[House Report 104-471]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-471
_______________________________________________________________________


 
                   OMNIBUS INSULAR AREAS ACT OF 1995
_______________________________________________________________________


 March 5, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1332]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Resources, to whom was referred the bill 
(H.R. 1332) to establish certain policies and responsibilities 
with respect to the administration of the Rongelap Resettlement 
Trust Fund, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Omnibus Insular 
Areas Act of 1995''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title.

                           TITLE I--RONGELAP

Sec. 101. Short title.
Sec. 102. Policy regarding assistance for resettlement of people of 
Rongelap.
Sec. 103. Responsibilities relating to Rongelap Resettlement Trust 
Fund.
Sec. 104. Trustee and other fund personnel.
Sec. 105. Resettlement expenditures and activities.
Sec. 106. Transfer of unexpended and unobligated funds.

                        TITLE II--AMERICAN SAMOA

Sec. 201. Short title.
Sec. 202. Findings.
Sec. 203. Authorization of funding.
Sec. 204. Establishment of trust.
Sec. 205. Uses of trust funds.
Sec. 206. Disbursement of trust funds.
Sec. 207. Audits.
Sec. 208. Audits by the United States.
Sec. 209. Settlement of disputes.
Sec. 210. Criminal violations.
Sec. 211. Definitions.

        TITLE III--COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS

Sec. 301. Termination of annual direct grant assistance.

           TITLE IV--TERRITORIAL ADMINISTRATIVE CESSATION ACT

Sec. 401. Short title.
Sec. 402. Congressional findings.
Sec. 403. Elimination of Office of Territorial and International 
Affairs.
Sec. 404. Certain activities not funded.

                           TITLE I--RONGELAP

SEC. 101. SHORT TITLE.

  This title may be cited as the ``Rongelap Recovery and Community 
Self-Reliance Act''.

SEC. 102. POLICY REGARDING ASSISTANCE FOR RESETTLEMENT OF PEOPLE OF 
                    RONGELAP.

  The purposes of this title are to improve the legal and policy 
framework for fulfillment of the objectives of section 103(i) of Public 
Law 99-239 (99 Stat. 1783) and to prescribe the manner in which the 
Rongelap Resettlement Trust Fund established pursuant to Public Law 
102-154 (105 Stat. 1009) shall be administered in order to achieve the 
goal of early and safe resettlement of the people of Rongelap. The 
measures set forth in this title are appropriate and necessary in light 
of the results of scientific studies on the habitability of Rongelap 
conducted pursuant to section 103(i) of Public Law 99-239 and are 
intended to enable the people of Rongelap to exercise greater self-
determination and local self-government, and to take control of their 
own destiny and become more self-reliant, through a resettlement 
program consistent with the wishes of the Rongelapese people 
themselves. United States assistance to the people of Rongelap for 
purposes of resettlement shall be as directed by Congress and will be 
completed upon determination by Congress that the United States has 
provided the total of its contribution to the rehabilitation of 
Rongelap Island and resettlement of the Rongelap people pursuant to 
section 103(i) of Public Law 99-239 and applicable provisions of Public 
Law 102-154. All such assistance shall be subject to the financial 
accountability provisions of this title and shall be provided within 
the framework of the government-to-government relationship between the 
Republic of the Marshall Islands and the United States as defined by 
the Compact of Free Association Act of 1985.

SEC. 103. RESPONSIBILITIES RELATING TO RONGELAP RESETTLEMENT TRUST 
                    FUND.

  (a) Secretary of the Interior.--
          (1) Transfer of funds to trustee of rongelap resettlement 
        trust fund.--Consistent with the Rongelap Resettlement Trust 
        Fund agreement between the Department of the Interior, the 
        Republic of the Marshall Islands, and the Rongelap Atoll Local 
        Government, dated May 13, 1992, funds appropriated in any 
        fiscal year for the purpose of increasing the corpus of the 
        Rongelap Resettlement Trust Fund shall be transferred by the 
        Secretary of the Interior to the trustee thereof, and the 
        Department of the Interior shall be administratively 
        responsible for effecting all such transfers of funds 
        appropriated for this purpose as required by law.
          (2) Limitation of department of the interior activities to 
        those provided by trust fund agreement.--The activities of the 
        Department of the Interior with respect to management of the 
        Rongelap Resettlement Trust Fund shall be limited to those 
        provided for in the trust fund agreement referred to in 
        paragraph (1), as it may from time to time be amended.
  (b) Trustee.--
          (1) Duties, obligations and legal responsibilities.--The 
        duties, obligations and legal responsibilities of the trustee 
        with respect to the Rongelap Resettlement Trust Fund shall be 
        as set forth in the trust fund agreement referred to in 
        subsection (a)(1), to which the United States, the Republic of 
        the Marshall Islands and the Rongelap Atoll Local Government 
        are parties with legal rights and powers to enforce the terms 
        of the trust as set forth therein, and in applicable law.
          (2) Distribution of funds.--All funds contributed to the 
        Rongelap Resettlement Trust Fund referred to in subsection (a) 
        of this section shall be distributed by the trustee and used as 
        determined by the Rongelap Atoll Local Government consistent 
        with applicable provisions of this title, Public Law 102-154, 
        and the resettlement plan submitted to the United States 
        Congress on March 15, 1995, in accordance with Report 103-551 
        of the House of Representatives, and referred to in Rongelap 
        Atoll Local Government Council Resolution No. 95-20.
  (c) Audits.--
          (1) In general.--In addition, management or use of trust 
        assets shall be subject to the authority of the Comptroller 
        General of the United States to conduct financial audits of all 
        trust transactions and activities, in the same manner as 
        provided in section 110(c) of Public Law 99-239. The Inspector 
        General of the Department of the Interior also shall be 
        authorized to audit the use of Rongelap Resettlement Trust Fund 
        assets.
          (2) Notice regarding use of funds outside scope of trust.--If 
        at any time it is determined by the cognizant audit authority 
        that funds distributed by the trustee to the Rongelap Atoll 
        Local Government have been used for purposes outside the 
        statutory scope of the trust, such audit authority shall, at a 
        time and in a manner which is lawful and does not interfere 
        with any ongoing investigative process, law enforcement 
        activity or other activities or operations required under 
        applicable regulations and procedures, notify the chairman of 
        the Committee on Energy and Natural Resources of the United 
        States Senate, the chairman of the Committee on Resources of 
        the United States House of Representatives, the Republic of the 
        Marshall Islands, the Rongelap Atoll Local Government, and the 
        trustee, of such determination so that the trustee and the 
        parties to the trust agreement may exercise their legal rights 
        and powers, including recovery of such funds.
  (d) Retention of United States Authority Over Trust Fund.--The United 
States Congress shall retain its authority over the trust fund as set 
forth in the trust agreement referred to in subsection (a)(1) and 
applicable statutes, including Public Law 102-154.

SEC. 104. TRUSTEE AND OTHER FUND PERSONNEL.

  (a) Trustee Qualifications.--The trustee of the Rongelap Resettlement 
Trust Fund shall be a qualified United States financial institution 
with considerable experience in the administration of similar trusts 
and which serves as the trustee manager or custodian of over 
$1,000,000,000 in assets. If the trustee on the date of enactment of 
this Act does not meet the qualification criteria, a new trustee which 
does satisfy these requirements shall in due course be appointed 
subject to the procedures set forth in the trust fund agreement 
referred to in section 103(a).
  (b) Investment Fund Managers and Advisers and Consultants.--
Investment fund managers and advisers or consultants designated by the 
Rongelap Atoll Local Government in accordance with the trust agreement 
to provide services in connection with management of the Rongelap 
Resettlement Trust Fund must be registered with the Securities and 
Exchange Commission and be in compliance with applicable provisions of 
the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.)

SEC. 105. RESETTLEMENT EXPENDITURES AND ACTIVITIES.

  (a) Activities.--The Rongelap Atoll Local Government shall have the 
discretion, to the extent determined by the Rongelap Atoll Local 
Government Council acting within its lawful authority, to include in 
the resettlement program activities described in the Memorandum of 
Understanding of February 21, 1992, between the Department of the 
Interior, Department of Energy, the Republic of the Marshall Islands, 
and the Rongelap Atoll Local Government.
  (b) Use of Annual Income.--
          (1) In general.--With respect to each fiscal year following 
        the establishment of the Rongelap Resettlement Trust Fund 
        pursuant to Public Law 102-154, the authority of the Rongelap 
        Atoll Local Government and the trustee, within the statutory 
        scope and purpose of the trust, shall include distribution of 
        up to 50 percent of the annual income (interest and earnings) 
        of the trust fund, but in no year more than $500,000, increased 
        in accordance with paragraph (2), to provide local government 
        support and programs for the benefit of the people of Rongelap, 
        including funding for food, shelter, medicine, infant care, 
        sanitation, personal hygiene and other basic human needs 
        arising from dislocation and adjustment during resettlement, as 
        well as local government administrative and operations costs 
        and expenses arising directly from or which are directly 
        connected to the resettlement process.
          (2) Adjustment.--The amount referred to in paragraph (1) 
        shall be increased annually by the same proportion as the 
        percentage increase in the United States Consumer Price Index 
        For All Urban Consumers (published by the Bureau of Labor 
        Statistics, Department of Labor) for the most recent year 
        preceding the date on which the increase, if any, is 
        calculated.
  (c) Availability of Assistance for Resettlement in the Marshall 
Islands Other Than on Rongelap.--
          (1) Goal of resettlement on rongelap.--The Congress supports 
        the goal of enabling the entire Rongelap community to achieve 
        resettlement in accordance with Resolution Number 95-20 adopted 
        by the Rongelap Atoll Local Government Council on March 9, 
        1995, consistent with the findings of scientific studies 
        conducted pursuant to section 103(i) of Public Law 99-239 which 
        indicate that agreed upon radiation exposure limits can be met 
        at Rongelap Island if certain risk mitigation measures are 
        taken.
          (2) Resettlement assistance.--(A) To ensure that members of 
        the Rongelap community who do not choose to return to Rongelap 
        in light of these scientific findings are able to end their 
        dislocation and settle somewhere in the Marshall Islands, 
        assistance for construction of family housing and other 
        resettlement assistance may be provided to members of the 
        Rongelap community who elect to settle at a location in the 
        Marshall Islands other than Rongelap Atoll on the same basis as 
        assistance provided for those who elect to return to Rongelap, 
        subject to the authority and discretion of the Rongelap Atoll 
        Local Government to determine the schedule, terms, 
        specifications and scope of such assistance in the context of 
        the overall community resettlement program at Rongelap Atoll, 
        which shall remain the primary objective for management and use 
        of trust fund assets.
          (B) Assistance provided pursuant to subparagraph (A) to those 
        who elect to resettle at a place other than Rongelap shall not 
        include measures to be employed or benefits to be provided for 
        those resettling at Rongelap Atoll for the purpose of 
        mitigating risks posed by radiological conditions at Rongelap.
          (C) Any Rongelapese person receiving assistance for 
        resettlement at a location other than Rongelap Atoll pursuant 
        to subparagraph (A) shall be ineligible for such assistance for 
        the purposes of resettling again later at Rongelap Atoll. The 
        preceding sentence shall cease to apply once all members of the 
        Rongelap community, as defined and recognized by the Nuclear 
        Claims Tribunal established pursuant to section 177 of the 
        Compact of Free Association (as contained in Public Law 99-
        239), have received resettlement assistance at Rongelap or 
        assistance on the same basis, except as provided in 
        subparagraph (B), at another location of their choosing.
          (3) Scope of trust.--The assistance activities authorized in 
        this section shall be deemed to be within the scope of the 
        trust notwithstanding any provision of Public Law 102-154 to 
        the contrary.
  (d) Food Importation.--The trustee of the Rongelap Resettlement Trust 
Fund shall make no distribution from the corpus of the Trust which as a 
matter of prudent financial management in the judgment of the trustee 
would be inconsistent with the objective of ensuring that funds will be 
available for as long as the trust fund agreement referred to in 
section 103(a)(1) is in effect for the purpose of providing imported 
food and locally produced food which meets relevant health and safety 
standards in amounts sufficient to meet the nutritional needs of the 
Rongelap community residing at Rongelap Atoll.

SEC. 106. TRANSFER OF UNEXPENDED AND UNOBLIGATED FUNDS.

  All funds appropriated pursuant to the authorization contained in 
section 103(i) of Public Law 99-239 for scientific radiological studies 
to determine the habitability of Rongelap Island in the Republic of the 
Marshall Islands, or which have been obligated for use by the 
``Rongelap Resettlement Project'' to support such studies, which as of 
the date of enactment of this Act have not been expended shall be 
transferred to the Rongelap Atoll Local Government and expended only 
pursuant to a budget approved by the Rongelap Local Government Council 
and for activities consistent with the purposes for which such funds 
were appropriated, including scientific research and island 
rehabilitation measures connected to resettlement of Rongelap.

                        TITLE II--AMERICAN SAMOA

SEC. 201. SHORT TITLE.

  This title may be cited as the ``American Samoa Economic Development 
Act of 1995''.

SEC. 202. FINDINGS.

  The Congress finds that--
          (1) funding for the United States territory of American Samoa 
        has been based on the joint resolution entitled ``Joint 
        Resolution to provide for accepting, ratifying, and confirming 
        cessions of certain islands of the Samoan group to the United 
        States, and for other purposes'', as amended (48 U.S.C. 1661), 
        with commitments being made on a yearly basis;
          (2) American Samoa is locally self-governing with a 
        constitution of its own adoption and the direct election of the 
        Governor since 1977;
          (3) the territory of American Samoa has had difficulty in 
        planning and implementing comprehensive and sustainable 
        infrastructure based solely on annual ad hoc grants; and
          (4) the territory of American Samoa and the United States 
        would benefit from a multiyear funding commitment which 
        promotes economic development and self-sufficiency and requires 
        compliance with financial management accounting standards, the 
        establishment of semiautonomous public utility authorities 
        utilizing cost-recovery principles, and the phaseout of Federal 
        subsidies for Government operations.

SEC. 203. AUTHORIZATION OF FUNDING.

  (a) In General.--There are authorized to be appropriated to the 
Secretary of the Interior for the Government of American Samoa 
$34,500,000, backed by the full faith and credit of the United States, 
for each of fiscal years 1996 through 2005. Such amounts shall not be 
released to the Government of American Samoa if the conditions in this 
title are not met, and are subject to the limits specified in the table 
in subsection (b), to be used for--
          (1) construction of capital assets of American Samoa;
          (2) the operations of the Government of American Samoa; and
          (3) reduction of unbudgeted debt.
  (b) Table of Multiyear Funding.--The table referred to in this 
subsection is as follows:
      

                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                                            Deficit             
                    Fiscal year                      Year #   Operations  Construction     reduction      Total 
                                                                                         (100% match)           
----------------------------------------------------------------------------------------------------------------
1996...............................................     1        23.0           8.5           3.0          34.5 
1997...............................................     2        23.0           8.5           3.0          34.5 
1998...............................................     3        23.0           8.5           3.0          34.5 
1999...............................................     4        21.0          10.5           3.0          34.5 
2000...............................................     5        18.0          13.5           3.0          34.5 
2001...............................................     6        15.0          19.5                        34.5 
2002...............................................     7        12.0          22.5                        34.5 
2003...............................................     8         9.0          25.5                        34.5 
2004...............................................     9         6.0          28.5                        34.5 
2005...............................................    10         3.0          31.5                        34.5 
----------------------------------------------------------------------------------------------------------------

SEC. 204. ESTABLISHMENT OF TRUST.

  (a) In General.--The Government of American Samoa shall establish a 
trust into which the amounts appropriated pursuant to section 203 are 
placed.
  (b) Trustee.--
          (1) In general.--A trustee to administer the trust 
        established by this section shall be nominated by the Governor 
        of American Samoa with concurrence of the Secretary of the 
        Interior, and confirmed by both Houses of the Legislature of 
        American Samoa pursuant to local law, and shall be a United 
        States financial institution with considerable experience in 
        the administration of similar trusts and which serves as the 
        trustee manager or custodian of over $1,000,000,000 in trust 
        assets (hereafter in this title referred to as the 
        ``trustee''). The trustee shall not be the independent auditor 
        required by section 207. The trustee shall be paid by the 
        Government of American Samoa.
          (2) Replacement.--The trustee may be terminated only by 
        mutual agreement between the trustee and the Government of 
        American Samoa, or at the end of its contract for services as 
        trustee, or for good cause. Termination of a trustee for good 
        cause must be recommended by the Governor of American Samoa and 
        approved by both Houses of the Legislature of American Samoa.
          (3) Other terms and conditions.--The trustee shall be subject 
        to such other conditions as the Government of American Samoa 
        may provide under local law so long as such conditions do not 
        conflict with Federal laws or regulations or with applicable 
        trust fund agreement provisions governing administration of the 
        trust.
          (4) Responsibility of trustee.--A qualified trustee appointed 
        under this title shall perform its duties subject to the 
        governing law of the jurisdiction in which the principal office 
        of the trustee is located. Administration of the trust to 
        achieve the objectives of this title shall be in accordance 
        with a trust fund agreement between the Government of American 
        Samoa and the trustee governing the trust. Such agreement shall 
        provide that the trustee shall use reasonable and prudent care 
        and reasonable and prudent due diligence in the exercise of the 
        powers and the performance of the duties prescribed in this 
        title and the trust agreement. The trust agreement may 
        prescribe further the specific duties of the trustee, as well 
        as those of other parties identified in this title, including 
        audit authorities and the Government of American Samoa.
          (5) Liability.--
                  (A) In general.--The trustee shall be liable for any 
                release of funds which is not authorized by this title. 
                Upon a determination of liability under this 
                subsection, the trustee shall reimburse the United 
                States Treasury in the amount of the unauthorized 
                release of funds within 90 days of such determination.
                  (B) Exception.--The trustee shall not be liable for--
                          (i) any mistake or other action taken in good 
                        faith, or for any loss unless resulting from 
                        the trustee's own default, negligence, or bad 
                        faith; or
                          (ii) any act or omission mandated by law or 
                        by the process or final order of any court of 
                        appropriate jurisdiction.
                  (C) Reimbursement.--In the event the trustee is 
                determined by a court to have acted in bad faith in 
                breach of its duties under this title, the trustee 
                shall reimburse the United States Treasury in the 
                amount of any loss resulting therefrom.
  (c) Trust Funds.--
          (1) Deposit; investment.--The trust funds shall be deposited 
        in an account or accounts of a financial institution insured by 
        the Federal Deposit Insurance Corporation pursuant to 
        regulations and direction of the Department of the Treasury, 
        and, to the extent such funds are available for investment, may 
        be invested by the Government of American Samoa, or the trustee 
        if so designated, in only federally insured accounts or issues 
        of bonds, notes or other redeemable instruments of the 
        Government of the United States.
          (2) Use of interest and dividends.--Interest or dividends 
        earned from investment of trust funds under paragraph (1) may 
        be used for projects contained on the approved master plan of 
        capital needs developed under section 205, or for the costs of 
        managing the trust.
          (3) Availability and use of federal funds.--Federal funds 
        made available for the purposes described in section 203(a)(1) 
        may be used only on projects from the approved master plan of 
        capital needs.
  (d) Reports.--Within 90 days after the end of each fiscal year, the 
trustee shall submit an annual report to the chairmen and ranking 
minority members of the Committee on Energy and Natural Resources and 
the Committee on Appropriations of the United States Senate, the 
Committee on Resources and the Committee on Appropriations of the 
United States House of Representatives, the Government of American 
Samoa, the Comptroller General of the United States, and the Inspector 
General of the Department of the Interior. The report shall include at 
a minimum the financial statements of the account or accounts in which 
it holds trust funds pursuant to this title.

SEC. 205. USES OF TRUST FUNDS.

  (a) Capital Needs.--
          (1) Master plan of capital needs.--No funds appropriated 
        pursuant to this title shall be released by the trustee for 
        construction of capital assets without the submission by the 
        Government of American Samoa to the trustee of a master plan of 
        capital needs that ranks projects in order of priority for at 
        least five years. The master plan shall be approved by the 
        Governor and passed by both Houses of the Legislature of 
        American Samoa pursuant to such laws as the Government of 
        American Samoa may enact. The master plan of capital needs may 
        be amended at any time, but all amendments must be approved by 
        the Governor and passed by both Houses of the Legislature of 
        American Samoa. The plan shall include the capital needs of all 
        the islands of American Samoa.
          (2) Funds for construction of capital assets.--Funds for the 
        construction of capital assets shall be paid to the Government 
        of American Samoa, the relevant semiautonomous agency, or a 
        contractor only after approval by the trustee. The trustee 
        shall approve the release of funds only for construction 
        projects for a public purpose in the areas of communications, 
        electrical power, water, waste water, disposal of solid waste, 
        roads, schools, school transportation system, air, water and 
        surface transportation, ports, harbors, storage and 
        transportation facilities of fuels or other forms of energy, 
        health, and construction of government-owned buildings. Funding 
        made available for construction of capital assets may only be 
        used for projects listed on the master plan of capital needs as 
        set forth in this section. To the extent an appropriation is 
        available, the projects contained on the master list with the 
        highest priority are to be funded. Funding made available for 
        construction of capital assets may only be used for projects 
        which comply with the procurement requirements set forth in 
        subtitle A of part 12, Code of Federal Regulations.
          (3) Youth facilities.--At least $3,000,000 per year of any 
        funding made available pursuant to section 203(a)(1) may only 
        be used for the construction or repair of capital assets 
        primarily available for the school-age residents of American 
        Samoa, such as (but not limited to) school buildings, libraries 
        on school premises and the books contained therein, and 
        athletic facilities on school premises. Beginning with fiscal 
        year 1997, these projects shall be incorporated into the master 
        plan of capital needs required under paragraph (1). Facilities 
        for the American Samoa Community College are included within 
        the purview of this section. For fiscal year 1996, construction 
        of the following is authorized: $1,000,000 for a library for 
        the American Samoa Community College; $1,000,000 to expand the 
        gymnasium at the American Samoa Community College; $750,000 for 
        a gymnasium for Samoana High School; $100,000 for the 
        renovation of the library, computer room, and toilet facilities 
        at Fagaitua High School; $50,000 for the renovation of the 
        library, computer room and toilet facilities for Manu'a High 
        School; $50,000 for the renovation of the library and toilet 
        facilities at Aua Elementary School; and $50,000 for the 
        renovation of the library and toilet facilities for Fitiuta, 
        Faleasao, Ofu-Olosega, and Aunu'u Elementary Schools.
          (4) Requirement of semiautonomous agencies.--Beginning with 
        fiscal year 1997, no funds for the construction of capital 
        assets shall be released by the trustee in the areas of 
        communications, electrical power, public health, 
        transportation, water, and wastewater until there is 
        established by local law semiautonomous agencies of the 
        Government of American Samoa for the category in which the 
        funding is required.
          (5) Maintenance plan.--For fiscal years 1997 and all 
        following years, ten percent of the estimated cost of each 
        project shall not be released by the trustee for the 
        construction of capital assets until the Government of American 
        Samoa, or the appropriate semiautonomous agency if required, 
        submits to the trustee a maintenance plan covering the 
        anticipated life of the project and the maintenance of the 
        project is initially funded. The maintenance plan shall include 
        the estimated cost of maintaining and repairing the project and 
        identify a source to fund the estimated maintenance and repairs 
        for the anticipated life of the project. The initial funding 
        for this maintenance plan shall be in the amount of five 
        percent of the cost of the project. Federal funds made 
        available for the purposes described in section 203(a)(1) may 
        be used for the initial funding. Other Federal funds made 
        available pursuant to this title may not be used for this 
        purpose. Funds set aside pursuant to this paragraph may be used 
        for the maintenance and repair of any capital asset within the 
        purview of the government or the appropriate semiautonomous 
        agency.
  (b) Debt Reduction.--Any funding made available pursuant to section 
203(a)(3) used to reduce the unbudgeted debt of the Government of 
American Samoa must be matched, on a dollar for dollar basis, by funds 
provided by the Government of American Samoa or the relevant 
semiautonomous agency from revenue raised from non-Federal sources.
  (c) Prohibited Uses of Funds.--Neither the funds appropriated 
pursuant to this title, nor any interest or dividends earned on those 
funds may be transferred to other accounts, or loaned to other accounts 
or agencies; nor may these funds, interest or dividends be used as 
collateral for loans made by the local government.

SEC. 206. DISBURSEMENT OF TRUST FUNDS.

  (a) Operations.--Trust funds to be used for the operations of the 
Government of American Samoa shall be disbursed in equal amounts on a 
monthly basis, on the first business day of each month of the fiscal 
year. An extra drawdown may be made once each fiscal year in an amount 
not to exceed ten percent of the amounts appropriated for the fiscal 
year for the purposes of section 203(a)(2), and only for purposes 
caused by extreme or territorial emergencies deemed unforeseeable by 
the trustee.
  (b) Construction.--Trust funds to be used for the construction of 
capital assets shall be released by the trustee--
          (1) to the Government of American Samoa or the relevant 
        semiautonomous agency, only upon completion of identifiable 
        portions of the construction work if the work is performed by 
        employees of the Government of American Samoa or the relevant 
        semiautonomous agency, or
          (2) a bona fide contractor of the Government of American 
        Samoa or relevant semiautonomous agency pursuant to the terms 
        of a construction contract, on an invoice presented to the 
        Government of American Samoa or the relevant semiautonomous 
        agency and approved by appropriate officials of the Government 
        of American Samoa or the relevant semiautonomous agency.
  (c) Debt Reduction.--Trust funds to be used for unbudgeted debt 
reduction made available under section 203(a)(3) shall be released by 
the trustee on submission by the Government of American Samoa or the 
relevant semiautonomous agency of proof of payment from non-Federal 
sources for debt reduction.

SEC. 207. AUDITS.

  (a) In General.--
          (1) Required.--Beginning with fiscal year 1996, the 
        Government of American Samoa must obtain, at its own expense, a 
        comprehensive financial audit meeting the requirements of 
        chapter 75 of title 31, United States Code, and subtitle A, 
        part 12 of title 43, Code of Federal Regulations, which 
        requires that an independent audit be made in accordance with 
        generally accepted government auditing standards covering 
        financial and compliance audits. The audit shall determine 
        whether the financial statements of the American Samoa 
        Government present fairly its financial position and the 
        results of its financial operations in conformance with 
        generally accepted accounting principles. The audit shall 
        include the funds held in trust pursuant to this title.
          (2) Independent auditor's opinion.--Beginning with fiscal 
        year 2000, the audit required under this section must include 
        all the requirements of paragraph (1) and an independent 
        auditor's opinion that the financial statements of the 
        Government of American Samoa present fairly, in all material 
        respects, its financial position and the results of its 
        financial operations, in conformance with generally accepted 
        accounting principles.
  (b) Submission of Audit Report to United States.--Reports of audits 
required in this section along with the local government's corrective 
action plan to resolve any deficiencies reported shall be transmitted 
by the Governor of American Samoa to the chairmen and ranking members 
of the Committee on Energy and Natural Resources and the Committee on 
Appropriations of the United States Senate, the Committee on Resources 
and the Committee on Appropriations of the United States House of 
Representatives, the Comptroller General of the United States, and the 
Inspector General of the Department of the Interior within 180 days of 
the end of each fiscal year for which the United States provides 
funding under this title.
  (c) Failure To Obtain Audit.--In the event the Government of American 
Samoa does not obtain a qualifying audit within the time required by 
this section, the Inspector General of the Department of the Interior 
shall notify the appropriate Federal agencies and the trustee not to 
disburse additional funds available under section 203(a)(2) for the 
operations of the Government of American Samoa, or any unobligated 
funds available under section 203(a)(1) for the construction of capital 
assets, until such time as a qualifying audit is received and the 
previously reported deficiencies corrected and the report of that audit 
is forwarded as required by this section. Notwithstanding the preceding 
sentence, one emergency disbursement may be made per year under the 
provisions of section 206 of this title, even if a qualifying audit 
report is not obtained or the deficiencies identified by an audit have 
not been corrected.

SEC. 208. AUDITS BY THE UNITED STATES.

  (a) In General.--The Comptroller General of the United States and the 
Inspector General of the Department of the Interior shall have the 
authority to conduct audits of all funds of all branches and 
semiautonomous authorities of the Government of American Samoa. Nothing 
in this title shall be construed to restrict the authority of these or 
other Federal agencies to audit government funds as authorized by 
Federal law.
  (b) Corrective Action.--Where appropriate, audit reports of the 
Comptroller General and the Inspector General shall include reasonable 
time limits on recommendations for corrective action. Such 
recommendations and the respective time limits may be amended from time 
to time as the audit authority deems appropriate. Deficiencies on which 
recommendations for corrective action are made shall be designated 
major or minor.
  (c) Audit Comment.--The Government of American Samoa, and any 
relevant semiautonomous agency, shall be afforded the opportunity to 
comment on, and propose remedial action to, draft audit reports before 
they become final, and the comments and proposed corrective action 
shall be published as part of the final audit report.
  (d) Other Laws.--The requirements of this section are in addition to 
any other Federal law governing financial audits of American Samoa.
  (e) Submission of Reports.--Audit reports prepared by the Comptroller 
General or the Inspector General shall be submitted to the chairmen and 
ranking members of the Committee on Energy and Natural Resources and 
the Committee on Appropriations of the United States Senate, the 
Committee on Resources and the Committee on Appropriations of the 
United States House of Representatives, the Government of American 
Samoa, and the trustee.
  (f) Failure To Correct Deficiencies of United States Auditors.--If 
the cognizant audit authority determines that the Government of 
American Samoa has not corrected a major deficiency noted in audit 
reports submitted pursuant to subsection (b) within the time prescribed 
for that major deficiency, the cognizant audit authority shall notify 
the appropriate Federal agencies and the trustee not to disburse 
additional funds available under section 203(a)(2) for the operations 
of the Government of American Samoa, or any unobligated funds available 
under section 203(a)(1) for the construction of capital assets, until 
such time as the cognizant audit authority notifies the trustee and the 
appropriate Federal agencies that the major deficiency has been 
corrected, or disallowed costs have been recovered, whichever may be 
appropriate.
  (g) Notice Regarding Use of Funds Outside Scope of Trust.--If at any 
time it is determined by the cognizant audit authority that funds 
distributed by the trustee to the Government of American Samoa have 
been used for purposes outside the statutory scope of the trust, such 
audit authority shall, at a time and in a manner which is lawful and 
does not interfere with any ongoing investigative process, law 
enforcement activity or other activities or operations required under 
applicable regulations and procedures, notify the chairman and ranking 
member of the Committee on Energy and Natural Resources of the United 
States Senate, the chairman and ranking member of the Committee on 
Resources of the United States House of Representatives, the Government 
of American Samoa, and the trustee, of such determination so that the 
trustee and the Government of American Samoa may exercise their legal 
rights and powers, including recovery of such funds.

SEC. 209. SETTLEMENT OF DISPUTES.

  The High Court of American Samoa is authorized to resolve disputes 
which arise under this title pursuant to its rules of procedure.

SEC. 210. CRIMINAL VIOLATIONS.

  Prosecution of violations of Federal or local criminal law which 
occur concerning funds appropriated pursuant to this title may be 
brought in local and Federal courts, as appropriate.

SEC. 211. DEFINITIONS.

  As used in this title, the following definitions apply:
          (1) The term ``area of disbursement'' means one of the three 
        authorized purposes for which funds may be disbursed found at 
        paragraphs (1) through (3) of section 203(a).
          (2) The term ``cognizant audit authority'' means the 
        Comptroller General of the United States, or the Inspector 
        General of the Department of the Interior.
          (3) The term ``extreme or territorial emergencies'' means 
        serious situations or occurrences which happen unexpectedly and 
        have a significant impact on the finances of the territory, 
        including acts of God which cause severe disruption of public 
        services such as transportation, medical services, and utility 
        services.
          (4) The term ``master plan of capital needs'' means a list of 
        capital assets needed by the Government of American Samoa, 
        including any semiautonomous agencies which may be created 
        before or after the date of the enactment of this title, to 
        provide for efficient and effective operation of the 
        government. The master plan may be completed before or after 
        the date of the enactment of this title, so long as it meets 
        the requirements set forth in section 205.
          (5) The term ``semiautonomous agency'' means an agency within 
        the executive branch of the Government of American Samoa which 
        has the following characteristics:
                  (A) The agency is created by local statute, either 
                before or after the date of the enactment of this 
                title.
                  (B) The agency is managed by a board of directors, 
                the individual directors of which are nominated by the 
                Governor of American Samoa and confirmed by the 
                Legislature of American Samoa.
                  (C) The terms of the directors are staggered.
                  (D) The board of directors has control over the 
                budget for that agency, although the entity may be 
                funded in part by grants or loans from the Federal 
                Government or the Government of American Samoa.
                  (E) The board of directors has the authority to set 
                rates or fees collected by the agency for the service 
                it provides, subject to local law.
          (6) The term ``unbudgeted debt'' means debt incurred for a 
        lawful purpose by the Government of American Samoa, or any of 
        its agencies, departments, or offices, in fiscal years prior to 
        fiscal year 1996, including debt which has been caused because 
        more funds were spent than were lawfully appropriated for a 
        particular budget item or because revenue for a budget item did 
        not meet budgeted estimates.

        TITLE III--COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS

SEC. 301. TERMINATION OF ANNUAL DIRECT GRANT ASSISTANCE.

  (a) Termination.--Pursuant to section 704(d) of the Covenant to 
Establish a Commonwealth of the Northern Mariana Islands in Political 
Union with the United States of America (48 U.S.C. 1681 note), the 
annual payments under section 702 of the Covenant shall terminate as of 
September 30, 1995.
  (b) Repeal.--Sections 3 and 4 of the Act of March 24, 1976 (Public 
Law 94-241; 48 U.S.C. 1681 note), as amended, are repealed, effective 
October 1, 1995.
  (c) Conforming Amendments.--Section 5 of such Act (48 U.S.C. 1681 
note) is amended--
          (1) by striking out ``agreement identified in section 3 of 
        this Act'' and inserting in lieu thereof ``Agreement of the 
        Special Representatives on Future United States Financial 
        Assistance for the Government of the Northern Mariana Islands, 
        executed July 10, 1985, between the special representative of 
        the President of the United States and the special 
        representatives of the Governor of the Northern Mariana 
        Islands''; and
          (2) by striking out ``Committee on Interior and Insular 
        Affairs'' and inserting in lieu thereof ``Committee on 
        Resources''.

           TITLE IV--TERRITORIAL ADMINISTRATIVE CESSATION ACT

SEC. 401. SHORT TITLE.

  This title may be cited as the ``Territorial Administrative Cessation 
Act''.

SEC. 402. CONGRESSIONAL FINDINGS.

  The Congress finds that--
          (1) each of the four political subdivisions of the United 
        Nations Trust Territory of the Pacific Islands, known as the 
        Japanese Mandated Islands, have successfully entered into 
        distinct self-governing entities, thereby culminating in the 
        final termination of the Trusteeship and the end of the 
        trusteeship responsibilities of the United States as 
        administering authority of the Trust Territory on October 1, 
        1994;
          (2) the United States territories have developed 
        progressively increased local self-government over the past 
        five decades;
          (3) the territories predominantly deal directly with Federal 
        agencies and departments, as a State would;
          (4) the administering responsibilities of the Department of 
        the Interior with respect to the insular areas has declined 
        substantially during the past five decades; and
          (5) Federal-territorial relations can be enhanced and Federal 
        fiscal conditions improved by the elimination of unnecessary 
        Federal bureaucracy.

SEC. 403. ELIMINATION OF OFFICE OF TERRITORIAL AND INTERNATIONAL 
                    AFFAIRS.

  (a) In General.--The Office of Territorial and International Affairs 
of the Department of the Interior, established pursuant to the Order of 
the Secretary of the Interior 3046, of February 14, 1980, as amended, 
is hereby abolished.
  (b) Termination of Position of Assistant Secretary.--Section 5315 of 
title 5, United States Code, is amended by striking ``Assistant 
Secretaries of the Interior (6)'' and inserting ``Assistant Secretaries 
of the Interior (5)''.
  (c) Effective Date.--Subsection (a) and the amendment made by 
subsection (b) shall take effect on the first day of the first fiscal 
year that begins after the date of the enactment of this Act.

SEC. 404. CERTAIN ACTIVITIES NOT FUNDED.

  Amounts may not be made available for the following program 
activities for assistance to territories for fiscal years beginning 
after September 30, 1995, as identified under the appropriations 
account numbered 14-0412-0-1-808:
          (1) technical assistance, item 00.12;
          (2) maintenance assistance, item 00.14;
          (3) disaster fund, item 00.17; and
          (4) insular management controls, item 00.19.

                          Purpose of The Bill

    The purpose of H.R. 1332 is to provide for increased self-
government in the insular areas.

                  Background and Need for Legislation

                         Rongelap Resettlement

    In January 1986 Congress approved an overall settlement of 
claims arising form the U.S. nuclear testing program conducted 
in the Marshall Islands from 1946 to 1958 in Public Law 99-
239). The question of resettlement of Rongelap Island was not 
resolved because it was reported to Congress in mid-1985 that 
the entire Rongelap community had decided to abandon their 
homeland due to uncertainty and concern about the risk to human 
health posed by residual radiological contamination. As a 
result, even though resettlement of Bikini and Eneertak was 
provided for by the United States under the settlement, the 
people of Rongelap remain a dislocated population.
    However, due to the uncertainty and controversy surrounding 
the Rongelap resettlement issue, Congress did provide for ``a 
complete survey of radiation and other effects of the nuclear 
testing program relating to the habitability of Rongelap 
Island'' and authorized funds for an independent scientific 
team to survey and prepare a report ``as to steps needed to 
restore the habitability of Rongelap Island''. This report 
would serve to establish the scientific basis for the U.S., in 
cooperation with the national government of the Republic of the 
Marshall Islands and the Rongelap Atoll Local Government, to 
take ``such steps (if any) as are necessary to restore the 
habitability of Rongelap and return the Rongelap people to 
their homeland.''
    In accordance with Section 103(i) of Public Law 99-239 and 
Section 5(5)(8) of Marshall Islands Nitijela Resolution No. 62 
(N.D. 2), independent scientific studies of the habitability of 
Rongelap were conducted from 1992 to 1994. The studies 
concluded that without specific measures to mitigate risk of 
exposure to radiation Rongelap is not safe for human habitation 
under standards established in 1992 by agreement between the 
United States, the Marshall Islands and the Rongelap Atoll 
Local Government. The report did include recommended measures 
to mitigate risk to human health due to radiological 
contamination at Rongelap so that persons returning to resettle 
Rongelap could do so safely under the 1992 standards. These 
measures included removal of soil at housing and community 
building sites, potassium treatment of contaminated soil that 
is not removed to block up-take of radiation in food chain, and 
importation of food to prevent exposure to radiation through 
reliance on local diet. The measures have been formally 
accepted by the U.S. Department of Energy, the U.S. Department 
of the Interior (DOI) and the National Academy of Science 
Committee on Radiological Safety in the Marshall Islands.
    Based on these studies, Congress provided funds in fiscal 
year 1995 for Rongelap resettlement, including preparation of 
cost estimates and a resettlement plan (H. Rep. 103-551). 
Through DOI Rongelap contracted with the engineering firm that 
did the original resettlement plan in 1987. Instead of 
escalating the cost or even increasing estimates to keep up 
with inflation, Rongelap and the engineers embraced the 
discipline of current budgetary trends and modified the plan so 
that cost estimates came down from the 1987 figure of $93.2 
million to $85.8 million.
    On March 9, 1995, the Rongelap Atoll Local Government 
Council adopted Resolution 95-20, thereby formally adopting the 
official resettlement plan prepared in accordance with Section 
103(i) of Public Law 99-239 and House of Representatives Report 
103-551.
    In furtherance of the Rongelap resettlement process, 
between 1992 and 1994, Congress made annual contributions 
through the DOI budget (totaling $5.9 million) to the Rongelap 
Resettlement Trust Fund established under Public Law 102-154. 
In fiscal year 1995, Congress contributed and additional $5 
million tot he resettlement trust fund through the budget of 
the Department of Defense. Total U.S. contributions to the 
trust fund are $10.9 million.
    The official resettlement plan for Rongelap will require 
$85 million for full implementation. Resettlement will not be 
possible unless the U.S. makes a significant contribution to 
the resettlement trust fund so that a full resettlement program 
can be financed over a period of years. The engineering firm 
which prepared the Rongelap resettlement plan worked for the 
Atomic Energy Commission during the testing program, and has 
managed the logistics for Bikini resettlement. Based on that 
experience, the engineering experts estimate that Rongelap will 
need a minimum of $60 million in the trust fund to commence the 
resettlement program. Since certain infrastructure projects 
would be required first, in addition to soil removal and 
potassium treatment of remaining soil, the Rongelap 
resettlement trust will have to be managed quite carefully to 
achieve resettlement working with an amount in the trust fund 
that is less than the full cost.
    It is the desire and the intention of the United States 
Government, the Government of the Republic of the Marshall 
Islands and the Rongelap Atoll Local Goverment to provide a 
mechanism for the implementation of the Rongelap resettlement 
plan, and to bring about resettlement of the people of Rongelap 
in the Republic of the Marshall Islands consistent with the 
wishes of the community and its members. Subject to the terms 
of a Rongelap Resettlement Trust Fund Agreement between the 
United States, the Republic of the Marshall Islands and the 
Rongelap Atoll Local Government, it is appropriate at this time 
to enable the local government to carry out an island 
rehabilitation and population resettlement program for Rongelap 
and bring to completion the U.S. commitment to resettlement as 
set forth in Public Law 99-239.

                             American Samoa

    American Samoa is an unorganized, unincorporated possession 
of the United States. Congress has plenary authority over all 
possessions pursuant to the ``territories clause'' of the U.S. 
Constitution [Art. 4, Sec. 3]. This authority was delegated to 
the President of the United States, who further delegated it to 
the Secretary of the Navy, and in 1951, to the Secretary of the 
Interior.
    The main islands of American Samoa were ceded to the United 
States by two deeds of cession in 1900 and 1904. These deeds of 
cession were ratified by Congress in 1929. To this day, 
pursuant to a 1929 law (48 U.S.C. 1661) ``all civil, judicial, 
and military powers'' are vested in the President of the United 
States. The only reservation of this power granted by Congress 
to the President is that in 1983 congress prohibited any 
changes to the Constitution of American Samoa without an act of 
Congress.
    American Samoa's society reflects both traditional values 
and Western influences. The traditional Samoan social structure 
is built around extended families, or aiga. Family members 
acknowledge allegiance to the island leadership hierarchy 
comprised of family leaders, or matai. Matai are responsible 
for the welfare of their respective aiga and play a central 
role in protecting and allocating family lands.
    American Samoa's government is a constitutional democracy 
with executive, legislative and judicial branches. The 
executive branch consists of over 20 offices and departments 
providing services such as public safety, public works, 
education and health. The executive branch is headed by a 
governor popular elected to a four-year term. The legislature, 
or Fono, is comprised of 18 senators, 20 representatives, and 
one delegate. Senators are chosen by 12 local councils in 
accordance with Samoan custom (not by popular vote) and serve 
four-year terms. Representatives are elected by popular vote to 
represent 17 established districts and serve two-year terms. A 
non-voting delegate is elected to represent the people of the 
former Tokelau Atoll (initially called La Isla de le Gente 
Hermosa, by the Spanish explorer Pedro de Quiros, or Olohena in 
Tokelauan or Olosega Mamao in Samoan).
    There never has been a specific authorization for meeting 
the needs of the residents of American Samoa other than a 1929 
Joint Resolution of congress which accepted, ratified, and 
confirmed the cessions of the islands now known as American 
Samoa. The result of this relatively informal structure is that 
the Government of American Samoa has been funded on a yearly 
basis from discretionary funds, most recently within DOI.
    The annual setting of a funding level of American Samoa has 
made it difficult for the elected leaders of American Samoa to 
plan systematic improvements. For example, to bring the 
generation and distribution systems for electrical power up to 
acceptable standards, the American Samoa Power Authority 
adopted a five-year modernization plan. Because the authority 
did not know from year to year if its modernization would 
receive Federal assistance, actual purchases of equipment had 
to be made one year at a time and discounts which would have 
been available to a purchaser with a secure source of funding 
were lost.
    Congress has long recognized the benefits of multi-year 
funding for its developing territories and has provided funding 
similar in principle to the Northern Mariana Islands, the 
Republic of the Marshall Islands, the Federated States of 
Micronesia and the Republic of Palau.

           commonwealth of the northern mariana islands (nmi)

    The Northern Mariana Islands, previously part of the United 
States-administered Trust Territory of the Pacific Islands and 
now a U.S. territory, have received a generous stream of 
special grants from the Federal Government since NMI chose to 
come under U.S. sovereignty. The special grant authorization is 
contained in the 1976 law approving the NMI Covenant which 
provided the framework for the current Federal-territorial 
relationship. It appears the grants have produced the intended 
results as the Marianas now enjoy one of the highest standards 
of living in the Pacific.
    NMI Governor Froilan Tenorio testified before the 
Subcommittee on Native American and Insular Affairs on January 
31, 1995, that NMI no longer needs the funds and asked Congress 
to eliminate the special annual grant. The Governor stated:

          I strongly think the time must come to end the annual 
        Federal payment to the Northern Marian Islands. The 
        Federal Government is not helping us by giving us this 
        money. . . . In fact, Federal subsidies do us more harm 
        than good because they perpetuate our dependence on the 
        Federal Government and they come with too many Federal 
        strings attached.

    NMI still has yet to expend over $80 million in accumulated 
special annual grant funds from current and prior years.

            office of territorial and international affairs

    Congressman Elton Gallegly introduced legislation in the 
103rd Congress to end the administration of territories from 
DOI. This would mirror an earlier precedent involving the 
unincorporated territory of Puerto Rico. By an Executive 
Memorandum issued by President John F. Kennedy in 1961, Puerto 
Rico ceased to be administered by DOI, having achieved a 
significant level of self-governance. Since that time, the 
other territories of American Samoa, Guam, the Northern Mariana 
Islands, and the Virgin Islands have also developed similar 
levels local self-governance. Congressman Gallegly reintroduced 
his measure in the 104th Congress (H.R. 1332).
    In January 1995, the Clinton Administration finally agreed 
to end the administration of territories by announcing the 
closure of the Office of Territorial and International Affairs. 
Although the action was claimed to be a major example of 
reinventing government and cutting Federal costs, the 
Administration's proposal would save only $1 million per year, 
in stark contrast to the $120 million over seven years realized 
by H.R. 1332.

                            Committee Action

    H.R. 1332, the Rongelap Recovery and Self-Reliance Act, was 
introduced on March 28, 1995, by Congressman Elton Gallegly and 
Delegate Eni Faleomavaega. H.R. 1306, American Samoa Economic 
Development Act, was introduced on March 23, 1995, by Delegate 
Faleomavaega and Congressman Gallegly. Both bills were referred 
to the Committee on Resources and within the Committee to the 
Subcommittee on Native American and Insular Affairs. In 
addition, Congressman Gallegly introduced H.R. 602, the Omnibus 
Territories Act, on January 20, 1995. The bill contained 
provisions terminating the DOI Office of Territorial and 
International Affairs and the annual special grant to NMI. H.R. 
602 was referred to the Committees on Resources, Economic and 
Educational Opportunities, Judiciary, and Ways and Means. 
Within the Committee on Resources, the bill was referred to the 
Subcommittee on Native American and Insular Affairs.
    On January 31, 1995, the Subcommittee on Native American 
and Insular Affairs held a hearing on H.R. 602, which would, 
among other things, end the position of the Assistant Secretary 
of the Interior for Territorial and International Affairs and 
certain technical assistance programs for the territories. The 
Administration testified the Assistant Secretary position would 
end and the Office of Territorial and International Affairs 
would be substantially downsized as part of the President's 
Reinventing Government initiative.
    The Subcommittee on Native American and Insular Affairs 
held a hearing on March 29, 1995, to discuss H.R. 1306 and H.R. 
1332. Representatives of the Marshall Islands and the Rongelap 
Community testified in support of the provisions regarding 
Rongelap. The Administration testified in support of measures 
for the rehabilitation and resettlement of Rongelap and 
economic development of American Samoa. However, the 
Administration (represented by DOI) was opposed to the 
elimination of DOI's role as administrator of funding for 
American Samoa, as provided by H.R. 1306.
    On April 5, 1995, the Subcommittee met to mark up H.R. 
1332. Congressman Gallegly offered an amendment in the nature 
of a substitute which included four titles: Rongelap Recovery 
and Community Self-Reliance Act from H.R. 1332, the American 
Samoa Economic Development Act from H.R. 1306, Commonwealth of 
the Northern Mariana Islands from H.R. 602, and the Territorial 
Administrative Cessation Act from H.R. 602. The amendment was 
adopted by roll call vote of 7-0 as follows:

          subcommittee on native american and insular affairs

    Date: April 5, 1995.
    Bill Number: H.R. 1332.
    Amendment or Matter voted on: Gallegly Amendment to H.R. 
1332.

----------------------------------------------------------------------------------------------------------------
                                    Yea       Nea     Present                         Yea       Nea     Present 
----------------------------------------------------------------------------------------------------------------
Gallegly.......................        X   ........  .........  Faleomavaega.....        X   ........  .........
Young..........................  ........  ........  .........  Kildee...........        X   ........  .........
Gilcrest.......................  ........  ........  .........  Williams.........  ........  ........  .........
Jones..........................        X   ........  .........  Johnson..........        X   ........  .........
Hastings.......................        X   ........  .........  Romero-Barcello..  ........  ........  .........
Matcalf........................  ........  ........  .........  Underwood........        X   ........  .........
Longley........................  ........  ........  .........                                                  
----------------------------------------------------------------------------------------------------------------

    The bill as amended was then ordered favorably reported to 
the Full Committee in the presence of a quorum.
    On May 17, 1995, the Full Resources Committee met to 
consider H.R. 1332. Congressman Gallegly offered an amendment 
in the nature of a substitute to address concerns raised by the 
Administration and others regarding the accountability of 
American Samoa for Federal funds which would be appropriated 
over a 10 year period. Title II, the American Samoa Economic 
Development Act, was modified to strengthen accountability 
standards and clarify mechanisms which will stop the flow of 
funds if an audit discrepancy determined by the Inspector 
General or General Accounting Office is not timely resolved. 
Congressman George Miller offered an amendment to the Gallegly 
amendment relating to the full faith and credit of the United 
States and the funding provided to American Samoa. The Miller 
amendment by defeated by voice vote. Delegate Underwood offered 
and withdrew an amendment to the Gallegly amendment relating to 
the cessation of Office of Territorial and Internal Affairs 
multi-year projects. Delegate Underwood offered a second 
amendment to the Gallegly amendment which restored annual 
funding to NMI. The amendment failed by voice vote. Delegate 
Faleomavaega offered an amendment to the Gallegly amendment. 
The amendment clarified that the specific amounts of Federal 
funds authorized to American Samoa during each year of the 10 
year period of the Act shall not be released if the conditions 
in the Act are not met. The Faleomavaega amendment passed by 
voice vote. The Gallegly amendment in the nature of a 
substitute, as amended, passed by voice vote. On May 24, 1995, 
the bill as amended was ordered favorably reported to the House 
of Representatives, in the presence of a quorum, by the 
Committee on Resources.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title; Table of contents

    The short title of the bill is the ``Omnibus Insular Areas 
Act of 1995''. This section also contains a table of contents.

                           title i--rongelap

Section 101. Short title

    The short title of this title is the ``Rongelap Recovery 
and Community Self-Reliance Act''.

Section 102. Policy regarding assistance for resettlement of people of 
        Rongelap

    This section explains that the purpose of the bill is to 
accomplish resettlement consistent with U.S. commitments and 
provides that the extent of future funding for Rongelap 
resettlement is solely within the discretion of Congress.

Section 103. Responsibilities Relating to Rongelap resettlement trust 
        fund

    The section clarifies that the role of the Department of 
Interior in transferring funds appropriated by Congress to the 
Rongelap Resettlement Trust Fund is administrative in nature, 
and involves policy or oversight of trust management and the 
resettlement process only to the extent specifically required 
under the applicable legal instruments establishing the 
Rongelap Resettlement Trust Fund. Section 103 also provides for 
audit of trust fund activities by the Comptroller General and 
the Department of Interior Inspector General, and expressly 
reserves Congressional authority of the trust fund.

Section 104. Trustee and other fund personnel

    This section sets forth certain requirements and 
qualifications for the trustee and those who might serve as 
fund managers and investment advisers to the Rongelap Atoll 
Local Government.

Section 105. Resettlement expenditures and activities

    This section defines the scope of the trust and authorizes 
the use of up to 50 percent of certain components of the trust 
fund's annual earnings to meet basic human needs of the 
community and administrative expenses arising from the 
resettlement process. Annual earnings are defined in a way that 
allows the funds to grow and protects the corpus from 
inflation, even after the distribution authorized by this 
section.
    Section 105 also recognizes that some members of the 
Rongelap community may not choose to return to reside 
permanently at Rongelap even if measures to mitigate risk are 
implemented, and authorizes appropriately limited resettlement 
assistance to those who elect to resettle elsewhere in the 
Marshall Islands. Such assistance is restricted to avoid 
``double-dipping''.

Section 106. Transfer of unexpended and unobligated funds

    Section 106 is a housekeeping measure which recognizes that 
the Rongelap Resettlement Project which managed the scientific 
studies required under Section 103(i) of Public Law 99-239 will 
be entering a new phase now that the Scientific Management Team 
is disbanding and the report on resettlement of Rongelap Island 
is complete. All funding which has been made available for 
scientific studies but not expended now properly should be 
transferred to the Rongelap Atoll Local Government for use 
consistent with the purpose for which such funds were 
appropriated, including on-going scientific research and 
radiological monitoring during resettlement.

                        title ii--american samoa

Section 201. Short title

    This section sets forth the short title of the title as the 
``American Samoa Economic Development Act of 1995''.

Section 202. Findings

    Section 202 details Congressional findings which recite the 
prior authorization for Federal assistance to American Samoa, 
the difficulties in long-term planning if the next year's 
funding is not known, and the benefits to be derived from a 
multi-year source of funds.

Section 203. Authorization of funding

    This section provides a ten-year authorization of $34.5 
million per year for the territory. The funding would be 
available for construction of capital assets, government 
operations and reduction of government debt. Debt reduction 
requires 100 percent matching by American Samoa. the funding 
would not be released by the U.S. Treasury Department unless 
the conditions of the bill are met.

Section 204. Establishment of trust

    This section requires the Government of American Samoa to 
place the Federal funds disbursed pursuant to this title in a 
trust to be disbursed by a trustee. The trustee would be 
appointed and removed pursuant to local law, with the 
appointment subject to the concurrence of the U.S. Secretary of 
the Interior. The trustee is required to submit an annual 
report to Congress, DOI and the Government of American Samoa.
    The requirement that the trustee be a financial institution 
with over $1 billion in trust assets is intended to provide 
considerable security of the trust assets yet not be a 
requirement so burdensome as to eliminate competition. The 
Committee has researched the asset requirement included in the 
bill and believes it is a fair compromise between the two 
competing interests.
    While the Committee trusts the Government of American Samoa 
to select a responsible trustee, concern was expressed that 
there should be some Federal review of the process through 
which the trustee is selected. It is felt that the concurrence 
of the Secretary of the Interior will ensure any trustee 
nominated by the Governor is responsible and meets the 
requirements of the law. The Committee recognizes that the 
Government of American Samoa may find it beneficial to 
establish a selection process, and set forth operating 
procedures pursuant to local law. Section 204 provides for that 
possibility.
    Paragraph (b)(4) ensures that the trustee will comply with 
both laws of the state in which its principal office is located 
as well as all applicable laws in American Samoa.
    Paragraph (b)(5) is intended to hold the trustee 
responsible for the disbursement of funds inconsistent with the 
terms of this bill. If it is determined that an illegal 
disbursement was made, the full amount of the disbursement must 
be paid to the U.S. Treasury. This serves to make the U.S. 
taxpayers whole again, and serves as a prospective disincentive 
to the trustee, as the amount of the penalty could exceed the 
trustee's fees for any given year. The good faith exception to 
the general rule of liability on the part of the trustee is 
intended to protect the trustee from liability based on actions 
required of the trustee by others.
    The requirement in subsection (c) that the trust funds be 
deposited in an account or accounts in accordance with 
regulations of the Department of the Treasury is intended to 
ensure the Federal Government does not transmit funds to the 
Government of American Samoa until they are needed. Concern has 
been expressed that without this provision, the Government of 
American Samoa would be entitled all funds for construction 
projects at the beginning of each fiscal year. Furthermore, 
because of the annual deficits under which the Federal 
Government is currently operating and the requirement the funds 
be placed in accounts or bonds, notes or other redeemable 
instruments backed by the full faith and credit of the United 
States, the Federal government could, in effect, be providing 
tens of millions of dollars to American Samoa, and paying 
interest on the money as well. This provision is intended to 
remove that possibility.
    The requirement in subsection (c) that the Federal funds be 
deposited in an account or accounts of a financial institution 
which is insured by the Federal Deposit Insurance Corporation 
is intended to take advantage of other Federal laws which 
ensure the soundness of commercial depository institutions.
    The requirement contained in subsection (d) that the 
trustee submit an annual report within 90 days of the end of 
each fiscal year, will assist American Samoa in preparing for 
its annual audit by an independent auditor, and will give 
Congress and the executive branch a ``quick look'' at how the 
Federal funds were disbursed during the prior fiscal year.

Section 205. Uses of trust funds

    This section specifies the purposes for which trust funds 
could be used and the requirements to receive funds. The 
primary requirements for American Samoa to receive funds are 
that American Samoa must develop a master plan of capital 
needs, provide a maintenance plan for each project constructed, 
and establish semiautonomous government agencies before it can 
receive construction funds. At least $3 million per year of the 
construction money must be used for youth facilities.
    The Committee notes that the Government of American Samoa 
has, with the assistance of DOI and the Army Corps of 
Engineers, developed an initial master plan of capital needs. 
The Committee understands that American Samoa may wish to 
further refine this plan as time goes on, but for purposes of 
this bill, the master plan as it exists, once passed by the 
local legislature, will meet the requirements of this 
legislation. No new master plan is required, and no Federal 
approval is required.
    The requirement for the existence of semiautonomous 
agencies is intended to make the Government of American Samoa 
more efficient, and to assist the government in identifying 
areas of its operations which can and should be self-
supporting. The success of the American Samoa Power Authority 
(ASPA) is noted and, in fact, ASPA was used as a model in 
setting forth the minimal requirements of the semiautonomous 
agencies required under this bill.
    The Committee notes that the Government of American Samoa 
is not meeting the needs of the younger residents of the 
territory. As the education and development of the youth in the 
territory are considered fundamental requirements of operating 
a local government, the Committee has included a requirement 
that at least $3 million per year be used for the construction 
or repair of capital assets primarily available for the school-
age residents of American Samoa. For fiscal year 1996, 
illustrative projects are provided, with the expectation that 
beginning with fiscal year 1997 the needs of territory's youth, 
including those attending the American Samoa Community College, 
will be included in the master plan of capital needs.
    The Committee has been concerned that in American Samoa, as 
well as in the other insular areas, Federal funds are used to 
construct capital assets, but that these capital assets are not 
available to the residents of the territories for as long as 
they should be because the assets are not properly maintained. 
In years past, the Committee has supported the Operations, 
Maintenance and Improvement Program operated by the Office of 
Territories and International Affairs as a method of 
demonstrating to the territories the benefit of regular 
preventative maintenance programs. As Congress continues to 
tighten its belt in an effort to balance the Federal budget, 
the Committee believes this demonstration at Federal expense 
has served its purpose and it is now time for the territories 
to maintain the assets provided by U.S. taxpayers. To this end, 
this bill requires American Samoa to develop a maintenance plan 
for each capital asset that is constructed with funds 
appropriated pursuant to this authorization. Federal funds 
identified for the construction of capital assets may be used 
to initially fund this plan, but once the asset is placed in 
service and the initial funding is depleted, local funds must 
be used to repair and maintain it.
    The Committee notes that while preliminary reports for 
fiscal year 1995 indicate that the executive branch of the 
Government of American Samoa is operating at or under budget, 
the Committee is concerned that prior years have not always 
been managed in such a prudent fashion, the result of which is 
a considerable debt owed by American Samoa to Federal agencies, 
private creditors and other local government funds. While there 
is considerable reluctance to assist American Samoa by 
``bailing it out'' from a hole it dug for itself through 
inadequate management and financial controls, the Committee 
acknowledges American Samoa will find it very difficult to pay 
off its debt without some assistance. For this reason, and with 
the expectation that American Samoa has righted itself, the 
Committee has proposed a mechanism by which the Federal 
Government will, in effect, pay for one-half of this debt. The 
matching local funds need not be provided all at once, but 
rather, as American Samoa pays off old debt with funding from 
non-federal sources, it may receive a partial reimbursement 
after each payment is made.
    The uses of funds prohibited in paragraph (c) are intended 
to ensure the Federal funds are not lost through misuse or 
diverted to other accounts and purposes.

Section 206. Disbursement of trust funds

    Section 206 detail show trust funds will be disbursed: 
operations funding will be disbursed on a monthly basis, 
construction funds on proof that the work has been completed.
    The purpose of this section is to provide for the orderly 
release of funds by the Federal Government. Section 207 sets 
forth certain financial requirements which must be met if 
American Samoa is to continue receiving Federal funding. 
Section 206 provides that even if these conditions are not met, 
the Government of American Samoa may receive one disbursement 
not to exceed ten percent of the amount appropriated for that 
year for the operations of American Samoa if the territory 
experiences an extreme or territorial emergency deemed 
unforeseeable by the trustee.
    Section 206 also establishes a procedure by which the 
funding for the construction of capital assets may be paid to 
the Government of American Samoa, and semiautonomous agencies 
of the Government of American Samoa, or a bona fide contractor 
of the Government, depending on the circumstances of each 
contractual commitment.
    Paragraph (c) of Section 206 sets forth the procedure to be 
used for assisting American Samoa in paying down its unbudgeted 
debt incurred in fiscal years prior to 1995. Upon presentation 
to the trustee of proof that the government of American Samoa 
has made a payment from non-federal sources on debt incurred 
prior to fiscal year 1995, the trustee shall pay to American 
Samoa one-half of the amount paid by it. The total Federal 
expenditure in any fiscal year shall not exceed $3 million. It 
is intended that these funds shall be made available in fiscal 
years 1996 through 2000, but that if any of the funds are not 
used in the year they become available, they shall remain 
available until expended, or until there is no additional 
qualifying debt to be paid, in which case the funds shall 
remain in the U.S. Treasury.

Section 207. Audits

    Section 207 states the requirement that the Single Audit 
Act applies to these funds and requires that the audit be 
completed within 180 days from the end of each fiscal year. If 
American Samoa cannot obtain an audit report with an opinion 
within the allotted time, no additional Federal funds for the 
operation of the Government of American Samoa or unobligated 
construction money may be disbursed until a satisfactory audit 
report is submitted.
    The accuracy of the financial accounting required by the 
bill increases after five years. For the first five fiscal 
years (1996-2000), the financial audit report shall contain an 
auditor's opinion, but the opinion may be qualified. For fiscal 
years 2001-2005, the requirement is that the opinion of the 
independent auditor must be unqualified, or what is known as a 
``clean opinion''. Reports on which an independent auditor does 
not express an opinion or on which the opinion expressed is 
adverse do not meet the requirements of this legislation for 
any of the ten years. Audit reports are submitted to Congress 
and DOI.
    The recitation of the Single Audit Act and Code of Federal 
Regulations is not intended to place any new audit requirements 
on American Samoa. The intent is simply to affirm that the 
requirements of the cited Federal laws and regulations apply to 
funds appropriated pursuant to this bill.
    Paragraph (c) of Section 207 identifies the DOI Inspector 
General as the one who shall make the notification to the 
trustee not to release additional Federal funds if the audit 
requirements contained in the bill are not met.

Section 208. Audits by the United States

    This section restates the authority of the Comptroller 
General and the DOI Inspector General to audit all funds of the 
Government of American Samoa, and other Federal agencies to 
audit the use of their funds. These are not new requirements. 
Federal auditors are given the authority to set time limits as 
to when the discrepancies should be corrected. The trustee must 
withhold future operations funding and unobligated construction 
funding if a major discrepancy is not corrected in the time 
prescribed by the audit authority. Each audit authority may 
amend the time it has prescribed for the correction of a major 
deficiency. The Committee expects that unless an administrative 
error was made, any amendments to time limits would be to 
extend the time limit rather than to shorten it. The trustee is 
held accountable for funds it disburses for purposes outside 
the scope of the bill.
    The Committee is aware of the repeated statements in audit 
reports, and Federal reviews of the finances of the American 
Samoa Government, that part of the internal problem of 
financial management of American Samoa is that appropriate 
corrective action has not always been taken. The Committee is 
convinced that when given the responsibility to manage its own 
affairs, when coupled with advance notification that government 
leaders will be held accountable for their actions, the 
Government of American Samoa will properly manage its financial 
affairs. Section 208 is intended to give American Samoa that 
opportunity.

Section 209. Settlement of disputes

    Section 209 gives the High Court of American Samoa 
jurisdiction to resolve disputes which arise pursuant to this 
title. This provision was included to ensure this bill would 
not be construed to exclude the High Court of American Samoa as 
a venue available for resolution of disputes which arise under 
the provisions of this bill. This bill is not intended to 
exclude the parties to any disputes which arise under the 
provisions of this bill from settling the disputes through non-
judicial means available under the applicable Federal, state or 
territorial laws, nor is Section 209 intended to exclude as 
venues Federal courts which have jurisdiction under other 
Federal law and the U.S. Constitution.

Section 210. Criminal violations

    This section restates existing authority that violations of 
Federal or local criminal law concerning funds appropriated 
pursuant to this title may be brought in local or Federal 
court, as appropriate.

Section 211. Definitions

    This section defines several terms used in Title II.

        title iii--commonwealth of the northern mariana islands

Section 301. Termination of annual direct grant assistance

    The annual special grant assistance to the Northern Mariana 
Islands is terminated as of September 30, 1995. Any amounts 
previously appropriated but not obligated as of the date of 
enactment may not be obligated.

           title iv--territorial administrative cessation act

Section 401. Short title

    The short title of this part is the ``Territorial 
Administration Cessation Act.''

Section 402. Congressional findings

    The Congressional findings highlight the recent end of the 
United Nations Trust Territory of the Pacific Islands and 
corresponding trusteeship responsibilities of the United 
States. In addition, the U.S. territories have developed 
progressively increased self-governance during the past five 
decades, and Federal-territorial relations can be enhanced and 
fiscal conditions improved by the elimination of unnecessary 
Federal bureaucracy.

Section 403. Elimination of office of territorial and international 
        affairs

    The Office of Territorial and International Affairs of the 
Department of the Interior, established by Secretarial Order in 
1980, is eliminated. The position of Assistant Secretary for 
the Office is terminated by reducing the authorized number of 
assistant secretaries of the Interior from six to five. The 
provisions would take effective the first day of the first 
fiscal year following the date of enactment.

Section 404. Certain activities not funded

    No further amounts may be expended for certain assistance 
programs for territories administered by Interior: technical 
and maintenance assistance, disaster fund, and insular 
management controls.

            Committee Oversight Fundings and Recommendations

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that the 
enactment of H.R. 1332 will have no significant inflationary 
impact on prices and costs in the operation of the national 
economy.

                        Cost of the Legislation

    Clause 7(a) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 1332. However, clause 7(d) of that Rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the ill prepared 
by the Director of the Congressional Budget Office under 
Section 403 of the Congressional Budget Act of 1974.

                     Compliance With House Rule XI

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
Section 308(a) of the Congressional Budget Act of 1974, H.R. 
1332 does not contain any new budget authority, credit 
authority, or an increase or decrease in revenues or tax 
expenditures. The bill does increase mandatory spending.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 1332.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
Section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
1332 from the Director of the Congressional Budget Office.

               Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 16, 1995.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1332, the Omnibus 
Insular Areas Act of 1995. Because the bill would affect direct 
spending, pay-as-you-go procedures would apply.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

               congressional budget office cost estimate

    1. Bill number: H.R. 1332.
    2. Bill title: Omnibus Insular Areas Act of 1995.
    3. Bill status: As ordered reported by the House Committee 
on Resources on May 24, 1995.
    4. Bill purpose: H.R. 1332 contains the following four 
titles:
    Title I, the Rongelap Recovery and Community Self-Reliance 
Act, would make several administrative changes to the Rongelap 
Resettlement Trust Fund.
    Title II would provide spending authority of $34.5 million 
for each of the fiscal years 1996 through 2005 for payments to 
American Samoa and would place conditions on the use of those 
funds.
    Title III would terminate the guaranteed annual payments 
made by the United States to the Northern Mariana Islands.
    Title IV, the Territorial Administrative Cessation Act, 
would eliminate the Office of Territorial and International 
Affairs (OTIA) of the Department of the Interior, including 
certain assistance programs managed by that office.
    5. Estimated cost to the Federal Government: Enacting H.R. 
1332 would increase mandatory spending but would have no 
significant effect on discretionary spending, relative to 
current law. Total funding for activities covered by the bill 
would be $34.5 million a year over the 1996-2000 period, 
compared to 1995 funding of $76 million. The budgetary effects 
of the legislation are summarized below:

----------------------------------------------------------------------------------------------------------------
                                                   1995       1996       1997       1998       1999       2000  
----------------------------------------------------------------------------------------------------------------
                                    SPENDING SUBJECT TO APPROPRIATIONS ACTION                                   
Spending Under Current Law and Under H.R. 1332                                                                  
 \1\                                                                                                            
    Budget Authority..........................         48  .........  .........  .........  .........  .........
    Estimated Outlays.........................         49         19  .........  .........  .........  .........
                                                                                                                
                                               MANDATORY SPENDING                                               
Spending Under Current Law:                                                                                     
    Budget Authority..........................         28         28         28         28         28         28
    Estimated Outlays.........................          5         17         29         41         28         28
Proposed Changes:                                                                                               
    Budget Authority..........................  .........          7          7          7          7          7
    Estimated Outlays.........................  .........         18         24         19         13          4
Spending Under H.R. 1332:                                                                                       
    Budget Authority..........................         28         35         35         35         35         35
    Estimated Outlays.........................          5         35         53         60         41         32
----------------------------------------------------------------------------------------------------------------
\1\ The 1995 budget authority is the amount appropriated for that year. The bill would eliminate the OTIA and   
  change the funding for American Samoa from discretionary spending to mandatory spending. The proposed changes 
  under the mandatory spending heading reflect this category change.                                            


    The costs of this bill fall within budget function 800.
    6. Basis of Estimate: Authorizations of Appropriations. For 
fiscal year 1995, current law provides about $19 million for 
the OTIA and certain small assistance programs managed by that 
office and about $29 million for American Samoa (which is also 
administered by OTIA). H.R. 1332 would eliminate the OTIA and 
its related programs and change the funding for American Samoa 
from discretionary to mandatory. Current law provides no 
funding for these programs for fiscal years after 1995, and 
this bill would not authorize any appropriations for them.
    There could be some increased costs to the Department of 
the Interior to assume the responsibilities of OTIA in 
administering the payment to American Samoa. However, CBO 
estimates that these costs would not be significant.
    Direct Spending: Current law provides a guaranteed annual 
grant of about $28 million to the Northern Mariana Islands. 
Beginning in fiscal year 1996 H.R. 1332 would terminate this 
grant and would guarantee an annual payment of $34.5 million to 
American Samoa. Estimated outlays for these grants are based on 
the projected uses for the funds, such as for building 
construction and operations, and the anticipated rates of 
spending for these uses. CBO expects that funds for American 
Samoa would spend at a faster rate than those for the Northern 
Marianas, leading to higher outlays than under current law. In 
addition to the new direct spending for American Samoa, 
spending for the Northern Marianas would continue through 1999 
from budget authority provided in 1995 and prior years.
    7. Pay-as-you-go considerations: Section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts through 1998. Because this bill would 
affect direct spending, pay-as-you-go procedures would apply. 
These effects are summarized in the following table.

------------------------------------------------------------------------
                                 1995       1996       1997       1998  
------------------------------------------------------------------------
Change in outlays...........          0         18         24         19
Change in receipts..........      (\1\)      (\1\)      (\1\)      (\1\)
------------------------------------------------------------------------
\1\ Not applicable.                                                     

    8. Estimated cost to State and local governments: None.
    9. Estimate comparison: None.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Mark Grabowicz.
    12. Estimate approved by: Robert A. Sunshine, for Paul N. 
Van de Water, Assistant Director for Budget Analysis.

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC., February 29, 1996.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed intergovernmental mandates cost estimate 
for H.R. 1332, the Omnibus Insular Areas Act of 1995. CBO 
provided a federal cost estimate for this bill on June 16, 
1995.
    The bill would impose an intergovernmental mandate on the 
government of American Samoa, but the direct costs of complying 
with this mandate would not exceed the $50 million threshold 
established in Public Law 104-4. The bill would impose no new 
private sector mandates.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                         June E. O'Neill, Director.

    congressional budget office estimated cost of intergovernmental 
                                mandates

    1. Bill number: H.R. 1332.
    2. Bill title: Omnibus Insular Areas Act of 1995.
    3. Bill status: As ordered reported by the House Committee 
on Resources on May 24, 1995.
    4. Bill purpose: H.R. 1332 contains the following four 
titles:
    Title I, the Rongelap Recovery and Community Self-Reliance 
Act, would make several administrative changes to the Rongelap 
Resettlement Trust Fund.
    Title II would provide spending authority of $34.5 million 
for each of the fiscal years 1996 through 2005 for federal 
payments to American Samoa and would place conditions on the 
use of those funds.
    Title III would terminate the guaranteed annual payments 
made by the United States to the Northern Mariana Islands.
    Title IV, the Territorial Administrative Cessation Act, 
would eliminate the Office of Territorial and International 
Affairs (OTIA) of the Department of the Interior, including 
certain assistance programs managed by that office.
    5. Intergovernmental mandates contained in bill: Title II 
of H.R. 1332 would require the government of American Samoa to 
obtain a comprehensive financial audit, beginning with fiscal 
year 1996. The bill would further require the American Samoan 
government to submit audit reports along with plans to resolve 
any deficiencies to various Congressional committees and 
federal agencies. These requirements would be mandated as 
defined in Public Law 104-4. That law defines state governments 
to include territories of the United States, including American 
Samoa and the Northern Mariana Islands.
    6. Estimated direct costs to State, local, and tribal 
governments: (a) Is the $50 Million Threshold Exceeded? No. (b) 
Total Direct Costs of Mandates: CBO estimates that this mandate 
would impose no significant direct costs on the government of 
American Samoa. (c) Estimate of Necessary Budget Authority: Not 
applicable.
    7. Basis of estimate: This estimate is based on information 
provided by officials of the U.S. Department of the Interior.
    CBO estimates that American Samoa will spend between 
$500,000 and $750,000 per year to obtain the audits required by 
this bill, but we also expect that they would incur these costs 
in the absence of this legislation. American Samoa is required 
to obtain a comprehensive financial audit under current law, 
and it is currently taking steps to comply with that 
requirement.
    8. Appropriation or other Federal financial assistance 
provided in bill to cover mandate costs: While this bill 
authorizes payments from the federal government to American 
Samoa, it would specifically require that the audit be obtained 
at the territory's expense.
    9. Other impacts on State, local, and tribal governments: 
H.R. 1332 would authorize guaranteed annual payments to 
American Samoa of $34.5 million over fiscal years 1996 through 
2005. The bill would also terminate existing authority for 
guaranteed annual payments of $28 million to the Northern 
Mariana Islands.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Marjorie Miller.
    12. Estimate approved by: Robert A. Sunshine, for Paul N. 
Van de Water, Assistant Director for Budget Analysis.

                    Compliance With Public Law 104-4

    1. The Congressional Budget Office (CBO) has identified in 
H.R. 1332 an intergovernmental mandate on the Government of 
American Samoa by requiring a comprehensive financial audit 
beginning in Fiscal Year 1997. The Committee on Resources 
disagrees with this assessment because the bill merely requires 
compliance with existing law.
    2. According to CBO, the cost of the audit will be between 
$500,000 and $750,000 per year, although CBO also recognizes 
that ``American Samoa is required to obtain a comprehensive 
financial audit under current law and is currently taking steps 
to comply with that requirement.'' The benefit of the audit 
will be to ensure financial accountability for the $34,500,000 
in U.S. funds appropriated for American Samoa for each of 
Fiscal Years 1996 through 2005.
    3. The mandate affects only the public sector (the 
Government of American Samoa).
    4. Paying for the mandate will not affect the competitive 
balance between the Government of American Samoa and the 
private sector.
    5. Section 203 of H.R. 1332 directs that $34,500,000 be 
made available for each of Fiscal Years 1996 through 2005 for 
the Government of American Samoa. Funds under Section 203 may 
be used to fund the mandated audit, which is estimated to cost 
the Government of American Samoa between $500,000 and $750,000 
per year.
    6. The Committee intends that the audit mandate for 
American Samoa be entirely funded through appropriated funds.
    7. If the audit mandate is funded, there is no need for a 
mechanism used to allocate funding among jurisdictions since 
funds will be provided directly to the Government of American 
Samoa and the Government will be responsible for conducting the 
audit.
    8. Current appropriations to the Department of the Interior 
for the Government of American Samoa exist to cover the direct 
costs of the mandated audit.
    9. H.R. 1332 is not intended to preempt any State, local, 
tribal law, or American Samoan law.

                          Departmental Reports

    The Committee has received no departmental reports on H.R. 
1332.

         Changes in Existing Law Made by the Bill, as Reported

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

                         ACT OF MARCH 24, 1976

JOINT RESOLUTION To approve the ``Covenant To Establish a Commonwealth 
  of the Northern Mariana Islands in Political Union with the United 
              States of America'', and for other purposes

          * * * * * * *
    [Sec. 3. Pursuant to section 701 of the foregoing Covenant, 
enactment of this section shall constitute a commitment and 
pledge of the full faith and credit of the United States for 
the payment of $228 million at guaranteed annual amounts of 
direct grant assistance for the Government of the Northern 
Mariana Islands for an additional period of seven fiscal years 
after the expiration of the initial seven-year period specified 
in section 702 of said Covenant, which assistance shall be 
provided according to the schedule of payments contained in the 
Agreement of the Special Representatives on Future United 
States Financial Assistance for the Government of the Northern 
Mariana Islands, executed July 10, 1985, between the special 
representative of the President of the United States and the 
special representatives of the Governor of the Northern Mariana 
Islands. The islands of Rota and Tinian shall each receive no 
less than a \1/8\ share and the island of Saipan shall receive 
no less than a \1/4\ share of annualized capital improvement 
project funds, which shall be no less than 80 per centum of the 
capital development funds identified in the schedule of 
payments in paragraph 2 of part II of the Agreement of the 
Special Representatives. Funds shall be granted according to 
such regulations as are applicable to such grants.
    [Sec. 4. (a) Section 704(c) of the foregoing Covenant shall 
not apply to the Federal financial assistance which is provided 
to the Government of the Northern Mariana Islands pursuant to 
section 3 of this Act.
    [(b) Upon the expiration of the period of Federal financial 
assistance which is provided to the Government of the Northern 
Mariana Islands pursuant to section 3 of this Act, payments of 
direct grant assistance shall continue at the annual level 
provided for the last fiscal year of the additional period of 
seven fiscal years until Congress otherwise provides by law.]
    Sec. 5. Should the Secretary of the Interior believe that 
the performance standards of the [agreement identified in 
section 3 of this Act] Agreement of the Special Representatives 
on Future United States Financial Assistance for the Government 
of the Northern Mariana Islands, executed July 10, 1985, 
between the special representative of the President of the 
United States and the special representatives of the Governor 
of the Northern Mariana Islands are not being met, he shall 
notify the Government of the Northern Mariana Islands in 
writing with the intent to resolve such issue in a mutually 
agreeable and expeditious manner and notify the Committee on 
[Interior and Insular Affairs] Resources of the House of 
Representatives and the Committee on Energy and Natural 
Resources of the Senate. Should the issue not be resolved 
within thirty days after the notification is received by the 
Government of the Northern Mariana Islands, the Secretary of 
the Interior may request authority from Congress to withhold 
payment of an appropriate amount of the operations funds 
identified in the schedule of payments in paragraph 2 of part 
II of the Agreement of the Special Representatives for a period 
of less than one year but no funds shall be withheld except by 
Act of Congress:
          * * * * * * *
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              SECTION 5315 OF TITLE 5, UNITED STATES CODE

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Sec. 5315. Positions at level IV

    Level IV of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Deputy Administrator of General Services.
          Associate Administrator of the National Aeronautics 
        and Space Administration.
          Assistnt Administrators, Agency for International 
        Development (6).
          * * * * * * *
          Assistant Secretaries of the Interior [(6)] (5).
          * * * * * * *