[House Report 104-713]
[From the U.S. Government Publishing Office]



                                                                       
104th Congress                                            Rept. 104-713
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 1
_______________________________________________________________________


 
             UNITED STATES-PUERTO RICO POLITICAL STATUS ACT

                                _______
                                

                 July 26, 1996.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                    DISSENTING AND ADDITIONAL VIEWS

                        [To accompany H.R. 3024]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 3024) to provide a process leading to full self-
government for Puerto Rico, 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 ``United States-Puerto 
Rico Political Status Act''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title.
Sec. 2. Findings.
Sec. 3. Policy.
Sec. 4. Process for Puerto Rican full self-government, including the 
initial decision stage, transition stage, and implementation stage.
Sec. 5. Requirements relating to referenda, including inconclusive 
referendum and applicable laws.
Sec. 6. Congressional procedures for consideration of legislation.
Sec. 7. Availability of funds for the referenda.

SEC. 2. FINDINGS.

  The Congress finds the following:
          (1) Puerto Rico was ceded to the United States and came under 
        this Nation's sovereignty pursuant to the Treaty of Paris 
        ending the Spanish-American War in 1898. Article IX of the 
        Treaty of Paris expressly recognizes the authority of Congress 
        to provide for the political status of the inhabitants of the 
        territory.
          (2) Consistent with establishment of United States 
        nationality for inhabitants of Puerto Rico under the Treaty of 
        Paris, Congress has exercised its powers under the Territorial 
        Clause of the Constitution (article IV, section 3, clause 2) to 
        provide by statute for the citizenship status of persons born 
        in Puerto Rico, including extension of special statutory United 
        States citizenship from 1917 to the present.
          (3) Consistent with the Territorial Clause and rulings of the 
        United States Supreme Court, partial application of the United 
        States Constitution has been established in the unincorporated 
        territories of the United States including Puerto Rico.
          (4) In 1950 Congress prescribed a procedure for instituting 
        internal self-government for Puerto Rico pursuant to statutory 
        authorization for a local constitution. A local constitution 
        was approved by the people, amended and conditionally approved 
        by Congress, and thereupon given effect in 1952 after 
        acceptance of congressional conditions by the Puerto Rico 
        Constitutional Convention and an appropriate proclamation by 
        the Governor. The approved constitution established the 
        structure for constitutional government in respect of internal 
        affairs without altering Puerto Rico's fundamental political, 
        social, and economic relationship with the United States and 
        without restricting the authority of Congress under the 
        Territorial Clause to determine the application of Federal law 
        to Puerto Rico, resulting in the present ``Commonwealth'' 
        structure for local self-government. The Commonwealth remains 
        an unincorporated territory and does not have the status of 
        ``free association'' with the United States as that status is 
        defined under United States law or international practice.
          (5) In 1953 the United States transmitted to the Secretary-
        General of the United Nations for circulation to its Members a 
        formal notification that the United States no longer would 
        transmit information regarding Puerto Rico to the United 
        Nations pursuant to Article 73(e) of its Charter. The formal 
        United States notification document informed the United Nations 
        that the cessation of information on Puerto Rico was based on 
        the ``new constitutional arrangements'' in the territory, and 
        the United States expressly defined the scope of the ``full 
        measure'' of local self-government in Puerto Rico as extending 
        to matters of ``internal government and administration, subject 
        only to compliance with applicable provisions of the Federal 
        Constitution, the Puerto Rico Federal Relations Act and the 
        acts of Congress authorizing and approving the Constitution, as 
        may be interpreted by judicial decision.''. Thereafter, the 
        General Assembly of the United Nations, based upon consent of 
        the inhabitants of the territory and the United States 
        explanation of the new status as approved by Congress, adopted 
        Resolution 748 (VIII) by a vote of 22 to 18 with 19 
        abstentions, thereby accepting the United States determination 
        to cease reporting to the United Nations on the status of 
        Puerto Rico.
          (6) In 1960 the United Nations General Assembly approved 
        Resolution 1541 (XV), clarifying that under United Nations 
        standards regarding the political status options available to 
        the people of territories yet to complete the process for 
        achieving full self-government, the three established forms of 
        full self-government are national independence, free 
        association based on separate sovereignty, or full integration 
        with another nation on the basis of equality.
          (7) The ruling of the United States Supreme Court in the 1980 
        case Harris v. Rosario (446 U.S. 651) confirmed that Congress 
        continues to exercise authority over Puerto Rico as territory 
        ``belonging to the United States'' pursuant to the Territorial 
        Clause found at Article IV, section 3, clause 2 of the United 
        States Constitution, a judicial interpretation of Puerto Rico's 
        status which is in accordance with the clear intent of Congress 
        that establishment of local constitutional government in 1952 
        did not alter Puerto Rico's status as an unincorporated United 
        States territory.
          (8) In a joint letter dated January 17, 1989, cosigned by the 
        Governor of Puerto Rico in his capacity as president of one of 
        Puerto Rico's principal political parties and the presidents of 
        the two other principal political parties of Puerto Rico, the 
        United States was formally advised that ``. . . the People of 
        Puerto Rico wish to be consulted as to their preference with 
        regards to their ultimate political status'', and the joint 
        letter stated ``. . . that since Puerto Rico came under the 
        sovereignty of the United States of America through the Treaty 
        of Paris in 1898, the People of Puerto Rico have not been 
        formally consulted by the United States of America as to their 
        choice of their ultimate political status''.
          (9) In the 1989 State of the Union Message, President George 
        Bush urged the Congress to take the necessary steps to 
        authorize a federally recognized process allowing the people of 
        Puerto Rico, for the first time since the Treaty of Paris 
        entered into force, to freely express their wishes regarding 
        their future political status in a congressionally recognized 
        referendum, a step in the process of self-determination which 
        the Congress has yet to authorize.
          (10) In November of 1993, the Government of Puerto Rico 
        conducted a plebiscite initiated under local law on Puerto 
        Rico's political status. In that vote none of the three status 
        propositions received a majority of the votes cast. The results 
        of that vote were: 48.6 percent commonwealth, 46.3 percent 
        statehood, and 4.4 percent independence.
          (11) In 1994, President William Jefferson Clinton established 
        the Executive Branch Interagency Working Group on Puerto Rico 
        to coordinate the review, development, and implementation of 
        executive branch policy concerning issues affecting Puerto 
        Rico, including the November 1993 plebiscite.
          (12) There have been inconsistent and conflicting 
        interpretations of the 1993 plebiscite results, and under the 
        Territorial Clause of the Constitution, Congress has the 
        authority and responsibility to determine Federal policy and 
        clarify status issues in order to advance the self-
        determination process in Puerto Rico.
          (13) On December 14, 1994, the Puerto Rico Legislature 
        enacted Concurrent Resolution 62, which requested the 104th 
        Congress to respond to the results of the 1993 Puerto Rico 
        Status Plebiscite and to indicate the next steps in resolving 
        Puerto Rico's political status.
          (14) Nearly 4,000,000 United States citizens live in the 
        islands of Puerto Rico, which have been under United States 
        sovereignty and within the United States customs territory for 
        almost 100 years, making Puerto Rico the oldest, largest, and 
        most populous United States island territory at the 
        southeastern-most boundary of our Nation, located astride the 
        strategic shipping lanes of the Atlantic Ocean and Caribbean 
        Sea.
          (15) Full self-government for Puerto Rico is attainable only 
        through establishment of a political status which is based on 
        either separate Puerto Rican sovereignty and nationality or 
        full and equal United States nationality and citizenship 
        through membership in the Union and under which Puerto Rico is 
        no longer an unincorporated territory subject to the plenary 
        authority of Congress arising from the Territorial Clause.

SEC. 3. POLICY.

  In recognition of the significant level of local self-government 
which has been attained by Puerto Rico, and the responsibility of the 
Federal Government to enable the people of the territory to freely 
express their wishes regarding political status and achieve full self-
government, this Act is adopted with a commitment to encourage the 
development and implementation of procedures through which the 
permanent political status of the people of Puerto Rico can be 
determined.

SEC. 4. PROCESS FOR PUERTO RICAN FULL SELF-GOVERNMENT, INCLUDING THE 
                    INITIAL DECISION STAGE, TRANSITION STAGE, AND 
                    IMPLEMENTATION STAGE.

  (a) Initial Decision Stage.--A referendum on Puerto Rico's political 
status shall be held not later than December 31, 1998. The referendum 
shall be held pursuant to this Act and in accordance with the 
applicable provisions of Puerto Rico's electoral law and other relevant 
statutes consistent with this Act. Approval of a status option must be 
by a majority of the valid votes cast. The referendum shall be on the 
following questions presented on the ballot as options A and B in a 
side-by-side format in Parts I and II:

                                ``Part I

  ``Instructions: Mark the option you choose. Ballots with both options 
marked in Part I will not be counted.
  ``A. Puerto Rico should continue the present Commonwealth structure 
for self-government with respect to internal affairs and 
administration, subject to the provisions of the Constitution and laws 
of the United States which apply to Puerto Rico. Puerto Rico remains a 
locally self-governing unincorporated territory of the United States, 
and continuation or modification of current Federal law and policy to 
Puerto Rico remains within the discretion of Congress. The ultimate 
status of Puerto Rico will be determined through a process authorized 
by Congress which includes self-determination by the people of Puerto 
Rico in periodic referenda. If you agree, mark here ____.
  ``B. Puerto Rico should complete the process leading to full self-
government through separate Puerto Rican sovereignty or United States 
sovereignty as defined in Part II of this ballot. Full self-government 
will be achieved in accordance with a transition plan approved by the 
Congress and the people of Puerto Rico in a later vote. A third vote 
will take place at the end of the transition period in which the people 
of Puerto Rico will be able to approve final implementation of full 
self-government. This will establish a permanent political status under 
the constitutional system chosen by the people. If you agree, mark 
here: ____

                               ``Part II

  ``Instructions: Mark the option you choose. Ballots with both options 
marked in Part II will not be counted.
  ``If full self-government is approved by the majority of voters, 
which path leading to full self-government for Puerto Rico do you 
prefer to be developed through a transition plan enacted by the 
Congress and approved by the people of Puerto Rico?
  ``A. Puerto Rico should become fully self-governing through separate 
sovereignty leading to independence or free association as defined 
below. If you agree, mark here: ____
  ``The path of separate Puerto Rican sovereignty leading to 
independence or free association is one in which--
          ``(1) Puerto Rico is a sovereign nation with full authority 
        and responsibility for its internal and external affairs and 
        has the capacity to exercise in its own name and right the 
        powers of government with respect to its territory and 
        population;
          ``(2) a negotiated treaty of friendship and cooperation, or 
        an international bilateral pact of free association terminable 
        at will by either Puerto Rico or the United States, defines 
        future relations between Puerto Rico and the United States, 
        providing for cooperation and assistance in matters of shared 
        interest as agreed and approved by Puerto Rico and the United 
        States pursuant to this Act and their respective constitutional 
        processes;
          ``(3) a constitution democratically instituted by the people 
        of Puerto Rico, establishing a republican form of full self-
        government and securing the rights of citizens of the Puerto 
        Rican nation, is the supreme law, and the Constitution and laws 
        of the United States no longer apply in Puerto Rico;
          ``(4) The people of Puerto Rico owe allegiance to the 
        sovereign nation of Puerto Rico and have the nationality, and 
        citizenship thereof; United States sovereignty, nationality, 
        and citizenship in Puerto Rico is ended; birth in Puerto Rico 
        and relationship to persons with statutory United States 
        citizenship by birth in the former territory are not bases for 
        United States nationality or citizenship, except that persons 
        who had such United States citizenship have a statutory right 
        to retain United States nationality and citizenship for life, 
        by entitlement or election as provided by the United States 
        Congress, based on continued allegiance to the United States: 
        Provided, That such persons will not have this statutory United 
        States nationality and citizenship status upon having or 
        maintaining allegiance, nationality, and citizenship rights in 
        any sovereign nation other than the United States;
          ``(5) upon recognition of Puerto Rico by the United States as 
        a sovereign nation and establishment of government-to-
        government relations on the basis of comity and reciprocity, 
        Puerto Rico's representation to the United States is accorded 
        full diplomatic status;
          ``(6) Puerto Rico is eligible for United States assistance 
        provided on a government-to-government basis, including foreign 
        aid or programmatic assistance, at levels subject to agreement 
        by the United States and Puerto Rico;
          ``(7) property rights and previously acquired rights vested 
        by employment under laws of Puerto Rico or the United States 
        are honored, and where determined necessary such rights are 
        promptly adjusted and settled consistent with government-to-
        government agreements implementing the separation of 
        sovereignty; and
          ``(8) Puerto Rico is outside the customs territory of the 
        United States, and trade between the United States and Puerto 
        Rico is based on a treaty.
  ``B. Puerto Rico should become fully self-governing through United 
States sovereignty leading to statehood as defined below. If you agree, 
mark here: ____
  ``The path through United States sovereignty leading to statehood is 
one in which--
          ``(1) the people of Puerto Rico are fully self-governing with 
        their rights secured under the United States Constitution, 
        which is the supreme law and has the same force and effect as 
        in the other States of the Union;
          ``(2) the sovereign State of Puerto Rico is in permanent 
        union with the United States, and powers not delegated to the 
        Federal Government or prohibited to the States by the United 
        States Constitution are reserved to the people of Puerto Rico 
        or the State Government;
          ``(3) United States citizenship of those born in Puerto Rico 
        is guaranteed, protected and secured in the same way it is for 
        all United States citizens born in the other States;
          ``(4) residents of Puerto Rico have equal rights and benefits 
        as well as equal duties and responsibilities of citizenship, 
        including payment of Federal taxes, as those in the several 
        States;
          ``(5) Puerto Rico is represented by two members in the United 
        States Senate and is represented in the House of 
        Representatives proportionate to the population;
          ``(6) United States citizens in Puerto Rico are enfranchised 
        to vote in elections for the President and Vice President of 
        the United States; and
          ``(7) Puerto Rico adheres to the same language requirement as 
        in the several States.''.
  (b) Transition Stage.--
          (1) Plan.--(A) Within 180 days of the receipt of the results 
        of the referendum from the Government of Puerto Rico certifying 
        approval of a ballot choice of full self-government in a 
        referendum held pursuant to subsection (a), the President shall 
        develop and submit to Congress legislation for a transition 
        plan of 10 years minimum which leads to full self-government 
        for Puerto Rico consistent with the terms of this Act and in 
        consultation with officials of the three branches of the 
        Government of Puerto Rico, the principal political parties of 
        Puerto Rico, and other interested persons as may be 
        appropriate.
          (B) Additionally, in the event of a vote in favor of separate 
        sovereignty, the Legislature of Puerto Rico, if deemed 
        appropriate, may provide by law for the calling of a 
        constituent convention to formulate, in accordance with 
        procedures prescribed by law, Puerto Rico's proposals and 
        recommendations to implement the referendum results. If a 
        convention is called for this purpose, any proposals and 
        recommendations formally adopted by such convention within time 
        limits of this Act shall be transmitted to Congress by the 
        President with the transition plan required by this section, 
        along with the views of the President regarding the 
        compatibility of such proposals and recommendations with the 
        United States Constitution and this Act, and identifying which, 
        if any, of such proposals and recommendations have been 
        addressed in the President's proposed transition plan.
          (2) Congressional consideration.--The plan shall be 
        considered by the Congress in accordance with section 6.
          (3) Puerto rican approval.--
                  (A) Not later than 180 days after enactment of an Act 
                pursuant to paragraph (1) providing for the transition 
                to full self-government for Puerto Rico as approved in 
                the initial decision referendum held under subsection 
                (a), a referendum shall be held under the applicable 
                provisions of Puerto Rico's electoral law on the 
                question of approval of the transition plan.
                  (B) Approval must be by a majority of the valid votes 
                cast. The results of the referendum shall be certified 
                to the President of the United States.
          (4) Effective date for transition plan.--The President of the 
        United States shall issue a proclamation announcing the 
        effective date of the transition plan to full self-government 
        for Puerto Rico.
  (c) Implementation Stage.--
          (1) Presidential recommendation.--Not less than two years 
        prior to the end of the period of the transition provided for 
        in the transition plan approved under subsection (b), the 
        President shall submit to Congress legislation with a 
        recommendation for the implementation of full self-government 
        for Puerto Rico consistent with the ballot choice approved 
        under subsection (a).
          (2) Congressional consideration.--The plan shall be 
        considered by the Congress in accordance with section 6.
          (3) Puerto rican approval.--
                  (A) Within 180 days after enactment of the terms of 
                implementation for full self-government for Puerto 
                Rico, a referendum shall be held under the applicable 
                provisions of Puerto Rico's electoral laws on the 
                question of the approval of the terms of implementation 
                for full self-government for Puerto Rico.
                  (B) Approval must be by a majority of the valid votes 
                cast. The results of the referendum shall be certified 
                to the President of the United States.
          (4) Effective date of full self-government.--The President of 
        the United States shall issue a proclamation announcing the 
        date of implementation of full self-government for Puerto Rico.

SEC. 5. REQUIREMENTS RELATING TO REFERENDA, INCLUDING INCONCLUSIVE 
                    REFERENDUM AND APPLICABLE LAWS.

  (a) Applicable Laws.--
          (1) Referenda under puerto rican laws.--The referenda held 
        under this Act shall be conducted in accordance with the 
        applicable laws of Puerto Rico, including laws of Puerto Rico 
        under which voter eligibility is determined and which require 
        United States citizenship and establish other statutory 
        requirements for voter eligibility of residents and 
        nonresidents.
          (2) Federal laws.--The Federal laws applicable to the 
        election of the Resident Commissioner of Puerto Rico shall, as 
        appropriate and consistent with this Act, also apply to the 
        referenda. Any reference in such Federal laws to elections 
        shall be considered, as appropriate, to be a reference to the 
        referenda, unless it would frustrate the purposes of this Act.
  (b) Certification of Referenda Results.--The results of each 
referendum held under this Act shall be certified to the President of 
the United States and the Senate and House of Representatives of the 
United States by the Government of Puerto Rico.
  (c) Consultation and Recommendations for Inconclusive Referendum.--
          (1) In general.--If a referendum provided in this Act does 
        not result in approval of a fully self-governing status, the 
        President, in consultation with officials of the three branches 
        of the Government of Puerto Rico, the principal political 
        parties of Puerto Rico, and other interested persons as may be 
        appropriate, shall make recommendations to the Congress within 
        180 days of receipt of the results of the referendum.
          (2) Existing structure to remain in effect.--If the 
        inhabitants of the territory do not achieve full self-
        governance through either integration into the Union or 
        separate sovereignty in the form of independence or free 
        association, Puerto Rico will remain an unincorporated 
        territory of the United States, subject to the authority of 
        Congress under Article IV, Section 3, Clause 2 of the United 
        States Constitution. In that event, the existing Commonwealth 
        of Puerto Rico structure for local self-government will remain 
        in effect, subject to such other measures as may be adopted by 
        Congress in the exercise of its Territorial Clause powers to 
        determine the disposition of the territory and status of its 
        inhabitants.
          (3) Authority of congress to determine status.--Since current 
        unincorporated territory status of the Commonwealth of Puerto 
        Rico is not a permanent, unalterable or guaranteed status under 
        the Constitution of the United States, Congress retains plenary 
        authority and responsibility to determine a permanent status 
        for Puerto Rico consistent with the national interest. The 
        Congress historically has recognized a commitment to take into 
        consideration the freely expressed wishes of the people of 
        Puerto Rico regarding their future political status. This 
        policy is consistent with respect for the right of self-
        determination in areas which are not fully self-governing, but 
        does not constitute a legal restriction or binding limitation 
        on the Territorial Clause powers of Congress to determine a 
        permanent status of Puerto Rico. Nor does any such restriction 
        or limitation arise from the Puerto Rico Federal Relations Act 
        (48 U.S.C. 731 et seq.).
          (4) Additional referenda.--To ensure that the Congress is 
        able on a continuing basis to exercise its Territorial Clause 
        powers with due regard for the wishes of the people of Puerto 
        Rico respecting resolution of Puerto Rico's permanent future 
        political status, in the event that a referendum conducted 
        under section four is inconclusive as provided in this 
        subsection, or a majority vote to continue the Commonwealth 
        structure as a territory, there shall be another referendum in 
        accordance with this Act prior to the expiration of a period of 
        four years from the date such inconclusive results are 
        certified or determined. This procedure shall be repeated every 
        four years, but not in a general election year, until Puerto 
        Rico's unincorporated territory status is terminated in favor 
        of a recognized form of full self-government in accordance with 
        this Act.

SEC. 6. CONGRESSIONAL PROCEDURES FOR CONSIDERATION OF LEGISLATION.

  (a) In General.--The Chairman of the Committee on Energy and Natural 
Resources shall introduce legislation providing for the transition plan 
under section 4(b) and the implementation recommendation under section 
4(c), as appropriate, in the United States Senate and the Chairman of 
the Committee on Resources shall introduce such legislation in the 
United States House of Representatives, providing adequate time for the 
consideration of the legislation pursuant to the following provisions:
          (1) At any time after the close of the 180th calendar day 
        beginning after the date of introduction of such legislation, 
        it shall be in order for any Member of the United States House 
        of Representatives or the United States Senate to move to 
        discharge any committee of that House from further 
        consideration of the legislation. A motion to discharge shall 
        be highly privileged, and debate thereon shall be limited to 
        not more than two hours, to be divided equally between those 
        supporting and those opposing the motion. An amendment to the 
        motion shall not be in order, and it shall not be in order to 
        move to reconsider the vote by which the motion was agreed to 
        or disagreed to.
          (2) At any time after the close of the 14th legislative day 
        beginning after the last committee of that House has reported 
        or been discharged from further consideration of such 
        legislation, it shall be in order for any Member of that House 
        to move to proceed to the immediate consideration of the 
        legislation (such motion not being debatable), and such motion 
        is hereby made of high privilege. An amendment to the motion 
        shall not be in order, and it shall not be in order to move to 
        reconsider the vote by which the motion was agreed to or 
        disagreed to. For the purposes of this paragraph, the term 
        ``legislative day'' means a day on which the United States 
        House of Representatives or the United States Senate, as 
        appropriate, is in session.
  (b) Commitment of Congress.--Enactment of this section constitutes a 
commitment that the United States Congress will vote on legislation 
establishing appropriate mechanisms and procedures to implement the 
political status selected by the people of Puerto Rico.
  (c) Exercise of Rulemaking Power.--The provisions of this section are 
enacted by the Congress--
          (1) as an exercise of the rulemaking power of the Senate and 
        the House of Representatives and, as such, shall be considered 
        as part of the rules of each House and shall supersede other 
        rules only to the extent that they are inconsistent therewith; 
        and
          (2) with full recognition of the constitutional right of 
        either House to change the rules (so far as they relate to the 
        procedures of that House) at any time, in the same manner, and 
        to the same extent as in the case of any other rule of that 
        House.

SEC. 7. AVAILABILITY OF FUNDS FOR THE REFERENDA.

  (a) In General.--
          (1) Availability of amounts derived from tax on foreign 
        rum.--During the period beginning on October 1, 1996, and 
        ending on the date the President determines that all referenda 
        required by this Act have been held, from the amounts covered 
        into the treasury of Puerto Rico under section 7652(e)(1) of 
        the Internal Revenue Code of 1986, the Secretary of the 
        Treasury--
                  (A) upon request and in the amounts identified from 
                time to time by the President, shall make the amounts 
                so identified available to the treasury of Puerto Rico 
                for the purposes specified in subsection (b); and
                  (B) shall transfer all remaining amounts to the 
                treasury of Puerto Rico, as under current law.
          (2) Report of referenda expenditures.--Within 180 days after 
        each referendum required by this Act, and after the end of the 
        period specified in paragraph (1), the President, in 
        consultation with the Government of Puerto Rico, shall submit a 
        report to the United States Senate and United States House of 
        Representatives on the amounts made available under paragraph 
        (1)(A) and all other amounts expended by the State Elections 
        Commission of Puerto Rico for referenda pursuant to this Act.
  (b) Grants for Conducting Referenda and Voter Education.--From 
amounts made available under subsection (a)(1), the Government of 
Puerto Rico shall make grants to the State Elections Commission of 
Puerto Rico for referenda held pursuant to the terms of this Act, as 
follows:
          (1) 50 percent shall be available only for costs of 
        conducting the referenda.
          (2) 50 percent shall be available only for voter education 
        funds for the central ruling body of the political party, 
        parties, or other qualifying entities advocating a particular 
        ballot choice. The amount allocated for advocating a ballot 
        choice under this paragraph shall be apportioned equally among 
        the parties advocating that choice.
  (c) Additional Resources.--In addition to amounts made available by 
this Act, the Puerto Rico Legislature may allocate additional resources 
for administrative and voter education costs to each party so long as 
the distribution of funds is consistent with the apportionment 
requirements of subsection (b).

                          purpose of the bill

    The purpose of H.R. 3024 is to provide a process leading to 
full self-government for Puerto Rico.

                  background and need for legislation

History of Puerto Rico's legal and political status

            Puerto Rico and the Caribbean in American history
    During the age of European discovery and colonialism, and 
later in the Revolutionary period when the American political 
culture was born, Puerto Rico and the Caribbean islands were 
geographically, economically and politically an integral part 
of the North American experience.
    Puerto Rico was one of Christopher Columbus' landfalls, and 
thus was an important part of the European discovery and 
exploration of the New World. Ponce de Leon, the European 
discoverer of Florida, was the first Spanish Governor of Puerto 
Rico. Alexander Hamilton--aide de camp to General Washington 
during the Revolutionary War, collaborator with Madison in The 
Federalist Papers and the Constitutional Convention at 
Philadelphia, and first Secretary of the Treasury of the United 
States--was born and raised in the Virgin Islands adjacent to 
Puerto Rico.
    Although the Spanish American War was decided on Cuban 
soil, by July of 1898 the progress of the war made the time 
right for the U.S. invasion of Spanish-ruled Puerto Rico. An 
armistice was signed by the belligerents on August 12, and 
after securing Puerto Rico, the U.S. occupation forces 
evacuated the Spanish governor-general on October 18, 1898. At 
that time, Major General Nelson A. Miles, commanding officer of 
the invading forces, issued a proclamation which informed the 
people of Puerto Rico that:

          We have not come to make war on the people of a 
        country that for several centuries has been oppressed, 
        but, on the contrary, to bring protection, not only to 
        yourselves but to your property, to promote your 
        prosperity, and to bestow upon you the immunities and 
        blessings of the liberal institutions of our 
        government.

    Upon becoming law, H.R. 3024 will be the most significant 
measure enacted by Congress in nearly 100 years for the purpose 
of delivering on the promise of General Miles' pronouncement, 
by finally offering full self-government to the people of 
Puerto Rico.
            Puerto Rico as U.S. possession
    Puerto Rico was ceded to the United States by the Kingdom 
of Spain under the Treaty of Peace ending the Spanish-American 
War, signed at Paris on December 10, 1898, and proclaimed on 
April 11, 1899. Consistent with the Territorial Clause powers 
of Congress conferred by Article IV, Section 3, Clause 2 of the 
U.S. Constitution, as well as long-established U.S. 
Constitutional practice with respect to administration of 
territories which come under U.S. sovereignty but are not yet 
incorporated into the union, Article IX of the Treaty of Paris 
provided that the ``civil rights and political status of the 
native inhabitants of the territories hereby ceded to the 
United States shall be determined by the Congress.''
    Congress carried out its role under Article IX of the 
Treaty of Paris by providing for civilian government and 
defining the status of the residents under the Foraker Act (Act 
of April 12, 1900, c. 191. 31 Stat. 77). Shortly thereafter the 
Supreme Court ruled that Puerto Rico had the status of an 
unincorporated territory subject to the plenary authority of 
the U.S. Congress under the Territorial Clause, and that the 
Constitution would apply in such U.S. possessions as determined 
by Congress. Downes v. Bidwell, 182 U.S. 244 (1901); Dorr v. 
United States, 195 U.S. 138 (1904).
    In 1904 the Supreme Court confirmed that under the Foraker 
Act the people of Puerto Rico--as inhabitants of a territory 
which had come under U.S. sovereignty and nationality--were not 
``aliens'' under U.S. immigration law, and where entitled at 
home or abroad to the protection of the United States, but for 
domestic law purposes they were not citizens of the U.S. and 
did not have equal political and legal rights under the 
Constitution. Gonzales v. Williams, 195 U.S. 1 (1904). Under 
the Jones Act of 1917 (Act of March 2, 1917, c. 145, 39 Stat. 
961), Congress extended statutory U.S. citizenship to residents 
of Puerto Rico, but continued the less than equal status of 
Puerto Rican residents. The Jones Act also re-organized local 
civilian government, but this did not change Puerto Rico's 
political status.
    The extent to which the people of Puerto Rico have rights 
under the U.S. Constitution has been defined incrementally by 
the Supreme Court. It has been recognized that Congress has 
broad discretion in making rules and regulations for the 
unincorporated territories, although the Supreme Court also has 
recognized that the temporary nature of this territorial status 
and the non-application of the U.S. Constitution as a whole 
does not mean that the Federal Government can deny 
``fundamental'' personal rights to residents of these ``U.S. 
territories.'' Reid v. Covert, 354 U.S. 1, 13 (1957). The right 
to due process of law is one of the fundamental rights 
applicable in the unincorporated territories, including Puerto 
Rico. Balzac v. People of Puerto Rico, 258 U.S. 298, 312-313 
(1922). However, this does not preclude Congress from changing 
the citizenship status which was extended by statute, or 
unilaterally altering the political status of the territory. 
Rogers v. Bellei, 401 U.S. 815 (1971); U.S. v. Sanchez, 992 
F.2d 1143 (1993).
            Puerto Rico's ``Commonwealth'' status as a territory under 
                    Federal law
    The current ``Commonwealth of Puerto Rico'' structure for 
local self-government was established through an exercise of 
the authority of Congress under Article IV, Section 3, Clause 2 
of the U.S. Constitution (``Territorial Clause''), pursuant to 
which the process for approval of a local constitution was 
prescribed and the current Puerto Rico Federal Relations Act 
was enacted. (See, U.S. Public Law 600, July 3, 1950, c. 446, 
64 State. 319; codified at 48 U.S.C. 731 et seq.)
    Public Law 600 comprised the process for democratically 
instituting a local constitutional government in Puerto Rico. 
The process prescribed by Congress included authorization for 
the people of Puerto Rico to organize a government under a 
constitution approved by the people. Congressional amendment 
and conditional approval of the locally promulgated 
constitution also was an element of the process, as was 
acceptance of the Congressionally-determined amendments by the 
Puerto Rican constitutional convention. This method of 
establishing a local government charter with consent of both 
the people and Congress is the basis for the language in 
Section 1 of Public Law 600 (48 U.S.C. 731b) describing the 
process as being in the ``nature of a compact'' based on 
recognition of the ``principle of consent.''
    The subject matter of Public Law 600 was limited to 
organization of a local government as authorized by Congress 
under the Territorial Clause, and the very existence--as well 
as the actions of--the local government are subject to the 
Supremacy of the Federal Constitution and laws passed by 
Congress. Thus, the authority and powers of the constitutional 
government established under through the Public Law 600 process 
are a creation of Federal process, and the legal effect of the 
exercise of the rights of the people in approving the local 
constitution is that there was consent to a form of self-
government over internal affairs and administration. Although 
Congress presumably would include some procedure which 
recognizes the principle of consent in changing the structure 
for local self-government in the future, the existing statutory 
authority for the current ``commonwealth'' structure can be 
rescinded by Congress pursuant to the same Territorial Clause 
power exercised to create it in the first place. Public Law 600 
merely revises the previously enacted territorial organic act 
adopted by Congress under the Jones Act in 1917, and changes 
the name to the ``Puerto Rico Federal Relations Act'' (PRFRA). 
See Historical and Statutory Notes, 48 U.S.C. 731b-e.
    The preceding assessment is confirmed in the ``Historical 
and Statutory Notes'' found at section 731b, title 48, United 
States Code Annotated, which state that PRFRA was approved 
based upon the understandings expressed in House Report 2275, 
which states:

          The bill under consideration would not change Puerto 
        Rico's fundamental political, social, and economic 
        relationship to the United States. Those sections of 
        the Organic Act of Puerto Rico [this chapter] 
        pertaining to the political, social, and economic 
        relationship of the United States and Puerto Rico 
        concerning such matters as the applicability of United 
        States laws, customs, internal revenue, Federal 
        judicial jurisdiction in Puerto Rico, Puerto Rican 
        representation by a Resident Commissioner, etc., would 
        remain in force and effect, and upon enactment [the 
        bill] would be referred to as the Puerto Rican Federal 
        Relations Act [this chapter]. The sections of the 
        organic act which Section 5 of the bill would repeal 
        are the provisions of the act concerned primarily with 
        the organization of the local executive, legislative, 
        and judicial branches of the government of Puerto Rico 
        of other matters of purely local concern.

    Based upon the present status of Puerto Rico under the 
PRFRA, the Federal courts have ruled that for purposes of U.S. 
domestic law this arrangement for local territorial government 
has not changed Puerto Rico's status as an unincorporated 
territory subject to the plenary authority of Congress under 
the Territorial Clause; that the right to equal protection of 
the law applies to Puerto Rico, but under the Territorial 
Clause Congress has discretion to provide Federal benefits to 
U.S. citizens in Puerto Rico at a lower level than benefits are 
provided to citizens residing in the States; that the authority 
of the Government of the Commonwealth of Puerto Rico is limited 
to purely local affairs; and that the establishment of local 
constitutional self-government with the consent of the people 
was an exercise of Congressional discretion under the 
Territorial Clause which could be revoked at will by Congress. 
Harris v. Rosario, 446 U.S. 651 (1980); Examining Board v. 
Flores de Otero, 426 U.S. 572, 600 (1976); U.S. v. Sanchez, 992 
F. 2d 1143 (1993).
    Relying on Rogers v. Bellei, 401 U.S. 815 (1971) and other 
Supreme Court rulings interpreting Congressional powers under 
the Territorial Clause and defining the Constitutional rights 
and status of persons born in Puerto Rico, the Congressional 
Research Service (CRS) has concluded that, absent recognition 
of fully equal citizenship status for people born in the 
territory protected Constitutionally in the same manner as 
nationality and citizenship arising from birth in one of the 50 
States, the statutory citizenship of the residents of Puerto 
Rico (now codified at 8 U.S.C. 1402) could be restricted, 
modified or even withdrawn by Congress as long as the 
fundamental rights test of the Insular Cases as cited above is 
met, based on the existence of a legitimate Federal purposes 
achieved in a manner reasonably related to that purpose. Thus, 
for example, the CRS legal analysis confirmed that 
establishment of separate Puerto Rican sovereignty would 
provide the legal basis for Congress to withdraw statutory 
citizenship without violating due process. See, Legal 
Memorandum of John H. Killian, Senior Specialist, American 
Constitutional Law, CRS, American Law Division, November 15, 
1990.
            Puerto Rico's international legal status
    The foregoing discussion makes it clear that to the extent 
the process for approval of the new constitution by the people 
of Puerto Rico and Congress in 1952 was ``in the nature of a 
compact,'' its purpose and scope was to establish a local 
government of limited authority subject to the supremacy of the 
Federal Constitution and laws. The notion that the actions and 
statements of diplomatic representatives in the United Nations 
(U.N.) characterizing this new constitutional status for 
purposes of the U.N. decolonization process somehow expanded 
the legal effect beyond the clear intent of Congress is not 
supported by the formal measures adopted by the U.N. in this 
matter. To understand the international dimension of Puerto 
Rico's status, a review of the relevant international 
instruments and the U.N. record regarding Puerto Rico is 
necessary.
    As noted above with respect to Puerto Rico's status under 
U.S. domestic law, the Foraker Act of 1900, the Jones Act of 
1917 and Public Law 600 each constitute measures to implement 
Article IX of the Treaty of Paris adopted by Congress in the 
exercise of its plenary authority over unincorporated 
territories under the Territorial Clause. However, the Treaty 
of Paris no longer is the only relevant international agreement 
regarding the status of Puerto Rico to which the U.S. is a 
party. Specifically, after the United States became a party to 
the United Nations Charter, Puerto Rico was classified as a 
non-self-governing area under Chapter XI of the Charter, 
``Declaration Regarding Non-Self-Governing Territories.'' As 
such, the U.S. was designated to be a responsible administering 
power obligated under Chapter XI of the Charter to adhere to 
U.N. decolonization procedures with respect to Puerto Rico.
    This included the specific requirement to transmit reports 
to the U.N. regarding conditions in the territory under Article 
73(e) of Chapter XI of the Charter. In 1953 the U.S. informed 
the U.N. that it would cease to transmit information regarding 
Puerto Rico pursuant to Article 73(e) of the Charter based upon 
establishment of local constitutional government in Puerto Rico 
under Public Law 600. See, Appendix IV, ``Memorandum by the 
Government of the United States of America Concerning the 
Cessation of Transmission of Information Under Article 73(e) of 
the Charter with regard to the Commonwealth of Puerto Rico,'' 
Constitutional Documents, Puerto Rico Federal Affairs 
Administration, Doc. 90, 1988. Based on that communication from 
the United States, on September 27, 1953, the General Assembly 
of the United Nations, by a vote of 22 to 18 with 19 
abstentions, adopted Resolution 748 (VIII), accepting the U.S. 
decision to cease transmission of reports regarding Puerto 
Rico.
    The formal United States notification to the United Nations 
that reporting on Puerto Rico would was based on the detailed 
memorandum to the U.N. Secretary-General put the Members of the 
U.N. on notice that, among other things, the new constitutional 
arrangements in Puerto Rico were subject to the applicable 
provisions of the U.S. Constitution, that the new local self-
government would be administered consistent with the Federal 
structure of government in the U.S., and that the precise legal 
nature of the relationship and Puerto Rico's status was subject 
to judicial interpretation in the U.S. courts. Thus, those who 
suggest that U.S. diplomats overstated the degree of self-
government achieved under the Constitution to get the U.N. to 
go along may be partially right, but that is why countries 
submit written statements to clarify ambiguities and set the 
record straight. The formal, written communication which 
notified the U.N. of the U.S. position clearly and expressly 
limited the scope of constitutional self-government to local 
affairs and required compatibility with the Federal 
Constitution, including judicial interpretation of the 
relationship by the Federal courts. The United States told the 
truth to the United Nations in 1953.
    The following critical elements of Resolution 748 reveal 
that while there may have been a meeting of the minds between 
the United Nations and the United States as to the result of 
Resolution 748 for the international purposes of the world 
body, the tension created between the U.S. Constitutional 
process for administering non-state areas under the Territorial 
Clause and the terms of reference employed by the U.N. in the 
resolution would contribute to decades of ambiguity which has 
been actively exploited in the debate between local political 
parties in Puerto Rico. The failure of Congress to more 
actively seek to resolve these ambiguities and the overall 
political status issue also has contributed to the confusion 
related to the non-binding but politically relevant U.N. 
measures adopted in 1953.
    The most critical elements of Resolution 748 include the 
following passages:

          The General Assembly * * * Bearing in mind the 
        competence of the General Assembly to decide whether a 
        Non-Self-Governing Territory has or has not attained a 
        full measure of self-government as referred to in 
        Chapter XI of the Charter * * * Recognizes that the 
        people of the Commonwealth of Puerto Rico, by 
        expressing their will in a free and democratic way, 
        have achieved a new constitutional status * * * 
        Expresses the opinion that it stems from the 
        documentation provided that the association of the 
        Commonwealth of Puerto Rico with the United States has 
        been established as a mutually agreed association * * * 
        Recognizes that, in the framework of their Constitution 
        and of the compact agreed upon with the United States 
        of America, the people of the Commonwealth of Puerto 
        Rico have been invested with the attributes of 
        political sovereignty which clearly identify the status 
        of the self-government attained by the Puerto Rican 
        people as that of an autonomous political entity * * *.

    The meaning and significance of this language from 
Resolution 748 must be understood in the context of Resolution 
742 (VIII), also adopted by the General Assembly on September 
27, 1953. That general resolution is entitled ``Factors which 
should be taken into account in deciding whether a Territory is 
or is not a Territory whose people have not yet attained a full 
measure of self-government.'' Resolution 742 establishes the 
criteria of general application for the General Assembly to 
determine ``whether any Territory, due to changes in its 
Constitutional status, is or is no longer within the scope of 
Chapter XI of the Charter, in order that, in view of the 
documentation provided * * * a decision may be taken by the 
General Assembly on the continuation or cessation of the 
transmission of information required by Chapter XI of the 
Charter.'' In prescribing the conditions which provide a basis 
for, inter alia, cessation of reporting under Article 73(e), 
the provisions of the resolution regarding association between 
a Territory and an administering power include the following 
statements of criteria:

          The General Assembly * * * Considers that the manner 
        in which Territories referred to in Chapter XI can 
        become fully self-governing is primarily through the 
        attainment of independence, although it is recognized 
        that self-government can also be achieved by 
        association with another State or group of States if 
        this is done freely and on the basis of absolute 
        equality * * * and the freedom of the population of a 
        Territory which has associated itself with the 
        metropolitan country to modify at any time this status 
        through the expression on their will * * * Association 
        by virtue of a treaty or bilateral agreement affecting 
        the status of the Territory, taking into account (i) 
        whether the Constitutional guarantees extend equally to 
        the associated Territory, (ii) whether there are powers 
        in certain matters Constitutionally reserved * * * to 
        the central authority, and (iii) whether there is 
        provision for the participation of the Territory on a 
        basis of equality in any changes in the Constitutional 
        system of the State * * * Representation without 
        discrimination in the central legislative organs on the 
        same basis as other inhabitants and regions * * * 
        Citizenship without discrimination on the same basis as 
        other inhabitants * * * Local self-government of the 
        same scope and under the same conditions as enjoyed by 
        other parts of the country.

    As the U.S. domestic legislation which determined the 
nature of the relationship between the U.S. and Puerto Rico, 
Public Law 600 authorized the people of Puerto Rico to approve 
a constitution through a process which would be ``in the nature 
of a compact.'' However, the ``compact'' was for the creation 
of a form of local constitutional self-government, which 
represented progress toward, but did not fulfill or completely 
satisfy, U.N. criteria for full self-government.
    The conditions supporting this conclusion include the 
statutory citizenship status of the inhabitants of Puerto Rico 
which is not equal, full, permanent, irrevocable citizenship 
protected by the 14th Amendment, the lack of voting 
representation in Congress as the legislative body which 
determines the form of government and law under which the 
people of the territory live, the lack of vote for President or 
Vice President, rights of equal protection and due process 
which are not the same rights enjoyed by citizens in the 
States, and retention by Congress of discretion unilaterally to 
determine the disposition of the territory pursuant to the 
Territorial Clause of the Constitution, with a procedural 
rather than legally binding substantive commitment to ascertain 
the wishes of the people.
    It can be argued that the discrepancy between the 
interpretation of information provided to the U.N. by the U.S. 
in 1953 about Puerto Rico's new constitutional status and the 
reality of Puerto Rico's status under the U.S. Federal 
political system was the result of a very sophisticated 
misunderstanding. In other words, perhaps the U.N. simply did 
not understand the Territorial Clause regime under the U.S. 
Constitutional process. An alternative view is that the close 
vote on approval of a somewhat equivocal resolution represented 
a practical diplomatic accommodation of U.S. insistence in 1953 
that Puerto Rico's status should not be subject to U.N. 
oversight. Neither of these views, however, alter the result.
    In any event, on December 15, 1960, the General Assembly 
adopted Resolution 1541 (XV), which is entitled ``Principles 
which should guide Members is determining whether or not an 
obligation exists to transmit the information called for under 
Article 73 of the Charter.'' This resolution clarifies U.N. 
standards for determining when the non-self-governing status of 
a territory has been terminated in favor of full self-
government, and defines the options available to territories 
seeking full self-government. Puerto Rico's current status does 
not meet the criteria for any of the options for full self-
government under Resolution 1541, but H.R. 3024 defines a 
process which could lead to establishment of full self-
government consistent with the three status alternatives which 
have been formally recognized by the United States in 
consideration of Resolution 1541: full integration on the basis 
of equality, free association based on separate sovereignty, or 
absolute national independence.
    As a consequence of how international standards regarding 
decolonization have evolved since 1953, and in view of how the 
political branches of the Federal Government and the courts 
have implemented and interpreted the ``compact'' for local 
self-government under the Puerto Rico Federal Relations Act, 
the United States has recognized that Puerto Rico did not 
achieve full self-government in 1952. While Puerto Rico has not 
been reinscribed on the U.N. list of non-self-governing 
territories, this recognition that the territory's ultimate 
political status has not been resolved has been expressed by 
every recent President. For example, on November 30, 1992, 
President George Bush issued a Memorandum for the Heads of the 
Executive Departments and Agencies which stated that:

          On July 25, 1952, as a consequence of steps taken by 
        both the United States Government and the people of 
        Puerto Rico voting in a referendum, a new constitution 
        was promulgated establishing the Commonwealth of Puerto 
        Rico. The Commonwealth structure provides for self-
        government in respect of internal affairs and 
        administration, subject to relevant portions of the 
        Constitution and laws of the United States. As long as 
        Puerto Rico is a territory, however, the will of its 
        people regarding their political status should be 
        ascertained periodically by means of a general right of 
        referendum * * *.

    On March 6, 1996, H.R. 3024 was introduced in the U.S. 
Congress, accompanied by a statement signed by four committee 
and subcommittee chairmen of the House of Representatives with 
jurisdiction and interest in the status of Puerto Rico. See, 
Appendix III, Congressional Record, March 6, 1996, E299-300. 
This bill and the statement included by its sponsors in the 
Congressional Record are strong evidence of U.S. recognition 
that Puerto Rico's decolonization process has not been 
completed as a matter of international or domestic law.
    However, it is irrefutable that the United States has 
provided for an unprecedented level of local self-government in 
Puerto Rico since 1952. During the past four decades there have 
been continuing elections conducted pursuant to democratic 
processes under Puerto Rico law often resulting in changes in 
government. Puerto Rico has indeed administered internal 
affairs and local matters without intrusion by the United 
States beyond that which is exercised by the Federal Government 
in the States of the Union. Although Puerto Rico has not yet 
achieved a permanent political status, given the local self-
governance of the territory and the domestic nature of the 
United States-Puerto Rico relationship, there is no basis for 
the United States to resume annual reporting to the United 
Nations. The United States-Puerto Rico Political Status Act can 
ultimately result in full self-government for Puerto Rico.
    On December 14, 1994, the Legislature of Puerto Rico 
adopted Resolution 62, requesting that the U.S. Congress 
respond to the results of a political status plebiscite 
conducted in the territory under local law in 1993 (see 
Appendix I). In that plebiscite, definitions of the three 
status options of independence, statehood and the current 
territorial status under the ``commonwealth'' label as 
presented to the voters on the ballot were formulated by local 
political parties which support each such status alternative. 
Unfortunately, the ballot developed in this manner included 
proposals which were both unrealistic and in some cases simply 
unconstitutional.
    As a consequence, the results of the 1993 vote 
(Commonwealth 48.6 percent, Statehood 46.3 percent, 
Independence 4.4 percent) were extremely difficult to 
interpret. For example, the ballot definition of 
``commonwealth'' included elements attainable only through 
statehood, such as permanent union with the U.S. and guaranteed 
irrevocable U.S. citizenship equal that conferred on persons 
born in a State of the Union. At the same time, the 
``commonwealth'' option included elements that would amount to 
a treaty based government-to-government relationship consistent 
with separate Puerto Rican sovereignty or independence, as well 
as exemptions from Federal taxation, increased Federal programs 
and benefits, and a Constitutionally unsustainable binding 
territorial veto power over Federal laws. The independence and 
statehood definitions were more discernible, but without a 
framework for status resolution prescribed by Congress, none of 
the 1993 ballot options alone provide a basis for orderly 
change based on self-determination.
    Although some Members of Congress spoke out before and 
after the 1993 vote about the internal inconsistencies in the 
ballot definitions (see, Congressional Record of November 10, 
1993, and September 30, 1994, Appendix II), the 103rd Congress 
adjourned more than a year after the 1993 plebiscite without 
breaking its silence regarding the results of that plebiscite. 
For that reason, in Resolution 62 the Legislature of Puerto 
Rico expressly requested the 104th Congress, if it did not 
``accede'' to the 1993 ballot definitions and resulting vote, 
to determine ``the specific status alternatives'' the United 
States ``is willing to consider,'' and then to state what steps 
the Congress recommends be taken in order for the people of 
Puerto Rico to establish for the territory a ``process to solve 
the problem of their political status.''
    Resolution 62 must be understood for what it is: a formal 
request by the duly-constituted Legislature of Puerto Rico that 
Congress address itself to resolving the status of 3.8 million 
people who have statutory U.S. citizenship and reside in a 
territory governed by Federal law, but who do not have equal 
legal and civil rights with citizens in the states, guaranteed 
citizenship, or permanent standing within the U.S. 
Constitutional system. In the nearly 100 years in which the 
U.S. has exercised sovereignty over this territory under the 
Treaty of Paris, Congress has never afforded the people an 
opportunity freely to express their wishes regarding a 
permanent and fully self-governing political status. This 
includes the last 40 years, during which, as a signatory to the 
United Nations Charter, the U.S. has had an obligation to 
respect self-determination and promote establishment of full 
self-government in Puerto Rico. The current ``commonwealth'' 
arrangements for local self-government which exist at the 
pleasure of Congress and subject to its plenary authority under 
the Territorial Clause power (Art. IV, Sec. 3, Cl. 2) 
represented progress when adopted in 1952, but to the 
disappointment of all concerned it has not fulfilled the U.S. 
commitment to promote and ultimately deliver on the promise of 
full self-government for Puerto Rico.
    Indeed, the current unincorporated territory status and 
``commonwealth'' system of local self-government, as well as 
the present statutory citizenship without equal legal and 
political rights, must be viewed as a temporary and 
transitional condition which will end upon approval by the 
people of Puerto Rico and Congress of a change of status in 
favor of full self-government consistent with incorporation 
into the U.S. Constitutional system on the basis of equality, 
or through the establishment of separate sovereignty, 
nationality and citizenship. To the greatest extent and at the 
earliest time possible, the rights of people subject to Federal 
authority must be Constitutionally protected and guaranteed, 
rather than existing at the pleasure of Congress. If full 
Constitutional status and the attendant protections along with 
equal citizenship for the people of Puerto Rico is not 
intended, then the option of achieving full citizenship through 
separate sovereignty and nationality must be made available.
    The year 1998 will mark the end of an entire century since 
the cession of Puerto Rico to the U.S. by Spain. Before a 
second century of territorial administration begins, Congress 
has a responsibility to establish a process of self-
determination that will empower the people to end territorial 
status of Puerto Rico in favor of a permanent political status. 
Under relevant resolutions adopted by the General Assembly of 
the United Nations and customary international law recognized 
by the United States, as well as U.S. Constitutional law and 
practice with respect to territories under U.S. sovereignty but 
not incorporated into the union, the status alternatives 
available to people with a colonial or non-self-governing 
history and aspiring to achieve full self-government are: i) 
integration into an existing nation on the basis of equality; 
ii) free association based on separate sovereignty, nationality 
and citizenship; or iii) fully independent nationhood. Of 
course, if the people are not ready to complete the transition 
to full self-government and prefer to remain in a temporary 
unincorporated territory status, that result must be due to the 
freely expressed wishes of the people rather than failure of 
Congress to make available to the people the choice to become 
fully self-governing.
    On October 17, 1995, the Subcommittee on Native American 
and Insular Affairs, Committee on Resources, and the 
Subcommittee on Western Hemisphere, Committee on International 
Relations, held a joint hearing in Washington, D.C. on the 
results of the 1993 plebiscite. All political parties were 
represented in the hearing, and all interested organizations 
and individuals were allowed to submit written statements for 
the record of that hearing. Based upon the testimony and 
materials submitted at that hearing, the approach embodied in 
H.R. 3024 was developed to enable Congress to define a process 
of legitimate self-determination for Puerto Rico. In addition, 
on February 29, 1996, a formal statement addressed to the 
Legislature of Puerto Rico with respect to the subject matter 
of Concurrent Resolution 62 was transmitted by the four 
chairmen of the committees and subcommittees in the House of 
Representatives with primary jurisdiction over the status of 
Puerto Rico. The statement of February 29, 1996, subsequently 
was included in the Congressional Record to accompany 
introduction of H.R. 3024 on March 6, 1996 (See, Cong. Rec., 
March 6, 1996, E299-300, Appendix III).
            Differences between H.R. 3024 and other political status 
                    proposals for Puerto Rico
    H.R. 3024, the ``United States Puerto Rico Political Status 
Act,'' is firmly grounded in U.S. practice regarding self-
government for unincorporated territories over which this 
nation exercises sovereignty. The current territorial regime 
and less-than-equal citizenship status of Puerto Ricans does 
not constitute full self-government, and will not lead to a 
permanent status with guaranteed rights until one of the 
recognized forms of self-government is established through a 
process of self-determination.
    After the U.S. Congress failed to approve legislation on 
Puerto Rico's political status in 1992, the Legislature of 
Puerto Rico authorized a local status vote in 1993. Under the 
local referendum law, each principal local political party in 
Puerto Rico was allowed to formulate the ballot definition for 
the political status option it endorses. The local political 
party endorsing ``Commonwealth'' adopted a ballot definition 
which promised:

          The terms of the ``Commonwealth'' relationship are 
        binding upon Congress in perpetuity, enforceable under 
        an unalterable ``bilateral pact'' giving Puerto Rico a 
        ``mutual consent'' veto power over acts of Congress.
          Conversion of the current temporary unincorporated 
        territorial status and limited statutory citizenship 
        into permanent union with the U.S. and fully guaranteed 
        citizenship equivalent to birth or naturalization in 
        one of the States.
          Increases in Federal outlays to give Puerto Rico 
        parity with the states in taxpayer-funded social 
        spending in Puerto Rico, while at the same time 
        continuing exemption from Federal taxation for U.S. 
        citizens and corporations in Puerto Rico.
          Continuation of the possessions tax credits (Section 
        936 of the Internal Revenue Code), as well as 
        entitlement to Federal programs and services, at the 
        same time guaranteeing a right to fiscal autonomy and 
        cultural separatism from the United States.

    Given the unrealistic and misleading ``have it both ways'' 
nature of this definition, the most remarkable thing about the 
result of the 1993 referendum is that the ``Commonwealth'' 
option received only a slim plurality and less than a majority 
of the votes cast.
    Unlike the 1993 plebiscite, the political status process 
contemplated by H.R. 3024 recognizes that resolution of Puerto 
Rico's political status is not something that is going to 
result from unilateral action by Puerto Rico. Certainly, there 
has been no suggestion to date that there will be a change of 
status that is not approved by the people in a valid act of 
self-determination, but H.R. 3024 also establishes that the 
U.S. has a right to self-determination in its relationship with 
Puerto Rico. That is why a legitimate self-determination 
process requires a give-and-take between Congress and Puerto 
Rico to define and approve the options for change.
    H.R. 3024 also recognizes that the current status of Puerto 
Rico is that of an unincorporated territory under U.S. 
sovereignty exercised by Congress under the Territorial Clause 
power, and that defines its relationship to the United States. 
The current ``Commonwealth'' system of local self-government 
has not altered the status of Puerto Rico or the underlying 
Constitutional relationship. While the territorial status and 
relationship has lasted nearly 100 years, the ``Commonwealth'' 
structure for local self-government organized under a 
territorial constitution authorized by Congress in the Puerto 
Rico organic statute is a 40 year arrangement which has not 
resulted in full self-government.
    This ``Commonwealth'' status was a significant improvement 
over previous civil administration under the prior organic law, 
and the new local constitutional arrangements established in 
1952 has had strengths of which the U.S. and Puerto Rico 
properly have been proud over the years. The problem that 
arises is that those who wish the ``Commonwealth'' arrangements 
were something other than what it is attempt to impose their 
theories and doctrines on the people of Puerto Rico and the 
people of the United States at the expense of accuracy and 
objectivity. Thus, as already discussed, any ballot option 
regarding ``Commonwealth'' must be formulated carefully based 
on realistic and correct statements of current law.
    Since the current ``Commonwealth'' unincorporated status is 
not a basis for achieving full self-government, the original 
version of H.R. 3024 did not present the status quo as an 
option. Instead, a decision by the people not to approve any of 
the legally recognized alternatives for full self-government 
would have meant that the status quo would continue, and that 
any changes to the current relationship proposed by Puerto Rico 
would be made by Congress under the Territorial Clause. This 
approach mistakenly was perceived by some as one intended to 
exclude the ``Commonwealth'' option which received a plurality 
of votes in the 1993 local plebiscite. Of course, the 1993 
definition of ``Commonwealth'' failed to present the voters 
with a status option consistent with full self-government, and 
it was misleading to propose to the voters an option which was 
unconstitutional and unacceptable to the Congress in almost 
every respect.
    Still, to avoid even the perception of unfairness by 
otherwise rational people who might not appreciate the history 
of these issues, the version of H.R. 3024 which has been 
reported to the full House of Representatives expressly 
provides that the voters will have an opportunity in the form 
of ballot options to preserve the current ``Commonwealth'' 
status, defined in a manner consistent with the rulings of the 
U.S. Supreme Court regarding Puerto Rico's present status. In 
addition, on June 4, 1996, Congressman Elton Gallegly (R-CA), 
cosponsor of H.R. 3024 and Chairman of the Subcommittee on 
Native American and Insular Affairs, included in the 
Congressional Record a statement about this 1993 ballot 
definition of the ``Commonwealth'' status option (See, Appendix 
VII, Congressional Record June 4, 1996). Consistent with that 
statement, the 1993 ballot definition of ``Commonwealth'' was 
offered as an amendment to H.R. 3014, only to be unanimously 
rejected by the Subcommittee of Native American and Insular 
Affairs at its mark up of this bill on June 12, 1996.
    To understand H.R. 3024, Congress must realize it is the 
official position of the party of ``Commonwealth'' in Puerto 
Rico that there is no need for further self-determination in 
Puerto Rico. This position runs deeper than the short-term 
tactic of insisting that H.R. 3024 is unnecessary because ``the 
people have spoken'' and the 1993 definition of 
``Commonwealth'' simply should be implemented. Everyone knows 
Congress is not going to implement a ballot option which not 
only received less than a majority of votes cast, but is 
unconstitutional and unacceptable as well.
    The long-term strategy of the local party identified with 
``Commonwealth'' is to win U.S. and international recognition 
that Puerto Rico enjoys a fully autonomous status within the 
U.S. Constitutional system. This is based on a misleading 
interpretation of the U.N. acceptance in 1953 of the U.S. 
decision to stop reporting to the world body on Puerto Rico due 
to the degree of internal self-government under the new 
constitution in 1952--as already discussed in this report. Even 
though the U.S. formally advised the U.N. and Puerto Rico all 
along that the authority of the local government was limited to 
internal affairs, and was subject to the U.S. Constitution and 
Federal law as determined by Congress and the courts, 
``Commonwealth'' leaders recently confirmed the party's 
position that the U.N. findings in 1953 establish that Puerto 
Rico is a free state, associated with the U.S. but no longer an 
unincorporated territory subject to the authority of Congress 
under the Territorial Clause of the Constitution.
    In support of this implausible and paradoxical position, 
the supporters of this hypothetical hybrid ``Commonwealth'' 
status in Puerto Rico assert that Puerto Rico already has a 
right to permanent union with the U.S. and guaranteed U.S. 
citizenship, and at the same time has a separate Puerto Rican 
nationality and sufficient separate sovereignty to conduct its 
own international relations. Indeed, until the U.S. Department 
of State intervened, in the late 1980s supporters of the extra-
legal ``Commonwealth'' doctrine in the administration of a 
former Governor of Puerto Rico and President of the party of 
``Commonwealth'' attempted to negotiate tax sparing treaties 
with foreign governments. Leaders of the party of 
``Commonwealth'' still insist that in the future the 
``Commonwealth'' of Puerto Rico as established in 1952 will be 
able to conduct treaty relations in its own name and right once 
the ``misunderstanding'' about the nature of the present status 
is ``corrected.''
    To this day, the advocates of a revised ``Commonwealth'' 
status that creates a separate ``nation'' within the U.S. 
Constitutional framework also assert that P.L. 600, the Federal 
statute passed by Congress in 1950 which authorized adoption of 
the local constitution approved in 1952, created an 
``unalterable bilateral pact'' which precludes Congress from 
making any changes in the state of Federal law applicable to 
the ``Commonwealth'' without the consent of Puerto Rico. (See 
48 U.S.C. 731b-e). Coupled with the assertion of separate 
international personality, this extra-constitutional political 
and ideological doctrine is nothing less than an attempt to 
convert the statutory delegation of Congressional authority 
over local affairs in 1952 into a de facto form of the 
international, treaty-based status of ``free association'' 
within the framework of the U.S. Constitution.
    This ``nation-within-a-nation'' political strategy, which 
ultimately would usurp Federal authority if it were fully 
carried out, has been epitomized by the adoption of ``Free 
Associated State'' as the official Spanish language term for 
the present status, but using the unrelated term 
``Commonwealth'' as the English term since it was deemed more 
familiar and acceptable to the United States. In a similar 
tactic, the language of Federal statutes describing the process 
for approving the local constitution in 1952 as being ``in the 
nature of a compact'' is cited by ``Commonwealth'' supporters 
as proof that the statute created a binding, treaty-like, 
government-to-government compact which--if it were true--would 
give Puerto Rico a political status superior to the states of 
the union.
    The notion of an unalterable bilateral pact is predicated 
on the theory that the implied compact supposedly created in 
1952 is mutually binding on Puerto Rico and the Congress. The 
principle of consent recognized in Public Law 600 with respect 
to establishment of local constitutional self-government 
respecting internal affairs is elevated, according to this 
revisionist theory, onto the plane of government-to-government 
mutuality, and on that basis it is concluded that there is a 
treaty-like relationship which can be altered only with mutual 
consent of both governments. This is precisely the 
relationship--based on separate sovereignty, nationality and 
citizenship--which exists between the U.S. and the Pacific 
island nations party to the Compact of Free Association which 
ended the U.S. administered U.N. trusteeship in Micronesia. 
See, Title II, Public Law 99-239.
    While such a relationship presumably is available to Puerto 
Rico if that is the option chosen by the voters, and it is 
established by mutual agreement in accordance with U.S. policy 
and practice relating to free association as defined in 
international law, such a mutual consent relationship was not 
created in 1952. Indeed, the notion that an unalterable, 
permanently binding mutual consent political relationship can 
be instituted under the U.S. Constitution between an 
unincorporated territory and the Congress has been discredited. 
The Clinton Administration Justice Department has confirmed 
that mutual consent provisions are not binding on a future 
Congress, are not legally enforceable, and must not be used to 
mislead territorial residents about their political status and 
legal rights.
    Specifically, on July 28, 1994, the Deputy Assistant 
Attorney General of the United States Department of Justice 
issued a legal opinion which included the following statement 
about ``bilateral mutuality'' in the case of Puerto

          The Department [of Justice] revisited this issue in 
        the early 1990's in connection with the Puerto Rico 
        Status Referendum Bill in light of Bowen v. Agencies 
        Opposed to Soc. Sec. Entrapment, 477 U.S. 41 (1986), 
        and concluded that there could not be an enforceable 
        vested right in a political status; hence the mutual 
        consent clauses were ineffective because they would not 
        bind a subsequent Congress.

    Dept. of Justice Memo, footnote 2, p. 2; See, Report on 
Joint Hearing of the Committee on Resources and Committee on 
International Relations, October 17, 1995, p. 312.
    The Department of Justice (DOJ) memo also concludes that:

          A ballot definition of commonwealth based on the idea 
        of an unalterable bilateral pact with mutual consent as 
        the foundation ``would be misleading,'' and that 
        ``honesty and fair dealing forbid the inclusion of such 
        illusory and deceptive provisions * * *.''
          Unalterable mutual consent pacts ``raise serious 
        constitutional issues and are legally unenforceable.''
          Status definitions based on the notion of unalterable 
        mutual consent pact should not be on a plebiscite 
        ballot ``unless their unenforceability (or precatory 
        nature) is clearly stated in the document itself.''

    The DOJ memo offers, as a sympathetic exercise of 
discretionary authority by Federal officials rather than as of 
right, to honor as existing mutual consent provisions--such as 
that in the Northern Mariana Islands Covenant--even though 
``unenforceable'' as a matter of law. Congress should not 
indulge such discretionary disposition of the political status 
and civil rights of U.S. citizens in the territories. Instead 
Congress must create a process that defines real status options 
under which the people of Puerto Rico will have real rights 
that are enforceable.
    As explained above, Public Law 600 established a process 
for approval of a new constitution for local self-government, 
and was described as being ``in the nature of a compact'' 
because Congress determined that approval by the voters alone 
would not have been sufficient to institute constitutional 
government. Thus, joint action--including approval by the 
voters followed by approval of Congress--was required. The 1952 
statute constituted precisely such a process, which was ``in 
the nature of a compact'' to organize a local constitutional 
government approved by the people to replace the previous local 
government established unilaterally by Congress.
    The approval process for the local constitution did not 
alter Puerto Rico's status as an unincorporated territory or 
create a political status under international or domestic U.S. 
law which constitutes full self-government. This was made very 
clear at the time the Puerto Rico Federal Relations Act was 
approved by House Report 2275. Instead, it was intended that 
the ``Commonwealth'' would, as described in a Memorandum of the 
President regarding Puerto Rico signed by President Kennedy in 
1961, ``provide for self-government in respect of internal 
affairs and administration.''
    If Congress had intended for the U.S. to enter into a 
``compact of free association'' on a plane of mutuality or at 
the international level (like the current compact between the 
U.S. and the Micronesian republics), Public Law 600 would not 
have prescribed a process which by definition was not a 
government-to-government or ``bilateral'' compact at all, but 
was ``in the nature of a compact'' limited to internal affairs 
and administration. Nor if ``free association'' or a binding, 
unalterable ``bilateral pact'' had been intended would the U.S. 
have informed the U.N. and Puerto Rico that the U.S. 
Constitution and Federal law would still apply even after a 
local constitution was in place, and that the nature of the 
relationship would be subject to judicial interpretation as a 
matter of U.S. domestic law.
    Given U.S. notification to the U.N. in 1953 that the nature 
of the ``Commonwealth'' would be ``as may be interpreted by 
judicial decision,'' it is significant that in 1980 the U.S. 
Supreme Court did not adopt the ``free association'' theory of 
Puerto Rico's status, and ruled instead that Puerto Rico 
remains an unincorporated territory subject to the Territorial 
Clause. See Harris v. Rosario, 446 U.S. 651 (1980).
    If the ``have-it-both-ways'' legal theory advanced by those 
who advocate the revisionist version of ``Commonwealth'' were 
to prevail, Puerto Rico would enjoy in perpetuity the most 
precious American rights of membership in the national union 
and guaranteed citizenship, without having to cast its lot or 
fully share risks and burdens with the rest of the American 
political family. But this expansive and unconstitutional 
``Commonwealth'' mythology can not withstand scrutiny any 
longer.
    While sometimes confusing the issue by trying to 
accommodate those on all sides of this matter, in relevant 
formal measures the Congress, the Federal courts and the last 
several Presidents have exercised their Constitutional powers 
with respect to Puerto Rico in a manner consistent with 
applicability of the Territorial Clause, continued 
unincorporated territory status and local self-government 
limited to internal affairs. See U.S. v Sanchez, 992 F.2d 1143 
(1993). Supporters of the extra-constitutional theory of 
``Commonwealth'' explain this away as merely demonstrating the 
need to perfect the free association with permanent union and 
common citizenship which they insist in the status the U.S. and 
U.N. recognized in 1953.
    For example, supporters of the expansive theory of 
``Commonwealth'' often cite the case of U.S. v. Quinones, 758 
F.2d. 40, (1st Cir. 1985), because dictum in that opinion 
adopted some of the nomenclature of the ``commonwealth'' 
doctrine. However, the Department of Justice has pointed out 
that reliance on this dictum to advance the expansive and 
revisionist theory of ``Commonwealth'' is contradicted by the 
actual ruling of the court in that case, which upheld a Federal 
law unilaterally altering the 1952 constitution and the Puerto 
Rico Federal Relations Act without the consent of Puerto Rico. 
See, Appendix VIII, GAO/HRD-91-18, The U.S. Constitution and 
the Insular Areas, April 12, 1991, Letter to GAO from Assistant 
Attorney General of the United States.
    H.R. 3024 is the most significant decolonization measure 
for Puerto Rico offered in the last 100 years. By offering 
Puerto Ricans full self-government through statehood or real 
separate sovereignty, and defining the option of continued 
``Commonwealth'' based on an accurate account of existing law, 
H.R. 3024 will end the ambiguity and internal inconsistency 
that has eroded the moral and Constitutional basis of Federal 
policy toward the territory for more than 40 years.

                            COMMITTEE ACTION

    H.R. 3024 was introduced on March 6, 1996, by Congressman 
Don Young (R-AK), Chairman of the Committee on Resources. 
Cosponsoring the bill were Speaker of the House Newt Gingrich 
(R-GA), Congressman Elton Gallegly, Congressman Jose E. Serrano 
(D-NY), Congressman Patrick J. Kennedy (D-RI), Congressman Nick 
J. Rahall II (D-VW), Delegate Carlos A. Romero-Barcelo (D-PR), 
Congressman Benjamin A. Gilman (R-NY), Congressman Dan Burton 
(R-IN), Delegate Robert A. Underwood (D-GU), Congressman Ken 
Calvert (R-CA), Congressman James B. Longley, Jr. (R-ME), 
Congressman Gene Green (D-TX), Congressman Peter Deutsch (D-FL) 
and Congressman Ron Klink (D-PA). The bill was referred to the 
Committee on Resources, and within the Committee to the 
Subcommittee on Native American and Insular Affairs.
    On March 23, 1996, the Committee of Resources held a 
hearing on H.R. 3024 in San Juan, Puerto Rico, and received 
testimony from the heads of all principal political parties and 
other interests organizations and individuals, as well as 
written statements from all concerned parties. The hearings 
were broadcast live by numerous television and radio stations 
in Puerto Rico and over 70 media credentials were issued.
    On June 12, 1996, the Subcommittee met to mark up H.R. 
3024. Three amendments were offered. Delegate Eni F. H. 
Faleomavaega (D-AS) offered an amendment adding a 
``Commonwealth'' definition from a 1990 House report on Puerto 
Rico status legislation as a choice leading to full self-
government. However, this ``Commonwealth'' definition in the 
report was an expression of the political party advocating that 
status and was meant to merely be a starting point in any 
future consideration by the Congress, and by no means was it 
meant to infer there was any endorsement or guarantee of 
enactment of those provisions. The Subcommittee also rejected 
this amendment in a 1:8 vote, as follows:

  Subcommittee on Native American and Insular Affairs--104th congress 
                             RECORDED VOTE

    Date: June 12, 1996; time: 3:12.
    Bill No.: H.R. 3024.
    Amendment No. 1; offered by: Faleomavaega.
    Rollcall: Defeated (8-1).

----------------------------------------------------------------------------------------------------------------
                                   Yeas      Nays     Present                        Yeas      Nays     Present 
----------------------------------------------------------------------------------------------------------------
Gallegly.......................  ........        X   .........  Faleomavaega.....        X   ........  .........
Young..........................  ........        X   .........  Kildee...........  ........        X   .........
Gilchrest......................  ........        X   .........  Williams.........  ........        X   .........
Jones..........................  ........  ........  .........  Johnson..........  ........        X   .........
Hastings.......................  ........        X   .........  Romero-Barcello..  ........        X   .........
Metcalf........................  ........  ........  .........  Underwood........  ........  ........  .........
Longley........................  ........  ........  .........  .................  ........  ........  .........
                                -------------------------------                   ------------------------------
      Total Republicans........  ........        4   .........  Total Democrats..        1         4   .........
----------------------------------------------------------------------------------------------------------------


    Congressman Pat William offered an amendment with the 
``commonwealth'' definition from the 1993 plebiscite was 
proposed to be added as a third choice leading to full self-
government in the Initial Decision Stage referendum in addition 
to separate sovereignty and statehood. Delegate Faleomavaega 
offered an amendment to the Williams amendment regarding the 
definition of ``commonwealth''; the amendment failed on voice 
vote. The Williams amendment was then defeated in a 1:10 vote, 
as follows:

  Subcommittee on Native American and Insular Affairs--104th CONGRESS 
                             RECORDED VOTE

    Date: June 12, 1996; time: 3:25.
    Bill No.: H.R. 3024.
    Amendment No. 1; offered by: Williams.
    Rollcall: Defeated (10-1).

----------------------------------------------------------------------------------------------------------------
                                   Yeas      Nays     Present                        Yeas      Nays     Present 
----------------------------------------------------------------------------------------------------------------
Gallegly.......................  ........        X   .........  Faleomavaega.....        X   ........  .........
Young..........................  ........        X   .........  Kildee...........  ........        X   .........
Gilchrest......................  ........        X   .........  Williams.........  ........        X   .........
Jones..........................  ........  ........  .........  Johnson..........  ........        X   .........
Hastings.......................  ........        X   .........  Romero-Barcello..  ........        X   .........
Metcalf........................  ........        X   .........  Underwood........  ........  ........  .........
Longley........................  ........        X   .........  .................  ........  ........  .........
                                -------------------------------                   ------------------------------
      Total Republicans........  ........        6   .........  Total Democrats..        1         4   .........
----------------------------------------------------------------------------------------------------------------


    The final amendment in the nature of a substitute offered 
by Subcommittee Chairman Gallegly was approved in a 10-0 vote, 
as follows:

  Subcommittee on Native American and Insular Affairs--104th CONGRESS 
                             RECORDED VOTE

    Date: June 12, 1996; time: 3:45.
    Bill No.: H.R. 3024.
    Amendment No. 1; offered by: Gallegly.
    Rollcall: Passed (10-0).

----------------------------------------------------------------------------------------------------------------
                                   Yeas      Nays     Present                        Yeas      Nays     Present 
----------------------------------------------------------------------------------------------------------------
Gallegly.......................        X   ........  .........  Faleomavaega.....        X   ........  .........
Young..........................        X   ........  .........  Kildee...........        X   ........  .........
Gilchrest......................        X   ........  .........  Williams.........        X   ........  .........
Jones..........................  ........  ........  .........  Johnson..........  ........  ........  .........
Hastings.......................        X   ........  .........  Romero-Barcello..        X   ........  .........
Metcalf........................        X   ........  .........  Underwood........  ........  ........  .........
Longley........................        X   ........  .........  .................  ........  ........  .........
                                -------------------------------                   ------------------------------
      Total Republicans........        6   ........  .........  Total Democrats..        4   ........  .........
----------------------------------------------------------------------------------------------------------------


    The Gallegly amendment incorporates a number of suggestions 
of leaders of Puerto Rico and Members of Congress. One primary 
change permits the people of Puerto Rico to vote to continue 
the current ``Commonwealth'' status as a territory, or to 
proceed towards a status of full self-government of either 
separate sovereignty or statehood. The provision is based on 
the suggestion of the President of the Puerto Rico Independence 
Party (PIP), Reuben Berrios-Martinez. This choice is included 
in Part I of a two-part ballot in the first referendum. Part II 
of the ballot maintains the original choices between full self-
government of separate sovereignty leading to independence or 
free association, or statehood.
    Another change requires periodic referenda in Puerto Rico 
every four years on the same question in the event a majority 
indicate they are not ready to proceed towards full self-
government. This provision is based on the legislative concept 
of Congressman Dan Burton and Robert Torricelli (D-NJ), 
Chairman and Ranking Minority Member respectively, of the 
Subcommittee on Western Hemisphere of the Committee on 
International Relations, to require periodic referenda in a 
territory until the status issue is resolved. The periodic 
voting requirement on status maintains the integrity of the 
purpose of the bill, which is ``to provide a process leading to 
full self-government''.
    The amendment also includes a provision in which a 
constituent convention would be held in Puerto Rico in the 
event of a majority vote in favor of separate sovereignty, to 
determine which form of separate sovereignty is preferred by 
the people of Puerto Rico: absolute independence or separate 
sovereignty in free association with the United States. This 
change is based on a suggestion by President Berrios-Martinez 
of the PIP. The President of the United States is directed to 
address proposals and recommendations of the constituent 
convention (if any) in the Transition Plan submitted to 
Congress within the 180 day period following the referendum.
    Finally, the amendment modifies or adds a number of 
findings to reflect important events in the chronological 
development of the United States-Puerto Rico territorial 
relationship. In addition, changes in the language of the 
policy section reflects the responsibility of the Federal 
Government to enable the people of Puerto Rico to freely 
express their wishes regarding their political status and 
achieve full self-government.
    The bill, as amended, was then ordered to be favorably 
reported to the Full Committee in the presence of a quorum, by 
a roll call vote of 10-0, as follows:

  subcommittee on native american and insular affairs--104th congress 
                             recorded vote

    Date: June 12, 1996; time: 3:45.
    Bill No.: H.R. 3024.
    Rollcall: Passed 10-0.
    Ordered report to Full Committee, subject to technical 
amendments approved by the minority.

----------------------------------------------------------------------------------------------------------------
                                   Yeas      Nays     Present                        Yeas      Nays     Present 
----------------------------------------------------------------------------------------------------------------
Gallegly.......................        X   ........  .........  Faleomavaega.....        X   ........  .........
Young..........................        X   ........  .........  Kildee...........        X   ........  .........
Gilchrest......................        X   ........  .........  Williams.........        X   ........  .........
Jones..........................  ........  ........  .........  Johnson..........  ........  ........  .........
Hastings.......................        X   ........  .........  Romero-Barcello..        X   ........  .........
Metcalf........................        X   ........  .........  Underwood........  ........  ........  .........
Longley........................        X   ........  .........  .................  ........  ........  .........
                                -------------------------------                   ------------------------------
      Total Republicans........        6   ........  .........  Total Democrats..        4   ........  .........
----------------------------------------------------------------------------------------------------------------


    On June 26, 1996, the Full Resources Committee met to 
consider H.R. 3024. Congressman Don Young offered en bloc 
amendments which passed by voice vote. The en bloc amendments 
made technical and clarifying changes. The language of certain 
findings are clarified pertaining to the conditional approval 
by Congress of the Puerto Rico constitution, the notification 
to the United Nations by the United States, and the Supreme 
Court ruling confirming Congressional authority over Puerto 
Rico as a territory. In Section 4, the Transition Plan only 
occurs in the event of a ballot choice ``of full self-
government,'' and the Legislature of Puerto Rico ``may 
provide'' by local law a constituent convention in the event of 
a majority vote for separate sovereignty. In Section 5, the 
periodic referenda requirement applies if a referendum is 
inconclusive, ``or a majority vote to continue the Commonwealth 
structure as a territory.'' Section 7 is clarified regarding 
the use of Federal excise taxes on foreign rum which go to the 
Puerto Rico Treasury. The President identifies the amounts to 
be used for the conduct of referenda without changing the flow 
of funds to Puerto Rico. In addition, the President is required 
to submit a report to Congress regarding the amount used to 
conduct the referendum.
    Congressman George Miller (D-CA) offered an amendment to 
shorten the time line for operation of the bill. It failed by 
voice vote. Delegate Faleomavaega offered an amendment to 
change the definition of ``commonwealth'' on the ballot; it 
also failed by voice vote. Delegate Faleomavaega then offered 
an amendment to delete the ``free association'' language from 
the ballot; it failed by voice vote. Delegate Faleomavaega 
offered and withdrew an amendment to change ``statehood'' 
language on the ballot. Congressman Bruce F. Vento (D-MN) 
offered an amendment to strike additional four-year referenda; 
it failed on a voice vote. Subcommittee Chairman Gallegly 
offered an amendment to the definition regarding the retention 
of United States citizenship under separate sovereignty, which 
was approved by voice vote.
    The bill, as amended, was then ordered favorably reported 
to the House of Representatives, by voice vote in the presence 
of a quorum.

                      section-by-section analysis

Section 1. Short title; table of contents

    This provision contains the Short Title by which the bill 
will be known once it becomes an Act, as well as the Table of 
Contents.

Section 2. Findings

    This section contains the findings of Congress with respect 
to political status and self-determination in the case of 
Puerto Rico, which are self-explanatory in most respects, 
especially when read in the context of the preceding historical 
and legal materials, including the contents of the February 28, 
1996, letter (see Appendix V) responding to Resolution 62 from 
the four chairman of the committees and subcommittees of the 
House of Representatives with jurisdiction and interest in the 
status of Puerto Rico.

Section 3. Policies

    This is a statement of policy also consistent with the 
historical and legal materials already reviewed, and which 
should be read in light thereof. The Committee notes that on 
June 28, 1996, four distinguished Members of Congress in the 
minority party with long experience and knowledge of these 
issues transmitted to the Majority Leader of the Puerto Rico 
Senate a further response to Resolution 62 and the 1993 vote. 
This letter is included as Appendix V, and indicates bipartisan 
support for the policy set forth in Section 3, as well as the 
overall approach to self-determination and political status 
resolution embodied in H.R. 3024.

Section 4. Process for Puerto Rican full Self-government, including the 
        initial decision stage, transition stage, and implementation 
        stage

    This central element of the bill prescribes the three 
stages of the process leading to full self-government, 
requiring an expression of the wishes of the people concerned 
at each stage:
    Initial Decision Stage.--Section 4 provides for a status 
referendum to be held in Puerto Rico before the end of 1998, in 
which voters will make choices presented in a two-part ballot. 
Part I of the ballot offers a choice between continuation of 
the current ``Commonwealth'' unincorporated territory status 
quo or to proceed toward full self-government as presented in 
Part II of the ballot. Under Part II of the ballot, the two 
choices are: (A) full self-government through separate Puerto 
Rican sovereignty consistent with independence or free 
association; or (B) full self-government through equality under 
U.S. sovereignty leading to statehood.
    Transition Stage.--If voters approve further self-
determination regarding the preferred path to full self-
government approved in the Initial Decisions Stage, within 180 
days the President must propose a ten year Transition Plan to 
implement that status preference to Congress. After Congress 
approves the Transition Plan under ``expedited procedures,'' it 
is presented to the people of Puerto Rico for approval. If the 
Transition Plan is approved it will commence under an Executive 
Order of the President.
    Implementation Stage.--This stage begins at least two years 
prior to end of Transition Plan, with the President submitting 
to Congress a legislative proposal to implement full self-
government. Congress approves an Implementation Act and that is 
submitted for approval by the people in a vote. If the 
Implementation Act is approved, then full self-government is 
implemented on the part of the Federal Government by a 
Presidential Proclamation.
    In Part I of the ballot, voters are given a choice to 
preserve the current ``Commonwealth'' relationship or take the 
next step in the overall process created by H.R. 3024, in which 
Congress would propose to the people of Puerto Rico the terms 
under which it would be willing to implement the status 
preference expressed by the people in Part II of the ballot.
    Under the two-part ballot, voters are free to choose to 
continue the current ``Commonwealth'' based on a preference for 
that status over other available options. No voter will be 
``forced'' to participate in a choice between statehood and 
separate sovereignty in order to express any preference for 
``Commonwealth.'' For the first time in almost 100 years under 
the sovereignty of Congress, the people of Puerto Rico will be 
empowered to choose between local self-government within the 
Territorial Clause and the two options for a permanent status 
based on an exercise of sovereignty by the people through which 
such a permanent and fully self-governing status is achieved.
    A copy of the ballot prescribed by Section 4 in English and 
Spanish is included as Appendix VI.
    In the manner provided in Section 4, Congress will, for the 
first time, be creating an orderly and informed process for 
self-determination in Puerto Rico. Instead of allowing local 
political parties to impose choices between mismatched options 
which do not withstand Constitutional scrutiny, and which lead 
to contradictory legal and political results, Congress will 
bring clarity and validly defined choice into the process 
consistent with applicable U.S. Constitutional law and 
international practice recognized by the United States.
    Here is how it will work: Once there is a majority vote for 
a new status, Congress will proceed in a deliberate manner and 
there will be no change imposed. Indeed, there will be no 
change in status at any of the three stages without approval of 
the voters, so that the fairness of the self-determination 
element of the process is beyond reproach. By going back to the 
voters not once, not twice, but three times, Congress will 
empower the people to redeem the right to self-determination 
within a framework established by Congress consistent with our 
values as a nation.
    If at any stage the voters do not approve measures proposed 
by Congress to achieve full self-government in accordance with 
the preference expressed by the voters, then the self-
determination process prescribed in the bill begins anew, 
subject only to the authority of Congress to amend or repeal 
the act and replace it with other measures consistent with the 
authority and responsibility of Congress under the Territorial 
Clause, the Treaty of Paris and the U.N. Charter.
    With respect to Section 4(a), there are specific issues 
which require detailed explanation to ensure that there will 
not be any further ambiguity about the state of applicable law 
and the intent of Congress.
    1. Definition of ``Commonwealth'' in Part I(A) of the 
ballot. The controversy surrounding the definition of 
``Commonwealth'' in Puerto Rico arises from partisan disputes 
about the meaning and legal effect of the Federal and local 
measures establishing the constitutional government in 1952. 
Each local political party has its own interpretation of the 
approval process for the constitution, as well as the manner in 
which it has been implemented.
    For the people of Puerto Rico to be empowered to engage in 
a free and informed act of self-determination, the definition 
of Commonwealth must be one which is not formulated for the 
purpose of either confirming or repudiating the positions of 
the local political parties regarding the legal and political 
nature of the current status of Puerto Rico. Language should be 
adopted which is accurate, authoritative and balanced as a 
matter of law. The desirability of the formula to be adopted in 
the view of the political parties should not control the 
contents. Congress is responsible for formulating a definition 
that it accepts as fair, and which has a clear meaning that 
Congress can respond to if it is approved by the voters.
    While there should be nothing in the definition which is 
unnecessarily negative or unfavorable to the position of any of 
the local political parties, the desire to avoid offending 
local parties should not influence the definition at the 
expense of truthfulness and accuracy. Ambiguity of language and 
policy employed in the past by some Puerto Rican and Federal 
officials who thought they knew what was best for the people of 
Puerto Rico is what contributed to the difficulty of the 
current status dilemma. To resolve the problem Congress simply 
must be accurate and consistent with applicable current law so 
the people of Puerto Rico can determine for themselves what is 
in their own best interest under the circumstances which now 
exist.
    The definition of ``Commonwealth'' contained in Section 4 
is necessary because it:
          Is based on existing Constitutional arrangements and 
        organic laws defining the status of the Commonwealth 
        and its relationship to the Federal Government, 
        recognizing that any amendments, enhancements or 
        modifications of the existing relationship must be 
        brought about through the existing Constitutional 
        process before becoming part of what ``Commonwealth'' 
        means;
          Is consistent with the measures adopted by the 
        political branches of the Federal Government to 
        establish and implement the current relationship, as 
        well as those of the local constitutional government, 
        as interpreted by the U.S. Supreme Court;
          Recognizes supremacy of Federal law, as well as the 
        authority of the local constitutional government under 
        the 1952 constitution.
    Under the U.S. Constitution, when there is a legal dispute 
about the meaning and legal effect of actions taken by the 
Congress or the President, the Supreme Court has the 
Constitutional authority and responsibility to interpret the 
Constitution and determine the meaning and effect of the laws 
as enacted and implemented by the political branches. It is of 
fundamental importance, therefore, that in 1980 the U.S. 
Supreme Court ruled that because of the Territorial Clause 
status of Puerto Rico it does not violate the Fifth Amendment's 
equal protection guarantee for Congress by statute to impose a 
discriminatory classification on the people of Puerto Rico by 
providing lower levels of Federal programs and benefits than is 
provided in the States. In reaching this decision the Court 
stated that:

          Congress, which is empowered under the Territory 
        Clause of the Constitution, U.S. Const., Art. IV, 
        Section 3, Clause 2, to ``make and needful Rules and 
        Regulations respecting the Territory * * * belonging to 
        the United States,'' may treat Puerto Rico differently 
        from the States so long as there is a rational basis 
        for its actions. Harris v. Rosario, 446 U.S. 651.

    The definition of ``Commonwealth'' in Section 4 has to 
commend its compatibility with this Supreme Court ruling 
regarding the status of Puerto Rico. That can not be said for 
any of the other definitions of ``Commonwealth'' advanced to 
date.
    2. Nationality and citizenship issues. One of the most 
difficult issues to address in this self-determination process 
is that of the nationality and citizenship of the people of 
Puerto Rico in relation to the recognized alternatives for full 
self-government. Discussion of these issues tends to be quite 
emotional, for obvious and valid reasons. U.S. nationality and 
citizenship is a blessing that is synonymous with liberty 
itself. At the same time, failure of Congress previously to 
afford the people of Puerto Rico a choice between full, equal 
U.S. citizenship and the option of separate nationality and 
sovereign nationhood has prevented the true sentiments of the 
people from being translated into a recognized form of 
permanent self-government.
    As a result, in addition to the ideas and emotions evoked 
when the subject of citizenship arises, there is a great deal 
of confusion about applicable law and policy in this area. The 
``nation-within-a-nation'' myth that there can be two 
nationalities with what amounts to one citizenship has been 
allowed to be perpetuated for so long that untying the knot 
with regard to citizenship is going to be difficult. Yet, doing 
so in a careful and fair manner is perhaps the single most 
important task if we are to provide the people of Puerto Rico 
with a meaningful opportunity to engage in a free and informed 
act of self-determination.
    Too often the discussion of nationality and citizenship in 
the context of full self-government proceeds from the flawed 
premise that the rulings of the U.S. Supreme Court regarding 
dual citizenship and loss of U.S. nationality govern this 
issue. To the contrary, legal and political principles relating 
to self-determination and emergence of new nations, as well as 
the special status that people born in Puerto Rico have under 
the Territorial Clause and the statutes implementing Article IX 
of the Treaty of Paris, are more relevant. To ensure that the 
intent of Congress is well-established and clearly defined in 
this regard, there are several fundamental points which must be 
understood.
    Section 4 defines the nationality and citizenship 
principles that will be legally binding in the event that the 
people vote for separate sovereignty. With respect to 
nationality and citizenship under a separate sovereignty 
scenario, it is the intent of the Committee that the governing 
legal analysis is and will be as follows:
    Formulation of a legally effective provision to govern the 
change of citizenship for the Puerto Rican population in the 
event of a vote for separate sovereignty is imperative. 
Although quite properly the future of Puerto Rico will be 
determined by the eligible voters who qualify to cast a ballot 
in the status referendum based on compliance with Puerto Rican 
law requiring residence in the territory, the results of the 
self-determination process must be implemented fairly with 
respect to all those who have U.S. citizenship based upon birth 
in Puerto Rico during the territorial period. That includes 
those who reside in Puerto Rico and those affected persons who 
reside in the several States or elsewhere.
    Not only must the self-determination process be respected, 
but in order to implement a vote in favor of separate 
sovereignty, the international law of nation-state succession 
as recognized by the United States also must be observed. This 
requires a transfer of sovereignty, nationality and citizenship 
to establish a new nation if that is what the people of Puerto 
Rico vote to approve.
    The U.S. long has recognized that the allegiance of the 
population of a territory transfers with sovereignty, and 
failure to adhere to that practice in the context of Puerto 
Rico's emergence into nation-state status would represent an 
unjustified and profoundly problematic departure from 
established U.S. practice. American Insurance Company v. 
Canter, 26 U.S. (1 Pet.) 511, 542 (1828).
    It is entirely consistent with the rights of the people of 
Puerto Rico under those parts of the U.S. Constitution and laws 
of the U.S. which apply to Puerto Rico at this time for the 
nationality and citizenship which had been extended to Puerto 
Rico under the Treaty of Paris to be withdrawn upon the 
transfer of sovereignty over the territory and population to 
the government of the Puerto Rican nation-state if that is in 
accordance with the results of the self-determination process. 
As long as there is a procedure available for those who wish to 
retain the citizenship of the U.S. as predecessor sovereign on 
the same terms it previously had been enjoyed, the succession 
of nationality and citizenship as part of the succession of 
sovereignty is consistent with U.S. Constitutional law, this 
nation's historical practice and customary international law 
recognized by the United States. American Insurance Company v. 
Canter, 26 U.S. (1 Pet. 511, 542 (1828); O'Connell, The Law of 
State Succession 246 (1956).
    Some confusion has arisen in Puerto Rico on this point 
because the U.S. recognizes that those with citizenship 
protected by the Fourteenth Amendment will lose that status 
only by relinquishing it voluntarily and intentionally, Afroyim 
v. Rusk, 387 U.S. 253, 260 (1967). But the case of an 
individual with full U.S. citizenship acquiring another 
nationality, or enjoying a benefit or right of citizenship in 
another country as in the Afroyim case, Constitutionally is 
distantly related to the case in which a population with 
statutory citizenship in a less than fully self-governing 
territory exercises its right of self-determination in favor of 
separate sovereignty. For that act of self-determination to be 
honored and implemented in accordance with U.S. Constitutional 
and international practice, the new nationality of that 
population must be accorded formal recognition by the U.S. and 
the international community.
    This would not violate the rights of the population of 
Puerto Rico for reasons which include that it would only happen 
due to the results of a democratic voting process. As noted 
below, determination of the status of those who wish to retain 
the predecessor nation's citizenship would, in this case, be 
within the discretion of Congress, and ending statutory U.S. 
nationality and citizenship created by Congress during the 
territorial period to implement an act of self-determination in 
favor of separate sovereignty would not be barred 
constitutionally. Rogers v. Bellei, 401 U.S. 815 (1971).
    The recognized and well-established procedure of requiring 
an election between citizenship of the predecessor or successor 
sovereigns, or otherwise preventing the population concerned 
from having citizenship and allegiance with respect to both the 
predecessor and successor nations on an across-the-boards 
basis, is an essential and imperative feature of a valid, 
legitimate and credible separation of sovereignty and 
succession of state. This feature of the law of state 
succession has been recognized and practiced by the U.S. 
throughout our history, as it was under the nationality and 
citizenship provisions of Article IX of the Treaty of Paris 
when Puerto Rico was ceded to this nation by Spain, the Foraker 
Act in 1901 and the Jones Act in 1917.
    Thus, it is consistent with U.S. Constitutional and 
international practice, as well as the international law of 
state succession, to give people with the nationality of the 
previous or predecessor sovereign the right individually to 
choose not to be part of the overall process of succession to 
the nationality of the successor sovereign. While there are 
variations of how this is accomplished, it is clear that the 
domestic law of the predecessor nation governs the retention of 
the previous nationality and citizenship, and the domestic law 
of the successor nation governs the acquisition of the 
nationality and citizenship of the new nation. O'Connell, The 
Law of State Succession 245-248 (1956).
    Consequently, Congress will have to prescribe the criteria 
and procedures to protect the right of all those Puerto Ricans 
who want to retain their current statutory U.S. citizenship. At 
the same time, we need to recognize that the Federal Department 
of Justice has long taken the position, and is on record before 
Congress, that the statutory citizenship which Congress has 
conferred on people born in Puerto Rico during the territory 
period is not full, equal citizenship protected by the 
Fourteenth Amendment to the Constitution. See Section-By-
Section Comments on S. 244, U.S. Department of Justice, 
February 5, 1991.
    That the current U.S. citizenship of persons born in Puerto 
Rico during the territorial period is restricted and less-than-
equal is self-evident from the fact that this class of 
citizens, as residents of an unincorporated territory subject 
to the Territorial Clause, do not have voting representation in 
Congress, do not vote in national elections, and the U.S. 
Supreme Court has ruled that Congress can exercise its 
Territorial Clause powers to treat the U.S. citizens in Puerto 
Rico in a manner which is not equal to the treatment of U.S. 
citizens in the several states. Harris v. Rosario, 446 U.S. 
651, 1980. The Congressional Research Service has concurred in 
these views, and the record of the Committee's hearings 
includes documentation of these authoritative legal opinions. 
See, Legal Memorandum of John H. Killian, Senior Specialist, 
American Constitutional Law, CRS, American Law Division, 
November 15, 1990.
    The current citizenship status of people born in Puerto 
Rico was established by Congress in an exercise of its 
Territorial Clause authority to implement the Treaty of Paris. 
Article IX of the Treaty of Paris states that the ``civil 
rights'' and ``political status'' of the inhabitants of the 
Puerto Rico will be determined by Congress. In 1904 the U.S. 
Supreme Court ruled in Gonzales v. Williams that Puerto Ricans 
have U.S. nationality, but that the specific citizenship status 
of the population of the territory is subject to the discretion 
of Congress under the Territorial Clause. In 1917 Congress 
ended the limited territorial citizenship of Puerto Ricans, but 
the U.S. citizenship granted by statute since 1917 is limited, 
restricted and less-than-equal citizenship. Full equal 
citizenship, irrevocable in the same legal and political sense 
as citizenship due to birth in a state of the union, comes only 
with full integration of Puerto Rico into the union.
    Thus, the current citizenship status of Puerto Ricans 
exists at the discretion of Congress. Because the Constitution 
has been partially extended to Puerto Rico, including 
fundamental rights of due process and equal protection, 
Congress obviously cannot exercise its discretion in an 
arbitrary and irrational way. But the suggestion that the 
current citizenship can be guaranteed or that it is irrevocable 
by a future Congress is dangerously misleading. No such 
statutory status can bind a future Congress from exercising its 
Constitutional authority and responsibility under the 
Territorial Clause to carry out Article IX of the Treaty of 
Paris.
    Indeed, the Congressional Research Service memo cited above 
concluded that the current statutory citizenship of people born 
in Puerto Rico can be regulated or even rescinded without 
violating the equal protection and due process rights which 
have been extended to Puerto Rico by Congress and the Federal 
courts. (See, Killian, ``Questions in re Citizenship Status of 
Puerto Ricans,'' CRS, November 15, 1990). As long as Congress 
acts for a legitimate Federal purpose and the measures taken 
are reasonably related to such a purpose, the form of 
citizenship status provided by Congress for persons born in 
Puerto Rico can be altered or modified by Congress.
    The CRS memo also states that the ``possibility of 
revocation in the event of independence'' would not involve the 
same difficulty of identifying a ``legitimate reason'' for 
ending U.S. citizenship for those who acquired it during the 
territorial period based on being born in Puerto Rico. (See, 
Killian. p. 4). A vote for separate sovereignty would lead to 
separate sovereignty, nationality and citizenship. As former 
attorney General Richard Thornburgh told the Senate during the 
1991 hearings on the Puerto Rico status legislation under 
consideration at that time, the doctrine of state succession 
would apply and there would be no Constitutional bar to ending 
U.S. citizenship since U.S. nationality would end as well. 
Congress cannot agree to separate ``nationality'' but grant 
mass common ``citizenship'' if the voters approve separate 
sovereignty. That would make no sense, and both legally and 
politically it would undermine U.S. as well as Puerto Rican 
sovereignty. The attempt to have it both ways has failed, and 
will never succeed.
    So Congress must preserve the right of statutory 
citizenship for those who individually do not want to 
participate in the change of nationality along with the general 
population. But in doing so, we need to avoid confusing the 
citizenship rights which we must protect for the U.S. citizens 
of Puerto Rico who wish to retain that status, on one hand, 
from the citizenship of persons born or naturalized in a State 
of the Union and thereby protected by the Fourteenth Amendment 
to the Constitution, on the other.
    This distinction is important because Congress will need to 
prescribe the nature of the continuing statutory right to U.S. 
citizenship which Puerto Ricans will have if they choose to 
maintain allegiance to the United States. As just two examples, 
such persons must retain the right to renounce U.S. 
citizenship, and the eligibility of such persons for Federal 
benefits when residing in Puerto Rico will have to be defined 
in a manner consistent with the succession of state doctrine 
and the fact that the status of Federal programs in Puerto Rico 
will be determined be subject to agreement of the U.S. and 
Puerto Rico under a separate sovereignty scenario.
    This entire discussion underscores the fact that the 
statutory right of U.S. citizenship based on birth in Puerto 
Rico as it is today, and as it will be if the voters approve 
separate sovereignty, is not full Constitutionally-protected 
citizenship. If there is going to be an informed act of self-
determination in Puerto Rico, the people must know that the 
only path to full, equal, permanent, irrevocable United States 
nationality and citizenship for the people of Puerto Rico is 
through statehood and the Fourteenth Amendment protection that 
comes exclusively with that Constitutionally-based status.
    In the context of the international law of state 
succession, it also is necessary in order to establish the 
identity of the new Puerto Rican nation as a state in 
international law that there be no equivocation, ambivalence or 
ambiguity about the succession of sovereignty, nationality and 
citizenship of the population of Puerto Rico as the body 
politic of the territory under the sovereignty of a new state. 
If the establishment of separate sovereignty is what the people 
vote to approve, that is what the U.S. and the new nation of 
Puerto Rico must seek to bring into existence.
    The experience of the U.S. and the free associated states 
which emerged from the U.S. administered U.N. Trust Territory 
of the Pacific Islands under a compact of free association 
demonstrates that the new separate sovereignty, nationality and 
citizenship of the new nations must be well-defined and clearly 
established if the separate identity of the new nation is to be 
believed, accepted and formally recognized by the international 
community. Any attempt at creation of a new state in name or 
form only, without the underlying elements and substance of a 
separate nation-state in the international sense, will not 
succeed.
    At the same time all these issues need to be understood and 
addressed, the Committee also had to reduce the expression of 
this freedom of choice regarding citizenship and succession of 
state requirements to language which could be included on a 
plebiscite ballot. The final language is found at Section 4(a) 
of H.R. 3024. However, if we had no constraints in the length 
of the citizenship definition we more fully would have given 
expression to the meaning of the provision as follows:
    In accordance with the act of self-determination approving 
separate sovereignty for Puerto Rico, as well as the succession 
of nationality and government, the people of Puerto Rico owe 
allegiance to a Puerto Rican nation and have the nationality 
and citizenship thereof; United States sovereignty, nationality 
and citizenship is terminated with respect to Puerto Rico and 
is transferred to the Puerto Rican nation, which has an 
existence and identity in international law separate and apart 
from that of the United States; thereafter, birth in Puerto 
Rico or relationship to a person who became a U.S. national and 
citizen by statute based on birth in Puerto Rico during the 
period of U.S. territorial administration is not the basis for 
U.S. nationality or citizenship; provided that, persons who 
acquired such statutory U.S. citizenship during the territorial 
period have a right to be secure in and to enjoy U.S. 
citizenship for the remainder of their natural lives in 
accordance with their individual choice not to participate 
personally and individually in the succession from U.S. to 
separate Puerto Rican sovereignty, nationality and citizenship 
with respect to the territory and population of Puerto Rico; 
Congress shall prescribe the procedures and criteria to ensure 
that no such person determining to retain U.S. citizenship 
shall be denied the right to do so, and that all such persons 
shall have the ability to exercise their free will in favor of 
their statutory right of U.S. citizenship. Consistent with this 
statutory citizenship right, U.S. laws applicable to U.S. 
citizens shall apply, including the statutory right to renounce 
U.S. citizenship. There will be an election procedure or other 
mechanism and criteria through which individuals who do not 
want to change to Puerto Rican citizenship will not be forced 
to do so, but neither those who acquire Puerto Rican 
citizenship nor those who retain U.S. citizenship as part of 
the process of state succession will have dual U.S. and Puerto 
Rican citizenship as a result. Any incidence of dual 
citizenship in individual cases must be on the basis of 
separate statutory or Constitutional grounds due to birth or 
naturalization in one of the States of the Union. The special 
statutory right available to those who elect to retain U.S. 
citizenship under this traditional arrangement for person born 
in Puerto Rico during the territorial period requires continued 
allegiance to the U.S. and will terminate for any otherwise 
eligible person who becomes a national and citizen, or has and 
exercises the rights of citizenship, of any nation other than 
the United States--including the new sovereign nation of Puerto 
Rico. These restrictions on dual Puerto Rican-U.S. citizenship 
arising from this transitional citizenship arrangement are 
determined by the Committee to be necessary in order to ensure 
that both the U.S. and Puerto Rico will be able to exercise 
effective control over the territory and population that 
defined each as a separate nation, respectively--in accordance 
with their respective constitutional processes and laws. This 
is required to preserve the sovereignty of each nation and 
bring about an effective succession of sovereignty, nationality 
and citizenship in the event separate sovereign status is 
implemented. This arrangement also ensures continuity and a 
coextensive relationship as between the statutory citizenship 
conferred during the territorial period and the statutory 
citizenship which is available by election or entitlement as 
Congress may determine. This intended result could be 
frustrated if the procedures and requirements of U.S. law 
relating to dual citizenship for persons whose U.S. nationality 
and citizenship is protected by the 14th Amendment to the 
Constitution were misapplied in the cases of persons with 
statutory U.S. citizenship arising from birth in Puerto Rico as 
recognized under this transitional citizenship arrangement. 
Rather, Congress must limit the availability of this special 
transitional statutory citizenship right so that it is 
circumscribed and not extended beyond what is necessary to 
ensure that the state of citizenship now enjoyed by persons 
born in Puerto Rico under the territorial regime can be 
extended as an equivalent statutory right for life on an 
individual basis employed in the event Puerto Rico becomes a 
separate nation.
    The actual language of Section 4(a) of H.R. 3024 should be 
understood as an abridged version of the preceding paragraph.

Section 5. Requirements relating to referenda, including inconclusive 
        referendum and applicable laws

    This section provides the legal framework for conducting 
referenda under this bill. Current election laws of Puerto Rico 
requiring U.S. citizenship and satisfaction of residency 
requirements will apply. Under those election laws, non-
residents who are serving on active duty in the military are 
allowed to cast absentee ballots, and this exception is 
acknowledged without creating or authorizing any deviation from 
current residency and citizenship requirements.
    The provisions of Section 5 relating to the authority and 
procedures for conducting referenda are self-explanatory and 
unambiguous.

Section 6. Congressional procedures for consideration of legislation

    This section prescribes the ``expedited procedures'' for 
Congressional action pursuant to this bill in response to the 
results of referenda conducted under its provisions.

Section 7. Availability of funds for the referenda

    This section provides that funding to conduct the referenda 
required under the bill will be from existing Federal excise 
taxes on foreign rum, which is covered over to the Puerto Rico 
Treasury. The President may identify all or part of the excise 
tax as grants to the State Elections Commission of Puerto Rico 
for conducting the referenda and for voter education.

            COMMITTEE OVERSIGHT FINDINGS 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)(l) 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. 3024 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. 3024. 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 bill 
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. 
3024 does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    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. 3024.
    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. 
3024 from the Director of the Congressional Budget Office.

               congressional budget office cost estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 18, 1996.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 3024, the United States-Puerto Rico Political 
Status Act, as ordered reported by the House Committee on 
Resources on June 26, 1996. CBO estimates that H.R. 3024 would 
result in no significant cost to the federal government. 
Enacting H.R. 3024 would not affect direct spending or 
receipts; therefore, pay-as-you-go procedures would not apply.
    Bill purpose.--H.R. 3024 would establish a process for 
determining and implementing a permanent political status for 
Puerto Rico. The process would include three stages:
          (1) Puerto Rico would hold a referendum by December 
        31, 1998, whereby voters would choose between Puerto 
        Rico's continued status as a territory of the United 
        States and full self-government. If the voters select 
        the status quo, then another referendum would be held 
        in four years, and if necessary, every four years 
        thereafter. If the voters opt for self-government, they 
        would select on the second part of the ballot between a 
        separate sovereignty from the United States, resulting 
        in either independence or free association, and 
        statehood.
          (2) If a majority of voters select self-government, 
        the President would submit legislation to the Congress 
        that provides for a transition of at least 10 years. In 
        a second referendum, voters would then approve or 
        disapprove the enacted transition plan.
          (3) At least two years prior to the end of the 
        transition period, the President would submit 
        legislation to the Congress to implement the selected 
        form of self-government. A third referendum would then 
        be held to approve or disapprove the enacted plan.
    The bill would help fund the referenda by earmarking 
existing federal excise taxes on foreign rum. Under current 
law, the federal government collects and then transfers these 
taxes to the government of Puerto Rico. Under H.R. 3024, the 
President could elect to specify that some or all of the funds 
be made available to the Puerto Rico Sate Election Commission.
    Federal budgetary impact.--We estimate that H.R. 3024 would 
result in no significant cost to the federal government. Some 
minor costs could be incurred to formulate and approve the 
subsequent legislation required by the bill if the voters of 
Puerto Rico select self-government. Other than such minor 
costs, H.R. 3024 would only reallocate, upon request, a portion 
of funds derived from federal exise taxes already paid to the 
government of Puerto Rico. The total amount of those funds 
would not change.
    A change in the political status of Puerto Rico could have 
a significant budgetary impact on the federal government. The 
potential impact could include changes in spending on federal 
assistance programs, such as Supplemental Security Income (SSI) 
and Medicaid, plus changes in receipts from a federal income 
taxes, which residents of Puerto Rico currently do not pay. Any 
such changes, however, would be contingent on the outcome of 
the referenda and future actions of the Congress and the 
President. It is unlikely that any change could occur before 
fiscal year 2010. Because the potential budgetary impact of a 
change in Puerto Rico's status would depend on future 
legislation, enacting H.R. 2024 would have no direct budgetary 
impact (other than the minor discretionary costs cited above).
    Impact on State, local, and tribal governments.--H.R. 3024 
contains intergovernmental mandates as defined in the Unfunded 
Mandates Reform Act of 1995 (Public Law 104-4), but the direct 
cost of these mandates would not exceed the $50 million 
threshold established by that act. This bill would require the 
Puerto Rican government to hold a referendum no later than 
December 31, 1998. If a majority of voters choose some form of 
self-government, the bill would require a second referendum in 
fiscal year 2000 and, possibly, another in about fiscal year 
2010. If a majority choose to continue the current commonwealth 
status of Puerto Rico, the bill would require a second 
referendum in fiscal year 2003.
    CBO estimates that the government of Puerto Rico would 
incur costs of $5 million to $10 million for each referendum 
required by H.R. 3024. Given the timetable established by the 
bill, we expect that one referendum would be held in fiscal 
year 1999 and second in either fiscal year 2000 or 2003, 
depending on the outcome of the first. This estimate is based 
on the cost of recent elections in Puerto Rico. It includes the 
cost of voter education as well as the cost of holding 
elections.
    Should the process established by this bill result in a 
change in the political status of Puerto Rico, this would have 
a significant fiscal impact on the government of that island. 
Any such change would be the result of future legislation.
    Private-sector mandates.--This bill would impose no new 
private-sector mandates as defined in Public Law 104-4.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are John R. 
Righter (for federal costs), and Marjorie Miller (for the state 
and local impact).
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                    compliance with public law 104-4

    H.R. 3024 contains intergovernmental mandates as defined in 
Public Law 104-4, but the direct cost of these mandates would 
not exceed the $50 million threshold established by that act. 
As described in the Congressional Budget Office letter included 
above, the mandate imposed on the Government of Puerto Rico is 
to hold referenda on the question of self government, at a cost 
of between $5-10 million each for holding elections and voter 
education. The benefit to the United States would be to clarify 
the intentions of the citizens of Puerto Rico regarding their 
status. The benefits for Puerto Rican citizens (who also hold 
reduced U.S. citizenship) is to provide them an opportunity to 
achieve self government status or to become a State of the 
United States, in addition to their status quo as citizens of 
the U.S. Territory. Paying for this intergovernmental mandate 
will not affect competitive balance between Puerto Rico and the 
private sector. H.R. 3024 provides funding for the referenda by 
earmarking existing Federal excise taxes on foreign rum, which 
are currently collected by the Federal Government and 
transferred to the Government of Puerto Rico. These funds are 
intended to provide at least partial funding, which could be 
supplemented by appropriations from the Government of Puerto 
Rico. Funding would be made available to the Government of 
Puerto Rico for distribution. Central ruling bodies of various 
political parties or other qualifying entities advocating a 
particular choice for Puerto Rico's political status would be 
eligible to receive grants. H.R. 3024 is not intended to 
preempt any Puerto Rican law.
    H.R. 3024 imposes no private sector mandates.

                        changes in existing law

    If enacted, H.R. 3024 would make no changes in existing 
laws.
                            DISSENTING VIEWS

    H.R. 3024 gives the people of Puerto Rico the same kinds of 
promises they have heard before about plebiscites and future 
Congressional actions to resolve status. This bill will not 
resolve the status question because it would allow 15 years or 
more the additional reconsideration and modification both by 
future Congress and by the voters of Puerto Rico.
    The time frame set out under H.R. 3024 is ridiculously long 
and gives the United States several possibilities to back out 
of granting a new status. Under this bill, statehood or 
independence would not be granted until the year 2011 at the 
earliest. Foot dragging by either Congress or Puerto Rico could 
extend that date indefinitely. An entirely new generation of 
Congress, and potentially four new presidential 
administrations, would determine whether or not Puerto Rico 
changes status. The bill calls for 3 rounds of votes by both 
Congress and the people of Puerto Rico with years of waiting in 
between for the people of Puerto Rico. Congress need simply not 
to act on either the transition legislation or the 
implementation legislation in order to postpone a final 
resolution of the status question.
    During mark up of this legislation by the Resources 
Committee, Representative George Miller (D-CA) sought to give 
credibility to the decisionmaking process contained in the bill 
and to provide certainty as decisions are made. The first vote 
by the people of Puerto Rico would determine future status. If 
statehood or independence won, the second vote would decide 
implementation of the new status. The Miller amendment would 
have ensured that the results of the status vote would be 
respected by Congress. If statehood won, it would no longer be 
a question of ``if'' but simply ``when'' Puerto Rico became a 
State. The same would be true for independence. The Miller 
amendment was a truth-in-packaging amendment intended to force 
Congress to be honest with the voters of Puerto Rico about its 
commitment to respecting the outcome of the plebiscite. Under 
the Miller amendment, the status question would have been 
decided and implementation would have been underway by the 
100th anniversary of Puerto Rico's becoming a territory of the 
United States. Under the approach of the legislation, nothing 
will be resolved by 1998, or for years--or even decades--
thereafter.
    The Administration was provided no role in either the 
formulating or consideration of the legislation. Although a 
hearing was held on the bill, the Administration was not 
invited to testify. The Committee was never given the 
opportunity to receive the expertise of the Departments of 
State, Justice, Defense, or the Interagency Working Group on 
Puerto Rico. Surely, if Congress intends to admit a new State 
or support a new independent nation, it would not do so without 
first learning how such a change would affect the several 
States.
    There have been 3 votes on status in Puerto Rico and the 
gap between those supporting statehood and those supporting 
commonwealth has been narrowing substantially. The results of 
the vote taken in 1952 was 76.5% for commonwealth and 23.5% for 
statehood, Many independence supporters boycotted this 
election. The 1967 plebiscite found that 60.41% supported 
commonwealth, 38.99% supported statehood, and 0.6% supported 
independence from the United States. In the 1993 plebiscite 
48.4% of voters supported commonwealth, 46.2% supported 
statehood, and 4.4% supported independence.
    In order for there to be a status change in Puerto Rico, 
that change must be the desire of most people living on the 
islands. It is essential that a territory fully support and be 
prepared for the responsibilities it will encounter prior to 
admission into the Union. Our nation would suffer serious 
consequences if a State were brought into the Union without the 
consent of it citizens. Therefore, any legislation leading to 
such a possibility must be conducted in an open manner with 
full participation of the Puerto Rico voters.
    H.R. 3024 as introduced did not include the possibility of 
retaining commonwealth, the status that has won all three 
elections and is advocated by one of the two major political 
parties in Puerto Rico. This effort to constrain the options 
offered the people of Puerto Rico was unacceptable and drew 
criticism from Congressman Miller and the Clinton 
Administration. Shortly, after introduction of the bill, polls 
were taken showing that overwhelmingly even statehood 
supporters believed that commonwealth should be included in the 
legislation. Eventually, the definition of commonwealth added 
to the bill was written by statehood supporters and would 
appear on the ballot without the support of the Commonwealth 
party.
    H.R. 3024 remains transparently skewed to illicit a 
specific response. In the first round of voting, the bill puts 
statehood and independence, two diametrically opposing options, 
together as a new status for the obvious purpose of assuring 
defeat of Commonwealth. Once that occurs, there would be a 
second round run-off between commonwealth and independence 
which must almost certainly result in a victory for statehood, 
the option favored by the sponsors of this legislation. If this 
bill proceeds, most of the voters of Puerto Rico will believe 
Congress tilted the process in order to eliminate their choice, 
and they will be right.
    This bill also calls for the introduction of part of a new 
status into the available options. The status of free 
association is lumped together with independence. These are two 
very separate and distinct status options.
    A law enacted on July 3, 1950 authorized a constitutional 
convention in Puerto Rico to draft a constitution. The 
constitution has been in effect since July 3, 1952. The 
constitution established a government which was given the 
Spanish name of ``Estado Libre Asociado'' and the English name 
of ``Commonwealth''. ``Estado Libre Asociado'' was purposely 
translated by the constitutional convention into English as 
``Commonwealth'' so it would not be mistaken for its literal 
translation of ``Free Associated State''. At the time, the 
purpose was to avoid the suggestion that Puerto Rico intended 
to be a State of the Union. However, it now can be confused 
with the status of free association.
    Congress spent several years working out the Compacts of 
Free Association with the Trust Territories of the Pacific and 
Palau. These compacts require a closer relationship than would 
be given an independent nation. To combine and confuse these 
two options is another problem with this bill. Free Association 
as Congress and the international community uses the term, has 
never been called for by Puerto Rico voters. During Resource 
Committee consideration, Representative Eni F.H. Faleomavaega 
(D-AS) attempted to delete the term from the bill but, with 
little discussion, was not successful.
    Additionally, the status ballot is unmanageably long, 
confusing and cumbersome. It should be shorter and more 
intelligible. For example, it is not clear if those supporting 
Commonwealth in the first round are allowed to move on to the 
second round.
    The issue of what happens to the almost 4 million U.S. 
citizens if independence is selected is yet another problem 
with this legislation. As introduced, the bill automatically 
took U.S. citizenship away from all Puerto Ricans if 
independence was selected. At the Resources Committee 
consideration an amendment was accepted which appears to temper 
the original language some but still leaves the question of 
whether Puerto Ricans with U.S. citizenship would be treated 
differently than other U.S. citizens living in foreign 
countries. This amendment was added without the Committee 
receiving input from either experts in the area of citizenship 
or constitutional law. Dealing with citizenship issues would be 
more appropriate in the transition or implementation 
legislation than being made part of the ballot on the question 
of status. Including such language on the ballot may be 
perceived by some as a threat if independence is supported.
    Puerto Rico holds elections every four years at which time 
the Resident Commissioner, Governor, Legislature, and local 
officials are chosen. The three political parties in Puerto 
Rico are all tied to the question of status with the United 
States. The Popular Democratic Party supports Commonwealth, the 
New Progressive Party supports Statehood, and the Popular 
Independence Party supports Independence. H.R. 3024 is being 
considered during the height of the political season in Puerto 
Rico, perhaps adding to the level of hyperbole.
    There continues to be strong division among the voters of 
Puerto Rico as to its status with the United States. The almost 
4 million U.S. citizens living in Puerto Rico are not afforded 
the same opportunities as those living in the several States 
under the current status arrangement. That is unacceptable, and 
should be addressed. Unfortunately, H.R. 3024 is not the 
solution.


                                   George Miller.
                                   Eni Faleomavaega.
                            ADDITIONAL VIEWS

    I would like to take this opportunity to expand upon my 
previous remarks made before the Resources Committee during the 
markup of H.R. 3024: The United States-Puerto Rico Political 
Status Act. As anyone will acknowledge, the 3.8 million 
American citizens in Puerto Rico should have the same degree of 
rights, advantages, liberties, and responsibilities as any 
other U.S. citizen.
    Since 1917 the people of Puerto Rico have contributed to 
the social, economic, and cultural history of the United 
States. They have fought alongside other Americans in war and 
shared in our times of domestic struggle.
    Currently, Puerto Rico is living under territorial status. 
For decades, this status and the special Section 936 tax 
provision of the U.S. Internal Revenue Code helped Puerto 
Rico's economy to mature and develop. to be sure, Section 936 
was instrumental in transforming Puerto Rico from an 
impoverished economic state to one of growth and opportunity.
    Unfortunately, times have changed. The dramatic expansion 
of the global marketplace has begun to show its impact on 
Puerto Rico's economy. Puerto Rico now faces an unpredictable 
investment environment in which foreign competition, especially 
in labor intensive jobs, is on the rise. Moreover, as corporate 
profits steadily grew, new investment and job creation began to 
dwindle on the Island. In fact, employment commitments by non-
local investors in Puerto Rico, the true beneficiaries of the 
936 tax status, have fallen from over 11,000 jobs in 1987 to 
4,900 jobs in 1995.
    Under the Territorial Clause of the Constitution, Congress 
clearly has within its powers to legislate on the future 
political and economic status of Puerto Rico. For several years 
now the 936 tax status has been under attack in Congress. Once 
seen as an engine of economic development, 936 is today more 
commonly thought of as a facilitator of corporate welfare and 
economic instability.
    In many ways the 936 tax status is at an end. Both the 
104th Congress and the Clinton Administration have taken steps 
to fundamentally reform Puerto Rico's economic relationship 
with the United States. Should 936 status be officially 
terminated without providing an alternative status neutral job 
creating program, it is reasonable to assume that the Puerto 
Rican economy will experience increased job loss (unemployment 
is already at 12 percent) and economic uncertainty.
    Clearly, the economy of Puerto Rico is inexorably tied to 
the future of the Island's political status. During the 1993 
plebiscite, advocates of retaining Commonwealth status declared 
that Puerto Ricans would be able to retain the 936 tax status 
and permanently secure the ``bilateral pact'' with the United 
States that could not be altered without mutual consent. As 
this Congress has clearly indicated, these assertions are 
simply not the case. The United States has the express 
authority to dictate the future of Puerto Rico's economic and 
political status without the approval of the American citizens 
in Puerto Rico.
    Fortunately, the United States has chosen to recognize the 
right of the people of Puerto Rico to self-determination, 
including the right to approve any permanent political status 
which will be established upon termination of the current 
unincorporated territory status. For years, Puerto Rico has 
tried to address the issue of political status through 
unsuccessful referenda. This situation has led to a significant 
degree of confusion about the future of the Island.
    The introduction of The United States-Puerto Rico Political 
Status Act (H.R. 3024), of which I am an original co-sponsor, 
is consistent with the established right of all Puerto Ricans 
to choose their own political destiny. It is the goal of the 
bill to help Puerto Rico move towards a process of full self 
government and end almost 100 years of political limbo.
    For my part, I have indicated many times before that if I 
were given the choice of retaining territorial status or 
ratifying Puerto Rico as the 51st state I would definitively 
choose the latter. Territorial status has certainly served the 
people of Puerto Rico well. It is time however, to move on for 
both political and economic reasons.
    Politically, the fact that almost 4 million citizens cannot 
vote for the President is egregious. If Puerto Rican's can 
fight in war and potentially die for our nation then they 
should have the opportunity to vote for the person who decides 
to send them into battle.
    Additionally, the fact that Congress can make substantial 
funding and legislative decisions upon the people of Puerto 
Rico without their consent or participation is contradictory to 
the spirit of Democracy. If Puerto Rico becomes a state, the 
Island will boast the full voting strength of at least 7 
members in the House of Representatives and two in the Senate. 
These elected officials will be able to fight for the rights 
and privileges of the Americans living in Puerto Rico.
    Economically, the citizens in Puerto Rico currently live in 
a state of colonialism. The rights and opportunities that are 
conferred upon the individual states are not equally attributed 
to the territory of Puerto Rico.
    Due to Puerto Rico's current federal tax status many U.S. 
programs and entitlements are summarily capped. The reason for 
the cap has traditionally been because of lack of payment of 
federal income taxes.
    Unfortunately, the advantage that Puerto Rico has received 
in return. Section 936 tax status, is not transferred to the 
working people and families of Puerto Rico. In fact over 24% of 
the Puerto Rican economy in 1995 was held by non-resident 
businesses and corporations. Moreover, many of these 
businesses, in particular large pharmaceutical companies, have 
saved as much as $187,000 per employee annually through Section 
936 tax credits. This far exceeds the wages earned by these 
employees, and signifies huge profit margins for the corporate 
subsidiaries. Clearly, Section 936, which was designed to 
facilitate investment in Puerto Rico has worked, but it has 
done so at the expense of the Puerto Rican people. Large 
companies have greatly increased their wealth while working 
families have struggled. Per capita income in Puerto Rico is 
more than 50% lower than that of the poorest states in the 
continental United States.
    Concurrently, Puerto Rican residents have not been able to 
enjoy the same benefits as the states when it comes to federal 
entitlement and discretionary spending.
    In my own state of Rhode Island one of the most important 
entitlement programs is Medicaid. In 1994 Rhode Island received 
almost $500 million Medicaid entitlements to help ensure health 
and long-term care coverage to poor families and disadvantaged 
children. Rhode Island has a total population of less than 1 
million in which approximately 19 percent was enrolled in the 
Medicaid program.
    By contrast, Puerto Rico's Medicaid disbursement was capped 
at just over $122 million for FY95 for a population that is 
almost 4 times larger. If we compare this statistic to states 
like Kentucky and South Carolina, which have similar 
populations to Puerto Rico, we can see first hand the 
tremendous disparity that the Island faces in Medicaid 
entitlements. In 1995, Kentucky and South Carolina received 
about $1.5 and $1.4 billion in Medicaid disbursements, 
respectively, a significant difference from that of Puerto 
Rico.
    The majority of Puerto Ricans are clearly experiencing a 
second class standard of living. In 1992 over 2.5 million or 
66% of Puerto Ricans were classified as living below the 
poverty level. In the same year almost 50% of the people did 
not have health insurance. With regard to the current Medicaid 
formula, Puerto Rico, with its particularly high percentage of 
below poverty citizens, would stand to significantly increase 
health care coverage for all who qualify for the program.
    Adequate funding for education is equally lacking. In 1993, 
the average per pupil expenditure in public and secondary 
education was $1,779 as compared to almost $6,700 in Rhode 
Island. If Puerto Rico was considered with the individual 
states the Island would rank last in this important category. 
Additionally, in the same year, 50% of Puerto Ricans did not 
graduate from high school and less than 15% of the population 
attained a bachelor's or more advanced degree.
    To be sure, the foundation of Puerto Rico's future 
workforce is not being trained to compete for the high skill/
high wage jobs of the 21st century. Under territorial status, 
the children and Puerto Rican students are disproportionately 
handicapped to excel in the global marketplace.
    Combined, the factors of an ineffectual 936 tax status, 
capped federal funds, and reduced overall discretionary 
spending, have led to a substantially lower standard of living 
for all the American citizens living on the Island. Indeed, the 
aforementioned statistics seem to indicate that Puerto Rico is 
not prospering under territorial status.
    As I have indicated, with the very real prospect of Section 
936 phase-out, Puerto Rico has come to an economic crossroads 
that can only be addressed by significant political reform. The 
need for full self government is at hand. If the people of 
Puerto Rico choose the Statehood option, it is my contention 
that the Island will begin to develop the seeds of true 
economic growth and prosperity. This development will not be 
based on the failed notion of trickle down economics where the 
large companies have grown rich while working families remain 
poor. Rather, with equal participation in U.S. affairs, Puerto 
Rico will be able to take advantage of every opportunity that 
the Federal Government and separate states have to offer.
    Ultimately, the choice between territorial status and 
statehood is a choice between stagnation and growth, and 
between the past and the future. The privileges of statehood 
are many where the opportunities of territorial status are 
steadily being erased. I have allied myself with the advocates 
of statehood because I believe that full integration with the 
United States is the only way to end centuries of colonialism 
and disenfranchisement for the people of Puerto Rico.
    The United States-Puerto Rico Political Status Act seeks to 
address this issue in good faith. Only by first addressing the 
political question can we hope to create an environment of 
prosperity for all the Americans living in Puerto Rico.
                                                Patrick J. Kennedy.



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