[House Report 105-38]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     105-38
_______________________________________________________________________


 
                 AMERICAN SAMOA DEVELOPMENT ACT OF 1997

                                _______
                                

 March 20, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


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

                              R E P O R T

                        [To accompany H.R. 757]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 757) to develop the economy of Samoa, having considered 
the same, report favorably thereon with an amendment and 
recommend that the bill as amended do pass.
    The amendment (stated in terms of the page and line number 
of the introduced bill) is as follows:
    On page 2, line 11, strike ``shall'' and insert ``may''.

                          PURPOSE OF THE BILL

    The purpose of H.R. 757 is to develop the economy of Samoa.

                  BACKGROUND AND NEED FOR LEGISLATION

    American Samoa is an unorganized, unincorporated territory 
of the United States. The five easternmost islands of the 
Samoan archipelago and the southernmost island of the Tokelau 
chain constitute what was previously named Eastern Samoa and is 
today called American Samoa. Some 55,000 people reside in the 
islands, predominantly all Samoans, including many relatives 
from the western Samoan islands of the separate sovereign 
nation of Western Samoa.
    The United States Congress has plenary authority over all 
possessions, which includes the territory of American Samoa, 
pursuant to the ``territorial clause'' of the U.S. 
Constitution, Article IV, Section 3, Clause 2. In 1929, 
Congress delegated this authority for the islands of eastern 
Samoa to the President of the United States, who as Commander-
in-Chief, had administered the easternmost islands of the Samoa 
archipelago through a continuous Naval presence since 1900. 
United States Naval contact with Samoa began as early as 1839. 
While the President initially delegated this authority to the 
Secretary of the Navy, in 1951 the Secretary of the Interior 
assumed responsibility for the islands.
    The existing Secretarial Order provides for self-governance 
of American Samoa under a republican form of government 
pursuant to a locally-adopted constitution. However, unlike the 
local constitutional governments of the United States 
territories of Puerto Rico and the Northern Mariana Islands, 
federal law requires Congressional approval of any changes to 
the American Samoa Constitution. In 1977 the voters of American 
Samoa began to elect the Governor in place of a Presidentially-
appointed one. Since 1981, American Samoa has been represented 
in Congress by a delegate in the House of Representatives.
    American Samoa's economy is driven mainly by two tuna 
canneries, one garment manufacturing plant and the local 
government. The two tuna canning plants have provided stable 
employment for the past 30 years. However, there is increasing 
concern in American Samoa that businesses operating in the 
territory will no longer be competitive with other countries 
which have lower wages, fewer environmental restrictions and a 
better geographic position. Such economic concerns are largely 
based on recent U.S. and international changes in trade and tax 
policies, principally the reduction in tariffs under North 
American Free Trade Agreement and the General Agreement on 
Tariffs and Trade, and the repeal of the possessions tax credit 
(Section 936 of the Internal Revenue Code), which are 
accentuated given that American Samoa is outside of the United 
States customs territory. The tuna operations employ one-third 
of the labor force, and with derivative businesses account for 
over one-half of the economic activity in the territory.
    The world economy is rapidly changing and American Samoa 
does not have the technical expertise to develop a 
comprehensive approach to guide its economy through this period 
of transition. H.R. 757 would establish a short-term, unpaid 
Presidential commission to temporarily bring together the 
expertise of individuals experienced in tax and trade policy 
and economicdevelopment who would analyze the territory's 
current economic condition and provide recommendations to Congress and 
the leaders in Samoa.
    The goal of H.R. 757 is for the private-public Commission 
to formulate timely and effective fiscal, trade, and economic 
models to be used to increase the diversity and size of the 
Samoan economy. Recommendations of the Commission for private 
sector led development in the territory require private sector 
input, while considering Samoa's unique historical and cultural 
characteristics, geographical location, infrastructure, natural 
resources of the land and the surrounding oceans, and the 
political, social, and legal relations with nearby Pacific 
islands.
    The Commission will examine the benefits of including 
American Samoa in the United States customs territory, and 
thereby in the existing North American Free Trade Agreement, 
which only includes the U.S. territory of Puerto Rico. In 
addition, the Commission will examine the benefits of including 
American Samoa in any future Asia-Pacific free trade agreement. 
As part of the examination of American Samoa as part of 
existing and prospective free trade agreements, the Commission 
will focus on possible trade and economic models in which 
American Samoa is the focal point of joint economic activities 
with adjacent island areas: Western Samoa, Tonga, Niue, the 
Cook Islands and Tokelau.
    The Commission will be comprised of six members appointed 
by the President. Three of the Members shall be from 
nominations from the Governor of American Samoa and the 
Secretary of the Interior. Members of the Commission will serve 
without compensation. While the American Samoa Development Act 
commission is non-paid, funding for any logistical and 
administrative support by the Department of the Interior comes 
from ongoing territorial technical assistance. There is no 
requirement to reimburse members of the Commission for travel 
and other expenses.
    A report with recommendations of the Commission are to be 
submitted to the President and the Congressional committees of 
jurisdiction no later than June 30, 1999. The Commission 
terminates three months after the transmission of the report 
and recommendations.
    The Commission provided for in H.R. 757 is similar to the 
provision which was the subject of a Committee on Resources 
hearing and became Section 8 of H.R. 1332, which passed the 
House in the 104th Congress by a vote of 398 to 5. The Senate 
adjourned before acting on the legislation in the 104th 
Congress. In addition, H.R. 757 is nearly identical to Section 
11 of S. 210 of the current Congress. The Senate Committee on 
Energy and Natural Resources held a hearing on S. 210 on 
February 6, 1997, where the Administration testified in support 
of the goals of the legislation but preferred they be 
accomplished at the discretion of the Secretary of the Interior 
under existing authority, instead of being directed in law by 
Congress.

                            committee action

    H.R. 757 was introduced on February 13, 1997, by 
Congressman Eni F.H. Faleomavaega (D-AS). The bill was referred 
to the Committee on Resources. On March 12, 1997, the Full 
Resources Committee met to consider H.R. 757. Congressman 
Faleomavaega offered a technical amendment regarding the 
authorization for Members of the Commission to be reimbursed 
for expenses incurred related to their work on the Commission 
was changed from ``shall'' to ``may'' be reimbursed for travel, 
subsistence and other necessary expenses incurred by them in 
performance of their duties of the Commission. The amendment 
was adopted by voice vote. The bill, as amended, was then 
ordered favorably reported to the House of Representatives by 
voice vote.

            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)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                  federal advisory committee statement

    The functions of the proposed advisory committee authorized 
in H.R. 757 are not currently being nor could they be performed 
by one or more agencies, an advisory committee already in 
existence or by enlarging the mandate of an existing advisory 
committee.

                   constitutional authority statement

    Article I, section 8, and Article IV, section 3 of the 
Constitution of the United States grants Congress the authority 
to enact H.R. 757.

                        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. 757. 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. 
757 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. 757.
    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. 757 
from the Director of the Congressional Budget Office.

               congressional budget office cost estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 19, 1997.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 757, the American 
Samoa Development Act of 1997.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kristen 
Layman.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 757--American Samoa Development Act of 1997

    CBO estimates that implementing H.R. 757 would cost the 
federal government $600,000 over fiscal years 1997 through 
1999, assuming that the amounts authorized by the bill are made 
available. H.R. 757 would not affect direct spending or 
receipts; therefore, pay-as-you-go procedures would not apply. 
This bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
and would not have a significant impact on the budgets of 
state, local, or tribal governments.
    H.R. 757 would create a six-member commission to make 
recommendations to the President and the Congress on policies 
necessary to provide a secure local economy in American Samoa 
through 2020. The bill would require the commission to submit a 
report to the President, the Senate Committee on Energy and 
Natural Resources, and the House Committee on Resources no 
later than June 30, 1999. The report would include the 
recommendations of the commission, an analysis of the 
capability of American Samoa to meet projected needs, 
projections of the need for direct or indirect federal 
assistance for operations or infrastructure, and a historical 
overview of American Samoa and its relationship to the United 
States. The commission would terminate three months after the 
submission of the report.
    In addition to the direct costs of the commission at the 
authorized level of $600,000, implementing H.R. 757 could 
result in further costs if other federal agencies detail 
employees to the commission. Any such additional costs are not 
likely to be significant.
    The CBO staff contact for this estimate is Kristen Layman. 
This estimate was approved by Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                    compliance with public law 104-4

    H.R. 757 contains no unfunded mandates.

                        changes in existing law

    If enacted, H.R. 757 would make no changes in existing law.

                                
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