[Senate Report 104-101]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 134
104th Congress                                                   Report
                                 SENATE

 1st Session                                                    104-101
_______________________________________________________________________


 
                    INSULAR DEVELOPMENT ACT OF 1995

                                _______


    June 30 (legislative day, June 19), 1995.--Ordered to be printed

_______________________________________________________________________


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 638]
    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 638) to authorize appropriations for 
United States insular areas, and for other purposes, having 
considered the same, reports favorably thereon with an 
amendment and recommends 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. TERRITORIAL AND FREELY ASSOCIATED STATE INFRASTRUCTURE 
                    ASSISTANCE.

    Section 4(b) of Public Law 94-241 (90 Stat. 263) as added by 
section 10 of Public Law 99-396 (99 Stat. 837, 841) is amended by 
deleting ``until Congress otherwise provides by law.'' and inserting in 
lieu thereof:
    ``except that, for fiscal years 1996 and thereafter, payments to 
the Commonwealth of the Northern Mariana Islands pursuant to the multi-
year funding agreements contemplated under the Covenant shall be 
limited to the amounts set forth in the Agreement of the Special 
Representatives on Future Federal Financial Assistance of the Northern 
Mariana Islands, executed on December 17, 1992 between the special 
representative of the President of the United States and special 
representatives of the Governor of the Northern Mariana Islands and 
shall be subject to all the requirements of such Agreement with any 
additional amounts otherwise made available under this section in any 
fiscal year and not required to meet the schedule of payments set forth 
in the Agreement to be provided as set forth in subsection (c) until 
Congress otherwise provides by law.
    ``(c) The additional amounts referred to in subsection (b) shall be 
made available to the Secretary for obligation as follows:
          (1) for fiscal year 1996, all such amounts shall be provided 
        for capital infrastructure projects in American Samoa;
          (2) for fiscal years 1997 and thereafter, all such amounts 
        shall be available solely for capital infrastructure projects 
        in Guam, the Virgin Islands, American Samoa, the Commonwealth 
        of the Northern Mariana Islands, the Republic of Palau, the 
        Federated States of Micronesia and the Republic of the Marshall 
        Islands: Provided, That, in fiscal year 1997, $3 million of 
        such amounts shall be made available to the College of the 
        Northern Marianas and beginning in fiscal year 1997, and in 
        each year thereafter, not to exceed $3 million may be 
        allocated, as provided in Appropriation Acts, to the Secretary 
        of the Interior for use by Federal agencies or the Commonwealth 
        of the Northern Mariana Islands to address immigration, labor, 
        and law enforcement issues in the Northern Mariana Islands, 
        including, but not limited to detention and corrections needs. 
        The specific projects to be funded shall be set forth in a 
        five-year plan for infrastructure assistance developed by the 
        Secretary of the Interior in consultation with each of the 
        island governments and updated annually and submitted to the 
        Congress concurrent with the budget justifications for the 
        Department of the Interior. In developing and updating the five 
        year plan for capital infrastructure needs, the Secretary shall 
        indicate the highest priority projects, consider the extent to 
        which particular projects are part of an overall master plan, 
        whether such project has been reviewed by the Corps of 
        Engineers and any recommendations made as a result of such 
        review, the extent to which a set aside for maintenance would 
        enhance the life of the project, the degree to which a local 
        cost-share requirement would be consistent with local economic 
        and fiscal capabilities, and may propose an incremental set 
        aside, not to exceed $2 million per year, to remain available 
        without fiscal year limitation, as an emergency fund in the 
        event of natural or other disasters to supplement other 
        assistance in the repair, replacement, or hardening of 
        essential facilities: Provided, That the cumulative amount set 
        aside for such emergency fund may not exceed $10 million at any 
        time.
    ``(d) Within the amounts allocated for infrastructure pursuant to 
this section, and subject to the specific allocations made in 
subsection (c), additional contributions may be made, as set forth in 
Appropriations Acts, to assist in the resettlement of Rongelap Atoll: 
Provided, That the total of all contributions from any Federal source 
after January 1, 1995 may not exceed $32 million and shall be 
contingent upon an agreement, satisfactory to the President, that such 
contributions are a full and final settlement of all obligations of the 
United States to assist in the resettlement of Rongelap Atoll and that 
such funds will be expended solely on resettlement activities and will 
be properly audited and accounted for. In order to provide such 
contributions in a timely manner, each Federal agency providing 
assistance or services, or conducting activities, in the Republic of 
the Marshall Islands, is authorized to make funds available, through 
the Secretary of the Interior, to assist in the resettlement of 
Rongelap. Nothing in this subsection shall be construed to limit the 
provision of ex gratia assistance pursuant to section 105(c)(2) of the 
Compact of Free Association Act of 1985 (P.L. 99-239, 99 Stat. 1770, 
1792) including for individuals choosing not to resettle at Rongelap, 
except that no such assistance for such individuals may be provided 
until the Secretary notifies the Congress that the full amount of all 
funds necessary for resettlement at Rongelap has been provided.''

SEC. 2. FEDERAL MINIMUM WAGE.

    Effective thirty days after the date of enactment of this Act, the 
minimum wage provisions, including, but not limited to, the coverage 
and exceptions provisions, of section 6 of the Fair Labor Standards Act 
of June 25, 1938 (52 Stat. 1062), as amended, shall apply to the 
Commonwealth of the Northern Mariana Islands, except:
          (a) on the effective date, the minimum wage rate applicable 
        to the Commonwealth of the Northern Mariana Islands shall be 
        $2.75 per hour;
          (b) effective January 1, 1996, the minimum wage rate 
        applicable to the Commonwealth of the Northern Mariana Islands 
        shall be $3.05 per hour;
          (c) effective January 1, 1997 and every January 1 thereafter, 
        the minimum wage rate shall be raised by thirty cents per hour 
        or the amount necessary to raise the minimum wage rate to the 
        wage rate set forth in section 6(a)(1) of the Fair Labor 
        Standards Act, whichever is less; and
          (d) once the minimum wage rate is equal to the wage rate set 
        forth in section 6(a)(1) of the Fair Labor Standards Act, the 
        minimum wage rate applicable to the Commonwealth of the 
        Northern Mariana Islands shall thereafter be the wage rate set 
        forth in section 6(a)(1) of the Fair Labor Standards Act.

SEC. 3. REPORT.

    The Secretary of the Interior, in consultation with the Attorney 
General and Secretaries of Treasury, Labor and State, shall report to 
the Congress by the March 15 following each fiscal year for which funds 
are allocated pursuant to section 4(c) of Public Law 94-241 for use by 
Federal agencies or the Commonwealth to address immigration, labor or 
law enforcement activities. The report shall include but not be limited 
to--
          (1) pertinent immigration information provided by the 
        Immigration and Naturalization Service, including the number of 
        non-United States citizen contract workers in the CNMI, based 
        on data the Immigration and Naturalization Service may require 
        of the commonwealth of the Northern Mariana Islands on a 
        semiannual basis, or more often if deemed necessary by the 
        Immigration and Naturalization Service,
          (2) the treatment and conditions of non-United States citizen 
        contract workers, including foreign government interference 
        with workers' ability to assert their rights under United 
        States law,
          (3) the effect of laws of the Northern Mariana Islands on 
        Federal interests,
          (4) the adequacy of detention facilities in the Northern 
        Mariana Islands,
          (5) the accuracy and reliability of the computerized alien 
        identification and tracking system and its compatibility with 
        the system of the Immigration and Naturalization Service, and
          (6) the reasons why Federal agencies are unable or unwilling 
        to fully and effectively enforce Federal laws applicable within 
        the Commonwealth of the Northern Mariana Islands unless such 
        activities are funded by the Secretary of the Interior.

SEC. 4. IMMIGRATION COOPERATION.

    The Commonwealth of the Northern Mariana Islands and the 
Immigration and Naturalization Service shall cooperate in the 
identification and, if necessary, exclusion or deportation from the 
Commonwealth of the Northern Mariana Islands of persons who represent 
security or law enforcement risks to the Commonwealth of the Northern 
Mariana Islands or the United States.

SEC. 5. CLARIFICATION OF LOCAL EMPLOYMENT IN THE MARIANAS.

    (a) Section 8103(i) of title 46 of the United States Code is 
amended by renumbering paragraph (3) as paragraph (4) and by adding a 
new paragraph (3) as follows:
    ``(3) Notwithstanding any other provision of this subsection, any 
alien allowed to be employed under the immigration laws of the 
Commonwealth of the Northern Mariana Islands (CNMI) may serve as an 
unlicensed seaman on a fishing, fish processing, or fish tender vessel 
that is operated exclusively from a port within the CNMI and within the 
navigable waters and exclusive economic zone of the United States 
surrounding the CNMI. Pursuant to 46 U.S.C. 8704, such persons are 
deemed to be employed in the United States and are considered to have 
the permission of the Attorney General of the United States to accept 
such employment: Provided, That paragraph (2) of this subsection shall 
not apply to persons allowed to be employed under this paragraph.''
    (b) Section 8103(i)(1) of title 46 of the United States Code is 
amended by deleting ``paragraph (3) of this subsection'' and inserting 
in lieu thereof ``paragraph (4) of this subsection''.

SEC. 6. CLARIFICATION OF OWNERSHIP OF SUBMERGED LANDS IN THE 
                    COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS.

    Public Law 93-435 (88 Stat. 1210), as amended, is further amended 
by:
          (a) striking ``Guam, the Virgin Islands'' in section 1 and 
        inserting in lieu thereof ``Guam, the Commonwealth of the 
        Northern Mariana Islands, the Virgin Islands'' each place the 
        words appear;
          (b) striking ``Guam, American Samoa'' in section 2 and 
        inserting in lieu thereof ``Guam, the Commonwealth of the 
        Northern Mariana Islands, American Samoa'';
          (c) striking ``Guam, the Virgin Islands'' in section 2 and 
        inserting in lieu thereof ``Guam, the Commonwealth of the 
        Northern Mariana Islands, the Virgin Islands''.
With respect to the Commonwealth of the Northern Mariana Islands, 
references to ``the date of enactment of this Act'' or ``date of 
enactment of this subsection'' contained in Public Law 93-435, as 
amended shall mean the date of enactment of this section.

SEC. 7. ANNUAL STATE OF THE ISLANDS REPORT.

    The Secretary of the Interior shall submit to the Congress, 
annually, a ``State of the Islands'' report on American Samoa, Guam, 
the United States Virgin Islands, the Commonwealth of the Northern 
Mariana Islands, the Republic of Palau, the Republic of the Marshall 
Islands, and the Federated States of Micronesia that includes basic 
economic development information, data on direct and indirect Federal 
assistance, local revenues and expenditures, employment and 
unemployment, the adequacy of essential infrastructure and maintenance 
thereof, and an assessment of local financial management and 
administrative capabilities, and Federal efforts to improve those 
capabilities.

SEC. 8. TECHNICAL CORRECTION.

    Section 501 of Public Law 95-134 (91 Stat. 1159, 1164), as amended, 
is further amended by deleting ``the Trust Territory of the Pacific 
Islands,'' and inserting in lieu thereof ``the Republic of Palau, the 
Republic of the Marshall Islands, the Federated States of 
Micronesia,''.
                         Purpose of the Measure

    S. 638 was submitted by the Administration to repeal the 
current entitlement of $27.7 million annually for the 
Commonwealth of the Northern Mariana Islands (CNMI) and 
establish a new entitlement for fiscal years 1996 to 2001 of:
          (1) $6,140,000 annually to the CNMI for 
        infrastructure and impact of the Compact of Free 
        Association;
          (2) $4,580,000 annually to Guam for Compact impact; 
        and
          (3) $17 million annually for infrastructure grants to 
        American Samoa, Guam, and the Virgin Islands (limited 
        to $15 million annually to Samoa and $3 million 
        annually each to Guam and the Virgin Islands).
    As reported by the Committee the legislation would:
          (1) Restructure the present entitlement to the CNMI 
        to fulfill the terms of the 1992 Agreement with the 
        CNMI on future funding, provide support for federal and 
        local labor, immigration, and law enforcement 
        activities, fund the land grant needs of the College of 
        the Northern Marianas, and provide for the 
        infrastructure needs of the territories and freely 
        associated states;
          (2) Phase in minimum wage rates in the CNMI;
          (3) Require an annual report on the use of any funds 
        allocated for labor, immigration, or law enforcement 
        activities by federal agencies;
          (4) Require cooperation between the CNMI and the 
        Immigration and Naturalization Service;
          (5) Clarify that persons lawfully admitted into the 
        CNMI may be employed as seamen in the CNMI;
          (6) Clarify that the CNMI has the same ownership of 
        submerged lands as previously granted to Guam and the 
        other territories;
          (7) Codify the current requirement for an annual 
        State of the Islands report contained in the Senate 
        report on the fiscal year 1992 Appropriations Act; and
          (8) Make a technical correction to territorial grant 
        legislation to recognize the freely associated states 
        as successor entities to the Trust Territory of the 
        Pacific Islands.

                          Background and Need

    In 1976, Congress approved a Covenant to Establish a 
Commonwealth of the Northern Mariana Islands in Political Union 
with the United States (PL 94-241). The Covenant had been 
approved in a United Nations observed plebescite in the 
Northern Mariana Islands and formed the basis for the 
termination of the United Nations Trusteeship with respect to 
the Northern Mariana Islands. The CNMI became a territory of 
the United States and its residents became United States 
citizens. Under the terms of the Covenant certain federal laws 
would be inapplicable in the CNMI including minimum wage to 
take into consideration the relative economic situation of the 
islands and their relation to other east Asian countries. The 
CNMI was also given control over immigration into the CNMI 
since it appeared that the CNMI would have to augment its local 
labor pool with foreign workers.
    At the time of passage of the Covenant, the CNMI was still 
dependent on annual federal grants to support basic operations 
of government. Article VII of the Covenant provided for a seven 
year period of grant assistance backed by a pledge of Full 
Faith and Credit. The assistance began at $14 million and was 
indexed for inflation. A total of $191 million was provided in 
three areas: $113 million for government operations, $55 
million for capital infrastructure, and $23 million for 
economic development loans.
    Section 902 of the Covenant provided for the US and the 
CNMI to meet prior to the expiration of the seven year period 
to reach an agreement on future multi-year assistance. Section 
704(d) of the Covenant provides that the level of payments 
would continue until Congress appropriates a different amount 
or ``otherwise provides by law''. That provision had been 
insisted on by the Congress so that funding for the CNMI would 
not expire through inadvertence and to ensure that Congress 
would be consulted. In 1985, an agreement on a new seven year 
agreement was reached with the CNMI and enacted by Congress in 
1986 (sec. 10 of PL 99-396) which added a new section 3 and 4 
to PL 94-241). The new agreement provided $228 million over the 
seven year period. The agreement began to phase down 
operational grants, required development of a seven year 
infrastructure plan, and mandated certain performance 
standards.
    The new section 4(b) provides:
    ``(b) Upon the expiration of the period of Federal 
financial assistance which is provided to the Government of the 
Northern Mariana Islands pursuant to section 3 of this Act, 
payments of direct grant assistance shall continue at the 
annual level provided for the last fiscal year of the 
additional period of seven fiscal years until Congress 
otherwise provides by law.''
    The final year of funding was $27.7 million, and that level 
of funding has continued since the expiration of the seven 
years.
    On December 17, 1992, a new agreement was negotiated for a 
third seven year agreement. That new agreement terminated any 
operational assistance and provided $120 million for 
infrastructure over the term with a requirement that the CNMI 
match the federal assistance 50-50. The assistance would be 
provided on a declining basis from the federal government with 
reciprocal increases in the CNMI match to achieve the overall 
match. The agreement also specifically recognized that at its 
end the CNMI would no longer require guaranteed annual 
assistance and the entitlement would end.
    President Clinton endorsed the agreement and included the 
agreement in his budget submission. The Committee included the 
agreement in our submission on the 1993 Budget Reconciliation 
Measure since the agreement would produce savings over the 
baseline of $27.7 million/year. Agreement could not be reached 
with the House due to other concerns and the agreement was 
never approved. The Appropriations Committee, while continuing 
to provide $27.7 million annually, has restricted the use of 
the funds to the terms of the agreement and directed the use of 
the excess to other needs within the CNMI, such as the American 
War Memorial Park. In the fiscal year 1995 Appropriation for 
Interior, $7 million was set aside to support activities of the 
Departments of Labor, Justice, and the Treasury to deal with 
serious allegations of labor abuse and immigration problems.

                           cnmi labor issues

    Repeated allegations of violations of applicable federal 
laws relating to worker health and safety, concerns with 
respect to immigration problems, including the admission of 
undesirable aliens, and reports of worker abuse, especially in 
the domestic and garment worker sectors, led to the inclusion 
of the $7 million set aside to support federal agency presence 
in the CNMI. The Administration was not prepared to commit 
limited agency resources to the CNMI absent the funding, but 
with the assistance, the Department of the Interior reported to 
the Committee on April 24, 1995 that:
          (1) $3 million would be used by the CNMI for a 
        computerized immigration identification and tracking 
        system and for local projects;
          (2) $2.2 million would be used by the Department of 
        Justice to strengthen law enforcement, including the 
        hiring of an additional FBI agent and Assistant US 
        Attorney;
          (3) $1.6 million by the Labor for two senior 
        investigators as well as training; and
          (4) $200,000 by Treasury for assistance in 
        investigating violations of federal law with respect to 
        firearms, organized crime, and counterfeiting. A copy 
        of the report is included as an appendix to the 
        Committee hearing record as well as a report from the 
        Governor of the CNMI.
    In addition, the report recommends that federal law be 
enacted to phase in the federal minimum wage level in 30 cent 
increments (which is the present local requirement), end 
mandatory assistance to the CNMI when the current agreement is 
fulfilled, continue annual support of federal agencies at a $3 
million/year level (which would include funding for a detention 
facility that meets federal standards), and possible federal 
take-over of immigration. On May 24, 1995, the Administration 
transmitted legislation that would, in part, implement the 
recommendations contained in the report.
    The Administration has complicated consideration of the 
legislation by assuming its enactment in its budget submission. 
The fiscal year 1996 budget submission assumes that the present 
CNMI entitlement would be amended to provide both Compact 
impact assistance to Guam and the CNMI as well as $15 million 
in infrastructure grants to American Samoa. That assistance 
would normally be provided in discretionary accounts in 
Interior. Absent enactment of the Administration legislation, 
Appropriations would be required to add additional funds since 
the CNMI entitlement is only available to the CNMI. A more 
responsible approach would have been to request discretionary 
grants and then submit a budget amendment to conform the 
request with enactment of the legislation. If the Senate and 
the House are not able to agree on legislation, there is a 
considerable danger that Samoa will not receive needed 
assistance. In addition, the Administration's report is not 
consistent with the Administration's legislation. At least $3 
million/year would have to be deducted from either the Compact 
impact assistance to Guam and the CNMI or from the 
infrastructure grants to the territories to meet the needs of 
federal agencies in the CNMI. On May 25, 1995, the Committee 
conducted a hearing on S. 638 as well as the report on the 
CNMI, the additional legislation recommended by the 
Administration in its May 24, 1995 transmittal, and other needs 
of the territories.
    Senator Murkowski, in his letter to the governors, and 
delegates notifying them of the hearing, requested comments on 
a different approach that would continue the present 
entitlement of $27.7 million/year, but that would redirect the 
funding to provide:
          (1) completion of the seven year agreement with the 
        CNMI on infrastructure;
          (2) funding for federal agencies in the CNMI in 
        accordance with the Administration report;
          (3) cover the needs of Samoa in fiscal year 1996; and
          (4) use the excess indefinitely as a fund for 
        infrastructure needs in all the territories based on a 
        five year plan, updated annually by the Department of 
        the Interior in consultation with the territories.
    The amendment adopted by the Committee would incorporate 
the outline suggested by Senator Murkowski and in addition 
would fund the land grant institution, the College of the 
Northern Marianas. As a result of the hearing and information 
submitted to the Committee, the Committee has also adopted 
additional provisions.
    Section 2 of the Committee amendment was proposed by the 
Administration in its May 24, 1995 transmittal. The section 
would make the provisions of federal law with respect to 
minimum wage rates applicable in the CNMI, but would phase in 
the rates as presently provided by the CNMI. The Administration 
believes that federal enactment would ensure stability for the 
phase-in and would also provide federal authority for minimum 
wage enforcement in the CNMI.
    Section 3 of the Committee amendment was proposed by the 
Administration in its May 24, 1995 transmittal. The section 
would require an annual report by the Secretary of the Interior 
to ensure that any immigration or labor issues in the CNMI 
receive prompt attention and that activities under the 
initiative begun with the allocation of $7 million from funds 
earmarked for the CNMI are properly tracked.
    Section 4 of the Committee amendment was proposed by the 
Administration in its May 24, 1995 transmittal to ensure that 
there will be adequate cooperation between the CNMI and the INS 
in the identification and, if necessary, the exclusion or 
deportation of persons who represent security or law 
enforcement risks to the CNMI or the United States.
    Section 5 of the Committee amendment is designed to resolve 
a problem that has arisen in the implementation of the 
Covenant's provisions giving the CNMI control over immigration. 
Although the CNMI is part of the United States and certain 
persons are lawfully admitted into the CNMI pursuant to the 
federal legislation granting the CNMI control over immigration, 
some federal agencies have taken a tortured legal position that 
an alien legally permitted to enter and be employed in the CNMI 
is not eligible for employment as an unlicensed seaman on a 
fishing, fish processing, or fish tender vessel operating 
exclusively within the CNMI and the adjacent federal EEZ. The 
section would permit aliens lawfully admitted into the CNMI for 
employment to be so employed.
    Section 6 of the Committee amendment is a technical 
clarification. Public Law 93-435 granted ownership over 
submerged lands within three miles to the territories as 
Congress had previously done for the coastal States. At the 
time, the CNMI was part of the Trust Territory of the Pacific 
Islands for which the United States was Administering Authority 
pursuant to a Trusteeship Agreement with the United Nations. 
The Covenant to Establish a Commonwealth of the Northern 
Mariana Islands in Political Union with the United States 
approved by Public Law 94-241 extended United States 
sovereignty over the CNMI, which became a territory of the 
United States. The Covenant used a general formula to extend 
federal laws to the CNMI, but questions have remained over the 
jurisdiction over submerged lands. This section would grant the 
CNMI ownership over submerged lands seaward to three miles with 
the same limitations as are otherwise applicable to other 
territories.
    Section 7 of the Committee amendment requires the 
submission of an annual report on conditions in the territories 
and freely associated states. The report is presently being 
prepared pursuant to direction contained in the Senate Report 
(102-122) to accompany the Appropriations for the Department of 
the Interior and Related Agencies for Fiscal Year 1992. The 
report has been very useful in tracking developments in the 
islands and the Committee believes that it should continue to 
be prepared.
    Section 8 of the Committee amendment makes a technical 
correction to legislation authorizing federal agencies to 
consolidate grants and simplify forms and reporting 
requirements. The legislation refers to the Trust Territory of 
the Pacific Islands, which has been terminated. Some agencies 
have questioned whether the authority is still available to the 
successor entities that are in free association with the United 
States--the Republic of Palau, the Republic of the Marshall 
Islands, and the Federated States of Micronesia. Although the 
Committee believes that there is sufficient authority under the 
Subsidiary Agreement on the provision of services to achieve 
the objectives of this legislation, the technical correction to 
substitute the freely associated states for the term Trust 
Territory of the Pacific Islands will settle any confusion.

                          Legislative History

    On February 27, 1995, the Administration transmitted draft 
legislation that was introduced by Senator Murkowski, by 
request, on March 28, 1995 as S. 638. On May 24, 1995, the 
Administration transmitted additional legislation. On May 25, 
the Committee held a hearing on S. 638 as well as the 
additional legislative proposal although it had not yet been 
formally received. At the business meeting on June 28, 1995, 
the Committee on Energy and Natural Resources ordered S. 638, 
as amended, favorably reported.
           Committee Recommendations and Tabulations of Votes

    The Committee on Energy and Natural Resources, in open 
business session on June 28, 1995, by unanimous vote of a 
quorum present, recommends that the Senate pass S. 638, if 
amended as described herein.
    The roll call vote on reporting the measure was 20 yeas, 0 
nays, as follows:
        YEAS                          NAYS
Mr. Murkowski
Mr. Hatfield \1\
Mr. Domenici
Mr. Nickles \1\
Mr. Craig
Mr. Campbell
Mr. Thomas
Mr. Kyl
Mr. Grams
Mr. Jeffords
Mr. Burns
Mr. Johnston \1\
Mr. Bumpers
Mr. Ford \1\
Mr. Bradley
Mr. Bingaman \1\
Mr. Akaka
Mr. Wellstone
Mr. Heflin
Mr. Dorgan

    \1\ Indicates voted by proxy.
          Section-by-Section Analysis of Committee Amendments

    During the consideration of S. 638, the Committee adopted 
an amendment as a complete substitute.
    Section 1 of the amendment sets forth how the permanent 
funding presently provided to the CNMI will be obligated in the 
future. Consistent with the Administration's proposal, that 
portion of the funding not needed to meet the requirements of 
the 1992 Agreement with the CNMI will be made available for 
other insular needs. The Committee did not agree with the use 
of the funding for operational expenses of Guam and the CNMI, 
as proposed in the Administration's legislation, and believes 
that any operational needs should be reviewed on an annual 
basis and be considered within other operational needs for 
other territories. While the Committee does not object to 
appropriations to Guam or the CNMI to offset the additional 
costs attributable to the Compacts of Free Association, the 
Committee believes that those costs need to be weighed against 
the compelling needs in places such as American Samoa.
    The Committee also rejected the idea of a formula 
distribution of infrastructure funds. Given budget realities, 
it is essential that only the highest priority needs be funded. 
That may mean that the entire allocation will be obligated in 
one territory in some years. The Committee wants to emphasize 
that it does not view this allocation as a complete substitute 
for normal discretionary appropriation requests if justified. 
The intent of the allocation is to provide some measure of 
stability and planning for infrastructure needs, not to place a 
cap on requests. To accomplish that end, the Committee has 
required that the Department of the Interior, which has overall 
responsibility and authority for program assistance in the 
United States territories and the Freely Associated States, to 
prepare, and update annually, a five year plan for the 
obligation of this funding. In preparing the plan, and in 
updating it, the Committee expects the Department to consult 
closely with the chief executives of the areas. The Committee 
has included the Freely Associated States within the 
allocation, but wishes to emphasize that this should not be 
constructed as a new program for new projects. Rather, the 
Committee is trying to accommodate needs that are related to 
the Trusteeship. For example, if there are problems with 
infrastructure not identified in the Berger report, such as the 
Yap runway, then the Committee believes that consideration 
should be given to including such projects within the five year 
plan. Projects related to ongoing United States activities, 
such as the work at Ebeye, could also be considered as well as 
other Trusteeship related responsibilities, such as assistance 
in the resettlement of Rongelap.
    The Committee also believes that consideration needs to be 
given to the capability of each area to contribute to the costs 
of individual projects. Again the Committee does not believe 
that a general formula is appropriate. The present Agreement 
with the CNMI recognizes this and requires increasing levels of 
cost share over the term of the Agreement. Depending on the 
importance, cost, and nature of a particular project, the 
Committee encourages the consideration of requiring some cost 
sharing, especially to stretch these limited funds. The 
particular economic and fiscal conditions will obviously set 
parameters on what the local government can do. That also 
militates against a standard formula for all projects even 
within a particular area. The Committee has also required that 
consideration be given to setting aside some percentage of 
individual projects for maintenance. The Committee wants to 
emphasize that this is an infrastructure program and not a 
substitute for other activities, such as the OMIP or Technical 
Assistance programs, that the Committee believes have had, and 
will continue to have, long term benefits.
    The Committee does not expect that the Department will be 
prepared to fully provide the initial five year plan before 
consideration of the fiscal year 1998 budget, and accordingly 
has directed how virtually all of the fiscal year 1996 and 
fiscal year 1997 funds are to be obligated. For fiscal year 
1996, the Committee has directed that all funds not needed to 
meet the CNMI Agreement are to be made available to American 
Samoa. The Committee views the decision by the Administration 
to assume enactment of its original proposal, which it has 
since retreated from, in its budget request as reprehensible. 
The Committee was forced to choose between upholding the 
negotiated 1992 Agreement with the CNMI, which two 
Administrations have supported and which has previously been 
approved by the Committee and the Senate, and the critical 
infrastructure needs of American Samoa. Both could not be met. 
The responsible approach would have been to transmit the 
legislation and request funding for American Samoa in the 
normal process and then request a recession or other amendment 
if the legislation were approved. The Administration did not do 
that and it is likely that projects critical for health and 
safety in American Samoa will not be met. Hopefully, enactment 
of this legislation will meet some of those needs.
    For fiscal year 1997, the Committee has directed that of 
those funds not needed for the CNMI Agreement, $3 million be 
made available for the College of the Northern Marianas to fund 
its land grant status. While not an infrastructure project, the 
Committee sees no alternative to providing this important 
funding need. The Committee has also concurred in the 
Administration's request for not more than $3 million to fund 
the initiative in the CNMI related to immigration, labor, and 
law enforcement. The Committee rejected the Administration's 
request that this funding come from the infrastructure program 
in the CNMI. The costs of federal agencies should be borne by 
Federal agencies, not by the territorial governments from funds 
needed for basic infrastructure. While the Department requested 
a permanent set aside of $3 million annually, the Committee has 
provided that the allocation may not exceed $3 million. The 
Committee is concerned that federal agencies are beginning to 
assume that the Department of the Interior is a slush fund for 
activities they should fund through their budgets. The 
Departments of Justice, Labor, and the Treasury should be 
enforcing federal laws without seeking reimbursement from the 
Department of the Interior, and the Committee expects that the 
Appropriations Committee will closely monitor this activity.
    The Committee has also suggested that the Department 
consider in developing its five year plan to requesting an 
allocation to provide a fund to be available whenever a 
disaster occurs in some area. A major disaster, such as Hugo or 
Pamela, would quickly exhaust available funds. If the Secretary 
had a contingency fund, it might be possible to make greater 
use of other assistance, such as that provided by FEMA. It is 
unrealistic not to assume that there will not be another 
disaster in some area. The question is where and when and how 
bad, not whether.
    The Committee has also provided that this program could be 
used to assist in the resettlement of Rongelap. The Committee 
wants to emphasize that these funds are available only for 
resettlement at Rongelap. If the Administration or others want 
to request assistance for those individuals who, for whatever 
reason, choose not to return, there is provision under the ex 
gratia authorization of the Compact approval legislation (cf. 
section 105(c)(2) of P.L. 99-239). That request would need to 
be gauged against other discretionary appropriations and should 
not come at the expense of those seeking to resettle.
    Section 2 of the Committee amendment would federalize the 
CNMI minimum wage phase in. The Committee recognizes that the 
CNMI has enacted legislation to gradually phase in the present 
CNMI minimum wage to the federal rate, but also recognizes the 
pressures within the CNMI to alter that process. The enactment 
of this section will eliminate that internal pressure and also 
provide a firmer basis for federal law enforcement within the 
CNMI. The Committee views this section as supportive of the 
CNMI.
    Section 3 of the Committee amendment requires an annual 
report from the Secretary of the Interior each year that funds 
are allocated to the Secretary for the support of other Federal 
agencies or the Commonwealth to address immigration, labor or 
law enforcement activities. The section was recommended by the 
Administration and the Committee agrees that a full report is 
both necessary and useful. The Committee has added an 
additional item to the list proposed by the Administration and 
that is an explanation as to why federal agencies are unwilling 
or unable to perform their statutory responsibilities unless 
the Secretary of the Interior reimburses them. Congress has 
already allocated $7 million of needed territorial assistance 
to underwrite activities that Federal agencies should be doing 
normally. The limited resources available to the Secretary 
should not be consumed by other Federal agencies. The Committee 
expects that the Appropriations Committee will carefully review 
any future requests for such assistance.
    Section 4 of the Committee amendment was recommended by the 
Administration and is self explanatory.
    Section 5 of the Committee amendment deals with a 
particular problem that has arisen within the CNMI as a result 
of a cramped reading of federal law with respect to limitations 
on the employment of aliens as unlicensed seamen against the 
provisions of the Covenant for the CNMI that permit the CNMI to 
lawfully admit aliens for the purposes of employment in the 
CNMI. This section is self explanatory and is limited to the 
CNMI and the federal EEZ around the CNMI.
    Section 6 was explained in the Background and Need section 
and amends the Federal legislation conferring title to 
submerged lands to the territories to include the CNMI.
    Section 7 would codify the requirement for an annual state 
of the islands report from the Department of the Interior that 
is presently being prepared pursuant to the Senate Report 
accompanying the fiscal year 1992 appropriations measure for 
the Department of the Interior.
    Section 8 is a clarifying amendment that substitutes the 
names of the freely associated states for the term ``Trust 
Territory of the Pacific Islands'' in the statute authorizing 
federal agencies to consolidate grants and simplify reporting 
requirements.

                   Cost and Budgetary Considerations

    The Congressional Budget Office estimate of the costs of 
this measure has been requested but was not received at the 
time the report was filed. When the report is available, the 
Chairman will request that it be printed in the Congressional 
Record for the advice of the Senate.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 638. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses, other than section 2 of the Committee amendment 
that would phase in the federal minimum wage rate as presently 
provided by local legislation.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 638, as ordered reported.

                        Executive Communications

    S. 638 was proposed by the Administration. Subsequent to 
its introduction, the Administration transmitted additional 
legislation to implement its recommendations contained in its 
report on immigration, labor and law enforcement in the CNMI. 
The Executive Communications are set forth below:

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                 Washington, DC, February 27, 1995.
Hon. Albert Gore,
President, U.S. Senate,
Washington, DC.
    Dear Mr. President: Enclosed is a draft bill ``(t)o 
authorize appropriations for United States insular areas, and 
for other purposes.''
    The Department of the Interior recommends that the bill be 
introduced, referred to the appropriate committee, and enacted.
    The bill would terminate the mandatory financial assistance 
paid to the commonwealth of the Northern Mariana Islands (CNMI) 
and shift such mandatory assistance to more pressing 
territorial needs, i.e., contribution to Guam and the CNMI for 
impact of immigration caused by the Compacts of Free 
Association, and capital infrastructure construction. The bill 
would follow through on a commitment by the Congress to 
contribute to the defraying of impact costs incurred by Guam 
and the CNMI, and would represent a commitment to the 
territories by President Clinton and the Congress to address 
the territories' most pressing capital infrastructure needs. 
The draft bill is consistent with the budgetary requirements 
under ``Paygo.''
    The Covenant to Establish the Commonwealth of the Northern 
Mariana Islands in Political Union with the United States of 
America (Covenant) committed the federal government to 
mandatory funding for the CNMI for a period of seven years--
1979 through 1985. A total of $228 million in full faith and 
credit funding for a subsequent seven-year period was approved 
by the Congress in legislation (Pub. L. 99-396, 100 Stat. 840) 
that provided--

        (u) the expiration of the period of Federal financial 
        assistance * * *, payments of direct grant assistance 
        shall continue at the annual level provided for the 
        last fiscal year of the additional period of seven 
        fiscal years until Congress otherwise provides by law.

    Congress has not over the last two years approved a third 
and final financial assistance agreement, nor acted on 
Administration proposals transmitted with the 1994 and 1995 
budgets.
    With no additional provision of law by the Congress, 
however, the CNMI continues to receive $27.7 million annually 
as it did in fiscal year 1992, the final year of the second 
seven-year period.

                      provisions of the draft bill

    The draft bill addresses specific concerns shared by the 
Congress, the Administration and the insular areas.

CNMI

    The bill would authorize $6,140,000 a year for the 
Commonwealth of the Northern Mariana Islands through the year 
2001 for the purposes of capital improvement projects, 
administration and enforcement of immigration and labor laws, 
and contribution to costs of the compacts of free association. 
Flexibility would be accorded the CNMI in allocating the 
funding among such purposes. If authorized, the CNMI will have 
received a total of $120 million during the period of fiscal 
years 1993 through 2001--the equivalent of the 1992 agreement 
reached with the CNMI representatives.
    The bill would shift remaining mandatory funding to other 
priority insular needs, i.e., territorial infrastructure needs, 
and the congressional commitment to reimburse United States 
jurisdictions for the impact of the compacts of free 
association.

Guam

    When the compact of Free Association for the Marshall 
Islands and the Federated States of Micronesia was approved by 
the Congress, section 104(e)(6) of Public Law 99-239 authorized 
the payment of impact of the Compact costs incurred by United 
States Pacific island jurisdictions due to the extension of 
education and social services to immigrants from the freely 
associated states. The Palau Compact legislation (Public Law 
99-658) included Palau by reference. The Governments of Guam 
and the CNMI contend that they have incurred costs in excess of 
$75 million. While definitions of eligible costs and the 
magnitude of the costs may be in question, all agree that Guam 
and the CNMI has sustained substantial expenses due to the 
compact. With the implementation of the Palau Compact, which 
occurred on October 1, 1994, we anticipate that the problem 
will be compounded. Under the draft bill, funds to defray costs 
for the CNMI would be a part of the CNMI authorization 
contained in section 2 of the draft bill. Annual payments of 
$4.58 million for Guam would help defray Guam's expenses. The 
contributions would cease at the end of the Compact period, 
September 30, 2001.
Capital infrastructure

    The remaining $17 million in mandatory funding would be 
redirected to pressing capital infrastructure needs in American 
Samoa, Guam, and the Virgin Islands for a minimum period of six 
years. American Samoa has unfunded capital infrastructure needs 
well in excess of $100 million. Guam and the Virgin Islands 
have substantial needs in the environmental, health, and public 
safety areas.
    The draft bill would give recognition to the fact that of 
the four small United States territories, American Samoa has 
the greatest need for capital infrastructure, but lacks 
resources for financing construction.
    The bill would allow American Samoa to receive up to $15 
million annually for capital infrastructure projects. Guam and 
the United States Virgin Islands would receive up to $3 million 
annually for capital infrastructure projects related to the 
environment, health, and public safety.
    Capital infrastructure funds would be released only after 
an insular area--
          develops a capital infrastructure master plan 
        approved by the Department of the Interior and the 
        United States Army Corps of Engineers, and
          contributes five percent of the project cost to a 
        maintenance fund for the project to be expended 
        according to the project's maintenance plan:

Phaseout

    After the initial six years of mandatory funding, the 
program may be extended for an additional three-year, phaseout 
period, with grantee/federal sharing as follows: 25/75 percent 
in the first year, 50/50 percent in the second year, and 75/25 
percent in the third year. Because section 2 of the draft bill 
which includes capital infrastructure funding for the Northern 
Mariana Islands will terminate at the end of the fiscal year 
2001, the Northern Mariana Islands would participate in the 
phaseout years of the capital infrastructure program in annual 
amounts up to $3 million, like Guam and the Virgin Islands.
    The proposed bill would have no negative effect on the 
Federal budget and meets ``Paygo'' requirements by shifting the 
purposes of existing mandatory funding. Discretionary savings 
would result by shifting existing discretionary infrastructure 
funding for the purposes identified in the bill to this 
proposed replacement program.
    The Office of Management and Budget advises that there is 
no objection to presentation of this draft bill from the 
standpoint of the Administration's program.
            Sincerely,
                                  Leslie M. Turner,
                                       Assistant Secretary,
                             Territorial and International Affairs.
    Enclosures.
A BILL To authorize appropriations for United States insular areas, and 
                           for other purposes

    Be it Enacted by the United States Senate and House of 
Representatives in Congress Assembled,
    Section 1. Short Title.--This Act may be cited as the 
Insular Development Act of 1995.
    Sec. 2. Northern Mariana Islands.--There is authorized to 
be appropriated to the Secretary of the Interior for the 
Commonwealth of the Northern Mariana Islands $6,140,000, backed 
by the full faith and credit of the United States, for each of 
fiscal years 1996 through 2001, for capital improvement 
projects in the environmental, health, and public safety areas, 
administration and enforcement of immigration and labor laws, 
and contribution toward costs of the compacts of free 
association (for the same duration and purposes as are applied 
to Guam in Public Law 99-239 as amended by section 3 of this 
Act).
    Sec. 3. Impact of the Compact.--(a) Paragraph (6) of 
subsection (e) of section 104 of Public Law 99-239 (99 Stat. 
1770, 48 U.S.C. 1681 note), is amended by striking everything 
after the word ``after'' and inserting in lieu thereof the 
following language:
        September 30, 1995 and ending September 30, 2001, 
        $4,580,000 annually, backed by the full faith and 
        credit of the United States, for Guam, as a 
        contribution toward costs that result from increased 
        demands for education and social program benefits by 
        immigrants from the Marshall Islands, the Federated 
        States of Micronesia, and Palau.
    Sec. 4. Capital Infrastructure.--There is authorized to be 
appropriated to the Secretary of the Interior $17,000,000 for 
each fiscal year beginning after September 30, 1995 and ending 
September 30, 2001, backed by the full faith and credit of the 
United States, for grants for capital infrastructure 
construction in American Samoa, Guam, and the United States 
Virgin Islands, Provided, That the annual grant to American 
Samoa shall not exceed $15,000,000 and the annual grants for 
Guam and the United States Virgin Islands shall not exceed 
$3,000,000 each.
    Sec. 5. Capital Infrastructure Funding Requirements.--(a) 
No funds shall be granted under this Act for capital 
improvement projects without the submission by the respective 
government of a master plan of capital needs that (1) ranks 
proposed projects in order of priority, and (2) has been 
reviewed and approved by the Department of the Interior and the 
United States Army Corps of Engineers. The insular areas' 
individual master plans, with comments, shall be presented in 
the Department of the Interior's annual report on the State of 
the Islands, and shall be the basis for any requests for 
capital improvement funding through the Department of the 
Interior or the Congress.
    (b) Each grant by the Department of the Interior shall 
include a five percent payment into a trust fund, to be 
administered by the Governor (as trustee) of the territory in 
which the project is located, solely for the maintenance of 
such project. No funds shall be paid pursuant to a grant under 
subsection (a) of this section without the prior appropriation 
and payment by the respective territorial government to the 
trustee, of an amount equal to the federal contribution for 
maintenance of the project. A maintenance plan covering the 
anticipated life of each project shall be adopted by the 
Governor of the respective insular area and approved by the 
Department of the Interior before any grant payment for 
construction is released by the Department of the Interior.
    (c) The capital infrastructure funding authorized under 
this Act is authorized to be extended for an additional three-
year phase-out period: Provided, That each grant during the 
additional period contains a dollar sharing by each grantee and 
the grantor in the following ratios: twenty-five/seventy-five 
percent for the first year, fifty/fifty percent for the second 
year, seventy-five/twenty-five percent for the third year; 
Provided further, That funding for capital infrastructure for 
the Commonwealth of the Northern Mariana Islands shall not 
exceed $3,000,000 annually during the period of such extension.
    Sec. 6. Repeal.--Effective after September 30, 1995, no 
additional funds shall be made available under subsection (b) 
of section 4 of Public Law 94-241 (90 Stat. 263, 48 U.S.C. 1681 
note), and such subsection is repealed.
                                ------                                

                      Section-by-Section Analysis

                    insular development act of 1995

    Section 1 states the short title of the Act to be the 
``Insular Development Act of 1995.''
    Section 2 authorizes a full faith and credit appropriation 
in an annual amount of $6.14 million for fiscal years 1996 
through 2001 to the Secretary of the Interior for the 
Commonwealth of the Northern Mariana Islands (CNMI) devoted to 
the following purposes: (1) capital improvement projects in 
environmental, health, and public safety areas, (2) 
administration and enforcement of immigration and labor laws, 
and (3) contribution toward costs of the compacts of free 
association incurred by the CNMI.
    Section 3 amends the law authorizing payments to United 
States Pacific jurisdictions for costs associated with the 
compacts of free association to provide a specific $4.58 
million annual full faith and credit payment to Guam as a 
contribution toward such costs incurred by Guam.
    Section 4 authorizes a full faith and credit appropriation 
in the annual amount of $17 million for fiscal years 1996 
through 2001 to the Secretary of the Interior for capital 
infrastructure construction in American Samoa, Guam, and the 
Virgin Islands. The insular area with the greatest need, 
American Samoa, would receive annual grants of between $11 
million and $15 million; Guam and the Virgin Islands would each 
receive annual grants of up to $3 million.
    Section 5(a) provides that capital infrastructure funds 
granted under sections 2, 4, and 5 of the bill would be subject 
to master plans developed by the respective government that 
rank projects in priority order. The plans would be subject to 
review and approval by the Department of the Interior and 
United States Army Corps of Engineers.
    Section 5(b) provides that five percent of each Interior 
grant for capital infrastructure and a matching amount by the 
respective insular government be paid into trust funds solely 
for expenditure on maintenance of each project, according to a 
maintenance plan approved by Interior. The respective insular 
governor would be the trustee.
    Section 5(c) provides for extension of only the capital 
infrastructure program, authorized in section 4, for an 
additional three-year phase-out period. The federal share of 
construction grants would decrease to seventy-five percent in 
the first year, fifty percent in the second year, and twenty-
five percent in the third year, before termination of the 
program.
    Section 6, repeals subsection (b) of section 4 of Public 
Law 94-241 (which mandates continuing payments of $27.7 million 
to the Commonwealth of the Northern Mariana Islands until 
otherwise provided by law). The provision explicitly states 
that no additional funds shall be made available under this 
subsection of the 1976 law after fiscal year 1995.
                                ------                                

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                      Washington, DC, May 24, 1995.
Hon. Albert Gore,
President, U.S. Senate,
Washington, DC.
    Dear Mr. President: Enclosed is a draft bill ``(t)o provide 
for the territories, and for other purposes.''
    The Department of the Interior recommends that the bill be 
introduced, referred to the appropriate committee, and enacted.
    The bill contains two titles. The first title is comprised 
of provisions that would implement the long-term 
recommendations included in a report on Commonwealth of the 
Northern Mariana Islands (CNMI) immigration and labor issues, 
dated March 24, 1995, which was submitted to the Chairman of 
the Senate Committee on Energy and Natural Resources. The 
second title contains several miscellaneous provisions 
pertaining to the territories and freely associated states.

        title i--implementation of recommendations for the cnmi

    The Department of the Interior submitted a report to the 
Congress concerning immigration and labor problems in the CNMI. 
The result of CNMI immigration and minimum wage policies over 
the last decade is a two-tiered society in which United States 
citizen residents hold well-paying jobs, often in local 
government, while non-United States citizens, for the most 
part, work in menial, low wage jobs. The CNMI minimum wage, 
which is separate and substantially lower than the federal 
minimum wage, exacerbates CNMI societal division. Next door, 
Guam competes well in the tourist market and has paid the 
United States minimum wage for decades.
    In addition, non-United States citizen workers are too 
often the subject of intimidation and illegal acts relating to 
employee wages and hours, rape and prostitution, and illegal 
servitude. Unfettered importation of non-citizen labor, by 
itself, does not cause the problems. The more direct cause is 
the lack of effective law enforcement.
    The Interior report outlines the short-term uses of 
congressional funding, mostly in the enforcement and training 
areas. The report's five long-term recommendations require 
legislation. Our draft of such legislation appears in title I 
as sections 101 through 105.
    Section 101 would make the provisions of the federal laws 
regarding the minimum wage applicable in the Northern Mariana 
Islands, but allow for incremental growth to the higher federal 
level with thirty cent annual increases. The initial wage rate 
of $2.75 and thirty cent increases would conform to CNMI law. 
The Administration seeks federal enactment to ensure stability 
for the phase-in of the mainland minimum wage and to provide 
for federal authority for minimum wage enforcement in the CNMI.
    With the passage of this legislation, the Fair Labor 
Standards Act (coverage and exemptions) will apply in the CNMI 
in the same manner that it applies in the fifty states, except 
that the federal minimum wage will be initially set at $2.75 an 
hour with scheduled increases of 30 cents an hour on the first 
day of each January until the CNMI minimum wage reaches the 
minimum wage rate prescribed in section 6 of the Fair Labor 
Standards Act.
    The Department of the Interior transmitted draft minimum 
wage legislation to the Governor of the Northern Mariana 
Islands on May 9, 1995, in order to discuss coverage and 
exemption issues. The Department of Labor is continuing to seek 
consultations with the CNMI Governor.
    Section 102 would authorize the allocation of $3 million a 
year by the Secretary of the Interior from funds appropriated 
pursuant to the Covenant with the Northern Mariana Islands or 
the proposed Insular Development Act of 1995. The funds would 
be used by federal agencies and the CNMI for future activities 
relating to the immigration, labor, and law enforcement 
initiative in the CNMI, and for detention facility needs. The 
$7 million appropriated for fiscal year 1995 will be sufficient 
to fund enforcement activities for the year. The additional 
funding requested in section 102 would ensure that momentum for 
this initiative is maintained into the future.
    Section 103 would require that the Department of the 
Interior submit a report by March 15 each year that outlines 
(1) pertinent immigration information, (2) the treatment and 
condition of non-United States citizen contract workers, (3) 
effect of laws of the Northern Mariana Islands on federal 
interests, (4) adequacy of detention facilities in the Northern 
Mariana Islands, and (5) accuracy and reliability of the CNMI 
computerized alien identification and tracking system and its 
compatibility with the system of the Immigration and 
Naturalization Service.
    The publishing of such a report on a regular basis would 
help to ensure that immigration and labor issues will receive 
prompt attention as they arise, and that activities under the 
initiative are regularly tracked, and adjustments and 
recommendations are made, as appropriate.
    Section 104 would provide for cooperation between the CNMI 
and the Immigration and Naturalization Service (INS) in the 
identification and, if necessary, the exclusion or deportation 
of persons who represent security or law enforcement risks to 
the Commonwealth of the Northern Mariana Islands or the United 
States.
    Section 105 would require the Department of Justice, in 
consultation with the Departments of the Interior, Labor, and 
State, to promptly develop legislation for gradual but full 
implementation of the Immigration and Nationality Act (INA) in 
the CNMI if, as determined in the March 15, 1997 report, law 
enforcement in the CNMI remains deficient, or if the number of 
non-United States citizen contract workers exceeds the highest 
number of such workers present in the Northern Mariana Islands 
in 1992.
    The Department of the Interior seeks to promote self-
government that is consistent with the protection of federal 
interests. Thus, we recommend a delay until March 1997 in 
making a determination regarding the application of the 
Immigration and Nationality Act. Should the proper enforcement 
of law in the CNMI bring a halt to immigration and labor 
problems, federal interests in protecting individuals will have 
been achieved, and a federalized immigration program would be 
unnecessary. If, to the contrary, law enforcement in the CNMI 
is not aggressive or the numbers of contract workers exceeds 
1992 levels, section 105 would generate legislation for the 
application of the INA.

       title ii--provisions pertaining to the various territories

    Section 201 would make the submission of impact of the 
Compacts reports optional for concerned governors of the 
territories or the State of Hawaii, and would shift report 
preparation from the President to the respective governor. As 
potential recipients of impact of the Compacts funds, the 
territories and Hawaii are in the best position to estimate the 
impacts within their respective jurisdictions. The Department 
of the Interior would forward any reports submitted to the 
Congress with the views of the Department.
    Section 202 would specify that the American Memorial Park 
is a unit of the National Park system, and would repeal 
subsection (f) of section 5 of Public Law 95-348, which directs 
the Secretary of the Interior to transfer administration of the 
American Memorial Park on Saipan to the Government of the 
Northern Mariana Islands if the Governor requests the transfer. 
The transfer of jurisdiction has never occurred. The Department 
believes that a national park should be administered according 
to federal standards. Without clear federal jurisdiction, 
however, it is difficult to maintain federal standards for the 
park. Section 202 would clarify the Park's status as a unit of 
the National Park system and retain authority in the Secretary 
of the Interior.
    Section 203 would aid the Department of the Interior in 
streamlining its structure for addressing insular area issues. 
Current law calls for one professional staff person from the 
Department in each of the three freely associated states of the 
Republic of the Marshall Islands, the Federated States of 
Micronesia, and the Republic of Palau. The Department plans to 
employ one such staff person who would reside in Micronesia. 
Based on anticipated workload, a single employee could travel 
to and serve all three jurisdictions.
    The Department of the Interior believes that action by the 
Congress on the enclosed draft bill will be a great assistance 
in meeting policy objectives.
    The Office of Management and Budget advises that there is 
no objection to presentation of this draft bill from the 
standpoint of the Administration's program.
            Sincerely,
                                  Allen P. Stayman,
                                Acting Assistant Secretary,
                             Territorial and International Affairs.
    Enclosures.
     A BILL To provide for the territories, and for other purposes

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

                   TITLE I--NORTHERN MARIANA ISLANDS

SEC. 101. FEDERAL MINIMUM WAGE.

    Effective thirty days after enactment of this Act, the 
minimum wage provisions of section 6 of the Fair Labor 
Standards Act of June 25, 1938 (52 Stat. 1062), as amended, 
shall apply to the Commonwealth of the Northern Mariana 
Islands, except:
          (a) on the effective date, the minimum wage rate 
        applicable to the Commonwealth of the Northern Mariana 
        Islands shall be $2.75 per hour;
          (b) effective January 1, 1996, the minumum wage rate 
        applicable to the Commonwealth of the Northern Mariana 
        Islands shall be $3.05 per hour;
          (c) effective January 1, 1997 and every January 1 
        thereafter, the minimum wage rate shall be raised by 
        thirty cents per hour or the amount necessary to raise 
        the minimum wage rate to the wage rate set forth in 
        section 6(a)(1) of the Fair Labor Standards Act, 
        whichever is less; and
          (d) once the minimum wage rate is equal to the wage 
        rate set forth in section 6(a)(1) of the Fair Labor 
        Standards Act, the minimum wage rate applicable to the 
        Commonwealth of the Northern Mariana Islands shall 
        thereafter be the wage rate set forth in section 
        6(a)(1) of the Fair Labor Standards Act.
    The enactment of this legislation will result in all 
provisions of the Fair Labor Standards Act, including the 
coverage and exemptions provisions, applying in the same manner 
in the Commonwealth of the Northern Mariana Islands as they do 
on the mainland, with the exception of the minimum wage phase-
in as set forth in paragraphs (a) through (d) of this section.

SEC. 102. AUTHORIZATION.

    There is authorized to be allocated by the Secretary of the 
Interior, $3 million each year from appropriations for the 
Commonwealth of the Northern Mariana Islands under the Covenant 
approved in Public Law 94-241 of the Insular Development Act of 
1994, for use by federal agencies of the Commonwealth of the 
Northern Mariana Islands to address immigration, labor, and law 
enforcement issues in the Northern Mariana Islands, including 
detention and corrections needs.

SEC. 103. REPORT.

    The Secretary of the Interior, in consultation with the 
Attorney General and Secretaries of Treasury, Labor and State, 
shall report to the Congress by March 15 following each fiscal 
year for which funds are allocated pursuant to section 102 of 
this Act. The report shall include but not be limited to--
          (1) pertinent immigration information provided by the 
        Immigration and Naturalization Service, including the 
        number of non-United States citizen contract workers in 
        the CNMI, based on data the Immigration and 
        Naturalization Service may require of the Commonwealth 
        of the Northern Mariana Islands on a semiannual basis, 
        or more often if deemed necessary by the Immigration 
        and Naturalization Service,
          (2) the treatment and conditions of non-United States 
        citizen contract workers, including foreign government 
        interference with workers' ability to assert their 
        rights under United States law,
          (3) the effect of laws of the Northern Mariana 
        Islands on federal interests,
          (4) the adequacy of detention facilities in the 
        Northern Mariana Islands, and
          (5) the accuracy and reliability of the computerized 
        alien identification and tracking system and its 
        compatibility with the system of the Immigration and 
        Naturalization Service.

SEC. 104. IMMIGRATION COOPERATION.

    The Commonwealth of the Northern Mariana Islands and the 
Immigration and Naturalization Service shall cooperate in the 
identification and, if necessary, exclusion or deportation from 
the Commonwealth of the Northern Mariana Islands of persons who 
represent security or law enforcement risks to the Commonwealth 
of the Northern Mariana Islands or the United States.

SEC. 105. SENSE OF THE CONGRESS.

    It is the sense of the Congress that the Attorney General, 
in consultation with the Secretaries of the Interior, Labor, 
and State, and the Governor of the Northern Mariana Islands, 
should promptly develop legislation, after publication of the 
March 15, 1997 report, to gradually phase in, in an orderly 
manner, full application of the Immigration and Nationality Act 
for the Commonwealth of the Northern Mariana Islands, if, in 
the sole judgment of the Attorney General--
          (1) the application of such federal law in the 
        Commonwealth of the Northern Mariana Islands is 
        necessary for adequate law enforcement, or
          (2) the number of non-United States citizen contract 
        workers exceeds the highest number of such workers the 
        Attorney General determines to have been present in the 
        Northern Mariana Islands in 1992, and
full application of the Immigration and Nationality Act to the 
Commonwealth of the Northern Mariana Islands will not have a 
detrimental effect on the enforcement of federal immigration 
laws.

                      TITLE II--GENERAL PROVISIONS

SEC. 201. SUBMISSION OF IMPACT OF THE COMPACT REPORTS BY GOVERNORS.

    Paragraph (2) of subsection (e) of section 104 of Public 
Law 99-239 is amended by--
          (1) striking the words in the first sentence that 
        begin with the word ``President'' through and including 
        the period, and
          (2) inserting in lieu thereof the words ``Governor of 
        a United States territory, and commonwealth, or the 
        State of Hawaii may report to the Secretary of the 
        Interior by February 1 of each year, with respect to 
        the impacts of the compacts of free association on the 
        Governor's respective jurisdiction. The Secretary of 
        the Interior shall review and forward any such reports 
        to the Congress with the comments of the 
        Administration.''.

SEC. 202. AMERICAN MEMORIAL PARK.

    Secton 5 of Public Law 95-348 is amended by--
          (1) striking the period at the end of the first 
        sentence of subsection (a), and inserting in lieu 
        thereof the words ``, as a unit of the National Park 
        system.'',
          (2) striking subsection (f), and
          (3) renumbering subsections (g) and (h) as 
        subsections (f) and (g), respectively.

SEC. 203. FEDERAL PROGRAMS PERSONNEL

    Section 108 of Public Law 101-219 is amended by--
          (1) striking the words ``at least one professional 
        staff person in each of'', and
          (2) inserting in lieu thereof the words ``in the 
        freely associated states one professional staff person 
        to serve in''.
                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 638, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

      Public Law 93-435, 93d Congress, H.R. 11559, October 5, 1974

AN ACT To place certain submerged lands within the jurisdiction of the 
 governments of Guam, the Virgin Islands, and American Samoa, and for 
                             other purposes

    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That (a) 
subject to valid existing rights, all right, title, and 
interest of the United States in lands permanently or 
periodically covered by tidal waters up to but not above the 
line of mean high tide and seaward to a line three geographical 
miles distant from the coastlines of the territories of [Guam, 
the Virgin Islands] Guam, the Commonwealth of the Northern 
Mariana Islands, the Virgin Islands, and American Samoa, 
heretofore or hereafter modified by accretion, erosion, and 
reliction, and in artificially made, filled in, or reclaimed 
lands which were formerly permanently or periodically covered 
by tidal waters, are hereby conveyed to the governments of 
[Guam, the Virgin Islands] Guam, the Commonwealth of the 
Northern Mariana Islands, the Virgin Islands, and American 
Samoa, as the case may be, to be administered in trust for the 
benefit of the people thereof.
          * * * * * * *
    (d)(1) The Secretary of the Interior shall, not later than 
sixty days after the date of enactment of this subsection, 
convey to the governments of [Guam, the Virgin Islands] Guam, 
the Commonwealth of the Northern Mariana Islands, the Virgin 
Islands, and American Samoa, as the case may be, all right, 
title, and interest of the United States in deposits of oil, 
gas, and other minerals in the submerged lands conveyed to the 
government of such territory by subsection (a) of this section.
    (2) The conveyance of mineral deposits under paragraph (1) 
of this subsection shall be subject to any existing lease, 
permit, or other interest granted by the United States prior to 
the date of such conveyance. All rentals, royalties, or fees 
which accrue after such date of conveyance in connection with 
any such lease, permit, or other interest shall be payable to 
the government of the territory to which such mineral deposits 
are conveyed.
    Sec. 2. (a) Nothing in this Act shall affect the right of 
the President to establish naval defensive sea areas and naval 
airspace reservations around and over the islands of [Guam, 
American Samoa] Guam, the Commonwealth of the Northern Mariana 
Islands, American Samoa, and the Virgin Islands when deemed 
necessary for national defense.
    (b) Nothing in this Act shall affect the use, development, 
improvement, or control by or under the constitutional 
authority of the United States of the lands transferred by the 
first section of this Act, and the navigable waters overlying 
such lands, for the purposes of navigation or flood control or 
the production of power, or be construed as the release or 
relinquishment of any rights of the United States arising under 
the constitutional authority of Congress to regulate or improve 
navigation, or to provide for flood control or the production 
of power.
    (c) The United States retains all of its navigational 
servitude and rights in the powers of regulation and control of 
the lands conveyed by the first section of this Act, and the 
navigable waters overlying such lands, for the constitutional 
purposes of commerce, navigation, national defense, and 
international affairs, all of which shall be paramount to, but 
shall not be deemed to include, proprietary rights of 
ownership, or the rights of management, administration, 
leasing, use, and development of the lands and natural 
resources which are specifically conveyed to the government of 
[Guam, the Virgin Islands] Guam, the Commonwealth of the 
Northern Mariana Islands, the Virgin Islands, or American 
Samoa, as the case may be, by the first section of this Act.
    (d) Nothing in this Act shall affect the status of lands 
beyond the three-mile limit described in section 1 of this Act.
          * * * * * * *
                              ----------                              

    Public Law 94-241, 94th Congress, H.J. Res. 549, March 24, 1976

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

          * * * * * * *
    Sec. 4. (a) Section 704(c) of the foregoing Covenant shall 
not apply to the Federal financial assistance which is provided 
to the Government of the Northern Mariana Islands pursuant to 
section 3 of this Act.
    (b) Upon the expiration of the period of Federal financial 
assistance which is provided to the Government of the Northern 
Mariana Islands pursuant to section 3 of this Act, payments of 
direct grant assistance shall continue at the annual level 
provided for the last fiscal year of the additional period of 
seven fiscal years [until Congress otherwise provides by law.] 
except that, for fiscal years 1996 and thereafter, payments to 
the Commonwealth of the Northern Mariana Islands pursuant to 
the multi-year funding agreements contemplated under the 
Covenant shall be limited to the amounts set forth in the 
Agreement of the Special Representatives on Future Federal 
Financial Assistance of the Northern Mariana Islands, executed 
on December 17, 1992 between the special representative of the 
President of the United States and special representatives of 
the Governor of the Northern Mariana Islands and shall be 
subject to all the requirements of such Agreement with any 
additional amounts otherwise made available under this section 
in any fiscal year and not required to meet the schedule of 
payments set forth in the Agreement to be provided as set forth 
in subsection (c) until Congress otherwise provides by law.
    (c) The additional amounts referred to in subsection (b) 
shall be made available to the Secretary for obligation as 
follows:
          (1) for fiscal year 1996, all such amounts shall be 
        provided for capital infrastructure projects in 
        American Samoa;
          (2) for fiscal years 1997 and thereafter, all such 
        amounts shall be available solely for capital 
        infrastructure projects in Guam, the Virgin Islands, 
        American Samoa, the Commonwealth of the Northern 
        Mariana Islands, the Republic of Palau, the Federated 
        States of Micronesia and the Republic of the Marshall 
        Islands: Provided, That, in fiscal year 1997, $3 
        million of such amounts shall be made available to the 
        College of the Northern Marianas and beginning in 
        fiscal year 1997, and in each year thereafter, not to 
        exceed $3 million may be allocated, as provided in 
        Appropriation Acts, to the Secretary of the Interior 
        for use by Federal agencies or the Commonwealth of the 
        Northern Mariana Islands to address immigration, labor, 
        and law enforcement issues in the Northern Mariana 
        Islands, including, but not limited to detention and 
        corrections needs. The specific projects to be funded 
        shall be set forth in a five-year plan for 
        infrastructure assistance developed by the Secretary of 
        the Interior in consultation with each of the island 
        governments and updated annually and submitted to the 
        Congress concurrent with the budget justifications for 
        the Department of the Interior. In developing and 
        updating the five year plan for capital infrastructure 
        needs, the Secretary shall indicate the highest 
        priority projects, consider the extent to which 
        particular projects are part of an overall master plan, 
        whether such project has been reviewed by the Corps of 
        Engineers and any recommendations made as a result of 
        such review, the extent to which a set aside for 
        maintenance would enhance the life of the project, the 
        degree to which a local cost-share requirement would be 
        consistent with local economic and fiscal capabilities, 
        and may propose an incremental set aside, not to exceed 
        $2 million per year, to remain available without fiscal 
        year limitation, as an emergency fund in the event of 
        natural or other disasters to supplement other 
        assistance in the repair, replacement, or hardening of 
        essential facilities: Provided, That the cumulative 
        amount set aside for such emergency fund may not exceed 
        $10 million at any time.
    (d) Within the amounts allocated for infrastructure 
pursuant to this section, and subject to the specific 
allocations made in subsection (c), additional contributions 
may be made, as set forth in Appropriation Acts, to assist in 
the resettlement of Rongelap Atoll: Provided, That the total of 
all contributions from any Federal source after January 1, 1995 
may not exceed $32 million and shall be contingent upon an 
agreement, satisfactory to the President, that such 
contributions are a full and final settlement of all 
obligations of the United States to assist in the resettlement 
of Rongelap Atoll and that such funds will be expended solely 
on resettlement activities and will be properly audited and 
accounted for. In order to provide such contributions in a 
timely manner, each Federal agency providing assistance or 
services, or conducting activities, in the Republic of the 
Marshall Islands, is authorized to make funds available, 
through the Secretary of the Interior, to assist in the 
resettlement of Rongelap. Nothing in this subsection shall be 
construed to limit the provision of ex gratia assistance 
pursuant to section 105(c)(2) of the Compact of Free 
Association Act of 1985 (P.L. 99-239, 99 Stat. 1770, 1792) 
including for individuals choosing not to resettle at Rongelap, 
except that no such assistance for such individuals may be 
provided until the Secretary notifies the Congress that the 
full amount of all funds necessary for resettlement at Rongelap 
has been provided.
                              ----------                              

                    Public Law 95-134, 95th Congress

 AN ACT To authorize certain appropriations for the territories of the 
 United States, to amend certain Acts relating thereto, and for other 
                                purposes

          * * * * * * *

                                TITLE V

    Sec. 501. In order to minimize the burden caused by 
existing application and reporting procedures for certain 
grant-in-aid programs available to the Virgin Islands, Guam, 
American Samoa, [the Trust Territory of the Pacific Islands,] 
the Republic of Palau, the Republic of the Marshall Islands, 
the Federated States of Micronesia, and the Government of the 
Northern Mariana Islands (hereafter referred to as ``Insular 
Areas'') it is hereby declared to be the policy of the 
Congress, notwithstanding any provision of law to the contrary, 
that:
          * * * * * * *

                       PART F--MANNING OF VESSELS

                          chapter 81--general
Sec. 8101. Complement of inspected vessels.
Sec. 8102. Watchmen.
Sec. 8103. Citizenship and Naval Reserve requirements.
Sec. 8104. Watches.
[Sec. 8105. Repealed.]
          * * * * * * *

Sec. 8103. Citizenship and Naval Reserve requirements

          * * * * * * *
    (i)(1) Except as provided in [paragraph (3) of this 
subsection,] paragraph (4) of this subsection, each unlicensed 
seaman on a fishing, fish processing, or fish tender vessel 
that is engaged in the fisheries in the navigable waters of the 
United States or the exclusive economic zone must be--
          (A) a citizen of the United States;
          (B) an alien lawfully admitted to the United States 
        for permanent residence; or
          (C) any other alien allowed to be employed under the 
        Immigration and Nationality Act (8 U.S.C. 1101 et 
        seq.).
    (2) Not more than 25 percent of the unlicensed seamen on a 
vessel subject to paragraph (1) of this subsection may be 
aliens referred to in clause (C) of that paragraph.
    (3) Notwithstanding any other provision of this subsection, 
any alien allowed to be employed under the immigration laws of 
the Commonwealth of the Northern Mariana Islands (CNMI) may 
serve as an unlicensed seaman on a fishing, fish processing, or 
fish tender vessel that is operated exclusively from a port 
within the CNMI and within the navigable waters and exclusive 
economic zone of the United States surrounding the CNMI. 
Pursuant to 46 U.S.C. 8704, such persons are deemed to be 
employed in the United States and are considered to have the 
permission of the Attorney General of the United States to 
accept such employment: Provided, That paragraph (2) of this 
subsection shall not apply to persons allowed to be employed 
under this paragraph.
    [(3)] (4) This subsection does not apply to a fishing 
vessel fishing exclusively for highly migratory species (as 
that term is defined in section 3 of the Magnuson Fishery 
Conservation and Management Act (16 U.S.C. 1802)).