
     Government of Palau $10,000,000 in fiscal year 2014 for 
     deposit in an interest bearing account to be used to reduce 
     government arrears of Palau. Implementation of this section 
     shall be carried out in accordance with the provisions of 
     Appendix B to this Agreement.''.
       (4) Direct economic assistance.--Subsection (a) of section 
     4 of the Agreement shall be construed as though the 
     subsection reads as follows:
       ``(a) In addition to the economic assistance of $13,147,000 
     provided to the Government of Palau by the Government of 
     United States in each of fiscal years 2010, 2011, 2012, and 
     2013, and unless otherwise specified in this Agreement or in 
     an Appendix to this Agreement, the Government of the United 
     States shall provide the Government of Palau $69,250,000 in 
     economic assistance as follows--
       ``(1) $12,000,000 in fiscal year 2014;
       ``(2) $11,500,000 in fiscal year 2015;
       ``(3) $10,000,000 in fiscal year 2016;
       ``(4) $8,500,000 in fiscal year 2017;
       ``(5) $7,250,000 in fiscal year 2018;
       ``(6) $6,000,000 in fiscal year 2019;
       ``(7) $5,000,000 in fiscal year 2020;
       ``(8) $4,000,000 in fiscal year 2021;
       ``(9) $3,000,000 in fiscal year 2022; and
       ``(10) $2,000,000 in fiscal year 2023.

     The funds provided in any fiscal year under this subsection 
     for economic assistance shall be provided in 4 quarterly 
     payments (30 percent in the first quarter, 30 percent in the 
     second quarter, 20 percent in the third quarter, and 20 
     percent in the fourth quarter) unless otherwise specified in 
     this Agreement or in an Appendix to this Agreement.''.
       (5) Infrastructure projects.--Section 5 of the Agreement 
     shall be construed as though the section reads as follows:

     ``SEC. 5. INFRASTRUCTURE PROJECTS.

       ``The Government of the United States shall provide grants 
     totaling $40,000,000 to the Government of Palau as follows: 
     $30,000,000 in fiscal year 2014; and $5,000,000 annually in 
     each of fiscal years 2015 and 2016; towards 1 or more 
     mutually agreed infrastructure projects in accordance with 
     the provisions of Appendix C to this Agreement.''.
       (d) Continuing Programs and Laws.--Section 105(f)(1)(B)(ix) 
     of the Compact of Free Association Amendments Act of 2003 (48 
     U.S.C. 192ld(f)(1)(B)(ix)) is amended by striking ``2009'' 
     and inserting ``2024''.
       (e) Passport Requirement.--Section 141 of Article IV of 
     Title One of the Compact of Free Association shall be 
     construed and applied as if it read as follows:

     ``SEC. 141. PASSPORT REQUIREMENT.

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

[[Page S5506]]

     unexpired machine-readable passport that 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.
       ``(b) 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.
       ``(c) 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.
       ``(d) 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.''.

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