Welcoming America's newest commonwealth the second interim report of the Northern Mariana Islands Commission on Federal Laws to the Congress of the United States : documentary supplement

[From the U.S. Government Printing Office, www.gpo.gov]

ILIA-
92- - 147,56)
WELCOMING
'AMERICA7S
EWEST
COMMONWEALTH

The Second Interim Report of the
Northern Mariana Is-lands Commission

on Federal Laws to the
Congress of the United States

Documentary Supplement

August 1985

WELCOMING
.AMERICA7S
NEWEST
COMMONWEALTH

The Second Interim Report of the
Northern Mariana Islands Commission

on Federal Laws to the
Congress of the United States

dft

Documentary Supplement

August 1985

WELCOMIN'G
AMERICA'?S
NEWEST
COMMONWEALTH
The Second Interim Report of the
Northern Mariana Islands Commissioir

on Federal Laws to the
Congress of the United States

Documentary Supplement

S , 0CPARTMENT OF COMMERCE NOAA
h10A ST L SERVICES CENTER
` 5,
@, 16 SOUTH HOBSON AVENUE
CHARLE,STON , SC 29405-2413

August 1985'

Ln
Property Of CSC Libraw

DOCUMENTARY SUPPLEMENT

TABLE OF CONTENTS

Page

Bylaws of the Commission. 1

Minutes of Ccrnmission meetings. 11

May 7, 1980. 13

September 12, 1.980. 14

January 12, 1981. 19

November 30-Decerrber 1,- 1981. 29

July 7, 1982. 45

December 16-17, 1982. 57

March 2-9-30, 1983. 75

November 29-30, 1983. 92

July 12-13, 1984. 109

PlaY 8, 1985. 128

Canmission correspondence to Members of Congress. 143

February 5, 1981, to Senator McClure,
regarding Saipan hospital funding
(identical letters sent to Senator
Pobert Byrd and Representatives Yates
and McDade). 145

July 29, 1982, to Senator Thurmond,
regarding the bankruptcy laws
(identical letter sent to
Representative Rodino). 148

April 8, 1983, to Senator McClure,
reqardinq the imr-igration and
naturali zation laws (identical letters
sent to Senators Johnston, Matsunapa,
and Waicker, Representative Laqcmarsino,
and Delegate Won Pat). 161

-ii-

Page

in re Northern Mariana Islands Commission on
Federal Laws, Decision B-202206 of the
Comtroller General of the United States,
June 16, 1982. 163

Commission staff papers. 169

Background Information on the Legal
Status of the Cammission. 171

A Survey of Rights and Duties of United
States Citizen-ship, As Provided in the
United States Code, with Votes on
Extendire those Piphts and Duties to
Citizens of the northern Mariana
Islands prior to Termination of the
Trusteeship. 178

Borders: The Applicability of Federal
Law to Imports to and Exports from the
Northern Mariana Islands--A Survey. 264

Solicitation of Views on the Application
of the Medicaid Program in the northern
Mariana Islands. 346

Draft staff recommendations not acted on
by the Commission. 355

Title 19 of the United States Code,
Custom Duties. 356

Import quotas. 395

Vessel documentation and vessel
crewing laws. 404

BYLAWS

OF THE COMMISSION

Naidw Marlans Islands Cminlaslon on Federal Lem Washinpon, D.C. 20240 (202) 343-5617

BYIAWS

as adopted May 7, 1980 (31

with amendments made January 13, 1981

and July 12, 1984.

Section 1 The Cmuission.

1-1. Nam. The official, name of the Commission shall be the

Northern Mariana Islands Commission on Federal Laws.

1-2. Membership. Pursuant to section 504 of the Covenant to

Establish a Commonwealth of the Northern Mariana Islands in Political

Union with the United States of America, Public Law 94-241, March 24,

1976, 90 Stat. 263 (the Covenant), the meADeers of the Commission are seven

persons appointed to the Commission by the President of the United States.

At least four members of the Commission shall. be -citizens of the Trust

Terribory of the. Pacific Islands who are and have been for at least five

years domiciled continuously in the Northern Mariana Islands at the time

of their appointments. Cne member of the Commission shall be designated

Chair of the Commission by the President.

1-3. Voting. Each member of the Commission shall be entitled to one

vote. Unless otherwise required by these by-laws, action of the

Commission shall be taken when four members vote in favor thereof. Every

vote of the Commission shall be entered upon the minutes. Voting by proxy

shall be allowed.

1-4. Duties of the Commission. In accordance with section 504 of

the Covenant, the Commission will survey the laws of the United States and

make recommendations to United States Congress as to which laws of the

-2-

United States not applicable to the Northern Mariana Islands should be

r4l made applicable, to what extent, and in what manner, and which applicable

laws should be made inapplicable, to what extent, and in what manner. 'Ihe

Coaydssion will make its final report and reccminendations to the Congress

within one year after the termination of the Trusteeship Agreement betueen

the Security Council of the United- Nations and the United States of

America. It may make interim reports to the Congress before that time as

it considers apprcpriate. The Commission will, in undertaking its duties,

take into consideration the potential effect of each law on local

conditions within the Northern Mariana Islands, the policies embodied in

the law, and the provisions and purposes of the Cownant.

Section 2 - Meetings.

2-1. Quorum. Five members of the Goamdssion shall constitute a

quorun. Should there be less than five members serving on the Ccmmission

at any tkne, a quorum shall consist of the total number of members then

serving on the Commission. In case less than a quorum is present at a

meting, the presiding officer may adjourn the meeting frcm-time to time

until a quorum is present.

2-2. Regular Meetings. Regular meetings of the Commission shall be

held at least two times each year at places designated by the Ccnunission,

provided, however, that the Chair rray reduce the minimum number of

metings. to be held each @ear to one. Regular meetings need not be held

during periods in which no funds are available for expenditure by the

Commission. Should the Commission fail at a meeting to designate the time

and place of the next neeting, that designation shall be made by the

Chair.

-3-

2-3. Special Meetings. Special metings of the Gonnission may be

called - by the Chair at his or her discretion. The Chair shall call a [51

special meting when requested in writing to do so by at least four

members of the Ccmmission.

2-4. Special Meeting s-Conference by Telephone. Special meetings of

the Ccmmission may be held by mans of telephone conferences or through

the use of similar ocimmunications equipment with which. all ffembers

participating in the meting can hear each other. Participation in a

meting by telephone or similar ca.munications equipment shall constitute

presence in person at the special meting.

2-5. Notice. Wtitten notice of each meting shall be given to each

member of the Commission by the Chair, not less than -tuenty"one days in

advance of the meeting, except that if the Chair deems it appropriate or

necessary, he or she may provide less than twenty-one days.' written notice

of a meeting.

2-6. Recessed Meetings. A recessed meeting shall, be considered a

continuation of the preceding meting.

2-7. Cpen Meetings. Except- as otherwise voted by the Ommdssion,

all metings of the Commission shall be open to the public. Notice of

regular metings shall be published in the Federal Register and at least

one newspaper of general circulation in the Northern Mariana Islands not

less than seven days in advance of a meting. Persons attending a

Ccmmission meting -who are not members may be allowed to address the

Conadssion upon being recognized by the Chair.

-4-

Section 3 - Offices of the Caumission.

[61 7he principal office of the Commission shall be in %tshington, D.C.

The Conudssion way establish offices in the Northern Mariana Islands and

in such other places as may be designated by the Chair. The office in

Washington, D.C., shall be the repository for records of the OcXmission.

Section 4 - Organization of the Commission.

The Commission shall have a Chair as designated by the President of

the United States. The mmibers of the Ommission shall elect a

Vice-Chair. The Chair of the Commission or the Vice-Chair, in the absence

of the Chair, shall:

(a) preside at all meetings,of the Ccnnission

and of the committee of the whole;

(b) appoint special ccmTLittees of the Commission

as may be required;

subject to appeal to the Commission; and

(d) sign all resolutions of the Commission adcpted

in his or her presence.

Section 5 - Agenda.

An.agenda for each meeting of the Commission shall be prepared by

the Executive Director in consultation with the Chair. Ccpie s of the

agenda for each meeting shall be distributed to the members at least three

weeks before the neeting, unless shorter notice of the meeting is provided

under section 2-5. Any matter not on the agenda so distributed may be

considered at the neeting by consent of four of the members.

-5-

Section 6 Order of Business.

The order of business at each meeting of the Commission shall be as
(71

follows:

(a) Call'to order;

(b) Roll call;

(d) Review and approval of minutes of previous neeting;

(e) Peport by the Executive Director;

(f) Consideration of staff recommendations;

(g) Old business;

(h) New business;

(i) Place and date of next meeting; and
(j) Other. natters.

Section 7 - Rules of Procedure.

7-1. Participation by Presiding officer. The presiding officer at

any ffeeting may move, second, and debate from the chair and shall not be

deprived of any right to vote or of any other right, power, or duty of a

member by virtue of occupying the chair.

7-2. Motions to Reconsider. A motion to reconsider may be made by a

member on the prevailing side, and such mtion may be made only either at

the sane meting at which the action is taken or at the next succeeding

rmeting of the Conu-nission.

7-3. Robert's Rules to Govern. Except as otherwise specifically

provided ty the Commission or these by@laws, the proceedings of the

Cominission shall be governed by Robert's Rules of Order.

-6-

Section 8 - Minutes.

The Executive Director shall have prepared and distributed to the

members minutes of each meting. The minutes of any meting may be

approved without reading whenever they have been distributed at least

tuenty6--four hours prior to the time of approval. The approved minutes of

each ffeeting and any corrections thereof duly adopted shall be signed by

the Executive Director.

Section 9 - Clommittees.

9-1. Executive Committee. The Commission may establish an executive

ccmiTdttee of one or more members and may delegate to this ccmmittee pouer

to transact the business of the Commission between meetings of the

Caimmission and during any periods in which funds are not available for

expenditure by the CbrmTdssion. Me executive cannittee shall not make any

recamnendations to the United States Congress regarding applicability of

federal laws to the Northern Mariana Islands unless those reccmmendations

have been previously approved by the Conunission, either at a meting of

the Cbmiission or pursuant to the procedure authorized by section 10 of

these by-laws.

9-2. Other Committees . The Commission may establish other standing

or special committees as it deems appropriate or necessary.

Section 10. Voting by Mail.

VvIlenever in the judgment of the Chair or the executive ccmmittee, any

question shall. arise which the Chair or the'executive conuTdttee considers

should be put to a vote of the members, and when it is deerned inexpedient

to call a meting of the Commission for that purpose, the Chair or the

-7-

executive committee may submit the matter to the members in writing by
mail for vote and decision. The question thus presented shall be 191
determined according to a majority of the votes received by rail within

four weeks after such submission to the members, provided that, in each

case, votes of at least a quorum of the members shall have been received.

Action taRen in this manner shall be as effective as action taken at a

duly called neeting of the members.

Section 11 - C=mission Staff.

There shall be an Executive Director of the Commission, together with

other staff as may be necessary. The Executive Director and all staff,

other than secretarial and clerical supporting staff, shall be appointed

by the Chair, subject to consultation with the Commission. No staff my

,be terminated except for cause and with the approval of a majority of the

Commission members, provided however that such approval need not be

obtained for termination of secretarial and clerical supporting staff.

Staff other than the Executive Director shall report to the Chair through

the Executive Director. The Executive Director shall be responsible for

employment and termination of secretarial and clerical supporting staff.

Section 12 - Administrative and Personnel Services.

Administrative and personnel services, including office space, shall

be provided by the United States Department of the Interior.

Section 13 - Duration.

The Commission shall cease to exist fourteen months after termination

of the trusteeship under which the United States administers the Northern

-8-

Mariana Islands by agreeiTent with the United Nations, unless its life is
riol
extended beyond that date by Act of Congress or unless an earlier

cessation of the Commission's existence is agreed upon by the Ccmmission.

Section 14 - Anendments.

These by-laws may be amended, repealed, or altered, in whole or in

part, by five members of the Ccnudssion at any regular or special neeting

of the Com-nission.

CEFOIFICATION

I hereby certify that the foregoing are the By-laws of the Northern

Mariana Islands Ccmmission. on Federal Laws, as adopted on May 7, 1980, and

with amendments made on January 13, 1981, and on July 12, 1984.

a. jmz=
Joseph%#
Chair

MINUTES
OF
COMMISSION MEETINGS

May 16, 1980

Minutes: First Northern Mariana Islands Commission Meeting.
May 7, 1980

Department of the Interior Under Secretary James A. Joseph, Chair for the
Northern Mariana Islands (NMI) Commission on Federal Laws, called the meeting
to order at 9:00 a.m. in Room 5160, main Department of the Interior Building,
Washington, D.C.
[131
Mr. Joseph welcomed the new Commission members, and highlighted historical
events leading to the formation of the Commission, and addressed the chal-
lenging task ahead. Additional opening remarks were made by Commission
member and.Congressman Phillip Burton; Department of the Interior Solicitor,
Clyde Martz; Department of the Interior Deputy Under Secretary for Terri-
torial and International Affairs, Wallace Green; White House Domestic
Staff Representative, Jeff Farrow, and Commissioner Edward Pangelinan.

Other.persons present were Pedro Agulto Tenorio, Commissioner; Myron B.
Thompson, Commissioner; Agnes Manglona McPhetres, Commissioner; and Jesus C.
Borja, Commissioner.

Morning Business Session

The by-laws previously circulated for comment, were discussed,
amended and adopted.

Pedro Agulto Tenorio was elected Commission Vice Chair.

The meeting recessed for lunch.

Afternoon Business Session

Vice Chair Mr. Tenorio, in'the absence of Mr. Joseph, convened the
afternoon session.

The Staff Memoranda Outline was adopted as amended.

The Staff Memorandum Sample was adopted as amended.

Commission members agreed that the Commission staff should develop
priorities for laws slated for review, and also estabish procedural
guidelines for individuals who wish to comment on Federal laws as they
pertain to the Commission task.

Mr. Dawson, representing Department of Interior Personnel, discussed
travel-related concerns before Commission members.

The Commissioners determined that the next meeting would be held in
September at a time and place to be announced later.

The meeting was adjourned at 3:00 p.m.

CERTIFICATION

The minutes of the May 7, 1980 meeting of the Northern Mariana Islands
Commission on Federal Laws are set forth above as adopted y the Commission
at its meeting of September 12, 1980. @r
Danief P.. Mac-giekin
Executive Director

NORTHERN MARIANA ISLANDS COMMISSION
ON FEDERAL LAWS

MINUTES OF THE SECOND MEETINC
Washington, D.C., September 12, 1980

(141 Mr. Wallace Gre.en, Deputy Under Secretary for the Interior Department's
Office of Territorial and International Affairs, opened the second meeting
of the Northern Mariana Islands Commission on Federal Laws in Room 5160,
main Department of the Interior Building, Washington, D.C. Commission
Vice Chair Pedro A. Tenorio called the meeting to order at approximately
1:00 P.M.

Commissioners present were Edward DLG. Pangelinan, Pedro A. Tenorio, Myron
B. Thompson, Agnes Manglona McPhetres and Jesus C. Borla. Absent was
Congressman Phillip Burton. Commission Chair James A. Joseph Joined the
meeting shortly after the roll call.

The minutes of the first meeting of the Commission, held May 7, 1980 in
Washington, D.C., were approved.

Remarks of the Chair.
Mr. Joseph noted that the Commission's most significant accomplishment
since the jast meeting was the selection of an executive director for
the Commission. Mr. Joseph introduced Mr. Daniel H. MacMeekin to the
Commission as the new executive director, and gave a resume of his quali-
fications.

Report of the executive director.
Mr. MacMeekin then reported to the Commission, summarizing his initial
thoughts on how the Commission should accomplish its statutory mandate.
Emphasizing that, as executive director, he would receive his instruc-
tions from the Commission, he outlined his views with respect to:

- Commission goals;
- criteria for Commission evaluation of particular statutes;
- input the Commission should obtain from other sources;
- the method bv which the Commission should determine its pri-
orities, to decide which laws it is going to examine first
and which thereafter; and
- procedures for accomplishing its goals.

Goals. Mr. MacMeekin said the Commission's ultimate goals were esta-
blished by the law creating the Commission: submission of the final
report to Congress and any interim reports thought appropriate by the
Commission. The final report, to comply with the Covenant, will include
recommendations as to whether particular federal laws ought or ought not
apply in the Commonwealth of the Northern Mariana Islands (the NMI).
Each recommendation rests on a prior conclusion as to whether the law
now applies. The final report should include, Mr. MacMeekin suggested,
these Commission conclusions, noting whether they rest on specific pro-
visions in the particular statute, on terms or forrnulae contained in the
Covenant, on court decisions, or on other bases. He emphasized, however,

that the Commission's major effort should be directed toward recommendations
and not toward study of present applicability. Mr. MacMeekin also suggested
that the final report be* organized in the same format as the U.S. Code, for
easy reference, and that it be comprehensive, covering all sections of the
Code. He said the Commission should consider also including in the report
(1) a recommended formula for determining the applicability of future acts
of Congress to the NMI, and (2) draft legislation to enact all the Commis-
sion's recommendations.

Mr. MacMeekin said interim reports to Congress could serve at least three
purposes. First, immediate action may be needed to remedy problems caused
by present application of particular federal laws in the NMI. He noted
some such problems had been mentioned to him already by Commonwealth
leaders. Second, interim reports could be used to enhance the Commission's
credibility with Congress. Third, the Commission could endorse legislati-e
changes recommended by the various federal agencies within their special
jurisdictions or areas of expertise.

Criteria. Mr. MacMeekin then discussed criteria for evaluation of a parti-
cular statute, to determine whether that statute should apply in the NMI.
In general, he said, this evaluation would amount to an analysis of the
pros and cons of application within the context of that statute. Factors
more or less peculiar to the NMI would receive special attention: trans-
Dortation and communications difficulties, the traditional culture of
the islands, the relatively small population, and the tropical island
environment. He noted the possibility some federal statutes should be
universal in their application, either because they should apply to all
members of the U.S. political family or because an exception for the
Northern Marianas might create a loophole, rendering the law less effec-
tive elsewhere in the United States.

Input. The four basic sources of input for the Commission, Mr. MacMeekin
said, would be (1). interested parties and the general public in the NMI,
(2) concerned NMI government agencies and legislative committees, (3) con-
cerned Federal agencies, and (4) research by the Commission's own staff.

Priorities. Mr. MacMeekin then discussed his views on how the Commission
could determine which areas of the law it should examine first. He said
he would like, prior to examining particular areas of the law, to devote
substantial effort.to organization, so that data regarding any statute
from any source could be received, recorded, and easily retrieved at any
time. He then outlined alternative methods by which the Commission could
set its priorities. One approach, which he said he rejected, would be to
start at section I of Title I and proceed serially through the entire
U.S. Code to the last section in the Appendix to Title 50. Another pos-
sible approach, he said, would be to respond to the particular needs
expressed to the Commission from time to time, without any other precon-
ceived plan. A third approach suggested was to follow subject-matter
priorities established in advance by the Commission. For example, he said,
the Commission might designate health, education, and economic development
(and, within economic development, tourism, agriculture, and fisheries) as
areas in which staff efforts should be focussed initially.

Or, he said, the Commission could categorize statutes as they are classi-
fied in the Covenant--those specifically mentioned, those applicable uni-
formly to Guam and the fifty states, and so forth--, and examine each group

in order. Yet another approach would be examifiation first of statutes
providing grants or benefits of one sort or another. This could be done
in part by reference to the Catalog of Federal Domestic Assistance.

(161 Mr. MacMeekin noted the Commission could solicit outside views on establ-
ishing priorities, but suggested this might take much time. He also noted
the possibility of combining various of the approaches previously men-
tioned. For example, it could be determined within a particular subject-
matter area to proceed according to categories of statutes made by the
Covenant.

Procedures. Mr. MacMeekin then outlined the procedures by which he
intends to accomplish the work of the Commission. These procedures
would be:

--examination of the resources at hand and preparation
of a budget;
--organizational details: printing of stationery, ordering
a basic library, hiring a secretary, and so forth;
--employment of the Marianas staff person, who would
be in essence a hearing officer, charged with eli-
citing and recording views of persons in the NMI.
--establishment of liaison with the Federal agencies,
surveying plans, work underway, and work completed;
--announcement of the Commission's existence and avai-
lability to receive views in the NMI;
--collection and examination of prior work of a similar
nature, for example, the work of the Guam and Virgin
Islands Commissions, and the 1977 Interior survey of
federal programs available in the territories.

Mr. MacMeekin said he would like the staff's presentations to the Commis-
sion to be concise--ideally no more than single page per statute--, but
comprehensive. The presentation should summarize what the statute does,
whether it is presently applicable to the NMI, and the staff's recommen-
dations as to future 'applicability.

Discussion.
Commission Chair Joseph next asked for general comments on Mr. Macmeekin's
presentation.

Mr. Wallace Green stated the willingness of the entire staff of the office
of Territorial and International Affairs to assist the Commission.

Commissioner 'Agnes McPhetres asked if Mr. MacMeekin had been provided an
office. Mr. Joseph responded affirmatively, noting a temporary office
had been provided and a permanent office, already identified, would be
6@,ailable. While the Commission is independent, he said, the office of
Territorial and International Affairs will provide administrative con-
trol. The Commission will be in the Department of the Interior but the
Department will not appear on the Commission's letterhead, since the Com-
mission is independent of the Department.

The Commission then discussed priorities. Vice Chair Pedro A. Tenorio
noted that the logistics of transportation and communications were impor-
tant factors to consider. Commissioner Myron Thompson suggested that the

Commission keep in mind two important objectives: that the NMI achieve
political self-government and economic independence, and that U.S. defense
interests in the area be protected.

Mr. MacMeekin noted a hierarchy of priorities would be possible. For exam-
ple, he said, it would be possible to choose subject-matter priorities
such as health, education, and economic development and then, within each [171
subject area, examine laws which provide grant funds ahead of those which
do not. Ms. McPh 'etres said the three subject areas named by Mr. MacMeekin
would be good places to start and suggested the need for a survey of the
statutes in those areas now applicable to the NMI and of whether the NMI
is now participating in all the programs for which it is now eligible.
Mr. MacMeekin noted the office of Territorial and International Affairs
apparently has such a survey in progress, updating a similar 1977 survey
done with reference to the Trust Territory.

Commissioner Jesus Borja said emphasis might best be placed on study of
laws not now applicable to the NMI, noting as an example the amendment
of federal law to permit enlistment in the armed forces by NMI citizens.

Commissioner Edward Pangelinan suggested examining the work of other
commissions, such as those for Guam and the Virgin Islands, to see the
priorities they had selected, the information they had collected, and
the format they had used. Mr. Joseph agreed, noting that the magnitude
of the Commission's task demands identification and creative use of what-
ever other resources may be available.

Mr. MacMeekin said that to cover the entire U.S. Code with the funds avai-
lable to the Commission would be possible, but only in a relatively super-
ficial manner. Alternatively, the Commission can decide, he said, to con-
centrate its attention much more on some statutes than on others. He then
raised the question whether the Commission should monitor potential legis-
lation pending in Congress. Mr. Joseph suggested reliance on the monitoring
done by Territorial and International Affairs.

Mr. Joseph suggested the inapplicability of the Internal Revenue Code as
another potential issue and asked whether Interior was presently working
on that issue. (A negative answer was given by a representative from the
Solicitor's office.)

Mr. Thompson noted that the Department of Commerce, in connection with the
Pacific Basin Development Conference, had collected from various agencies
not only proposals for economic development, but lists of laws, rules,
and regulations regarded as impediments to economic development.

Mr. MacMeekin asked for and received the Commissionts approval to use a
generally wide-open approach in conducting the affairs of the Commission,
in order to be able to elicit comments and suggestions from a wide variety
of sources. He also asked for and received authority to modify as might
be necessary the format of the model staff memo adopted by the Commission
at its first meeting.

Mr. MacMeekin then agreed to provide in greater detail for the next meeting
options for the Commission in selecting priorities.

New business.
Non-Federal contributions. Mr. Joseph said the question had been raised,
and referred to Interior's Office of the Solicitor, whether the Commis-
sion could use moneys provided by the NMI government. The Solicitor's
office had determined, Mr. Joseph said, that the NMI could provide funds
(181 to be spent in gathering information for use by the Commission so long
as the information-gathering is not initiated by the Commission itself.
Mr. Billy Max Paul, Assistant Solicitor for Territorial Law, elaborated.
He said the Governor should call the meetings and invite three of the
Commissioners to attend. No more than three can attend so as not to con-
situte a quorum of the Commission and thereby act for the Commission itself,
he explained. The three invited must be from the Northern Mariana Islands,
and the meetings must be planned and sponsored by the NMI government.
Finally, he said, the Commissioners invited may only receive travel expenses.

Mr. Joseph than asked Mr. Paul to draft the standards by which the NMI
contribution could be expended, as a basis for initiating correspondence
with Governor Camacho.

Regrets of Congressman Burton; Future meetings of the Commission. Mr.
Joseph conveyed to the Commission Congressman Burton's apologies for
his inability to attend this meeting. He also conveyed the Congress-
manis suggestion that the C*ommission should try to accommodate the
individual dommissioners in the distance they must travel to meetings
by holding some meetings somewhere between Washington, D.C. and Saipan,
for example, in San Francisco or Honolulu. Mr. Pangelinan volunteered
the facilities of his Honolulu office for meetings in that city.

Ms. McPhetres asked whether it would be possible for the Commission to
meet in the NMI. Mr. Joseph suggested the fourth meeting be held there.

Salaries. It was asked at what level Commission staff in the NMI and
San Francisco would be paid. Mr. Joseph responded that Mr. MacMeekin
had not yet gone over the budget, but it was expected those positions
would be at about GS-11, or approximately $20,000 per year.

Adjournment.
The meeting was then adjourned.

CERTIFICATION

The minutes of the September 12, 1980 meeting of the Northern Mariana
Islands Commission on Federal Laws are set forth above as corrected and
adopted by the Commission at its meeting of January 12, 1981.
;A@
Danie I H. acMeekin
Executive Director

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

[191

MINUTES OF THE THIRD MEETING

Washington, D.C., January 12, 1981

Commission Chair James A. Joseph opened the third meeting of the
Northern Mariana islands Commission on Federal Laws in Room 5160 of
the main Department-of the Interior building in Washington, D.C. at
approximately 9:20 a.m.

Commissioners present, in addition to Mr. Joseph, were
Jesus C. Borja, Congressman Phillip Burton, Agnes Manglona McPhetres,
Edward DLG. Pangelinan, Pedro A. Tenorio, and Myron B. Thompson. No
commissioners were absent.

Remarks of the Chair.

Mr. Joseph began the meeting by expressing his appreciation to
the staff of the Department of the Interior's Office of Territorial
and International Affairs for the assistance provided in establishing
the Commission. Alluding to the forthcoming change in
administration, he expressed the hope that the new administration
would continue to support the work of the Commission. He noted that
the work of the Commission transcended partisan politics, and that
members of the Commission were appointed as individuals, not as
representatives of particular agencies or interest groupings. He
pointed out that the Commission is an independent entity, reporting
directly to the U.S. Congress and supported by the office of the
Assistant Secretary for Territorial and International Affairs.

Remarks of Commissioner Pangelinan.

Commissioner Edward DLG. Pangelinan expressed the appreciation
of the people of the Northern Mariana Islands for assistance given by
the Department of.the Interior to-the Commission and the need for
this assistance to be.continued by the incoming administration.

Quorum, notice of meeting, and approval of minutes.

Mr. Joseph announced that a quorum was present, and that notice
of the meeting had been given as required by the By-laws. The
executive director of the Commission, Mr. Daniel H. MacMeekin, said
notice of the meeting had been sent for publication to the Federal
Register, the Marianas Variety, and the Commonwealth Examiner.

The minutes of the second meeting of the Commission, held
September 12, 1980, in Washington, D.C., were corrected and approved.

(201 Report of the Executive Director.
NMI Liaison Attorney. Mr. MacMeekin first introduced
Mr. Jose S. Dela Cruz, who has been appointed as the Commission's
Northern Mariana Islands Liaison Attorney, and summarized his
educational background and experience. Mr. MacMeekin said
Mr. Dela Cruz will be the Commission's principal staff representative
in the Northern Mariana Islands, primarily responsible for enabling
the Commission to perform its statutory duty to take into
consideration the potential effect of federal laws on local
conditions within the Northern Mariana Islands.

Review of progress--the budget. Mr. MacMeekin stated that the
initial appropriation,for the Commission, in fiscal year 1980, was
$300,000. As part of a government-wide supplemental appropriation
for pay raises, an additional $10,000 was appropriated to the Office
of Territorial and International Affairs for use of the Commission in
fiscal year 1980. Another $15,000, Mr. MacMeekin said, had been
added for fiscal year 1981, so that, at the time of this meeting, the
total appropriated for use of the Commission is $325,000.

Mr. MacMeekin noted that the Office of Territorial and
International Affairs had requested.an additional appropriation of
$200,000 for the Commission for fiscal yedr 1982, and that this
request had been approved by the Office of Management and Budget.
This appropriation is necessary, Mr. MacMeekin said, because the
original appropriation contemplated only one office for the
Commission (rather than the two offices decided upon by the
Commission) and underestimated staff and travel expenditures.

Mr. MacMeekin said that, until additional funding seems assured,
he deemed imprudent hiring any personnel beyond himself, his
secretary, Mr. Dela Cruz, and a part-time secretary for
Mr. Dela Cruz. If, however, the additional $200,000 becomes
available, he said, he wanted to hire at least one additional
attorney and to extend the life of the Commission for a period of
several months, in part to have enough time to make effective use of
the additional attorney.

--organizational details. Mr. MacMeekin said Ms. Dianne Brickey
had been hired as the Commission's secretary, to begin work on
January 26., 1981. He summarized her previous experience and
training, noting in particular her expertise with word processing
equipment.

Mr. MacMeekin said he had requested the Office of Territorial

and International Affairs to order word processing equipment for.the [211
Commission, but that a delivery date had not yet been fixed.

The Commission has.obtained its own set of the United States
Code Annotated,, Mr. MacMeekin said. For most of its library needs,
he said, Commission staffmill use the Department Of the Interior's
law library.

Mr. MacMeekin said his immediate concern is obtaining office
space, desks, a.typewriter, other furniture.and equipment, and a
part-time secretary for Mr. Dela Cruz.

--establishing liaison with federal agencies. Letters have been
sent by the.Commission to.44 federal agencies and establishments,
asking each to designate a person to act as liaison to the
Commission, Mr. MacMeekin said. He said 39 of the agencies have
designated liaisons, and that each of those liaisons has been asked
to apprise the Commission of any particular federal law problems
encountered attributable to creation of the Commonwealth of the
Northern Mariana Islands and any legislative efforts the agency was
undertaking to remedy problems found. Of the eight responses
received by the time of this meeting, he said, none raised any
particular problems.

--announc ments in the NMI. No announcements of the
Commission's existence and availability to receive views have yet
been made in the Northern Mariana Islands, Mr. MacMeekin said. He
noted that such announcements will*be among Mr. Dela Cruz's first
tasks on returning to.the Northern Mariana Islands after this
meeting.

--collection and examination of similar prior work.
Mr. MacMeekin said he had collected and examined the reports of the
Commission on the Application of Federal Laws to Guam and the
Commission on.the Application of Federal Laws to the Virgin Islands,
and found that an earlier commission established to perform a similar
function for Puerto Rico apparently had produced as its final report
only a one-page letter-to the President. Mr. MacMeekin noted the
usefulness of these reports to this Commission is limited by their
age, the most recent report being dated 1956, and the many changes
that have been made in federal law since they were prepared.

--organization of data. Mr. MacMeekin said he had established a
filing system for the Commission to allow the Commission to receive
data on any federal statute from any source, and to retrieve that
data quickly as necessary.

--Federal controls and procedures. Mr. MacMeekin said that,

[221 after studying the Civil Service Act, the Freedom of Information Act,
the Federal Advisory Committee Act, the Administrative Procedure Act,
and the Privacy Act, he was of the opinion that only the Privacy Act
clearly applied to the Commission. He said that, with respect to the
other laws, it made more sense to postpone any detailed inquiry into
their applicability to the Commission, an inquiry that would
necessarily be time-consuming, until particular problems arose making
such an inquiry unavoidable.

Mr. MacMeekin expressed his appreciation to the Department of
Interior personnel who had advised him on Interior policies and
procedures.

Nondisqualification on FCMA issues. Mr. MacMeekin said he had
decided it would not be necessary for him to disqualify himself from
making recommendations to the Commission with regard to the Fisheries
Conservation and Management Act or the vessel documentation laws. He
had considered the possibility of such disqualification, he said,
because of his previous association with counsel for plaintiffs in a
challenge to the present applicability of those laws in the Northern
Mariana Islands, Marianas Fisheries, Inc., v. Kreps (the Olvol case).
He said his reasons for deciding not to disqualify hims!lf were (1)
he had made full disclosure to the Commission of his pr ior
association; (2) neither he nor the Commission has the power to
decide the applicability issue adversely to the interests of the
Olvol plaintiffs--he could only recommend to the Commission, and the
Commission could only recommend to Congress; (3) he had received no
compensation attributable to the Olwol litigation; and (4) the Olwol
litigation is primarily concernedwith the present applicability of
the statutes at issue to the Northern Mariana Islands, while the
Commission is concerned with whether as a matter of policy those
statutes should apply to the Northern Mariana Islands.

Proposals for other commissions. Mr. MacMeekin noted the
existence of proposals to create other commissions, the jurisdictions
of which would overlap with that of this Commission if they were
created. Those commissions, variously, would examine the
applicability of all federal laws, or only federal laws related to
economic development, to all territories, to all territories except
the Northern Mariana Islands, or to all insular areas of the United
States, including Hawaii and Puerto Rico. Although no commission has
been authorized by the U.S. Congress, he said, the Department of the
Interior's budget request for fiscal year 1982 includes $1,000,000
for a "Federal Laws Commission" "to examine the effects of Federal
Laws on all the territories."

Commissioners' tenure. Mr. MacMeekin said he had done some
legal research to determine whether the change of administrations

5
would have any effect on the tenure of members of the Commission. (231
His conclusion is that, because the Commission reports only to
Congress, it is not a part of the executive branch. Accordingly, he
said, applicable case law holds that members retain their positions
throughout the life of the Commission.

Mr. Joseph noted that Mr. MacMeekin's analysis coincided with
his understanding at the time the members were originally appointed.

Old business.

Priorities for interim reports. Mr. MacMeekin suggested the
Commission initially focus on three areas to determine whether the
Commission should recommend-amendments to the law by an interim
report or interim reports to the U.S. Congress. The three areas are
immigration, rights of citizenship, and the Federal Tort Claims Act.

--Immigration. Mr. MacMeekin said that the President's Select
Commission on Immigration and Refugee Policy would present its final
report and recommendations to the U.S. Congress in March 1981. He
noted the Select Commission has a specific statutory responsibility
to make recommendations with respect to applicability of the federal
immigration laws to the Northern Mariana Islands. He also noted that
the Covenant to Establish a Commonwealth of the Northern Mariana
Islands provides, in general, that the federal immigration laws will
not apply in the Northern Mariana Islands, at the earliest, until
after termination of the trusteeship-. At least two practical
concerns are important, Mr. MacMeekin said. First, because the
Northern Mariana Islands have a small population, inclusion of the
islands within the United States for immigration purposes raises the
possibility that groups of immigrants into the United States, very
small in numbers by comparison with the population of the United
States but very large by comparison with that of the Northern Mariana
Islands, would settle in the Northern Mariana Islands, quickly
outnumbering the local populace. Second, he said, because of the
importance of tourism to the local economy, the Northern Mariana
Islands may prefer to control and, through that control, to minimize
entry requirements for foreign visitors.

Because the Select Commission's recommendations will soon be
submitted to Congress, Mr. MacMeekin said it would be advisable for
this Commission to be ready to comment to Congress on the immigration
laws at an early date. Mr. MacMeekin then adverted to a letter from
Lawrence Fuchs, Executive Director of the Select Commission, to this
Commission, seeking this Commission's views on alternative treatments
of the Northern Mariana Islands under the immigration laws. The
Commission decided to defer consideration of this letter until later
in the meeting.

--Citizenship. Mr. MacMeekin noted that some rights of U.S.
[241 citizenship had already been granted to citizens of the Northern
Mariana Islands by statute, presidential proclamation, or
administrative decision, but that full U.S. citizenship would not be
conferred until termination of the trusteeship. Because the date of
termination remains uncertain, he suggested the entire U.S. Code be
examined, with the aid of a legal research computer, to determine
what other rights of U.S. citizenship should be granted the people of
the Northern Mariana Islands before termination of the trusteeship.

--Federal Tort Claims Act. Mr. MacMeekin recommended the
Commission make an early examination and, if necessary,
recommendation to make sure remedies of the Federal Tort Claims Act
are available to persons suffering personal inuries in the Northern
Mariana Islands as a result of negligently conducted activities of
the federal government.

Other priorities. Mr. MacMeekin recommended examination of the
Catalog of Federal Domestic Assistance to determine applicability of
programs there listed to the Northern Mariana Islands, with a view to
recommending such changes as seem desirable. He also suggeseed a
general survey of the following titles of the U.S. Code:

Title 16. Conservation (only those chapters
dealing with fisheries);
Title 46. Shipping;
Title 15. Commerce and Trade;
Title 12. Banking (and any other chapters or
sections of the U.S. Code
dealing with banking);
Title 49. Transportation (only those sections
dealing with air
transportation);
Title 28. Judiciary and judicial procedure;
Title 19. Customs Duties;
Title 29. Labor; and
Title 18. Crimes and Criminal Procedure.

He said the Commission should then survey, in an even more
superficial fashion, all other titles of the U.S. Code to make sure
no important areas are overlooked. He said he had not listed
specifically Title 20, Education, or Title 42, Public Health and
Welfare, because most programs in these titles would be examined in
the course" of surveying the Catalog of Federal Domestic Assistance.
He called attention to recent legislation allowing the Secretary of
Agriculture to extend to the Northern Mariana Islands programs set
out in Title 7, Agriculture.

- 7 -

Mr. MacMeekin noted his view that priorities should be flexible
and subject to modification. [251

He then raised a question as to the extent to which the
Commission should give priority to statutes, the application of which
to the Northern Mariana Islands is-controversial. He gave the Clean
Air Act as an example. Congressman Phillip Burton said it was
important for Congress to know ramifications of applying federal laws
in the Northern Mariana Islands. For example, he said, if Congress
applied the Clean Air Act to the Northern Mariana Islands, it did so
because it thought the Act would be beneficial there. Commissioner
Edward DLG. Pangelinan spoke in favor of the Commission addressing
the Clean Air Act, and noted that, even though a temporary waiver of
Clean Air Act requirements had been obtained, application of the
National Traffic and Motor Vehicle Safety Act prevented solution of
the problem, since the Japanese automobiles predominantly imported
into the Northern Mariana Islands are fitted to comply with both laws
or with neither, but not with only one of the laws. Mr. Joseph
suggested any matter of serious concern ought to be analyzed so the
Commission could make a policy decision on whether it should take a
position.

Mr. Burton observed that federal criminal laws assume a standard
of conduct uniformly accepted in the United States but perhaps alien
to the custom and culture of the Northern Mariana Islands. Because
of this factor, he suggested for-doubtful cases a presumption against
applicability of federal criminal laws to the Northern Mariana
Islands, noting that the Northern Mariana Islands Legislature is
competent to enact whatever criminal laws may be necessary.

Commissioner Pedro A. Tenorio called attention to delays in
obtaining preconstruction permits from the Army Corps of Engineers
for dredging wetland areas. Mr. Burton suggested the delays called
for speeding up the processing of permit requests by the bureaucracy,
not for changing the law requiring the permits.

Mr. Burton noted that public health programs presently
applicable in the Northern Mariana Islands are applicable only in
theory because an adequate hospital facility is lacking. He
particularly noted the Northern Mariana Islands would be eligible for
the Medicaid program but for the present inadequate hospital.

Commissioner Agnes M. McPhetres said the same situation applied
in the area of higher education grants. She said that although the
Northern Mariana Islands educational system is eligible for various
higher education grants, it cannot obtain these grants without an
accredited college. Mr. Burton suggested, because of the small
population of the Northern Mariana Islands, an accredited college

would strain the local budget and, in the long run, might be
uneconomical.

(261 Ms. McPhetres noted that recent regulations would increase the
number of students in the Northern Mariana Islands who must be
provided bilingual education to the point where it is very burdensome
and expensive for the local educational system, and expressed her
support for congressional efforts to overturn those regulations.

Motion-Agricultural programs. Mx. Burton moved that the
Commission send a letter to the Secretary of Agriculture urging an
early examination of programs administered by the Department of
Agriculture to determine which should be extended to the Northern
Mariana Islands under authority granted the Secretary by Public Law
No. 96-597. The motion was seconded and passed.

Discussion--continued. Mr. Burton expressed the view that
obtaining enactment by Congress of legislation allowing citizens of
the Northern Mariana Islands to work in the federal civil service or
of legislation amending the Federal Tort Claims Act to include claims
arising in the Northern Mariana Islands should not be difficult. He
said the most important area of Commission focus is the immigration
laws. He also said federal laws affecting fisheries and inter-island
transportation deserve the Commission's attention.

Mr. Pangelinan noted that, even though legislation has been
enacted to allow citizens of the Northern Mariana Islands to enlist
in the.U.S. armed forces, other citizenship requirements related to
service in the armed forces remain obstacles to citizens of the
Northern Mariana Islands and need amendment.

Mr. Pangelinan said persons in the Northern Mariana Islands
already had started to look upon the Commission as a source of legal
research for questions on the applicability of particular federal
laws to the islands. He said such questions could become a burden on
the Commission's limited sLaff. Mr. Joseph said the Commission must
select the questions to which the stqff will devote time.

Mr. Joseph then proposed the Commission adopt the priorities
suggested by the executive director, with modifications as suggested
by the Commission's discussion. The Commission agreed to this
proposal.

Motion-Hospital funding. Mr. Pangelinan moved that the
Commission send letters to the appropriate subcommittees of the House
and Senate committees on appropriations, urging early appropriation
of architectural and engineering costs, and, to the extent budgetary
restrictions permit, of construction costs for the Saipan hospital

--authorized'by-Ptiblic Law 96-205.. Commissioner Myron H* 'Thompson
suggested the letter include reference to the need for an adequate [271
hospital in order to take advantage of federal laws providing
health-care benefits available but for the lack of an ade'quate
hospital. Mr. Pangelinan agreed to this modification. The motion
was then seconded and passed.

New business.

Motion-Privacy Act. Mr. Thompson moved the Commission adopt
Privacy Act regulations proposed by the executive director. The
motion was seconded and passed.

Resolution to amend the By-laws. Mr. Thompson moved passage of
the resolution proposed by the executive director, to Amend section
10 of the Commission's By-laws to allow appointment and termination
of secretarial and clerical supporting staff by the executive
director rather than by the Chair in consultation with the
Commission. The resolution was seconded and passed.

Funds appropriated by the Government of the Northern Mariana
Islands. The Commission, after discussion, decided that, should the
Government of the Northern Mariana Islands authorize and appropriate
funds for use by the members of the Commission from the Northern
Mariana Islands, the use of such funds should be determined by those
members and that Government, and the Commission as a whole should
neither approve nor disapprove the use made of such funds.

Letter from the Select Commission on Immigration and Refugee
Policy. Lawrence H. Fuchs, Executive Director of the Select
Commission on immigration and Refugee Policy on December 22, 1980,
wrote this Commission asking its views on the treatment that should
be accorded the Northern Mariana Islands under the Immigration and
Nationality Act. After discussion, the Commission decided that it
should respond by recommending that no change be made in the present
treatment of the Northern Mariana Islands, by requesting that the
Select Commission make reference in its report to the jurisdiction of
this Commission on the subject, and by asking that the Select
Commission give this Commission its assurance that its
recommendations would not contravene the clear language of the
Covenant.

Motion-Additional funding. Mr. Burton moved that the Chair or
the Ch-airs delegate be authorized to support the $200,000 budget
request for the Commission for fiscal year 1982. The motion was
seconded and passed.

10 -

Future Meetings.

Mr. Joseph suggested meetings of the Commission be held only
[281 twice a year, because of the impact of travel expenses on the
Commission's budget. He suggested the next meeting be held in Saipan
in approximately six months. Mr. Pangelinan suggested that the time
and place of the next meeting be set by the Chair when it was clear
sufficient research had been finished to justify a meeting. This
suggestion was adopted without dissent.

--By-laws amendment. Commissioner Jesus C. Borja noted that the
Commission's By-laws required three meetings per year, and commented
that elimination of one meeting per year might allow the Commission
to hire an additional staff attorney in its Washington office. He
suggested the By-laws language be amended to require only two
meetings per year. Mr. Joseph suggested, as an alternative, the
three-meeting requirement be retained, but the By-laws be amended to
allow one 'meeting per year to be waived by the Chair. Mr. Thompson
moved amendment of the By-laws to allow the Chair to waive one
meeting per year. The motion was seconded and passed.

Closing remarks; adjournment.

Mr. Joseph then closed the meeting by expressing his desire to
continue as Chair of the Commission, but volunteering to resign if
any of the Commission members thought he should. No suggestion for
his resignation was made.

The third meeting of the Northern Mariana Islands Commission on
Federal laws was then adjourned.

CERTIFICATION

The minutes of the January 12, 1982, meeting of the Northern
Mariana Islands Commission on Federal Laws are set forth above as
corrected and adopted by the Commission at its meeting of
November 30, 1981.

ITa-niel HrMac-Meel4in
Executive Director

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5817

MINUTES OF THE FOURTH MEETING

HONOLULU, HAWAII

r291
November 30-December 1, 1981

Commission Chair James A. Joseph opened the fourth meeting of
the Northern Mariana Islands Commission on Federal Laws in Room 348
(the Marianas/Hawaii Liaison Office) at 1221 Kapiolani Boulevard in
Honolulu, Hawaii, at approximately 9:25 a.m.

Commissioners present, in addition to Mr. Joseph, were
Jesus C. Borja, Agnes Manglona McPhetres, Edward DLG. Pangelinan, and
Pedro A. Tenorio. Commissioners absent were Congressman
Phillip Burton and Myron B. Thompson.

Remarks of the Chair

Mr. Joseph began the meeting by welcoming the members present
and noting that he was delighted to continue serving as Chairperson
of the Commission. He commended the Commission's executive director,
Daniel H. MacMeekin, and the staff for the excellent work being done.
He told the members he maintains frequent communication with
Mr. MacMeekin in Washington. He informed the members Congressman
Phillip Burton was not able to attend the meeting because of his very
busy schedule in Congress. He noted that rescheduling the meeting
was not practical because of the importance of soon submitting an
interim report by the Commission to Congress. He informed the
members that Mr. Myron Thompson could not attend the meeting because
of previous commitment, but that Mr. MacMeekin met with Mr. Thompson
and briefed him on the matters to be discussed at this meeting.

Quorum, Notice of Meeting, and Approval of Minutes

Mr. Joseph announced that a quorum was present, and that notice
of the meeting had been published in the Federal Register, the
Marianas Variety, and the Commonwealth Examiner. He also noted that
the meeting was open to the public.

The minutes of the third meeting of the Commission, held
January 12, 1981, in Washington, D.C., were corrected and approved.

Report of the Executive Director

Personnel. Mr. MacMeekin informed the Commission he was able to
hire a secretary for his office just before the presidential freeze
on hiring came into effect. He mentioned the problem, created by
that freeze, in hiring a part-time secretary for the Commission in
the Northern Mariana Islands, but noted that, since the freeze was
lifted several months ago, Mr. Dela Cruz has been able to hire a
part-time secretary for that office.

Budget. Mr. MacMeekin said money is still available from the
initial Commission funding of $325,000. In addition, the Department
of the Interior requested an additional $200,000 supplemental
[301 appropriation for the Commission as part of its fiscal year 1982
budget request to Congress. Mr. MacMeekin said he endorsed that
budget request. The $200,000 request has so far survived the federal
budget cuts and has passed the House and the Senate and, thereafter,
the conference committee, he said.* He indicated that whether the
President will sign the appropriation into law is uncertain in view
of the President's statement to Congress that he will veto any
"budget busting" appropriation bill.

Mr. MacMeekin told the members he plans to hire an additional
attorney and secretary from the present budget. He noted that,
according to his estimate, the Commission has spent $140,000, leaving
an unexpended balance of $185,000. He said that the official
accounting for Commission expenditures by the Department of the
Interior was not very timely, so that he had rely on his own figures.
The remaining funds, he said, are sufficient for hiring the
additional attorney and secretary, and for three more meetings. With
those expenditures, a balance of approximately $49,000 would remain
available for expenditures for other purposes. Mr. Borja asked
whether there will be any balance for the next fiscal year. Mr.
MacMeekin replied that some funds remain available for expenditure in
fiscal year 1983 according to his best estimate. He said, however,
he wanted to hire another attorney and to extend the life of the
Commission by at least six months, and that the additional money from
Congress would be necessary for these purposes.

Mr. MacMeekin noted that the original budget of the Commission
is "no-year money" that remains available until expended. The
supplemental $200,000 requested, however, is not no-year money, but
must be expended in fiscal year 1982. He said he did not know why
the fiscal year 1982 funds were not also no-year money.

Mr. MacMeekin then expressed his appreciation for the in-kind
contribution made by the Government of the Northern Mariana Islands
for use by the members of the Commission in the Northern Mariana
Islands.

*In fact, the conference committee reduced all appropriations in
this bill by 4 percent, thereby reducing the Commission appropriation
to $192,000.

- 3 -

Northern Mariana Islands office. Mr. MaeMeekin briefed the
members on Mr. Dela Cruz's initial operations in the Northern Mariana
Islands. He said that Mr. Dela Cruz was originally provided an
office in the Department of the Interior's federal comptroller's
office on Saipan. That space was inadequate for effective [311
operations. Mr. Dela Cruz then moved to private office space, and
eventually to his present quarters in the Nauru Building.

Mr. MacMeekin next summarized for the members the contacts
Mr. Dela Cruz had made with various officials, groups, and
individuals in the Northern Mariana Islands, noting that the response
from the Northern Mariana Islands has been very positive.
Announcements of the opening of the Northern Mariana Islands office
were made early in the year. Mr. Dela Cruz then further summarized
his work in establishing the office in the Northern Mariana Islands.

Federal agency contacts. Mr. MacMeekin then summarized his
efforts to obtain from federal agencies information on problems
encountered by those agencies with respect to the application of
federal law in the Northern Mariana Islands. Few such problems, he
said, have been made known to the staff by these agencies. Some
agencies, particularly the Departments of Transportation and Justice,
have been very helpful to the Commission.

The role of the Office of Management and Budget. Mr. MacMeekin
reported that an employee of the Office of Management and Budget
(OMB) recently asserted that the Commission must submit any
recommendations to OMB for clearance before those recommendations may
be given to Congress. Mr. MacMeekin said he felt clearance by OMB
would compromise the Commission's statutory mandate to report to
Congress. He also noted that, while the OMB routinely cleared
recommendations by executive agencies to Congress, the Comptrol*ler
General had ruled that this Commission is not a part of the executive
branch. Mr. MacMeekin said that OMB probably does have the power to
require executive branch agencies to clear any comments on
recommendations by the Commission with OMB before those comments are
given to the Commission. Mr. MacMeekin explained his understanding
that Congress, after receiving Commission recommendations, would no
doubt seek executive branch comments on those recommendations and, at
that time, any executive branch comments would be cleared by OMB.
Mr. Joseph suggested that the question of OMB clearance be addressed
.by the Commission later in the meeting.

Correspondence. Mr. MacMeekin next reviewed the letters sent
pursuant to the directions given by the Commission at its previous
meeting. A letter sent to the Secretary of Agriculture sought an
examination of the programs administered by the Department of
Agriculture to determine which programs would increase agricultural
production in the Northern Mariana Islands and, consequently, should
be extended there under Public Law 96-597. The reply received, a
copy of which was furnished to Commission members, was rather
noncommittal, Mr. MacMeekin said.

Mr. Pangelinan noted that the reduction of federal programs and
services in general is having an adverse effect on the Northern
Mariana Islands. Between three and four million dollars would be
[321 lost to the territories, he said. He mentioned that Senator Weicker
had introduced a bill to offset these losses to the territories.

Pursuant to the Commission's direction, a letter was also sent
to the Select Commission on Immigration and Refugee Policy,
recommending that the Select Commission make no. changes in the way
federal immigration and naturalization laws are now applied to the
Northern Mariana Islands, and allowing this Commission to address the
subject and make definitive recommendations to Congress.
Mr. Lawrence Fuchs, the executive director of the Select Commission,
responded, advising this Commission that the Select Commission would
not recommend changes in the existing immigration and naturalization
laws with respect to Northern Mariana Islands.

Mr. MacMeekin said that letters were also sent to appropriate
committees of both houses of Congress, again pursuant to Commission
direction, emphasizing the need for funding the Northern Mariana
Islands hospital, noting that some federal health programs could not
be made available in the Northern Mariana Islands because the present
hospital facility does not meet federal standards. No reply to these
letters has been received, he said.

Interior study of federal laws affecting the territories.
Mr. MacMeekin said that Ms. Ruth Van Cleve, now working in the
Solicitor's Office in the Department of the Interior, several months
ago initiated a study of federal laws as they apply to the
territories of the United States. Her study encompasses the Northern
Mariana Islands, he said. Mr. MacMeekin noted that, from what he has
seen of Ms. Van Cleve's initial work, she is a good scholar and her
research is useful. He said there should be no objection to the
overlapping of her study and the work of this Commission, even if her
recommendations to Congress differ from those of this Commission.
Mr. Joseph said that the Commission need not be concerned about the
overlap and that Ms. Van Cleve's work would be a welcome contribution
in an area where much work is needed. He also noted that Ms. Van
Cleve's study would represent the views of the executive branch, and
that those views would not necessarily coincide with the views of
this Commission. Mr. MacMeekin noted that
Ms. Van Cleve's recommendations to Congress would probably not be
submitted to Congress until she finishes her work with respect to all
titles of the United States Code.

Review of Proposed Interim Report of the Commission to Congress

The Commission next reviewed the interim report recommended by
the staff for submission by the Commission to Congress.

Substance of recommendations. Mr. MacMeekin first commented on
the substantive aspects of the proposed recommendations.

--statutory rights of citizenship. Mr. MacMeekin said a large
number of federal laws require persons to be United States citizens
in order to qualify for certain rights, privileges, or benefits. At
the present time, he said, citizens of the Northern Mariana Islands (331
are treated as if they were citizens of the United States for
purposes of a few particular statutes. This treatment is accorded by
statute, or through administrative decisions or rulings. For
example, he said, legislation has been enacted to allow citizens of
the Northern Mariana Islands to be treated as citizens o.f the United
States for purposes of enlistment in the armed forces of the United
States. By administrative decision citizens of the Northern Mariana
Islands are treated as citizens of the United States for purposes of
the Medicare program. An agency's general counsel's opinion holds
that citizens of the Northern Mariana Islands are to be treated as
United States citizens for purposes of certain vessel documentation
laws. Mr. MacMeekin pointed out that, while such administrative
rulings are beneficial, those rulings can also be reversed
administratively. He gave as an example administrative reversals of
policy by the Immigration and Naturalization Service affecting the
ability of citizens of the Northern Mariana Islands to enter the
United States.

Mr. MacMeekin also noted that the privileges ' and immunities
provision of the Covenant probably has not accorded citizens of the
Northern Mariana Islands any rights of United States citizenship
under federal statutes, but only protects them from discrimination by
the States of the United States.

Mr. MacMeekin pointed out that there are literally thousands of
provisions in the United States Code touching on citizenship. Only
about one third of these deal with distinctions based on citizenship.
Those statutes containing distinctions based on citizenship were
divided into seven subject matter categories by the staff for
convenience in treatment. The seven categories were: (1) federal
employment, (2) uniformed services, (3) protection and services in
foreign countries, (4) commerce, (5) political and civil rights,
(6) federal programs and benefits, and (7) appointment to high
office. He noted that these categories are not exhaustive because
certain rights of citizenship are more easily treated separately, for
example, those under the tax laws or the immigration laws.
Mr. MacMeekin said that the draft interim report included
recommendations with respect to all seven subject matter areas. An
eighth recommendation offers legislation to ensure citizens of the
Northern Mariana Islands are able to enjoy rights of United States
citizenship under any federal statute applicable in the Northern
Mariana Islands.

Mr. MacMeekin noted that, for purposes of the draft
recommendations having to deal with the uniformed services, he had
included a requirement that a citizen of the Northern Mariana Islands

declare intent to become a citizen of the United States on
termination of the trusteeship in order to qualify as a United States
citizen for purposes of the statutes covered by those
[341 recommendations. He said he based this intent requirement on similar
language in the legislation allowing enlistment of citizens of the
Northern Mariana Islands in the Armed Forces of the United States.
Mr. Pangelinan remarked that the intent requirement was included in
the enlistment legislation because it was thought advisable in light
of provisions in the Trusteeship Agreement.

Mr. MacMeekin noted that the citizenship recommendations did not
include any recommendations with respect to laws imposing burdens or
liabilities on United States citizens. Mr. Tenorio asked whether the
draft recommendations would allow citizens of the Northern Mariana
Islands to be commissioned as officers in the U.S. Army Reserve.
Mr. MacMeekin replied affirmatively. Mr. Pangelinan noted that his
office was presently working on legislation to allow citizens of the
Northern Mariana Islands to become officers in the U.S. armed forces

reserves..

Mr. MacMeekin noted that the intention of the citizenship
recommendations is not to discredit prior administrative rulings
treating citizens of the Northern Mariana Islands as United States
citizens for purposes of particular federal statutes.

Mr. MacMeekin then raised the question of whether the Commission
should submit recommendations to Congress covering all statutes
limiting benefits or rights to United States citizens or should use a
more targeted approach, focussing only on those statutes apt to
create problems for citizens of the Northern Mariana Islands if
legislation is not enacted. He also noted the alternative
possibility of asking Congress to confer United States citizenship on
citizens of the Northern Mariana Islands now, prior to termination of
the Trusteeship. Mr. MacMeekin said he thought there might be
adverse international reaction and, consequently, adverse reaction
from the State Department to an early grant of United States
citizenship. He also noted that an early grant would amount to
amendment of the Covenant and that, while this particular amendment
would be favorable to the Northern Mariana Islands, setting a
precedent of amending the Covenant might lead to other, less
favorable amendments. Mr. Pangelinan asked whether United States
citizenship could be granted without amending the Covenant.
Mr. MacMeekin said he felt that many of the rights of citizenship
could be obtained by the approach taken in the draft interim report,
treating citizens of the Northern Mariana Islands as citizens of the
United States for purposes of particular statutes.

Mr. Pangelinan suggested that many of the provisions in the
draft recommendation are unlikely actually to affect persons in the
Northern Mariana Islands. Mr. MacMeekin explained that his approach

had been to list all statutes which conceivably could affect persons
in the Northern Mariana Islands and then allow the Commission to
delete those it thought not of sufficient importance to include,
rather than making deletions at the staff level, and then trying to [351
explain Commission what other provisions, not before the Commission
in draft form, it might want to include.

Mr. Tenorio suggested that early termination of the trusteeship
for the Northern Mariana Islands would accomplish the same purpose.
Mr. Pangelinan responded that the United States Government has taken
the position the trusteeship for the Northern Mariana Islands will
not be terminated before it is terminated for the remainder of
Micronesia. Ms. McPhetres asked whether the draft recommendations
would conflict with the Covenant. Mr. MacMeekin said that they would
not, noting that the United States Congress has broad powers under
the Trusteeship Agreement to extend federal legislation to the
Northern Mariana Islands, and even now treats citizens of the Trust
Territory as citizens of the United States for certain purposes.

Ms. McPhetres then suggested that the Commission strike from the
recommendations those statutes unlikely to be of importance to
citizens of the Northern Mariana Islands. Mr. MacMeekin said he had
already identified provisions the Commission might want to delete.
The Commission then went through the citizenship recommendations with
Mr. MacMeekin, discussing and reaching a consensus on each provision.
Mr. Pangelinan then moved for deletion of the statutes identified in
this discussion. The motion was seconded by Mr. Tenorio and passed.
Mr. MacMeekin then asked whether the citizenship recommendation
should include a definition of "citizen of the Northern Mariana
Islands". He noted that the group of persons who will become
citizens pursuant to the Covenant differed slightly from the group of
persons identified as "interim citizens of the United States" under
the Constitution of the Northern Mariana Islands, and that
presidential proclamations defined the group in yet a third way. Mr.
Pangelinan moved that a section be added to the proposed legislation
defining citizens of the Northern Mariana Islands in accordance with
the definition in section 8 of Schedule on Transitional Matters of
the Northern Mariana Islands Constitution. The motion was seconded
and passed.

Mr. Pangelinan then moved for adoption of the citizenship
recommendations, as set forth in the draft interim report and as
modified by the Commission. The motion was seconded and passed.

Introduction of Members of the Public

At this point in the meeting, Mr. Joseph invited three members
of the public to introduce themselves. They were Mr. Jerry Norris,
executive director of the Pacific Islands Development Council,
Mr. Jerome McLaughlin, of Pacific, Micronesia, and Orient Shipping

- 8 -

Lines, and Mr. Mike Gallow. Mr. McLaughlin at this time was given
the opportunity to address the Commission pursuant to a request he
had made prior to the meeting. He asked the Commission to consider
[363 whether a ruling of the Federal Maritime Commission, requiring
carriers serving the Northern Mariana Islands to comply with domestic
tariff filing requirements rather than the less burdensome foreign
tariff filing requirements, should be changed by legislation.
Mr. Joseph asked the staff to study this issue. -Mr. MacMeekin noted
that he had included the question on his list of possible priority
areas for Commission review later in the meeting.

Review of Proposed Interim Report of the Commission to Congress
Tc-ontinued)

Substance of recommendations-Federal Tort Claims Act.
Mr. MacMeekin next summarized the second part of the draft interim
report to Congress, recommending legislation to insure the
applicability of the Federal Tort Claims Act to claims arising in the
Northern Mariana Islands. He said that plausible arguments exist
both in favor of and against the present applicability of the Act in
the Northern Mariana Islands. Passage of the recommended legislation
would remove any doubts as to the Act's applicability. Mr. Boria
moved for the adoption of the recomendation with regard to the
Federal Tort Claims Act. The motion was seconded and passed.

--Clean Air Act. Mr. MacMeekin then explained the
recommendation of the draft interim report on application of the
Clean Air Act to the Northern Mariana Islands. He said that
exemption from the Act is recommended only with respect to the
portions of the Act restricting emissions from mobile sources,
primarily motor vehicles. The recommendation, he said, also would
allow the Administrator of the Environmental Protection Agency to
exempt the Northern Mariana Islands from other provisons of the Act
on finding benefits of compliance to be significantly outweighed by
costs of compliance. Mr. Dela Cruz noted that comments from the
Northern Mariana Islands with regard to this draft recommendation
were generally favorable and that no opposition to the recommendation
had been received by him. Mr. Pangelinan suggested that language be
inserted in the proposed draft legislation to authorize waiver of the
Act's requirements by the Administrator of the Environmental
Protection Agency on request of the Governor of the Northern Mariana
Islands. Mr. Borja suggested that, if the Governor made such a
request, the Administrator should have no discretion to deny the
exemption. Mr. Pangelinan moved that the legislative language
proposed be-modified to require a waiver by the Administrator on a
finding by the Governor that costs of compliance with a particular
requirement significantly outweigh benefits to the Northern Mariana
Islands from compliance with that requirement. The motion was
seconded and passed.

Mr. MacMeekin noted that the Environmental Protection Agency had
not yet commented on the draft recommendation and asked whether the
agency should be given additional time in which to submit comments.
He suggested that the Executive Director, in consultation with the [37
Chair, could either modify the draft recommendation to reflect
suggestions from the Environmental Protection Agency or, if the
suggested changes were of sufficient gravity, obtain the approval of
all Commission members. After discussion, the Commission members
decided that the interim report to Congress should not be delayed to
permit receipt of comments from the Environmental Protection Agency
and possible alterations in the interim report in response to those
comments.

Procedure. The Commission next discussed the format of the
report and the persons to whom it should be submitted.
Mr. Pangelinan suggested the Chair and the Executive Director be
given flexibility to decide on the format of the interim report. The
members agreed to this suggestion.

Mr. Joseph noted that, while comments on the substance of the
draft interim report had been sought from a variety of sources and
had been received, the comment process had not been mentioned in the
draft interim report. Mr. MacMeekin suggested that, rather than
including a list of the persons and organizations commenting on each
draft recommendation, general language be inserted in the
introduction to the interim report alluding to the efforts made to
secure comments from a variety of sources. The Commission concurred
in this approach.

Mr. MacMeekin suggested that the interim report be addressed
formally to the President of the Senate (who is the Vice President of
the United States) and the Speaker of the House of Representatives,
the presiding officers of Congress.. He also suggested copies be sent
to all members of Senate and House of Representatives committees
having jurisdiction over the territories. Mr. Borja said that
officials of the Government of the Northern Mariana Islands should
also be provided with copies. The members of the Commission directed
Mr. MacMeekin to distribute the interim report to those recipients.

Adoption of interim report. Mr. Pangelinan then moved adoption
of the interim report in its entirety, as amended by the Commission
during its deliberations in this meeting. The motion was seconded by
Ms. McPhetres and passed.

Old Business

Commission priorities. Mr. MacMeekin said the staff's first
priority should be submission of the interim report to Congress. He
then discussed federal laws previously identified by the Commission
as laws to which the staff should give high priority.

10 -

-immigration laws. Mr. MacMeekin said two separate areas of
concern were presented by the immigration laws, one involving entry
into the Northern Mariana Islands and the other entry into other
[381 parts of the United States. He noted that, under the terms of the
Covenant, the Northern Mariana Islands presently controls its own
immigration and will continue to do so unless the United States
Congress decides otherwise.

Three primary concerns, Mr. MacMeekin said, dominate discussion
of possible application of federal immigration laws to entry into the
Northern Mariana Islands. First, the small population of the
Northern Mariana Islands soon could be outnumbered by emigrants from
a particular foreign country if a substantial portion of the 20,000
annual immigrants allowed from that country into the United States
each year decided to settle in the Northern Mariana Islands. Second,
because Guam has experienced problems attributed to federal
administration of alien labor laws there, many persons in the
Northern Mariana islands desire to retain local control over the
entry of alien laborers. Finally, he said, entry into the Northern
Mariana Islands by tourists should continue to be easy.

Mr. MacMeekin said entry into the United States by citizens of
the Northern Mariana Islands has occasionally been difficult. He
noted that suggestions have been made for issuance of a special
passport to citizens of the Northern Mariana Islands by the U.S.
State Department prior to termination of the trusteeship. He said
that present authority for admission of citizens of the Northern
Mariana Islands into the United States is in the form of a telex of
the Immigration and Naturalization Service allowing citizens of the
Northern Mariana Islands to be treated administratively as if they
were citizens of the United States for purposes of immigration
inspection. That telex, he said, does not permit citizens of the
Northern Mariana Islands to bring into the United States spouses who
are citizens of neither the United States nor the Northern Mariana
Islands.

Mr. MacMeekin said that the negotiating history of the
privileges and immunities provisions in the Covenant shows those
provisions were included to protect citizens of the Northern Mariana
Islands from deprivation of rights by State governments, and not by
the Federal Government.

Mr. MacMeekin said whether the Northern Mariana Islands could
restrict rights of aliens lawfully within United States to travel to
the Northern Mariana Islands presented a constitutional question
deserving research.

--Fishery Conservation and Management Act. Mr. MacMeekin
explained the operation of the Fishery Conservation and Management
Act. The emerging governments in other parts of Micronesia where the

Act does not apply have earned substantial sums by selling fishing
rights, primarily for tuna, to foreign nations. The Act's
applicability to the Northern Mariana Islands has been the subject of
debate and litigation, he said, and is not yet settled. If the Act [391
applies, any fees derived from foreign fishing permits would go into
the United States Treasury, not into the treasury of the Northern
Mariana Islands. Further, he said, the Act does not purport to
regulate the tuna fishery. Mr. MacMeekin also referred to the
controversial vessel documentation requirements applied under the
Act. Those requirements, he said, have been temporarily rendered
inapplicable to vessels owned by citizens of the Northern Mariana
Islands by a presidential proclamation.

Mr. MacMeekin said that, while an argument-could be made for
continuing ownership of Northern Mariana Islands waters by the
Northern Mariana Islands based on traditional ownership, his
impression is that once an area becomes a part of the United States,
its waters become United States waters. He noted that, under section
104 of the Covenant, the United States on termination of the
trusteeship is responsible for conduct of foreign affairs affecting
the Northern Mariana Islands. He said he thought it extremely
unlikely the United States would.seek to negotiate tuna fishing
rights on behalf of the Northern Mariana Islands when it takes the
position on its own behalf that tuna may only be controlled by
international fishery agreements.

Legislation allowing the Northern Mariana Islands to receive
fees derived from foreign fisheries in local waters might be
possible, Mr. MacMeekin said, under an amended Fishery Conservation
and Management Act. Even were the act so amended, he said, the
Northern Mariana Islands would still be unable to collect fees
derived from the excluded tuna fisheries.

Mr. MacMeekin said a regional fishery agreement covering tuna is
a possibility, but unlikely because the major fishing nations in the
area probably prefer the status quo. He noted that the Commission's
jurisdiction is limited to making recommendations to Congress, while
international fisheries agreeements are negotiated by the executive
branch.

--federal grants. Mr. MacMeekin said he had delayed staff study
of the availability of federal grants to the Northern Mariana
Islands, waiting for a Department of the Interior survey on the
question. He also noted that the massive federal budget cuts are
restructuring many federal grant programs. The Interior survey, when
it finally appeared, was found to have been based on a questionnaire
survey of the various grant-administering federal agencies rather
than on a study of the applicable legal provisions. The data in the
survey was two years old when it was published. Even so, he said,
the survey provides a good starting point for the Commission's study.
Of the 1012 programs listed in the Interior survey, he said, 785
appear to be available in the Northern Mariana Islands. Of these,

- 12 -

the Northern Mariana Islands actually participates in 150.
Mr. MacMeekin proposed that programs be divided into two categories:
(1) those available to other territories but not to the Northern
(401 Mariana Islands; and (2) those available neither to the Northern
Mariana Islands nor the other territories. The Interior survey
identifies 68 programs in the first category. Under section 703(a)
of the Covenant, the United States promises to make available to the
Northern Mariana Islands federal programs and services available to
the other territories. Mr. MacMeekin mentioned that he also wants to
investigate programs which certain agencies asserted to be available
to Guam but not to the Northern Mariana Islands, since such an
assertion is contrary to section 502(a)(1) of the Covenant, making
available to the Northern Mariana Islands all laws providing federal
services and financial assistance programs to Guam. Mr. Pangelinan
said that for a number of federal grant programs, the programs are
either not necessary in the Northern Mariana Islands or the Northern
Mariana Islands does not have the resources to implement those
programs.

--bankruptcy laws. Mr. MaeMeekin said a draft staff
recommendation insuring applicability of the federal bankruptcy laws
to the Northern Mariana Islands is near completion. He said the
federal bankruptcy laws had been repealed after the effective date of
the Covenant and new bankruptcy laws enacted to become fully
effective in 1984. In the process of repeal and amendment, the
existence of the Northern Mariana Islands was apparently overlooked.
He said the proposed draft recommendation would remedy that
oversight.

--land-grant colleges. Mr. MacMeekin suggested that laws
providing federal funds to land-grant colleges deserved review and
study by the Commission. Even though the Northern Mariana Islands
does not have a land-grant college, other institutions might be able
to administer funds appropriated under the land-grant college funding
laws to accomplish the purposes of those laws. The Northern Mariana
Islands Community College is one such institution, but other
institutions might also serve the purpose.

--service academy appointments. Mr. MaeMeekin suggested that a
recommendation be drafted giving the Representative to the United
States for the Northern Mariana Islands authority to appoint students
to the various service academies. He said that enactment of the
provisions in the draft interim report requiring officers in the
armed forces to be United States citizens also must be enacted to
enable citizens of the Northern Mariana Islands to attend the service
academies.

--investment tax credits. Mr. MacMeekin suggested study of
whether United States businesses could claim investment tax credits
for investments made in the Northern Mariana Islands and, if credits
cannot be claimed, drafting of a proposed recommendation allowing
such claims.

13 -

--customs laws. Mr. MacMeekin suggested that reexamination of
whether exclusion of the Northern Mariana Islands from the customs
territory of the United States is advantageous to the Northern
Mariana Islands might merit further study. [411
[The Commission then recessed and reconvened the following day,
December 1, 1981.1

--government depository libraries. Mr. MacMeekin suggested a
draft recommendation amending existing law to allow the Governor of
the Northern Mariana Islands to designate an official government
depository library in the Northern Mariana Islands to receive
selected publications of the Federal Government.

--tariff filing requirements for the shipping industry.
Mr. MacMeekin suggested that the staff should study, as urged by
Mr. McLaughlin earlier in the meeting, whether domestic or foreign
tariff requirements should apply to shipping between the United
States and the Northern Mariana Islands.

--Army Corps of Engineers permit requirements. Mr. MacMeekin
said that Mr. Tenorio had suggested that the applicability of federal
laws requiring Army Corps Engineer permits for certain types of
construction in the Northern Mariana Islands should be studied, since
important projects are often delayed by these requirements. Mr.
MacMeekin noted that the problem of delay in issuance of permits by
the Corps is also being addressed nationally.

--disaster assistance. Mr. MacMeekin said that housing
assistance made available by the Federal Government after a disaster
requires compliance with building code requirements. A problem is
created in the Northern Mariana Islands because there are no local
building codes.

--territorial delegate. Mr. MacMeekin said the question of
representation for the Northern Mariana Islands in the United States
House of Representatives should be addressed by the Commission.

Mr. MaeMeekin also mentioned several areas he thought did not
merit substantial study by the Commission.

--foreign aid. Mr. MacMeekin said that the desirability of
enacting feder;71-legislation to permit public or private foreign aid
to public or private entities in the Northern Mariana Islands
probably did not deserve Commission attention. Under section 104 of
the Covenant, he explained, the United States will handle the foreign
affairs of the Northern Mariana Islands. Foreign affairs are
normally conducted by the U.S. Department of State, and are not
usually governed by particular legislation from Congress. This
Commission, however, reports only to Congress.

- 14

--Restrictions on air charter flights and tour groups from Japan
to the Northern Mariana Islands. Mr. MacMeekin said it has been
suggested that the Commission recommend legislation to remove
restrictions on air charter flights and tour groups from Japan to the
[421 Northern Mariana Islands. These restrictions, he said, are contained
in international agreements between the United States and Japan.
Again, the Commission's jurisdiction to recommend only to Congress
does not extend to suggesting that the executive branch modify these
agreements.

Mr. Pangelinan emphasized the need for the Northern Mariana
Islands to continue its present status as a "domestic
essential-air-services area."

Mr. MacMeekin here interjected that federal cabotage
restrictions on air carriers, which are closely related to the
restrictions on charter flights and tour groups, should be studied by
the Commission. These restrictions prevent foreign air carriers from
picking up passengers on Saipan and carrying them only to Guam or
vice-versa.

--coastwise laws--exception for U.S. Government. Mr. MacMeekin
said that, notwithstanding the general inapplicability of the federal
coastwise laws to the Northern Mariana Islands, those laws did apply
to shipments to the Northern Mariana Islands by the United States
Government. As a consequence of this exception, the U.S. Department
of Agriculture has experienced difficulty in shipping food
commodities to the Northern Mariana Islands because no
coastwise-qualified vessels serve the Northern Mariana Islands on
regular basis. This problem will soon resolved with implementation
of the food stamp program in place of the commodities distribution
program in the Northern Mariana Islands.

The Chair then asked the members for their comments and
suggestions on the executive director's list of federal laws to be
given high priority for staff study. Mr. Tenorio expressed his
desire that the staff review all rules and regulations impeding
development in the Northern Mariana Islands. After a brief
discussion, the consensus of the members was that areas for study
need to be more narrowly defined.

Ms. McPhetres expressed the desire that the staff study federal
education block grants for use in the Northern Mariana Islands, with
particular attention to incorporating funds available under the
Higher Education Act in that block grant. Mr. Pangelinan suggested
that Ms. McPhetres look into the situation further, and give her
views to the staff.

- 15 -

Mr. Pangelinan then suggested that review of the applicability
of federal criminal law to the Northern Mariana Islands also be given
high priority for staff study.
The Commission agreed that the staff should proceed with the [431
priorities as outlined by Mr. MaeMeekin, incorporating the
suggestions made by the members of the Commission.

Purchase orders. Mr. MacMeekin asked the Commission for formal
authority to execute purchase orders on behalf of the Commission. He
said that., while he assumed this authority was inherent in the
position of executive director and had been acting accordingly, some
language in the recent Comptroller General opinion on the legal
nature of the Commission made desirable a grant of formal authority
by the Commission to him. Mr. Borja moved that the authority
previously understood to be in the executive director of the
Commission to issue purchase orders on behalf of the Commission be
confirmed. The motion was seconded and passed.

New Business

Role of the Office of Management and Budget. Mr. Joseph said
that the administration wants to control all matters that go to
Congress from the executive branch. The General Accounting Office
has ruled, he said, that the Commission is independent of the
executive branch. He said there appears to be need to confirm the
Commission's position as an independent agency to the Office of
Management and Budget. Mr. MacMeekin explained that he had informed
the Office of Management and Budget that he would raise this issue
with the Commission and inform the Office of Management and Budget of
the Commission's position. Mr. Borja moved to confirm the
Commission's independent status and to direct the executive director
to draft a letter to the Office of Management and Budget, for the
Chair's signature, stating that position. Mr. MacMeekin suggested
adding to the letter appropriate legal citations. Mr. Borja modified
his motion to include that suggestion. The motion seconded and
passed.

Letterhead. The members agreed that Commission letterhead
should be prepared to reflect the existence of the Northern Mariana
Islands office of the Commission.

Next meeting of the Commission

Mr. Joseph recommended that the next meeting of the Commission
be held in the Northern Mariana Islands, noting that no meeting of
the Commission had yet been held there. The members agreed that the
next meeting should be held in the Northern Mariana Islands. The
members also agreed that the meeting should be held in either early
May or early June, but with discretion in the Chair, in consultation
with the executive director, to set exact date.

Closing Remarks; Adjournment

Mr. Joseph asked that the executive director prepare a press
[441 release for issuance on transmittal of the interim report to
Congress. He then expressed the appreciation of the Commission to
the Marianas/Hawaii Liaison Office for hosting this meeting of the
Commission. Finally, he expressed his pleasure with the
accomplishments of the Commission thus far and thanked the staff for
its excellent work. He then adjourned the fourth meeting of the
Commission.

CERTIFICATION

The minutes of the November 30-December 1, 1981, meting of the
Northern Mariana Islands Commission on Federal Laws are set forth
above as adopted by the Commission at its meting of July 7, 1982.

Daniel H
Executive Director

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

MINUTES OF THE FIFTH MEETI%

SAIPAN, NORTHEIN MARIANA ISLANDS
July 7, 1982 [451

Commission Vice-Chair Pedro A. Tenorio, as Acting Chair, opened
the fifth meeting of the Northern Mariana Islands Commission on
Federal Laws in Room 103C of the Marianas High School, at Susupe,
Saipan, Northern Mariana Islands, at approximately 9:15 a.m.

Commissioners present, in addition to Mr. Tenorio, were
Agnes Manglona. McPhetres, Myron B. Thompson, Edward DLG. Pangelinan,
and Jesus C. Borja. Commissioners absent were Chair
James A. Joseph and Congressman Phillip Burton.

opening Remarks

Mr. Tenorio began the meeting by welcoming the Commission
members and the members of the general public in attendance. He
noted that the Commission was meeting for the first time in the
Northern Mariana Islands. He then briefly summarized for the mejTbers
of the public the purpose and function of the Commission. He
mentioned that the Commission earlier in 1982 had submitted to the
Congress of the United States an interim report which recommended
enactment of legislation altering the applicability of various
federal laws to the Northern Mariana Islands. He explained that the
meeting was open to the public and that public participation was
welcome. He noted that, in addition to listening,to views expressed
by persons in the audience, the Commission would discuss the proposed
format for its final report to Congress.

Quorum, Notice of Meeting, and Approval of Minutes

Mr. Tonorio announced that a quorum was present. Notice of the
meting had been published in the Federal Register, the Commonwealth
Examiner, and the Marianas Variety.

The minutes of the fourth meeting of the Commission, held
November 30 and December 1, 1982, in Honolulu, Hawaii, were approved.

Report of the Executive Director

Interim Report. Mr. Daniel H. MacMeekin, the executive
dire6lt@or,informed the Commission that the interim report adopted by
the Commission at its fourth meeting was submitted to the U.S.
Congress in January. That report recommended enacbuent of
legislation to (1) extend to citizens of the Northern Mariana Islands
various rights, benefits, or entitlements accorded citizens of the

United States pursuant to a number of federal laws; (2) clarify that
the Federal Thrt Claims Act does apply to the Northern Mariana
Islands, and (3) exempt the Northern Mariana Islands from the
automobile emission control requirements of the Clean Air Act and
[461 require the Environmental Protection Agency to grant a waiver to the
Northern Mariana Islands of any other requirement of the Act, upon a
finding by the governor of the Northern Mariana Islands that costs of
compliance with that requirement are outweighed by the benefits to be
derived.

Mr. MadMeekin noted that copies of the interim report were
distributed in the Northern Mariana Islands and in Washington.

Personnel. Mr. MacMeekin informed the members that in May he
hired two new staff attorneys for the Cxxrmission's office in
Washington. The two attorneys are Jeffrey Nackley and
John Cutler. Mr. MacMeekin also announced that
Lillian C. Villagomez had joined the Northern Mariana Islands office
as a part-time secretary.

In addition, Mr. MacMeekin told the Commission he intended to
hire Trevor Haydon as a special assistant from September to December
1. Mr. Haydon, formerly the Northern Mariana Islands desk officer in
the Department of the Interior, is now starting his second year at
Northeastern University Law School in Boston. His work with the
Commission will earn him credits toward graduation as part of
Northeastern's cooperative education program.

Budget. Mr. MacMeekin explained that the Comission's budget
remains adequate. He noted that the fiscal year 1982 budget
appropriation for the Commission was cut, along with all federal
agency budgets, by four percent. The fiscal year 1982 budget is not
11no-year" money, and so is not available after the end of the fiscal
year. The Commission still has funds from earlier appropriations
which will support the Commission's work at least until March or
April of 1983.

Corre@pndence. As directed by the Commission at its fourth
meting, a letter was sent to the Office of Management and Budget
(OMB), informing OMB of the Commission's position that the Commission
is not an executive branch agency subject to the jurisdiction of Cm.
An OMB official later informed Mr. MacMeekin that OMB had arrived at
the same conclusion.

Current status of Commission work. Mr. MacMeekin suggested to
the Coinnission that the staff direct all of its remaining effort
toward preparation of the Commission's final report and that another
interim report not be prepared. He said he anticipated the final
report could be submitted to Congress in March or April of 1983.

Mr. MacMeekin noted that the Northern Mariana Islands and
Washington offices of the Commission are in frequent contact with
various individuals, groups, and agencies regarding the work of the
Commission. The concerns of those individuals, groups, and agencies r.471
regarding the applicability of particular federal laws to the
Northern Mariana Islands forim the basis for the list of work
priorities developed by the staff.

With the addition of the two staff attorneys, the work of the
commission is now progressing at a faster pace, Mr. MacMeekin said.

Discussion. Mr. Pangelinan asked that the Commission later in
the meting reserve time to discuss further the Commission budget.
He wanted to discuss the need for "follow-up" in Congress after
submission of the Cominission's final report. Ms. McPhetres also
wanted to touch on follow-up procedures when the Commission addresses
the proposed outline for the final report. Mr. Borja asked that the
Commission later reconsider Mr. MacMeekin's suggestion that another
interim report not be submitted.

Mr. MacMeekin explained that even if the Commission were to
submit another interim report, congressional action on the
recommendations would be unlikely in an election year. He also said
few recommendations are ready for inclusion in a second interim
report. He noted that only three draft staff recommendations have
received sufficient public circulation to reasonably allow their
inclusion in an interim report. He said that the Northern Mariana
Islands Senate recently adopted a resolution requesting that the
Commission's draft staff recommendation on nominations to the service
academies be submitted as part of an interim report. Other
recamiendations that could form a part of a second interim report,
however, are not of compelling urgency.

Mr. Thompson asked why nominations to the U.S. Coast Guard
Academy were not included in the service academy recommendation.
Mr. MacMeekin answered that Coast Guard Academy nominations are not
made by members of Congress as are nominations to the other
academies and that no statute requires that any proportion of Coast
Guard Academy cadets be domiciled in particular jurisdictions.

Proposed outline for the Final Report

The Commission next addressed the staff's proposed outline for
the Commission's final report. Mr. MacKeekin noted that the reports
of the Guam and Virgin Islands federal laws commissions are not easy
reading. Mr. MacMeekin said he would like this Commission's final
report to be readable.

Mr. MacMeekin then briefly described the different sections
within the proposed outline for the final report. The introductory
section would describe the task of the Commission, its membership,
and its history. This section would also describe the methodology

used by the Commission: the determination of priorities, the
preparation of draft staff recommendations, the criteria used in
deciding whether a particular statute should be made applicable, the
solicitation of views from public and private interests in the
[481 Northern Mariana Islands and from concerned federal agencies, and,
finally, Commission consideration of staff recommendations.

The second section of the report would then list, in order of
importance, the recommendations of the Commission, in concise
language.

The third section of the report would be a title-by-title survey
of the United States Code. This section would specify whether a
particular law does or does not apply in the Northern Mariana Islands
and explain the Commission's rationale for recommending or not
recommending changes in that applicability.

A fourth section would contain proposed legislative language to
implement the Commission's recommendations. An appendix to the
report would list the staff of the Commission.

Mr. MacMeekin suggested that the Commission also publish a
separate documentary supplement to the final report. This volume
would include various official Commission documents, such as the
by@laws, the minutes of the Commission meetings, the General
Accounting Office ruling regarding the Commission's juridical status,
and Comission staff papers.

Mr. MacMeekin proposed that the final report be printed by the
offset process on 8 1/2" x 11" paper from typed originals, with an
attractive cover.

Mr. Tenorio noted that the proposed outline was quite
substantial. Ms. McPhetres asked whether the Commission staff should
be given flexibility to readjust priorities as the need arises.
Mr. MacMeekin responded saying that he felt the staff has sufficient
leeway to adjust priorities as necessary.

Mr. Pangelinan expressed concern that the final report might be
too lengthy for individual meui>ers of Congress to digest and
suggested that the Commission might want to divide the
recommendations of the report according to whether they deal with
laws now applicable or with those not applicable. Mr. MacMeekin
replied that this division could be made.

Mr. MacMeekin then suggested the possibility of publishing an
executive summary to the final report, either within the report or as
a separate documnt. Mr. MacMeekin noted the scope of the
Commission's task was such that its final report will necessarily be
lengthy.

- 5 -

Mr. Borja said he concurs with Mr. MacMeekin's suggested format
for the final report. He explained that the work of the Commission
should be complete and thorough. He also suggested inclusion of the
Covenant in the documentary supplement. [491
With respect to concerns raised that the final report may be too
lengthy or bulky, Mr. MacMeekin pointed out that this Commission's
final report will be small compared to the multivolume reports
prepared by some other study commissions.

Mr. Thampson asked that the Commission, at a later meeting
further discuss the format and contents of the final report.

Mr. Tenorio inquired whether the staff is reviewing federal
regulations, since problems of application often occur not in the
statutes but in implementing regulations. Ms. McPhetres suggested
the Commission address this matter in its discussion of priorities.

Motion. Mr. Thompson then moved for the adoption of the
proposed format for the Commission's final report, with flexibility
retained to make necessary changes to the format at a later date.
The motion was seconded by Ms. McPhetres and passed.

Public Participation

Mr. Tenorio then invited the members of the public to bring to
the Commission's attention their federal law concerns.

The Fishery Conservation and Management Act. Donald C.
Woodworth, legislative counsel to the Northern Mariana Islands
Senate, asked whether any draft staff recommendation had been
prepared by the Commission staff on the Fishery Conservation and
Management Act. Mr. MacMeekin replied that, while no draft
recommendation regarding the Act has been prepared, materials have
been gathered and a draft staff recommendation may be ready for
circulation in September. Mr. MacMeekin then disclosed, for the
record, his prior association with Mr. Woodworth in the Olwol
lawsuit, disputing the applicability of the Act in the Northern
Mariana Islands, when both were attorneys employed by Micronesian
Legal Services Corporation.

Pedro R. Guerrero, a local businessman, informed the Commission
that he opposes applying the Fishery Conservation and Management Act
to the Northern Mariana Islands. He then asked the Commission to
support the Northern Mariana Islands Marine Sovereignty Act, which
establishes a local 200-mile exclusive econanic zone.

Judge Alfred Laureta of the District Court for the Northern
Mariana Islands would like the Commission to decide whether federal
laws of doubtful applicability are or are not applicable, giving as
an example the Fishery Conservation and Management Act.

Mr. Tenorio noted that, with respect to the Fishery Conservation
and Management Act, there are conflicting positions in the Northern
Mariana Islands, and that a public hearing, once a draft
[501 recommendation has been circulated on that Act, inight be conducted.
Mr. MacMeekin agreed that a hearing could be useful.

Responding to a question raised by Judge Laureta, Mr. Pangelinan
said that the Commission may recommend that only certain provisions
of a particular federal law apply to the Northern Mariana Islands,
while other provisions in the same law not apply. This approach was
followed in the Commission's recommendation on the application of the
Clean Air Act to the Northern Mariana Islands, he noted.

Implementation of Commission recommendations. Janet Econome, an
attorney with fflc@ronesian Legal Services Corporation, asked what
plans the Commission has made to insure that recommendations in the
Commission's final report are acted upon by Congress. Mr. Macfvleekin
replied that no definite plans have been prepared by the Commission.

Covenant provisions on applicability. Joel Bergsma, legislative
counsel to the Northern Mariana Islands House of Representatives,
asked whether the Commission has jurisdiction to recommend changes
regarding federal laws specifically mentioned in the Covenant, for
example, the Internal Revenue Code. Mr. Mac@leekin replied that the
negotiating history of the Covenant implies the Commission may do so,
noting as an example the discussion in the negotiating history of the
federal banking laws. He said doing so is not tantamount to amending
the Covenant, since establishment of the Commission in the Covenant
indicated the drafters of the Covenant expected changes in the
applicability of some federal laws, even though the formulas in
section 502 of the Covenant generally make every federal law either
applicable or inapplicable.

Citizenship. Mr. Bergsma. also inquired whether the Commission
could recom-nend to Congress legislation allowing election of United
States citizenship by citizens of the Northern Mariana Islands. Mr.
MacMeekin replied that the U.S. State Department appears opposed to
any blanket grant of U.S. citizenship. Mr. Pangelinan stated that
the State Department is opposed to such a grant, because it would be
synonymous with exercising sovereignty over the Northern Mariana
Islands prior to termination of the trusteeship. Mr. Pangelinan then
noted the existence of proposed legislation in Congress allowing
Northern Mariana Islands military enlistees to become U.S. citizens
upon enlistment.

Slaughterhouse requirements. Pedro R. Guerrero said that Saipan
and Rota do not have slaughterhouses meeting the requirements of
federal law. These requirements, he said, prevent local livestock
raisers from selling beef to retail outlets here. Mr. Tenorio

- 7

replied that the office of the Governor of the Northern Mariana
Islands is presently studying this matter and that he expects to hear
soon from the U.S. Department of Agriculture on how to resolve this
issue. f5l]

Cultural center. Mr. Guerrero next said there is a need,for a
cultural center within the American Memorial Park. Mr. Tenorio said
that the Commission has no jurisdiction over this matter. The
Governor's office has tentative master plans, however, which include
a cultural center within the park, he said.

Libraries; communications; Commission records. Ms. Ruth Tighe,
acting Conmnwealth Librarian, noted her pleasure with the government
depository library draft staff recommendation. Ms. Tighe would like
the Commission to review the federal regulations establishing postal
rates for books and library materials to determine if they adversely
affect the Northern Mariana Islands. She also asked the Commission
to review federal laws guaranteeing public access to satellite and
cable TV franchises. Because of the many satellite and cable TV
stations in the mainland United States, public access guarantees are
not needed there. They are needed in the Northern Mariana Islands,
she said. Ms. Tighe also suggested the need to review the various
federal laws aimed at providing sophisticated technical assistance
and funding for library systems. What the Northern Mariana Islands
needs at this stage of its development, she said, is funding for
library buildings and other basic library infrastructure. Finally,
Ms. Tighe asked where the records of the Commission will be stored
and suggested that these records be microfilmed to reduce their bulk.
Mr. MacMeekin suggested that the Commission address this matter at
its last meeting.

Law library. David Collins, a law clerk for the District Court
for the Northern Mariana Islands, asked that the Commission review
existing regulations that limit access to legal research information
systems. These regulations limit the ability of the Northern Mariana
Islands to establish a comprehensive law library. He suggested
amending the regulations to allow the combination of federal and
local law libraries in the Northern Mariana Islands.

Commission Priorities

Priority areas. Mr. MacMeekin then provided a progress report
on the various priority areas previously established by the
Commission:

-Immigration laws. Mr. MacMeekin said that immigration issues
divide into two categories, those related to entry into the United
States, and those related to entry into the Northern Mariana Islands.
With respect to entry into the United States, a draft staff
recommendation on the creation of a special U.S. passport for

citizens of the Northern Mariana Islands has recently been
circulated. Another problem related to entry into the United States
is the limited ability of alien relatives of citizens of the Nbrthern
[521 Mariana Islands to enter the United States. Alternative approaches
to this problem are under study.

With respect to entry into the Northern Mariana Islands,
Mr. MacMeekin said, a principal issue is whether the Northern Mariana
Islands can restrict entry of aliens lawfully admitted into the
United States.

Another important issue, he said, arises out of the requirement
in the United States Constitution that the naturalization laws of the
United States be "uniform". Residency in the United States is
required prior to naturalization as a United States citizen.
Research is needed on the extent to which requirements for residency
in the Northern Mariana Islands may differ from those for residency
elsewhere in the United States without conflicting with the
uniformity requirement.

-Fishery Conservation and Management Act. Mr. MacMeekin
explairi@@that background research has been prepared and a draft
staff recommendation should be ready by September or early October.
He noted that the Northern Mariana Islands government appears to be
of two minds internally regarding whether the Act should be
applicable.

--Bankruptcy laws. Mr. MacMeekin pointed out that a draft staff
recommendation circulated earlier this year has received generally
favorable comments. Recently, however, the U.S. Supreme Court
declared the new bankruptcy courts unconstitutional. Congress is now
in the process of redrafting the bankruptcy laws to comply with that
ruling. Mr. Madmeekin suggested the Commission consider sending a
letter to the appropriate committees in Congress, recomending the
technical amendments of the draft staff recommendation be
incorporated in the redrafted law.

--Land grant college. Mr. MacMeekin said a draft staff
recomme_nUa@tion to enable the Northern Mariana Islands to be eligible
for funding under the land grant college laws has been prepared and
will soon be in circulation.

-Service academies. A draft staff recommendation has
previously been circulated to allow the Resident Representative to
the United States for the Northern Mariana Islands to nominate one
individual each from the Northern Mariana Islands to attend the
United States Military Academy, the United States Naval Academy, and
the United States Air Force Academy at any one time. The Comission
may at this meeting decide to take action on the proposed
recommendation, Mr. MacMeekin said.

- 9 -

--Investment tax credit. At issue is whether investments by
U.S. companies in the Northern Mariana Islands qualify for certain
investment tax credits. The question is being reviewed as part of
the staff's general review of the Internal Revenue Code, title 26 of [531
the U.S. Code.

--Customs laws. Initially, Mr. MacMeekin said, he had wanted to
determine whether it is to the advantage of the Northern Mariana
Islands to be outside the customs territory of the United States. He
has concluded, he said, that the present situation of the Northern
Mariana Islands, outside the customs territory of the United States
but entitled to preferential treatinent under headnote 3A, is
advantageous to the Northern Mariana Islands and should not be
changed. In addition, he has conducted a comprehensive survey of the
import and export laws of the United States. He plans to circulate
the survey prior to formulating'any draft staff recommendations on
the import and export laws.

depository library. Mr. MacMeekin said a draft
staff recommendation.for enactment of legislation to allow the
Governor of the Northern Mariana Islands to designate a library as a
depository for publications of the United States Government has been
circulated, and is now ready for Commission action.

--Domestic tariff filing. At issue, Mr. Macmeekin said, is
whether the Northern Mariana Islands should be considered a domestic
or foreign destination for purposes of tariff filing requirements of
the Federal Maritime Commission. If it is considered a domestic
destination, the requirements are apparently somewhat more onerous.
A draft staff recommendation is in preparation. Mr. MacMeekin noted
that the Philippine, Micronesian, and Orient Shipping Line has
recently petitioned the Federal Maritime Commission to suspend the
application of domestic filing requirments to the Northern Mariana
Islands until this Commission has reviewed the matter.

--Army Corps of Engineers pe it requirements. Mr. MacMeekin
told the members that a draft staff recommendation has been prepared
and soon will be circulated. The recommendation treats not only the
regulatory requirements of the Army Corps of Engineers, but also
other environmental permit requirements.

--Air cabotage laws. A draft staff recommendation to allow
foreign air carriers to transport passengers and their luggage
between the Northern Mariana Islands and Guam has recently been
circulated.

--Criminal laws. A draft staff recommendation on the federal
criminal laws, t 18 of the U.S. Code, is in preparation.

--Banking laws. A staff attorney has been assigned to review
the federal banking laws. Mr. MacMeekin mentioned that most of these
laws appear to be now applicable to the Northern Mariana Islands.

10 -

--Territorial delegate. One of the staff attorneys has been
assigne:3'-to prepare a draft staff recommendation on whether the
Northern Mariana Islands should have a delegate to the U.S. Congress.
(541 --Disaster housing requirements. Mr. MadMeekin said there
appears no longer to be any problem with building code requirements
for federal disaster housing assistance.

--Higher education block grant. Ms. McPhetres asked that the
staff study the possibility of consolidating all Higher Education Act
grants for the Northern Mariana Islands into a single block grant.

--Rural Electrification Agency loans. Mr. Tenorio said that the
Northern Mariana Islands has not been able to obtain electrification
loans from the Rural 'Electrification Agency, although that agency is
now considering a loan application from a telephone company in the
Northern Mariana Islands. Definition of the ten-a "rural" to exclude
the Northern Mariana Islands appears to be the problem, he said.

Discussion--special passports. Mr. Pangelinan suggested that
the Commission staff give high priority to the special passj@ort
recommendation and that it ascertain the State Department's position
on this draft recommendation.

Motion. Mr. Pangelinan moved that the Commission not rank the
prioii't-yareas but continue to allow the staff flexibility to
determine the time to be soent on each area. The motion was seconded
by Ms. McPhetres, and passed.

Commission Action on Draft Staff Recommendations.

Bankruptc
y laws--motion. Mr. Thompson moved that letters be
sent to the chairpersons of the Senate and House Judiciary Committees
suggesting that these cc*,vdttees, in their revision of the bankruptcy
laws in response to the recent Supreme Court decision, take into
account the technical amendments recum-ended in the draft staff
recommendation. The motion was seconded by Mr. Pangelinan and
passed.

Government Depository Library-motion. Mr. Thompson moved the
adoption of the draft staff recommandation on government depository
libraries. The motion was seconded by Ms. McPhetres and passed.

Service Academies--motion. W. Thompson moved the adoption of
the service academy draft staff recon*umndation. The motion was
seconded by Ms. McPhetres and passed.

No second interim report. The Commission then decided that the
two recommendations adopted should not be transmitted as a second
interim report, but should be included in the final report.

- 11 -

Recently Circulated Draft Staff Recommendations

The Commission decided not to discuss until the next meeting the
draft staff recommendations relating to air cabotage, intellectual [551
property, and creation of a special passport, because these drafts
have only been circulated recently.

Other Business

Commission budget. Mr. MacMeekin noted that most of the
$192,000 received for fiscal year 1982 will be spent by the end of
the fiscal year. Still remaining for use by the Commission is the
approximate balance of $185,000 from earlier appropriations. This
.sum, according to Mr. MacMeekin, will enable the Commission to
continue its work at least to the end of the first quarter of
calendar 1983. He noted that Commission personnel expenses are on
the average roughly $17,000 per month. He also said that the cost of
Commission meetings is roughly $20,000 per meeting.

Implementation of Commission recommendations. Mr. Pangelinan
said a follow-up effort after submission of the Commission's final
report is necessary to increase the chances Congress will act
favorably on the Commission's recommendations. He suggested the
executive director might do this. Mr. Tenorio agreed-that follow-up
is desirable. Ms. McPhetres also expressed concern, noting that the
Commission's work should not be "shelved," and suggesting as an
alternative that the office of the Special Representative to the
United States for the Northern Mariana Islands in Washington might
perform this function.

Mr. MacMeekin told the members he would like to study this
matter further.

Motion. Ms. McPhetres then moved that the staff review the
follow-up issue and related matters and report to the Commission on
its conclusions at a later meeting. The notion was seconded by
Mr. Thompson and passed.

Place and Date of Next Meeting

Motion. Mr. Thompson moved that the next Commission meeting be
held Tn -Hawaii in December, with the Chair to determine the specific
date and location. Mr. Borja seconded the motion, which then was
passed.

Bylaws requirement. Mr. MacMeekin noted that the Commission is
unlikely to meet a third time in 1982 and that the bylaw requirement
of three Commission meetings each year can be waived as to the third
meeting by the Chair. Mr. Tenorio said he would take no action on a
waiver at this meeting.

- 12 -

Closing Remarks; Adjournment

Mr. Tenorio expressed his pleasure at the accomplishnents of the
[561 meting, expecially in terms of the public participation. He thanked
the audience for attending the meeting. Mr. Pangelinan noted the
historical significance of the first meting of the Commission to be
held in the Northern Mariana Islands.

Mr. Thompson then moved to adjourn. The mtion was seconded by
Mr. Borja and passed. The meeting adjourned at 2:30 p.m.

CERTIFICATION

The minutes of the July 7, 1982, meting of the Northern Mariana
Islands Commission on Federal Laws are set forth above as cx-)rrected
and adcpted by the Commission at its meting of Deceirber 16, 1982.

HgrMaf--K*e n
Executive Director

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) N3-5617

MINUTES OF THE SIXTH MEETING

HONOLULU, HAVAII [571

December 16-17, 1982

Comndssion Chair Jams A. Joseph opened the sixth meeting oE the
Northern Mariana Islands Commission on Federal Laws in room 7323 of
the Federal Building, at 300 Ala M@ana Boulevard, in Honolulu,
Hawaii, at approximately 9:20 a.m.

In addition to Mr. Joseph, Commissioners Myron Thompson, Agnes
Manglona McPhetres, Jesus C. Borja, Pedro A. Tenorio, and FAward DIG.
Pangelinan were present. Congressman Phillip Burton was absent.

Remarks of the Chair

Mr. Joseph thanked the Vice-Chair, Mr. Tenorio, for conducting
the fifth -meeting of the Commission, held on Saipan. He then
welco-ned the Commssion meinbers and the members of the general public
in attendance. At his request Mr. Tenorio introdLred members of the
Northern Mariana Islands Senate and other officials present: Senator
Ignacio Quichocho, Senator Ramon Dela Cruz, Senator Froilan C.
Tenorio, Senate consultant Pete Reyes, Senate legislative counsel
Donald TAbodw:)rth, Northern Mariana Islands Attorney General Peter Van
Name Esser, and Northern Mariana Islands House of Representatives
legislative counsel Joel Bergsma.

Mr. Joseph informed the members of the Oommission that
Congressman Phillip Burton had sent %ord that he would not be able to
attend. Mr. Pangelinan suggested that Congress' busy schedule before
holiday adjournment probably prevented Congressman Burton's
attendance.

Quorun, Notice of Meeting, and Approval of Minutes

Mr. Joseph announced that a quorum was present, and that notice
of the meeting had been published in the Fbderal Register, the
Marianas Variety, and the Comwnwealth Examiner. He praised the
staff for the quality of the briefing materials.

The minutes of the fifth meeting of the Commission, held July 7,
1982, at Saipan, Northern blariana Islands, were corrected and
approved.

Report of the Executive Director

Mr. MacFeekin announced that he would report on f ive areas
regarding the progress of Commission work. He said he would

- 2

brief the Commission on progress made in examining the U.S. Code and
on 4iat has been done or needs to be done on each title. He also
wanted to provide the Commission an overview of the budget, report on
(58] Commission personnel, repDrt on Commission correspondence, and
sumnarize the testimony the Chair and he gave to the U.S. Congress on
the legislation introdLued in Congress as a result of the interim
report submitted in January.

Progress on final report. Mr. MadNie-ekin noted that there are 49
titles in the current U.S. Code. Mr. MacMeekin then sunmarized staff
work on each of the 49 titles, describing how much has been
accomplished and what remains to be done. He said the staff will
treat each of a number of titles as a unit, treating them rather
routinely in the final report. For example, there is little to
report to Congress on title 1, relating to rules of statutory
construction. For other titles, such as title 46 on shipping and
title 42 on public health and welfare, a chapter-by-chapter review is
planned. Other titles, such as title 11 on bankruptcy and title 17
on copyrights, have already been addressed in the various draft staff
recommendations. Further, a number of the draft staff
reccmiTendat ions have addressed specific chapters or sections in still
other titles.

Mr. MacMeekin noted his intention to circulate the "border
survey" on the import and export laws of the United States for
camments. This survey concentrates on title 19, containing the
customs laws of the United States, but also inclules provisions from
other titles, such as title 18 on criminal laws and title 21 on food
and drugs.

Mr. MacMeekin then pointed out that drafting for the final
report is now completed for six of the 49 titles; another 19 titles
will be treatea as units of one to three pages in length; three more
titles are largely covered by draft staff recommndations, with the
renainder of each to be treated as a unit; another nine titles will
be treated in forthcoming draft staff r6comiTendat ions; and, for the
rEmaining 12 titles, a chapter-by-chapter treatment is intended, with
most chapters receiving lifnited attention. In those last 12 titles,
there are 417 chapters, which means that, with the other titles to be
treated as a unit, a total of 448 separate treatments must be
written.

Mr. MacMeekin stated that he intends to circulate all remaining
draft staff recommendations by February 1, 1983.

Budget. Mr. MacMeeklin briefed the Commission on its budget.
For fiscal year 1980, $300,000 was appropriated and an additional
$10,000 was received as part of a goverrTnent-wide pay raise. In
fiscal year 1981, $15,000, part of another govarnment-wide pay
increase, was added. These appropriations are "no-year" money,
meaning they are available until expended. In fiscal Tar 1982 the

sun of $200,000 was requested for the Commission. A four per cent
across-the-board cut in the federal budget resulted in an
appropriation of $196,000. This appropriation was not "no-year"
inoney, so that any portion not expended in fiscal year 1982 reverted
to the United States treasury. [591
Mr. macmeekin said it appears the fiscal year 1982 funds were
all spent, although the Tatter is now academic. The Conudssion is
now operating on carry-over funds from fiscal years 1980 and 1981.
He had originally estiffated the carry-over funds at $185,000.
Department of Interior accounting officials had earlier put the
figure at $239,000. Later, in May 1982, those officials repDrted the
figure as $235,000. A month later the Department of the Interior
reported to the Office of Manageffent and Budget a reminder of
$235,000 less $20,000 charged to the fiscal year 1981 account for
fiscal year 1982 expenses, leaving a reminder of $215,000.

Thus, as of October 1, 1982, there ranained available for
expenditure $215,000. Mr. MacMeekin estiffeted that for October,
November, and DecEmber, 1982, the Commission will have spent $75,000
of that sun, leaving $140,000 available for expenditure after January
1, 1983.

Mr. MacMeekin noted that he expects two more Commission meetings
at a cost of $12,000 apiece, assuming there is no neeting in the
cost of printing the
Northern Mariana Islands. He estimated the
final report at about $5,000. Variable costs for personnel salaries
and equiFment rental average about $18,000 per month.

The CoTnmission then agreed to discuss the budget during
discussion of priorities to see whether additional funding needs to
be sought.

Personnel. Mr. MacMeekin reported that Oommission personnel
reffain essentially the same. On Saipan are Jose S. Dela Cruz and his
secretary, Lillian Villagomez. In Washington, the staff consists of
hinself, the t%o staff attorneys, Jeffrey Nackley and John Cutler,
his secretary, Dianne Brickey, and a clerk, Michelle M@nroe. He
noted that Trevor Haydon, who had begun his second War of law school
at Northeastern University in Boston and %ho uas formerly desk
officer for the Northern Fariana Islands at the Department of the
Interior, worked for the Cbmmission frcm September to December and
mentioned Mr. Haydon's excellent %ork on the Higher Education Act,
the securities and exchange laws, and title 28 of the U.S. code on
the judiciary and judicial procedure.

Correspondence. Mr. MacMeekin reported that, as instructed by
the Commissii5E-at its previous ffeeting, letters %ere sent to the
judiciary ccimnittees of the U.S. Senate and House of Representatives,
asking those committees to take into account the technical amendnents

- 4 -

proposed in the staff recamendation on the bankruptcy laws when they
rewrite those laws to comply with the Supreme Court decision in the
Northern Pipe Line case. He said a response had been received fran
[601 the Senate @mmt@tee on the Judiciary.

Interim Report. Mr. Macmeekin reported that in September, Mr.
Joseph and he testified before the U.S. Senate Committee on Energy
and Natural Fesources and submitted written testimony in support of
bills introduced in the Senate pursuant to the reconTendations made
by the Commission in its interim report to Congress. He noted- that
Mr. Pangelinan, in his capacity as Representative to the United
States for the Northern Mariana Islands, also testified in favor of
the bills. He also reported that the U.S. House of ReIxesentatives,
separately, in omnibus territories legislation, later enacted into
law the Commission's recommendation clarifying the applicability of
the Federal r1brt Claims Act to claims arising in the Northern Mariana
Islands.

Draft Staff Recommendations

Mr. Joseph asl<ed members of the audience to specify draft staff
recommendat ions on which they desired to be heard. Members of the
audience expressed interest in speaking on the draft staff
recommendations on: (1) air cabotage, (2) the Fishery Conservation
and Management Act and the Vessel Documentation Act, (3) the major
aquatic permit laws, and (4) the Higher Edtration Act.

Air cabotage. Mr. MacMeekin explained that the draft staff
recaE9n_d_a_t'1'o__nwould amend existing federal law to allow a fbreign
air carrier to carry passengers and their luggage between the
Northern Mariana Islands and Guam, and between points in the Northern
Mariana Islands, on flights to or from foreign points. The original
draft staff recommendation removed the restriction. As revised, the
recommendation makes clear that a foreign air carrier must still
obtain a permit to so operate from the Civil Aeronautics Board. The
Board may decline to issue of a permit if, say, it would endanger a
domestic airline already operating. Mr. MacMeekin noted that
Continental Air Micronesia, in particular, would be affected
adversely by adoption of the recommendation.

Senator Etoilan Tenorio said the recommndation, if approved,
would hurt the financial viability of U.S. carriers now operating.
There are now enough seats on United States carriers serving the
islands, he said. Further, foreign airlines like Japan Air Lines
have an advantage over United States carriers in that they are
government-subsidi zed. Commissioner Pedro A. Tenorio suggested that
more tourists might come to the Northern Mariana Islands if the
recommendation is adopted. Senator Ignacio Quichocho said that
foreign airlines do not now provide daily service or inter-island
service. He pointed out that Continental Air Micronesia now provides

service to Rota under a federal subsidy, and that allowing further
competition might endanger the financial viability of United States
carriers now operating.

Mr. Frank Der Yuen, a former board meiTher of Continental Air
Micronesia, whose firm provides aviation fuel in Havaii for don-estic
and foreign airlines, said that a foreign airline is not prohibited
from picking up "through-ticketed" passengers stopping in Honolulu,
contrary to the assertion in Vne draft staff recommendation. Mr.
MacMeekin said he would check this point. Attorney General Peter Van
Name Esser agreed with Mr. Der Yuen. Mr. Esser then mentioned that
frequency of flights is important for medical evacuations and that an
exception from the anticabotage law for that limited purpose would be
benefiVial. He noted that Island Air went bankrupt without fbreign
competition and said he would not want foreign carriers to serve
points within the Northern Mariana Islands. Senator Froilan Tenorio,
said that medical evacuation is a local goverment responsibility,
with which air carriers should not be burdened. Senator Quichocho
noted that three domestic carriers now serve the Northern Mariana
Islands.

Commissioner Tenorio asked what impact the draft recmmndation
would have on dorrestic carriers and suggested deferring action on
this recommendation until statistics have been obtained. MT.
Pangelinan agreed, saying the reconimndation if adopted might
adversely affect employment in the Northern Mariana Islands. He also
expressed reservations about giving the Civil Aeronautics Board
discretion to issue permits, noting that the Rot4/Guam service case
has not yet been decided by the Board. Ms. McPhetres noted that
airline revenue statistics are needed, and also favored deferring any
Commission action. Mr. Borja also suggested deferral to allow
Com-nission staff to verify the point "through-ticketing."

Mr. MacMe-ekin said that, if the through-ticketing exception does
exist, the rationale for the draft recommendation is weakened. He
said airline revenue statistics would be difficult to obtain and
noted that the Commission may not have the expertise to evaluate
whatever statistics are available. He also said that the essential
air services provisions of the Federal Aviation Act expire in 1986,
at which time seats available will be determined by the market place
rather than by essential-air-service guarantees. He said he thought
it unlikely the Civil Aeronautics Board would grant a permit to a
foreign carrier if that uould endanger the financial health of a
donestic carrier. He suggested the Commission defer action until the
through-ticket exception has been explored by the staff and then make
its decision one way or the other. Mr. Thoapson noted that the
Pacific Basin Development Council is preparing proposals related to
the air service needs of Amrican islands in the Pacific and
suggested the Commission's staff consult with the Council's staff.

-Motion. Mr. Ibampson moved to defer action on the
reccmirendation so the staff could gather additional information. The
motion was seconded by Ms. McPhetres, and passed.
[621
Mr. Joseph said that the Cormnission will again consider
recommendation at its next meeting.

Fishery Conservation and Management Act and Vessel Documentation
Act. Mr. MacKeekin noted that the draft staff rec=TL-ndatio-n -treats
the Fishery Conservation and Management Act (FCMA) and the Vessel
Documentation Act together. He also noted his previous association
with Mr. Donald Vbodworth, the principal lawyer for plaintiffs in the
Olwol case, which addressed the Act's applicability in the Northern
ffir@iana Islands. J.,

Mr. MacMeekin then summarized the staff reccmmendation. He said
all comments received on the staff draft opposed its recommendations.
Because of the opposition to the staff reccmmendation,.he suggested
that the Commission at this neeting not act on the recoffuTendation.

Mr. MacMeekin also said the U.S. Department of Commerce my
oppose the proposal to allow the Northern Mariana Islands to retain
revenue derived from fees for foreign fishing permits. A Comme. rce
official informally told him, he said, that establishing a mechanism
to determine which fees go to the Northern Mariana Islands would be
administratively difficult. The official said foreign vessels now
pay permit fees to the United States primarily to-fish in the fishery
conservation zone adjacent to Alaska. Allowing the Northern Mariana
Islands to receive fees paid the United States for foreign fishing in
waters adjacent to the Northern Mariana Islands would give Alaska a
claim to similar treatment. He suggested that the proposal to return
fees to the Northern Mariana Islands might be more palatable if that
revenue were ear-marked for fisheries development. The official also
said that the Northern Mariana Islands should determine whether it
wants to encourage a local fishing industry with local People or to
develop a land-based industry with canneries and extensive off-island
involvement.

Mr. MacMeekin said the central issue concerns tuna. Even if the
FCMA were amended to allow the Northern Mariana Islands to sell
fishing rights as do Palau and the Marshalls, few fees would be
derived if tuna is not included.

An important issue for the Northern Mariana Islands, he said, is
determining the extent of the "territorial waters" of the Northern
Mariana Islands. This issue, however, is not directly an issue of
federal law and is not appropriate for a Commission reconufendation.

Mr. MacMeekin then cannented on the present exploitation of
fishing grounds adjacent to the Northern Mariana Islands. He also

said that, tinder the privileges and immunities clause of the U.S.
Constitution, the Northern Mariana Islands cannot regulate American
fishing vessels differently fran local vessels. [631
Mr. MacMe-ekin said that, while the staff reccatmendation would
allow foreign-hul led vessels documented under the Vessel
DocuiTentation Act to fish in the fishery conservation zone adjacent
to the Northern Mariana Islands and would allow Northern Mariana
Islands citizens to be treated as United States citizens for purposes
of that Act, the recommendation did not address another issue that
has been raised. Because of the shortage of skilled officers and
crew for fishinc
.j vessels in the Northern Mariana Islands, it has been
urged that these vessels be exempted from federal laws requiring
their officers and crew to be United States citizens, so that
nationals of foreign countries can be utilized.

Mr. Joseph noted that correspondence 'just received from the
Governor of the Northern Mariana Islands requested that the
Commission delay action on the staff recommendation. A similar
request was received from the Speaker of the Northern Mariana Islands
House of Representatives. In addition, a letter signed by eight of
the nine members of the Northern Mariana Islands Senate opposed
adoption of the recommendation.

Mr. Esser, the Northern Mariana Islands Attorney General, said a
decision on the recommendation should appropriately be made by
elected officials of the Northern Mariana Islands. He said he saw no
gain to the Northern Mariana Islands in the FCMA being applicable
there. He noted that the Northern Mariana Islands' Marine
Sovereignty Act is still in effect, and questioned the ability of
officials of the Northern Mariana Islands to support applicability of
a federal law in conflict with that Act. He felt the argument that
the KMA does not apply to the Northern Mariana Islands is stronger
than the opposing argument. He saw the tuna issue as most impDrtant
and said the draft reccimnendation should be amended so that tuna
would also be regulated under the FCMA. He noted that as long as the
tuna fishery is not regulated under the FCMA, the return of foreign
perinit fees to the Northern Mariana Islands will not constitute a
significant source of revenue.

Mr. Esser also stated that permits for foreign fishing are
issued by the @@stern Pacific Regional Fishery Management Council,
where the Northern Mariana Islands will have only two votes out of
13. Further, he said, the Council is merely an advisory body; its
decisions are sLbject to veto by the U.S. Department of Commerce.
Finally, he pointed out that to earmark revenues derived from foreign
fishing for fishery development would be pointless because local
economic developnent mney set aside for fishery loans has never been
fully utilized by local fishermen. Mr. Pangelinan asked Mr. Fsser
what solutions he proposed. Mr. Esser noted t hat under the

Trusteeship AgreEment the United States is obligated to pramote the
economic developnent of the Northern Mariana Islands. The existing
official position of the Northern Mariana Islands, evidenced by the
Marine Sovereignty Act, is contrary to FCMA applicability to the
[641 Northern Mariana Islands. Mr. Esser suggested the Northern Mariana
Islands should convince the United States Department of State that
the Northern Mariana Islands ought to be treated differently fran
other parts of the United States.

Senator Ignacio Quichocho, speaking on behalf of the Northern
Mariana Islands Senate, said that the local Marine Sovereignty Act is
still in effect and that little is gained by the Northern Mariana
Islands by inclusion under the FCMA because tuna is not regulated.
He noted his concern with the U.S. citizenship requirements for
employment on fishing vessels docurtented under the Vessel
Documentation Act. He said foreign investors would need foreign
fishermen to crew fishing vessels registered in the Northern Mariana
Islands because skilled local personnel are lacking.

Mr. Donald %bodworth, legislative counsel to the Northern
Mariana Islands Senate, summarized the history of the Oluiol
litigation. He agreed with Mr. MacMeekin that the "territorial
waters" issue should be stu:3ied. He noted the need to document the
historical basis for the Northern Mariana Islands' claim to' the
waters surrounding it. He said that for centuries the people of the
Northern Mariana Islands have asserted ownership to local waters.
Ramp and Nakayama in their 1974 book, Micronesian Navigation: Island
Empires and Traditional Concepts mention these assertions of
ownership. Mr. Woodworth also said that, by the Covenant, title to
territorial waters is to pass, not to the United States, but to the
Northern Mariana Islands. He said that under the FCMA, the 200-mile
exclusive econamic zone is contiguous to the territorial seas of the
United States, so that if there is no territorial sea of the United
States in the Northern Mariana Islands, there is no contiguous
exclusive economic 2one under the FCMA.

Mr. Woodworth said he understood that foreign fishing permits
have been issued by the %bstern Pacific Regional Fishery Managenent
Council to cover the entire region, including the Northern Mariana
Islands. Mr. MacMe-ekin said the Department of Commerce official with
whcm he had spoken told him that no permits have been issued for this
area.

Mr. Tenorio noted that when he, as Lieutenant Governor,
addressed the %bstern Pacific Regional Fishery Managemant Council
regarding the position of the Government of the Northern Mariana
Islands on the F`CMA, he and Governor Tenorio had agreed on the
position taken. He inquired as to the basis for seeking an exemption
from FCMA applicability and suggested that statements in support of
exemption be submitted at a later date, to simplify and speed up the
resolution of the issue. Mr. Esser said the argument against FCMA
applicability is well stated in the staff reccimmendation.

- 9 -

--Motion. Mr. Pangelinan moved to defer action on the draft
staff recommendation. The motion was seconded by Mr. Thompson, and
passed.
[65-
Mr. Thcrapson inquired whether the Northern Mariana islands
Senate would consider lending its legislative counsel's services to
the Commission to help resolve this problem. Mr. Pangelinan
suggested that the Senate request its counsel to draft an alternative
to the recommendation prepared by the Com-nission's staff. Mr. Joseph
expressed the Commission consensus that the Senate President be
requested to have the Senate legislative counsel provide the
Commission with an alternative recommendation.

major aquatic permit programs. Fr. Macreekin said that this
staft recommendation discusses seven laws, all of which have to do
with water and require permits.

Mr. MacMeekin said an official of the Department of Justice had
recommended making all United States navigation laws, including the
River and Harbor Act, apply to the Northern Mariana Islands so that
all the territories would be treated uniformly.

Mr. MacKeekin noted that the last sentence of the first full
paragraph on page 4 of the staff recommendation should read: "Once a
State pjan is approved,, even federal programs must be consistent, to
the maximum extent practicable, with the State program and applicants
for a federal permit or license must show that the planned activity
will comply with State plan requirements."

Senator Froilan Tbnorio stated his opposition to the staff
recommendation because these federal laws will adversely affect the
economic development of the Northern Mariana Islands. All regulatory
laws stifle economic development and make foreign investors reluctant
to invest, he said. Commissioner Pedro A. Tenorio agreed, noting as
an example the Army Corps of Engineers permit requireffents. Senator
Tenorio said that even the availability of waivers in hardship cases
under these laws is not sufficient and that the laws ought not be
applicable. Connissioner Tenorio pointed out that some of these laws
include good programs which provide substantial economic benefits.
He gave as an the Rivers and Harbors Act, which has thus for provided
approximately $4 million for the Rota harbor improvement project.
Other grant prograns, however, have very little benefit and should
not apply, he said. Comidssioner TL-norio said these laws should be
examined on a case-by-case basis. CoTmnissioner Pangelinan agreed
that the Commission should consider the effect of each law before the
desirability of its application is determined. Senator rrenorio said
the requirements of the Coastal Zone Management Act delayed for two
years the Managaha tourist facility project.

- 10 -

Recess.

The meeting recessed at 5:15 p.m. and reconvened Decanber 17,
[661 1982, at 9:20 a.m.
National Labor Relations Act.

Mr. Joseph first gave Mr. Richard , M. Pend, an attorney
representing Micronesian Telecommunications Corporation (MTC), an
opportunity to address the Cominission regarding the National Labor
Relations Act. -Mr. Rand's written statement was accepted for
inclusion in the (bomission's files. Mr. Rand sunmarized his
statement, requesting the Commission to recourend that the Act be
made inapplicable to the Northern Mariana Islands.

Mr. Joseph then invited Ms. Bambi libil, an attorney representing
a local of the International Brotherhood of Electrical @brkers, to
address the Commission on the same law. Ms. Vbil noted that the
union has filed a petition with the National Labor Relations Board to
organize MTC employees on Saipan. She asked that the Commission
recamTend that the Act continue to apply to the Northern Mariana
Islands.

-Motion. Mr. Tenorio moved that the staff review the Act and
report on it at the next meeting. Mr. Borja suggested that review of
the Act be considered during the discussion on priorities. The
Notion %as rephrased as suggested, seconded, and passed.

Tb Mr. MacMeekin's inquiry as to what would prevent a union fran
organizing if the Act were not applicable, Ms. TAbil replied that a
union could still organize, but that workers could be fired for
belonging to the union.

Draft Staff Recommendations (continued).

Major aquatic permit programs (continued). Mr. Tenorio asked
whether Congress needs to recontirm the applicability of the aquatic
permit laws. Mr. MacMeekin replied that only the Rivers and Harbors
Act needs clarification. Mr. Pangelinan said that there may be
serious policy questions later, in light of the territorial %eters
issue, if the Commission were now to adopt the staff recommendation,
and suggested that a decision be made after the Commission has acted
on the 'Fishery Conservation and Management Act (FCMA). Mr. Joseph
said only two changes in existing law are proposed: confiming the
applicability of the Rivers and Harbors Act to the Northern Mariana
Islands and making the District 0ourt for the Northern Mariana
Islands an appropriate form for actions brouqht under the Clean
Water Act, the Ocean Dunping Act, and the Ocean 9hermal Energy
Conversion Act, each of which is now applicable.

Mr. MacMeekin noted that the Federal Power Act results in no
burdens or benefits for the Northern Mariana Islands and that the
Commission consequently may want to recarmend that it be made
inapplicable. [671
--Motion. Ms. McPhetres moved to adopt the staff reccmnendation
only insofar as it confirms the applicability of the Rivers and
Harbors Act. The motion was seconded by Mr. Tenorio, and passed.

Mr. Joseph then asked the staff to review further the other laws
covered by the recommendation before the Omunission takes final
action.

Higher Education Act. Mr. MacMeekin explained the staff
recommandation to est @11sh a block grant for the Northern Mariana
Islands under the Higher Education Act, consolidating existing
formula and discretionary grants. He noted two corrections in the
draft. He said that all comwnts received have been favorable.

Mr. Esser suggested that the proposed legislative language is
ambiguous as to whether the legislature should both "establish and
designate" the college. He also said the Board of EdLration, rather
than the legislature, should make the designation.

Senator Tenorio opposed the grant of federal funds to a local
agency without appropriation by the legislature.

-4iotion for amendment. Mr. Pangelinan moved for adoption of
the staff recommendation. The motion was seconded by Mr. W-norio.
Mr. Pangelinan then moved to amend his original motion to rephrase
section 2 of the proposed legislative language to read: "established
or to be established by the Government of the Northern Mariana
Islands." The motion to amand was seconded, and passed.

--Motion for amendment. Ms. McPhetres proposed a second
allenduent to the origi'nal motion to include a provision in the
proposed legislative language so that the Northern Mariana Islands
would not lose any minimum amount of funding guaranteed to all
jurisdictions. She also pointed out that under the Elementary and
Secondary Education Act block grant, funding is based entirely on
population, which is not good for the Northern Mariana Islands with
its small population. Mr. MacMeekin offered a proviso to take into
account Ms. McPhetres' concern, to be added following subsection (b)
of section 1 of the proposed legislative language: "If all
jurisdict.ions entitled to receive funds appropriated pursuant to the
authorizations listed in subsection (b) of this section are entitled
to receive a minimum miount of funds pursuant to any such
authorization and that minimum amount is greater than thirty"three
hundredths of one percent of that authorization, then that minimum

- 12

amount shall be substituted for thirty-three hundredths of one
percent for each such authorization in determining the total amount
(681 of the block grant." Ms. McPhetres moved for amendment b.v that
language. The motion was seconded by Mr. Panqelinan and passed.

--Motion for amendment. Ms. McPhetres moved to again amend the
original motion to allow the Northern Mariana Islands Board of
Education, rather than the legislature, to desianate the
postsecondary educational institution to receive the block grant.
The motion was seconded by Mr. Borja, and Passed.

-41otion. Mr. Pangelinan then moved to adopt the staff
recommended, as amended. The motion was seconded by Mr. Tenorio, and
passed.

At this point, Mr. Joseph announced that the discussion on the
remaining draft staff reccmTrendat ions would be limited to Commission
members, because little time remained for completion of tbe meetirn...

Intellectual property laws. Mr. Tenorio noted that the
recammendation to continue applicabilitY of the copyright, patent,
and trademark laws was good for musicians and artists in the Northern
Mariana Islands. Mr. Panqelinan said that these laws protect the
interests of Northern Mariana Islands citizens.

--Motion. Mr. Pangelinan moved for the adoption of the staff
recommendation. The motion was seconded by Mr. Borja, and passed.

Creation of sp@cial U.S. passport. Mr. Tenorio asked whether
the recommended special passport would allow multiple-entry visas to
foreign countries. Mr. MacMeekin said that it is up to those
countries to issue visas, but that foreign countries would probably
treat the proposed passport as equivalent to a United States
passport. Mr. Pangelinan noted that a number of countries have
waived visas for holders of United States passports.

--Motion. Mr. Pangelinan moved adoption of the staff
recommendation. The motion was seconded by Mr. Borja, and passed.

Land-grant colle@es. Mr. MacMeekin pointed out that the staff
recommendation authorizes the Northern Mariana Islands legislature to
designate the institution to receive funds under the land-qrant laws.
Mr. Pangelinan said that such authority is appropriate. Mr. Tenorio
inquired whether the land-grant laws require use of public land in
the Northern Mariana Islands, to which Mr. MacMeekin replied in the
negative.

--Motion. Mr. Tanorio moved the adoption of the staff
recommendation. The motion was seconded by Mr. Borja, and passed.

Federal crimes--mtion. Adoption of the staff recommendation on
federal crimes was moved, seconded, and passed.

- 13 -

old Business

Priorities. Mr. MacMeekin briefed the Commission on staff
progress on Commission priorities. He noted that the interim report [691
addressed citizenship, the Federal Tort Claims Act, and the Clean Air
Act. Other recomffendat ions previously adopted by the Commission
for inclusion in the final report have to do with goverment
depository libraries, nominations to the service academies, and the
barkruptcy I aws. Yx. MacMeekin then ccmrrented on the other areas
previously set as high priority areas by the Commission, as follows:

--innigration. Mr. MacMeekin said four draft
recommerid-at ions on the immigration and nationality laws are
in preparation, but noted that the four may be canbined
into a single draft.

-Fishery Conservation and Management Act. Mr.
MacMeeki-nadverted to the earlier discussion of--tTis Act,
and ask--d for guidance as to how the staff should proceed.

--land-grant colleges. Mr. MacMeekin noted the
adoption of a reconwendation on this subject at this
meting.

-Internal Revenue Code. Mr. MacMeekin said that the
staff has done some %ork on this issue but that he vas
uncertain whether the Conuni ss ion should make a
recomendation. He noted the widespread sentirrent in the
Northern Mariana Islands against application of the Code
there.

--domestic tariff filing requirements. Mr. MacMeekin
said the shipping firm opposed to 59e_-ting dorrestic tariff
filing requirments for service to the Northern Mariana
Islands, rather than the less onerous requiremnts for
shipping to foreign ports, had now submitted to the
domstic requiremnts. He suggested that the Commission no
longer give this issue high priority.

--customs laws. Mr. Mac@ieekin said that he intends
to circulate for comment a survey of the federal laws
governing the shipment of goods across the borders of the
United States. He noted that many such laws %ere not
enacted for the collection of customs duties.

--aquatic permit laws. Mr. MacMeekin noted the
discussion of the staff recomffendation on these laws
earlier in the meeting and the adoption of the portion of
that recmmndation dealing with the Rivers and Harbors
Act. He asRed for Commission guidance on how the staff
should proceed with respect to the other laws included in
the draft reccmiTendation.

- 14

--air cabotage. Again adverting to earlier
discussi:o-n -of the staf f recommendation on this subject, Mr.
[701 MacMeekin proposed to investigate the "through- ticket"
exception. He suggested that, if the exception does exist,
this law be removed from the priority list.

--essential air services. Mr. MacMeekin noted that
guarantees of air service to the Northern Mariana Islands
(and all other destinations) under the essential air
service provisions of the Federal Aviation Act will expire
in 1986. He said that the ODmn-dssion Tdght went to
establish this as a priority area for research. He noted
that the Pacific Basin Development Council has been locking
closely at this subject.

-banking laws. A draft staff recommendation on the
federal banking la-ws is in preparation, Mr. MacMe_ekin said.
The recommendation favors continued application of those
laws to the Northern Mariana Islands, with few exceptions.
He noted the recent concern that offshore banks in the
Northern Mariana Islands might be used for illegal
purposes.

--territorial delega e. Mr. MacMeekin said he
intends to draft a recomnendation for the Northern Mariana
Islands to be represented in Cbngress by a nonvoting
delegate, as are Guam and the other territories.

--Higher Education Act. Mr. Mac@bekin noted the
adoption of the staff recommendation on this Act at this
meting .

--Rural Electrification Act. Mr. Madneekin askad
whether the Conmiission desiF@ATto give this Act, which had
been mentioned at previous meetings, priority status.

--federal grants. Mr. MacMeekin said that he intends
only to study the six or seven grant prograTis in the
Department of Interior's survey for which the Tbrthern
Mariana Islands is not eligible but other territories are.

-judiciary and judicial procedure. Mr. MacMeekin
said a staff member has reviewed title 28 of the United
States Gode, on the judiciary and judicial procedure, and
that proposal of a few technical amendments to that title
is possible.

--airline passenger taxes. Whether the @brthern
Mariana Islands should be exempted from a provision in the

- 15 -

Federal Aviation Act barr ing collection of airline
passenger taxes is under study by Mr. Dela Cruz, Mr.
MacMeekin said. [711
--deep seabed minerals. Mr. Macmeekin said the staff
is looking into the appirc-ation of this law, to determine
its effects on the Northern Mariana Islands.

--Resource Conservation and Recovery Act. Mr.
MacKeekin said this law, governing the disposal of solid
waste, now applies to the Northern Mariana Islands. He
noted that its prohibitions against open dLmping may create
a problem for the Northern Mariana Islands.

--National Traffic and Motor Vehicle Safety Act.
This Act uas previously discussed, Mr. MacKeekin said, in
connection with the Cbmmission's recommendation on the
Clean Air Act. Since that discussion, Mr. MacKeekin said,
it has again been asserted that Japanese firms will make
automobiles complying with both laws or with neither, but
not with just one of the laws.

--veterans' benefits. Mr. Mad4eekin said there have
been recent suggestions that veterans in the Northern
Mariana Islands are not entitled by law to all benefits
received by veterans elsewhere in the United States.

--crop, insurance. Mr. MacMeekin noted that federal
crop insurance in the Northern Mariana Islands is already
authorized by statute.

--highway funding. Mr. MacKeekin suggested that the
Commission could add a proposal to reax@nd the continued
availability of federal highway funds to the Northern
Mariana Islands to its list of priorities.

Mr. MacMeekin said for many priority areas, work is not yet
finished or has not yet started. The Commission budget will allow
iADrk until roughly June 30.

Mr. Joseph noted the need for Cormission decisions with respect
to the FCMA, the aquatic permit laws, and air cabotage.

Mr. Tenorio aslied that the staff participate in the Northern
Mariana Islands executive-legi slat ive discussion regarding the FCMA.
Mr. Joseph proposed that a letter fram the Commission be sent to the
Speaker of the Northern Mariana Islands House of Representatives and
the President of the Northern Mariana Islands Senate. Ms. McPhetres
suggested that the letter specifically seek the assistance of the

- 16 -

Senate legislative counsel, Mr. Woodworth. Mr. Tenorio asked that a
similar letter be sent to Governor Tenorio. The Commission agreed
that the suggested letters should be sent and that the Senate
President should be asked to allow the Senate's legislative counsel
(721 to draft an alternative reccmrrendation for Commission consideration.

On the aquatic permit laws, Mr. Tenorio suggested that the staff
review the Coastal Zone Management Act as it applies to the Northern
Mariana Islands and determine %hether the local executive order
implementing the Act could be amended to fit local conditions without
violating the Act. Mr. Borja suggested that the other laws listed in
the aquatic permit law draft staff recommendation be reviewed in
terms of available funding and benefits. He also suggested that the
permit process requirements be reviewed.

Mr. Tenorio next suggested that the staff review the Internal
Revenue Code (IRC), with a view toward recommending that it be made
inapplicable. Mr. Pangelinan said that this issue should not be
addressed until the Government of the Northern Mariana Islands has
taken a position. He noted that the U.S. Departitent of the Treasury
supports "delinking" of the IRC and taxation in the Northern Mariana
Islands. Mr. Tenorio said that the Northern Mariana Islands is
seeking permanent exemption from the IRC and that it would be useful
for the staff to provide inforrmtion on the IRC. Mr. Borja suggested
that the staff be directed to contact local officials regarding the
Northern Mariana Islands position on the IRC. In response to an
inquiry by Ms. McPhetres, Mr. Pangelinan explained that changing the
applicability of the IRC would not amend the Covenant since the
revenue and taxation provisions are not subject to the mutual-consent
clause.

Mr. Tenorio asked that the air cabotage issue be dropped, as Mr.
Macneekin had suggested, should there be a "through-ticket"
exception, as earlier discussed. Mr. Borja noted his agreement to
this proposal.

Mr. Tenorio also suggested that the staff to look into any
problems under the immigration and nationality laws arising from the
grant of residency in the Northern @briana Islands to foreign
investors. Mr. MacMeekin said that those problems, wbich have to do
with residency requirements for naturalization, are already under
study.

Mr. Joseph then as]%--d the members for its views on whether the
staff's current priorities should be amended. Mr. Pangelinan
suggested the staff continue its %ork on those priority areas. The
Ccmmission then decided that none of the areas mentioned by Mr.
Mact4eekin as possible additional priorities should be added to the
priority list. The Commssion made clear that the Rural
Electrification Act was intended to be included on the priority list.

- 17 -

Final Report

Mr. MacMeekin proposed that an executive sumnary of the final
report be both available as a separate document and bound into the [731
final report. He suggested that the introduction to the report, in
addition to describing the Commission and its nethodology, give some
information on the territories and possessions of the United States.

Mr. Macivieekin said that the recomirendat ions of the final rep-rt
need not be limited to recomuendations for specific legislation, but
may also include more general recommendations. He listed three such
general recomne ndat ions that could be included. First, noting the
inconsistency between representative defrocracy and territorial
status, he said the Conmission could recommend that Congress defer to
Northern Mariana Islands views whenever possible in deciding whether
a particular federal law should apply in the Northern Mariana
Islands, that laws providing federal financial assistance or services
be routinely made applicable to the Northern Mariana Islands, and
that Congress afford to the people of the Northern Mariana Islands
that special trust status reserved for people who are subject, but
who do not have full access, to the Anerican political processes.

Mr. MacMeekin suggested that the final report also recommend
that the Covenant be treated as fforally, if not legally, of a status
higher than that of ordinary treaty or public law. He also suggested
that the Commission recommand that any standard congressional
legislative drafting checklists include specification of a statute's
geographic applicability.

Mr. MacMeekin asked for the views of the Commission members on
whether letters received by the Commission conmnting on draft staff
recom-ae.-y3at ions should be included in the documentary supplement to
the final report. He said that if those letters w-re included, a
selection should be made, as many letters have little substantive
content while others were obviously rather hurriedly written. He
also asled for Cbmmission views on the circulation to be given the
final report.

Mr. MacMeekin said he hoped to have all rffnaining draft staff
recommendations in circulation %,ell before the next Commission
meeting. He suggested two more meetings, one in March 1983 and a
final nee-ting in June 1983. He said the Commission should establish
a tentative wind-up date, since the Con-mission's work can always be
expanded to fill time available by going into greater detail in
examining particular federal laws. He noted that the staff needs to
know when its present employment will end in order to make its own
plans. He said the remaining funds of the Cionudssion would allow
work to continue into July 1983, and suggested that the Commission
set June 15 to July 15, 1983, as the period in which the Commission
will windup its affairs. Mr. MacKeekin proposed that the Commission
not dissolve itself at that time, however, as it might subsequently
vant to act officially.

18 -

Mr. Joseph agreed that the Commission should not dissolve itself
when the staff is dismissed, noting that the Caumission might need to
ireet again after submission of the final report.
[741
Mr. TLenorio expressed his concern that the June 15-July 15
deadline might be too soon, in view of the mount of staff %ork
remaining.

Ms. McPhetres said that a deadline is necessary, but that she
remained concerned about how to encourage congressional action on the
Commission's reconmndations once they are submitted to Congress.

--44otion. Mr. Tenorio moved for adoption of the June 15 to July
15 tim@peiiod for winding up the Commission's staff functions. The
motion was seconded by Mr. Pangelinan, and passed.

Waiver of third meeting in 1982.

Mr. Joseph, as authorized by the By-laws, waived the requirment
for a third ffeeting in calendar @ear 1982.

Next meeting

The Commission tentatively agreed to hold its next meeting in
Honolulu in March, with the exact dates to be determined by the Chair
in consultation with the members.

Coffee service.

--Motion. Mr. Tenorio moved that the staff be allowed to use
Commission funds to buy coffee and similar itefns for Caumission
meetings. The motion was seconded by Mr. Pangelinan, and passed.

Adjournuent

The meeting then adjourned.

CERTIFICATION

The minutes of the DeceTher 16-17, 1982, iTeeting of the Northern
Mariana Islands Commission on Federal Laws are set forth above as
adopted by the Commission at its neeting of March 29, 1983, and as
further corrected by the Cmmssion at its meeting of November 29,
1983.
Daniel H.MMA@c @ekin
Executive Director

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

(751
MINUTES OF THE SEVENTHMEETING
HONOLULU, HAWAII
MARCH 29-30, 1983

Commission Vice-Chair Pedro A. Tenorio, as acting Chair, opened
the seventh meeting of the Northern Mariana Islands Commission on
Federal Laws in room C270 of the Federal Building in Honolulu,
Hawaii, at approximately 9:20 a.m.

Commissioners present, in addition to Mr. Tienorio, were
Congressman Phillip Burton, Jesus C. Borja, and Agnes Manglona
McPhetres. Absent were the Chair, James A. Joseph, and Commissioner
Edward DLG. Pangelinan. Commissioner Myron Thompson had sent word
that he would arrive at the meeting later in the day.

There being no quorum at the morning session of the first day,
Mr. Tenorio dispensed with the roll call. The commissioners present
agreed to discuss those items on the agenda needing action when a
quorum was constituted.

Opening Remarks

Mr. Tenorio welcomed the Commission members and members of the
public in attendance. He noted that Chair James Joseph could not
attend because of a prior commitment and that Mr. Pangelinan could
not attend due to illness.

Mr. Tenorio next acknowledged the presence of the following
guests: Jams Beirne and Jeffrey Farrow, United States Congress
staff members; Northern Mariana Islands Senators Froilan C. Tenorio
and Ignacio Quichocho and Senate legislative counsel Donald C.
'Woodworth; Northern Mariana Islands Congressmen Jose Lifoifoi and
Jesus A. Sonoda and House of Representatives legislative counsel Joel
Bergsma; and Northern Mariana Islands Attorney General Peter Van Name
Esser.

Also attending were: Jerry Norris, of the Pacific Basin
Development Council; Ignacio Villanueva, of the Marianas/Hawaii
Liaison Office; Ken Fuji, of the United States Office of Personnel
Management; and Charles Caulkins, of the United States General
Accounting Office.

-2-

Report of the Executive Director

Budget. Mr. Daniel H. MacMeekin, the executive director,
(761 reported on the Commission budget. He said that, as of February 28,
1983, Department of the Interior figures showed $128,000 in
unexpended Commission funds. He has budgeted from this amount the
sum of $5,000 for the final report. He noted that $14,000 was spent
for the last meeting. Monthly Commission expenses average about
$18,000, he said. He expects that the remaining.funds will carry the
Commission until about the end of June or early July, 1983.

Personnel. Mr. MacMekin informed the Commission members that
the staff has not changed since the last meting. In Washington, the
staff includes himself, staff attorneys Jeffrey Nackley and John
Cutler, secretary Dianne Brickey, and clerk Michelle Monroe. On
Saipan, the staff consists of Jose Dela Cruz, the liaison attorney,
and his secretary, Lillian Villagomez.

Progress. Mr. MacMeekin said that the staff is still working on
treatments of the various titles of the United States Code for the
final report. He referred to the title-by-title progress report he
made to the Commission at the sixth meeting. To Congressman Burton's
inquiry, Mr. Macmeekin replied that no draft final report has been
completed yet.

-interim report. Mr. MacMeekin next briefed the members on the
status of the recommendations contained in the interim report
submitted to the United States Congress in January 1982. He said
that proposed legislation was introduced in the previous Congress on
the citizenship recommendation but not acted on, although a hearing
on the bill was held by the Senate Committee on Energy and Natural
Resources. No similar bill has yet been introduced in the present
Congress. The same is true for 'the Commission recom"endation on the
Clean Air Act. The third recommendation, to clarify the
applicability of the Federal Tort Claims Act in the Northern Mariana
Islands, however, has been enacted into law.

--other adopted recommendations. Mr. MacMeekin noted that
recawbe@n@dat ions adopted by tFe--C-om_'ission since the interim report
will be included in the final report. They include recommendations
pertaining to land-grant colleges, the Higher Education Act,
nominations to the United States service academies, the government
depository library program, a special passport for Northern Mariana
Islands citizens, the Rivers and Harbors Act, and intellectual
property laws.

Mr. MacMeekin said that the recommendation on' the federal
intellectual property laws--copyrights, trademarks, and patents-
favors their continued applicability. He noted that the staff

-3-

recommendation on air cabotage has been dropped, as instructed by the
Commi ss ion, because the "through-ticket" exception has been
determined by the staff to be correct.
-recommendations ready for action. Mr. MacMeekin told the [771
Commi-ssioners that the following staff recommendations are now ready
for the Commission's consideration and action: (1) the Fishery
Conservation and Management Act and the Vessel Documentation Act, (2)
the federal immigration and nationality laws, and (3) the
Wagner-Peyser Act.

Mr. MacMeekin said that three draft staff recommendations
included in the briefing book are not ready for Commission
consideration at this meeting since they have only very recently been
circulated. Those recommendations are on (1) the nonvoting delegate
to Congress, (2) the federal banking laws, and (3) the federal
securities laws.

-recommendations in preparation. Mr. MacMeekin said that
separate draft staff recommendations are being prepared on the
Coastal Zone Management Act, Ocean Thermal Energy Conversion Act, the
Ocean Dumping Act, the Clean Water Act, the Deepwater Port Act, and
the Federal Power Act.

In addition, Mr. MacMeekin mentioned that he is now working on a
very rough draft on the Internal Revenue Code (IRC). He noted that
this draft still requires much work. Congressman Burton requested
that the Commission reserve time later in the meeting for discussion
of the Internal Revenue Code, which he said is now applicable in the
Northern Mariana Islands but is in effect ignored. He said the Code
should be implemented in the Northern Mariana Islands forthwith. Ms.
McPhetres suggested that the matter be discussed under old business.
Mr. Tenorio agreed with Congressman Burton that this matter is
important and that time should be set aside to discuss it further.
Congressman Burton said that the Internal Revenue Code is not a
subject on which the Commission staff should spend time .

Another draft staff recommendation in preparation relates to the
Rural Electrification Act. A problem may arise from the Act's
definition of "rural" and "urban," Mr. MacMeekin stated. Another
draft in preparation deals with title 28 of the United States Code,
Judiciary and Judicial Procedure. Mr. MacMeekin noted that the law
creating the District Court for the Northern Mariana Islands appears
to have anticipated and avoided any problems with title 28.

Another draft deals with the federal prohibition on airline
passenger taxes imposed by state and local governments, Mr.
Macmeekin said. Congressman Burton said that much of the air traffic
in the Northern Mariana Islands--like Guam and American Samoa--is

-4-

foreign air traffic and, therefore, the Northern Mariana Islands
should be exempted from this prohibition, which limits local
revenues.

[781 Another draft staff recoomndation deals with the Deep Seabed
Hard Mineral Resources Act. Mr. MacMeekin explained that because
this law deals with areas beyond territorial waters, it is of no
great concern to the Northern Mariana Islands.

-draft sections for final report. Mr. MacMeekin next noted
that draft treatments of the following titles of the United States
Code, for inclusion in the final report, have been completed: titles
1, 9, 25, and 45. Ready for editing are titles 5, 41, 47, and 22.

In addition, Mr. MacMeekin reported that he has continued work
on the "borders survey", with the intention of circulating it for
comment upon completion. The survey collects all laws relating to
the moveinent of things--goods, currency, contraband, and so
forth--across the borders of the United States and for each law
determines whether the Northern Mariana Islands is considered within
or without the United States for purposes of that law.

Congressman Burton asked that the Medicaid provisions in title
42 of the Code be reviewed to determine if inatching-fund requirements
will create difficulties for the Northern Mariana Islands. He
explained that those requirements have caused a problem for Guam and
the Virgin Islands, and suggested similiar problems in the Northern
Mariana Islands should be anticipated and resolved prior to the
opening of the new health care center on Saipan.

Correspondence. Mr. MacMeekin told the Comndssion that he had
received a copy of a resolution adopted by the Northern Mariana
Islands House of Representatives urging Congressional adoption of the
citizenship recommendation contained in the Commission's interim
report.

He also said that, as directed by the Commission at its previous
meeting, the Chair had sent letters to the governor of th Northern
Mariana Islands, the speaker of the Northern Mariana Islands House of
Representatives, and the president of the Northern Mariana Islands
Senate requesting them to prepare an alternative to the Commission
staff's recommendation on the Fishery Conservation and Management Act
and the Vessel Documentation Act. Mr. MacMeekin noted that the
Northern Mariana Islands Senate prepared an alternative
recamendation, which is contained in the briefing book.

Resolutions from the Saipan Chamber of Commerce and from the
Northern Mariana Islands legislature asking the Commission to review
the applicability of the National Labor Relations Act to the Northern

-5-

Mariana Islands were also received, Mr. MacMeekin said.

Press. Mr. MacMeekin pointed out the briefing book included the
Wall Street Journal article on offshore banking activities in the
Northern Marlan@aIs@ands. He noted that a committee of the United [791
States Senate is investigating activities of offshore banks in the
Northern Mariana Islands and elsewhere.

Staff Recommendations

Mr. Tenorio suggested that Mr. MacMeekin briefly discuss each
staf f recomTendation.

Fishery Conservation and Management Act and the Vessel
Documentation Act. Mr. MacMeekin noted the recent passage of United
States Public Law 97-453, including the Northern Mariana Islands in
the %bstern Pacific Regional Fishery Management Council. He said
Congress through this legislation intended to make the Fishery
Conservation and Management Act (FCMA) applicable to the Northern
Mariana Islands. Congressman Burton interjected that the commission
should not infer from such legislation that the Northern Mariana
Islands is subject to the FCMA. He said that, if it was included, it
may have been through inadvertence. Mr. MacMeekin noted that the
legislative history of the law shows an explicit intent to apply the
FCMA to the Northern Mariana Islands. Ms. McPhetres asked how the
bill was passed. Mr. MacMeekin said that the bill was enacted in the
closing days of the last Congress, at the same time the Commission,
in its most recent meeting, was discussing the applicability of the
FCMA. He said the provisions affecting the Northern Mariana Islands
were a small part of a lengthy bill and that he did not know what
interests had caused the bill to be passed by Congress in its
pre-adjournmnt rush. Congressman Burton said that Congress, in
including the Northern Mariana Islands under the FCMA, surely thought
it was acting in the best interests of the Northern Mariana Islands,
but that it may not have been well-informed on the viewpoint of the
people of the Northern Mariana Islands.

Mr. MacMeekin said the staff recommendation. had not yet been
modified to take into account Public Law 97-453.

Mr. MacMeekin then compared the Camnission's staff
recommendation with the alternative recommendation prepared by the
legislative counsel of the Northern Mariana Islands Senate. He said
the staff draft recommends making the FCMA applicable to the Northern
Mariana Islands, while the alternative draft recommends making it
inapplicable. The staff recommendation would make the Northern
Mariana Mariana Islands a member of the Western Pacific Regional
Fishery Management Council; the alternative draft would not. Both
recommendations would make the Vessel Documentation Act applicable to

-6-

the Northern Mariana Islands. Both drafts would make permanent the
exemption frcm the ban on use of foreign-built fishing vessels. Both
recommendations treat Northern Mariana Islands citizens as United
States citizens under the Vessel Documentation Act in the period
[801 before the trusteeship terminates.

In addition, the staff reccmmendation provides for return of
fishery fees to the Northern Mariana Islands. The alternative
reccmiTendation requires the Department of State to enter into
regional fishery agreements with other nations on behalf of the
Northern Mariana Islands, particularly with respect to tuna. The
alternative recommendation permits use of foreign hulls by Northern
Mariana Islands citizens in the coastwise trade. Finally, the
alternative recommendation would allow third-country nationals to
work on vessels owned by Northern Mariana Islands citizens.

--discussion. Congresanan Burton noted that*the reccmmendation
to allow foreign-built vessels to be used in Northern Mariana Islands
fisheries was favored in both drafts and suggested it be submitted by
itself to Congress. He said any recommendation should be one the
executive branch will not veto. Mr. MacMe-ekin said the alternative
recommendation's provision directing the Secretary of State to
negotiate on behalf of the Northern Mariana Islands could be a
problem. Congressman Burton agreed that provision could create
difficulties and noted that certain of the other recommendat ions in
the alternative recommendation may turn out to be harmful. Further,
he said, the Northern Mariana Islands has very little prospect of
obtaining exceptions to requirements of maritime law. Mr. MacMeekin
noted that the alternative reccmmendation includes provisions on the
coastwise laws. He suggested that, because the Covenant already
provides favorable treatment to the Northern Mariana Islands, raising
the question in Congress again might be counterproductive.
Congressman Burton agreed. Mr. MacMe-ekin said that the alternative
rec<=L-ndation would allow use of alien crews in foreign hulls owned
by Northern Mariana Islands citizens in the coastwise trade between,
say, Boston and Baltimore. He said any such proposal must be
specifically limited to trade between, say, the Northern Mariana
Islands and Micronesia.

Northern Mariana Islands Senator Ignacio Quichocho supported the
position taken in the Senate's alternative recommendation, that the
FCMA be made inapplicable to the Northern Mariana Islands. He said
the alternative draft, if adcpted, would allow the local Marine
Sovereignty Act to remain in effect and would permit the landing of
fish from foreign vessels in the Northern Mariana Islands. He
supported repeal of the provision of Public Law 97-453 that makes the
Northern Mariana Islands a member of the %bstern Pacific Regional
Fishery Management Council. He said he favors United States
negotiation of regional fishery agreements on behalf of the Northern

-7-

Mariana Islands.

Congressman Burton asked Senator Quichocho vhy the Northern
Mariana Islands should not be a member of the Council. Senator
Quichocho replied that membership implies that the FCMA applies to (811
the Northern Mariana Islands. Congressman Burton asked vbether, if
it were clear that the FCMA did not apply, rmmbership of the Northern
Mariana Islands in the Council would be beneficial. He explained
that the Northern Mariana Islands might later regret exclusion from
membership. He suggested, as a compromise, that the Northern Mariana
Islands could continue as a "observer" until such time as, say, the
governor finds that the Northern Mariana Islands should becom a
nember. Such a provision viould authorize the governor to ask for
full membership at a later date if and when the Northern Mariana
Islands decides full membership on the Council would be beneficial.

Donald wboduorth, legislative counsel for the Northern Mariana
Islands Senate, explained that the alternative provisions on State
Departnent negotiation of regional fishery agreements on behalf of
the Northern Mariana Islands are based on language now in the FCMA.
Congressman Burton told Mr. Wooduorth that reopening the coastwise
laws issue uould not be wise since the Covenant already addresses
this subject. Mr. Vbodtworth said the Departrrent of Defense position
is that the FCMA does not now apply and that the Northern Mariana
Islands should be permitted to enact FCMA-type legislation. Mr.
@%Jbodworth said tuna should be regulated under the FCMA and that a
regional tuna fishery arrangewnt should be permitted.

Peter Van Name Esser, Attorney General for the Northern Mariana
Islands, said obtaining an exemption from the FCMA is very difficult
because of the United States policy considerations. No other part of
the United States is exempted, he said. He noted the need to develop
Northern Mariana Islands resources and pointed out that ownership of
Northern Mariana Islands fishery resources historically has been in
the people of the Northern Mariana Islands. He said Governor Tenorio
favors an exemption from the FCMA, making that the unified position
of the legislative and executive branches of the governnent of the
Northern Mariana Islands.

Senator Quichocho said an objective of the Northern Mariana
Islands, in seeking to develop its fishery resources, is to reduce
its dependence on federal funding. Congressman Burton replied that
the Northern Mariana Islands could begin to reduce that dependence by
implementing the Internal Revenue Code. He said for the Northern
Mariana Islands to be treated differently from Guam in federal
matters is unfair. He noted that the (bvenant already provides
special treatment for the Northern Mariana Islands by the
land-alienation restriction, by the ability to rebate taxes, and by
permission for deviation from the one-man one-vote requirenent.

-8-

Aside from the Covenant exemptions, he said, the Northern Mariana
Islands generally should be treated no differently frcm Guam.

Continuation of Commission operations.
[821 Congressman Burton said the Commission should not end its staff
operations in July as planned. He said the Commission is a very
useful forum. He also said that sufficient time must be allowed so
the Cxmiission is able to proceed cautiously and be well informed
before it makes recommendations to Congress. He said many questions
on the application of federal law to the Northern Mariana Islands
remain unansviered.

Staff Recommendations (continued)..

Federal immigration and nationality laws. Mr. MacMeekin
explil'nedthat the first proposal in this recommendation would allow
Northern Mariana Islands citizens married to aliens to petition for
permanent resident status in the United States for their alien
spouses and children under 21 years of age prior to termination of
the trusteeship. Congressman Burton requested that the Commission
staff, independently fram this recommendation, prepare a proposed
amendment to the Sirrpson-Mazzoli immigration bill now before
Congress, providing that, in the event of a conflict between that
legislation and the Covenant, the Covenant would prevail.

Mr. MacMeekin said the second proposed recaumendation Would
permit a Northern Mariana Islands citizen electing to become a United
States national rather that a United States citizen after termination
of the trusteeship to count residency in the Northern Mariana Islands
toward the required period of residency in the United States should
he or she later seek naturalization as a United States citizen. He
noted that, under existing United States immigration law, that person
would have to reside in a United States jurisdiction other than the
Northern Mariana Islands to satisfy the residency requirement.

--discussion. Congressman Burton expressed concern that the
first proposal does not limit the number of people eligible to become
permanent residents of the United States. He said eligibility should
be limited to individuals otherwise eligible as of a certain fixed
date, for example, the date of introduction of the bill. He also
suggested that, after Commission adcption of the immigration
recmurendation, a concurrent or joint resolution should be passed by
the Northern Mariana Islands legislature and approved by the
governor, giving Northern Mariana Islands consent to the proposed
legislation. He recommended that the Northern Mariana Islands
establish a procedural mechanism for granting consent pursuant to the
mutual consent requirements of the Covenant.

-9-

Quorum, Notice of Meeting and Approval of Minutes

Mr. Tenorio here noted the arrival of Commissioner Myron
Thompson and announced the presence of a quorum.
(831
Mr. Tenorio next announced that notice of the meeting had been
published in the Federal Register, the Marianas Variety, and the
Commonwealth Examiner.

The minutes of the sixth meeting of the Commission were approved
without change.

Agenda. Mr. Thcmpson moved for the adoption of the proposed
agenda. The notion was seconded by Mr. Borja, and passed.

Ms. McPhetres requested that the Internal Revenue Code be
discussed under old business.

Staff Recommendations (continued).

Federal immigration and nationality laws (continued). Mr.
Macbi@'e@kinsaid that Congress has the power under th@@ @United States
Constitution to allow the Northern Mariana Islands to control its own
immigration. He noted, however, that the others might disagree and
that a constitutional challenge to the inapplicability of the federal
immigration laws-could be made. He said a likely challenger would be
an alien who is the immediate relative of a United States citizen.
He suggested the Northern Mariana Islands make provision in its own
immigration laws to grant such persons a status similar to "immediate
relative" status under the federal law. If such a change were made,
constitutional challenge to the separate hmnigration laws of the
Northern Mariana Islands would be much less likely, he said.
Congressman Burton said the Northern Mariana Islands should consider
this suggestion. Senator Froilan Tenorio expressed opposition to the
staff reccmrrendation. He said very few people will be effected by
the recommendation, which is temporary in nature, and which does not
benefit Northern Mariana Islands citizens. He said the aliens who
become permanent residents of the United States under the first
proposal could -enjoy a status superior to Northern Mariana Islands
citizens, because they might become United States citizens through
naturalization before citizens of the Northern Mariana Islands become
citizens of the United States through termination of the trusteeship.
Congressman Burton said Senator TL-noriols concern reinforces the need
for a fixed cut-off date for eligibility. Senator Quichocho agreed
that eligibility should be limited. In response to Senator Ibnorio's
concern that alien inmiediate relatives of citizens of the Northern
Mariana Islands might beccme United States citizens before Northern
Mariana Islands citizens achieve that status, Congressman Burton

_10-

expressed his hope that, by that time, Congress would have accorded
to Northern Mariana Islands citizens all rights of United States
citizenship.
[841 Wagner-Peyser Act. Mr. MacMeekin said that this law,
establishing the Unitea- States Employment Service, is now applicable
in the Northern Mariana Islands. Federal grants to State employment
agencies are available under the Act. In order to receive funding,
however, a State must have an approved unemployment compensation law.
Mr. MacMeekin said that, under the Act, Guam is exempted from that
requirement and that the reccimmendation here proposed seeks a similar
exemption for the Northern Mariana Islands.

-discussion. Congressman Burton expressed surprise at the Guam
exenij@tion 'and asked how the Northern Mariana Islands private sector
could justify the absence of an unemployment compensation program.
He said that he does not believe that Guam should be exempted.

Senator Tenorio said that he disagrees with the staff
recommendation because a federal ly@ funded employment service is not
needed in the Northern Mariana Islands. Mr. MacKeekin explained
that, although the Act applies in the Northern Mariana Islands, the
Northern Mariana Islands still has to apply for funds under the Act.
Mr. Thompson said the Northern Mariana Islands will decide whether to
apply for funds, even if the proposed reccimmendation is adopted by
the Commission and enacted into law. Senator Tenorio said that, if
federal funding is terminated once a progran is started in the
Northern Mariana Islands, termination of persons hired to work in
that progran creates hardship. Mr. MacMeekin said the proposed
recommendation makas the funds available,"but allows the Northern
Mariana Islands to decide whether to apply for those funds.

Recess.

Me ireeting recessed at 2:30 p.m. and reconvened March 30, 1983,
at 1:00 p.m.

Staff Recommendations (continued).

Mr. Tenorio said that action should be taken on only the three
staff reccimmendations under consideration (on the Fishery
Conservation and Managenent Act and the Vessel Documentation Act, on
the federal immigration and nationality laws, and on the
Wagner-Peyser Act). lie suggested that discussion be postponed on the
other three staff recimmndations just circulated (on a nonvoting
delegate to the United States Congress, on the federal banking laws
and related federal housing laws, and on the federal securities
laws). Congressman Burton suggested that most people already know
their position one way or the other on the nonvoting delegate staff

recam-endation and that action on that reccmmendation would be
appropriate. Mr. MacMeekin pointed out that the three later staf f
recaumendations have only recently been circulated and that no
comments have been received on any of them. Senator rcenorio said
that the prcposed legislative language in the nonvoting delegate [851
staf f recommendation provides for election of the delegate in
even-numbered years when general elections are held in the Northern
Mariana Islands on odd-numbered years. , He suggested that the
delegate be elected in odd-numbered years.

--motion. Ms. McPhetres moved to defer action until a later
meeting on the staff reconurendations on the nonvoting delegate, the
federal banking laws, and the securities laws. The motion was
seconded by Mr. Borja, and passed.

Fishery Conservation and Management Art and Vessel Documentation
Act: Consideration and action. Mr. MacMeekin suggested tEit -section
5 (exenption from foreign hull restrictions) and section 6 (removal
of citizenship restrictions) of tl-ie staff reccmme-ndation's proposed
legislative language could be acted upon by the Ccmmission.
Congressman Burton asked the effect of enacting section 6 on vessel
manning requirements. Mr. MacKeekin answered that section 6 would
put into statutory form the opinion of the general counsel of the
Coast Guard, permitting treatment of Northern Mariana Islands
citizens as United States citizens for purposes of the vessel manning
laws. Mr. MacMeekin next suggested that section 4 of the proposed
legislative language, making the Vessel Documentation Act applicable
to the Northern Mariana Islands, could also be acted on, noting that
section 4 goes hand-in-hand with section 6.

Mr. Wbodoorth said that, until all other issues in the Northern
Mariana Islands Senate's alternative recommendation have been
resolved by the Commission, the Senate favors making the Vessel
Documentation Act inapplicable. Congressman Burton said there is no
point in recommending provisions that will not be enacted by
Congress. He offered to arrange a meting of Northern Mariana
Islands officials and maritime union leaders in Washington to sort
out any problems with prcposed recanmendations.

Mr. Tenorio asked whether the various proposals in either draft
are separable. Mr. TAbodworth replied tliat they are separable and
that the Canmission could take a position on the FCMA now and defer
the Vessel Documentation Act until a later meting. Ms. McPhetres
and Mr. 9honpson both agreed that a neeting between Northern Mariana
Islands goverment of f icials and maritime union leaders in
Washington, as suggested by Congressman Burton, would be helpful.

-12-

-motions. Mr. Borja moved to adcpt the portion of the
alternative proposal making the FCMA inapplicable. The motion was
seconded by Ms. McPhetres, and passed-four members voted in favor;
[861 none opposed; Congressman Burton voted present..

Mr. Borja then moved to defer action on the remaining proposals
in each recomwendation until a later meeting. The motion was
seconded by Mr. Thampson, and passed.

Federal immigration and nationality laws: Consideration and
action. In response to Mr. Borja's request for clarification of the
need to have a fixed eligibility date, Congressman Burton explained
that this suggestion would limit the number of people eligible for
permanent residency by requiring that status as an inmLediate relative
be determined as of a date specified in the legislation. He said
Congress is reluctant to allow "open-ended" avenues of immigration
into the United States. With a cut-off date, no incentives exist
for, say, entering into a fraudulent marriage to obtain entry into
the United States. He noted that subsequent legislation could be
enacted to change the cut-off date to allow aliens who later becore
immediate relatives of citizens of the Northern Mariana Islands to
beccme permanent residents of the United States and that this could
be done more than once or even annually as necessary.

--motions. C)ongressman Burton moved for adoption of section 1
of the staff recc=endation's proposed legislative language, amended
to establish the date of introduction of the bill as the eligibility
cut-off date. The motion was seconded by Ms. McPhetres, and passed.

Congressman Burton moved for adcption of section 2 of the staff
recoffmndation's proposed legislative language. The motion vas
seconded by Mr. Borja, and passed.

Wagner-Peyser Act: Consideration and action. Congressman
Burt6n-__sa__1r_d that Guam should not be exenpt from the unemployment
ccmpensation requirement and that he is not certain he favors an
exemption from the requirement for the Northern Mariana Islands. He
said he will not oppose the reocmmendation but will only vote
11present." He asked why the Northern Mariana Islands, when it
achieves full-fledged ccmffonwealth status, should not have an
unemployment compensation law as does the Virgin Islands. Senator
Tlenorio said little thought has been given establishing an
unemployment compensation program in the Northern Mariana Islands,
possibly because such a program may have been thought too burdensome
to the struggling private sector there. Congressman Burton said the
costs for unemployment ccimpensation insurance prEMWDS are very low.
He suggested that the United States Departuent of Labor be asked to
explain the requirements for an approved program in the Northern
Mariana Islands and that action on the draft reccmnendation be

-13-

deferred until the next meeting.
--motion. Mr. Borja moved to defer action on the draft staf f [871
recommen3ation on the Wagner-Peyser Act and to ask that the staf f
investigate why Guam was exempted fran the unEmployment campensation
requirenent. The notion was seconded by Ms. Mcphetres, and passed.

old Business

Priorities. Mr. Tie-norio asked Mr. MacMekin to review the
status of work on the areas designated by the Commission for priority
treatnent.

Imigration--Sirnpson-Mazzoli bill. Congressman Burton suggested
that letters, signed by the executive director, be sent to Senators
McClure, Johnston, Matsunaga, and Weicker, and Congressmen
Lagomarsino and Wbn Pat, urging that a provision be inserted in the
Simpson-Mazzoli legislation to the effect that, in the event of a
conflict between that legislation and the Covenant, the Covenant will
prevail. The Commission members present agreed that the suggested
letters should be sent.

Imigration-Ccmission recammendation-clarification. In
response to Mr. Woodworth's inquiry, Congressman Burton said the
eligibility cut-off date did not bar applications for permanent
residency after that date, but only applications based on
imffediate-relative status acquired after that date.

Priorities (continued). Mr. MacMeekin noted that the
CommissTo-n,--at 'itssixth meting, planned tern-&nation of staff
operations in July 1983. He said that he and the staff will
concentrate on the preparation of the final report between now and
then.

- Internal Revenue Code. Mr. MacMekin asl@ed for Cbmmission
guidance on how to proceed with respect to the Internal Revenue Code.
A very rough draft has been prepared but is still quite
unsatisfactory and much work remains to be done.

Joel Bergsma, the legislative counsel for the Northern Mariana
Islands House of Representatives, inquired whether the Internal
Revenue Code is a priority matter for Oonnission stuly. MS.
McPhetres said she still considers it a priority. Mr. Thompson
suggested that, if no additional funding is received, the Internal
Revenue Code should not be accorded priority. If additional funding
is received, the Internal Revenue Code could then be included c-inong
the Commission's priorities, he said. Congressman Burton said the
Govenant expressly provides that the Internal 1@evenue Code is now
applicable and that further treatment of the subject is thus

14-

unnecessary. He said that the Northern Mariana Islands should have
no unfair competitive advantage over Guam and emphasized that, except
(881 for, perhaps, earned inccme credit provisions, the Code should apply
in its entirety. He then suggested that the staff be directed to
write the governor of the Northern Mariana Islands and ask him,
assuming the applicability of the Internal Revenue Code to the
Northern Mariana Islands, to identify specific provisions in the Code
troublesome to the Northern Mariana Islands. He said the earned
inccme, credit is one such possibly legitimate concern. He emphasized
that the governor should be asked to identify specific problems and
to reccnmnd statutory language to resolve each such problem. Mr.
Borja said that the applicability of the Internal Revenue Code raises
important issues that should be addressed.

--motion. Mr. Thampson moved that the Commission ask the
governor oT_ the Northern Mariana Islands to identify specific
concerns of the Northern Mariana Islands with respect to the Internal
Revenue Code on the assumption the Code will continue to be
applicable to the Northern Mariana Islands and to ask him to offer
the statutory language needed to resolve each. The motion was
seconded by Congresman Burton, and passed.

The Commission agreed that the Internal Revenue Code should
remain as a priority matter but instructed the staff to prepare no
draft recomwendation.

-title 42, Public Health and Welfare. Mr. MacMeekin said he
would look into this title in some detail if additional funding
becomes available. In the absence of additional funding, at least
the Medicaid issues raised at this meeting should be examined.

-title 15, Carmerce and Trade. Mr. MacMeekin said that this
title also should be revie%ed in some detail if additional funds are
available.

--borders survey. Mr. Macmeekin said this survey will be
circLia-tedas soon as completed, but that completion may not be
possible before July.

--National Labor Relations Act. Mr. MacMeekin asked Commission
guidance on whether this Act should be given high priority.

Commission Instructions to Staff

Continuing the Cammission. Congressman Burton urged the
C ssion to seek to conti-nue its work and to send letters
requesting additional funds to members of Congress with jurisdiction
over Commission funding. He said the Commission should not wind down

-15-

yet and noted that the f inal report of the Commission is not due
until one year after the trusteeship is terminated. Mr. Tenorio said
that obtaining funding for purposes of continuing the Commission may
present a problem. He said that some staff members are now preparing [891
to leave. He noted that Mr. Dela Cruz in particular has already told
the executive director of his plans to leave and that the executive
director intends to close the Commission's Northern Mariana Islands
office when Mr. Dela Cruz leaves. Janes Beirne suggested that the
Commission seek additional funding through Interior's request for
supplemental funds for fiscal year 1983. Congressman Burton
suggested that no additional staff be hired until an additional
appropriation has been approved.

--motion. Congressman Burton moved that the Commission continue
its work and request additional funding at the level of the
Commission's most recent appropriation. The motion was seconded by
Mr. Thompson, and passed.

Medicaid. Congressman Burton said that the Commission should
not assign a high priority to drafting a recommendation on the
Medicaid program. Instead, he said a statement of the issues,
particularly regarding inpatient care payments, should be made.

Final Report. Congressman Burton said a final report should
still be prepared in the ewnt that additional funding is not
available.

National Labor Relations Act. Congressman Burton suggested that
the staff not spend time on the National Labor Relations Act. He
said there is very little chance the Northern Mariana Islands would
be exempted from this law.

Mr. Bergsma said that the Saipan Chanber of Commerce and the
Northern Mariana Islands legislature have adopted resolutions asking
that the National Labor Relations Act be made a priority matter. Mr.
MacMeekin said that two issues have been raised in the current
dispute involving the Micronesian Telecommunications Corporation.
The first question, vhether the Act is applicable to the Northern
Mariana Islands, has been conclusively settled already, he said, in
favor of the Act's applicability. The second question, whether the
National Labor Relations Board should exercise jurisdiction, is
beyond the Commission's normal purview, he said, because the Act
gives the Board sane discretion in deciding wtiether to exercise
jurisdiction, Thus, to require the Board to exercise or to decline
jurisdiction over labor disputes in the Northern Mariana Islands
would require legislation restricting the Board's discretion.
Congressman Burton expressed agreement with Mr. MacMeekin's
interpretation.

-16-

--motion. Mr. Borja moved that the National Labor Relations Act
not 6ij -accorded high priority by the staff. The motion was seconded
by Congresman Burton, and passed.
(901 Second Interim Report.

Mr. MacMeekin suggested that the proposed final report be
denominated an interim repDrt. That nomenclature, he said, would
allow the Commission to remain in existence, albeit without funding,
between submission of this report and the deadline for submission of
the final report to Clongress one year after termination of the
trusteeship. If the members perceived a need to address issues not
previously treated during that period, they would still be able to
take action as necessary, including seeking funds for additional
staff work. If no such issues arose, the (bmmission could submit a
one-page letter as its final report, he said. The Commission members
agreed to this proposal.

Format. At Mr. Tenorio's suggestion, the Cbmmission Trembers
agreed to allow the staff to determine the appropriate format and
cover for the report.

Implementation. Ms. McPhetres asked how implementation of the
Commfs_s_1Fn @s 'recommendat ions by Congress could be encouraged.
Congressman Burton suggested that this subject be addressed at the
next meeting. He emphasized the importance of providing the report
to key members of Congress.

Additional funding.

Congressnan Burton said that Mr. MacMeekin should discuss with
Mr. Beirne the language for the letter requesting an additional
appropriation.

New Business

No new business was offered.

Next Meeting

Mr. Mactlbekin said that Mr. Joseph had offered the facilities of
the Council on Foundations (of which he is President) for the next
meeting of the Gonmission. The Commission tentatively agreed to hold
its next meeting on June 17 and 18, 1983, in Washington, D.C., at the
offices of the Council of Floundations. Mr. Mac-Meekin noted that the
meting might take wore than two days.

Adjournment
The meeting was adjourned at approximately 4:50 p.m.

17 -

CERTIFICATION

The minutes of the March 29-30, 1983, meeting of the Northern
Mariana Islands Commission on Federal Laws are set fortli above as [91]
corrected and adopted by the Commission at its meeting of
November 29, 1983.

Daniel
Execu tive Director

Northern Mariana Islands Cwnmlsslon on Federal Laws Washingtonj D.C. 20240 (202) 343-5617

MINUTES OF THE EIGHTH MEETING

WASHINGION, D.C.
[921 NOVEMBER 29-30, 1983

Commission Chair Jams A. Joseph cpened the eighth iTeeting of
the Northern Mariana Islands Commission on Federal Laws in the
conference room of the Council on Foundations at 1828 L St., N.W., in
Washington, D.C., at 9@45 a.m.

Commissioners present, in addition to Mr. Joseph, were Jesus C.
Borja, Agnes Manglona McPhetres, Edward DLG. Pangelinan, and Myron
Thonpson. Absent was Vice-chair Pedro A. Tenorio.

Opening Rr=marks

Mr. Joseph %elcamed the Clonnission members and members of the
public in attendance. He then asked for a moment of silence in honor
of Congressman Phillip Burton, a Cam-tission member until his death on
April 10, 1983.

-motion. Mr. Pangelinan imved that the Gmnission's next
report be dedicated to Congressman Burton. The motion was seconded
by Mr. Thompson, and passed.

, Mr. Joseph reported that President Reagan is expected to appoint
Congressman Robert J. Lagomarsino in December to fill the vacancy
created by Congressman Burton's death.

Mr. Joseph then introduced the members of the Conunission and the
Com-nission staff to the public in attendance and asked members of the
public to introduce themselves. Among those present vere Puth Van
Cleve, of the Department of the Interior; Helene Harvey and Kay
Bernstein, of the Social Security Administration; Dorothy Brown, of
the Bureau of the Census; Northern Mariana Islands Senator Froilan C.
rrenorio; Donald C. Wooduorth, Northern Mariana Islands Senate
Counsel; Robert Garland, General Clounsel to the Northern Mariana
Islands Washington Representative; Jeffrey Farrow, Senior Advisor to
the Subcommittee on Insular Affairs of the U. S. House of,
Representatives; and Chris Brennan and Jess Flord, of the General
Accounting Office.

Quorum, Notice of Meeting, and Approval of Minutes.

Mr. Joseph announced the presence of a quorum and that notice of
the meeting had been provided as required.

The rdnutes of the seventh neeting of the Commission %ere
corrected and approved. A previously uncorrected error in the
already approved minutes of the sixth meeting vas also corrected.

-2-

Report of the Executive Director.

Omnibus territories legislation. Mr. Daniel H. MacMeekin, the
Commission's executive director, reported that Congress had passed,
and the President was expected to sign into law, Senate bill 589, the
Omnibus Territories bill. Among other provisions, the bill included [931
sections responding to reocimmendations in the (bmission's first
interim report to Congress regarding the Clean Air Act and the
removal of statutory citizenship requirments for citizens of the
Northern Mariana Islands. Mr. MacIvie-ekin said that Mr. Joseph and he
had testified before the Senate Committee on Energy and Natural
Pesources in October 1983 in support of the Ccimmiss ion I s
reccmrre ndat ions. He said that, with passage of this bill, Congress
has now acted favorably on all recommendations in the Ccimmission's
first interim report. He said that while the legislation adopted by
Congress differs somewhat from that recommanded by the CcRunission,
the legislation substantially resolves most of the problems
identified by the Cammission.

Progress. Mr. MacMeekin reported that he and Commission staff
attorney John Cutler continue to %ork on the title-by-title survey of
the United States Code. He reviewed the reccmn-e ndat ions previously
approved by the Conunission subsequent to submission of the first
interim report to Congress. Those reccmmndations are with regard to
the bankruptcy laws, nomination to the service academies, goverment
depository libraries, intellectual property laws, the Rivers and
Harbors Act, land-grant colleges, the Higher Education Act, federal
crimes, and the federal immigration and nationality laws. Mr.
MacMe_ekin said that the draft reccimmandation on the Fishery
Conservation and Management Act had been revised in accordance with
the instructions given by the Ccmmission at the previous ffeeting. As
part of that revision, he said a separate draft reccmmendation on the
Vessel Documantation Act had been prepared. That law had previously
been treated together with the Fishery Conservation and Management
Act. Both recammandat ions, he said, %ere now ready for Ccmmission
consideration and action.

Mr. MacMeekin said that also ready for consideration and action
by the Commission were staff recommendations on the Wagner-Peyser
Act, on a nonvoting delegate to the United States Congress, on the
federal banking laws, and on the federal securities laws. He noted
that three additional draft recammndations--on title 5, goverment
organization and emplo@mees; title 39, federal postal laws; and title
41, federal contract laws--had recently been circulated for cam-ent,
and should be ready for Commission consideration at its next neeting.

Two staff studies, Mr. MacMeekin said, had also been recently
circulated for comment: a "Solicitation of Views on the Application
of the Medicaid Program in the Northern Mariana Islands" and
"Borders: The Applicability of Federal Law to Imports to and Exports
frcm. the Northern Mariana Islands--A Survey." He noted that
substantive comments on the Medicaid study were included in the
briefing materials prepared for this meeting of the Commission.

-3-

--title-by@-title 2E25ress. Mr. MacMeekin then described for
each 7EI-t-le of the forty-eight -active titles of the United States Code
the work that has been completed and that which remains. ,

Sumorizing, he said that language for the Ccimmission's next
(941 report to Congress had been approved by the Gammission for three
titles: Title 11, Bankruptcy; title 17, Copyrights; and title 35,
Patents. For seven additional titles, he said, report language had
been drafted, but not yet approved by the Ccnunission. Those seven
are title 1, General Provisions; title 5, Government Organization and
Employees; title 9, Arbitration; title 12, Banks and Banking (with
the exception of one recently-enacted chapter); title 25, Indians;
title 39, Postal Service; and title 41, Public Contracts.

Mr. MacMeekin said that already-circulated and, in some cases,
approved staff recommendations will provide most report language for
title 2, the Congress; title 8, Aliens and Nationality; title 18,
Federal Crims; and title 44, PLblic Printing and Documents. For
each of these four titles, he said, relatively brief treatments need
to be prepared for the parts of the title not now covered by a staf f
recommendation. He said he expected little controversy over whether
these remaining parts should apply to the Northern Mariana Islands.

For eight additional titles, initial detailed staf f research had
been completed, Mr. MacMeaekin said, but edited report language had
yet to be prepared. Those eight titles, he said, are title 7,
Agriculture; title 15, Comnerce and Trade; title 22, Foreign
Relations and Intercourse; title 28, Judiciary and Judicial
Procedure; title 30, Mineral Lands and Mining; title 31, Money and
Finance; title 33, Navigation and Navigable Waters; and title 47,
Telegraphs, Telephones, and Radiotelegraphs.

In addition, Mr. MacMeekin said, research is now underway on
title 21, Food and Drugs; title 40, Public Buildings, Property, and
%brks; and title 42, The Public Health and Welfare.

There are fourteen titles on which the staff has spent little
time thus far, but which appear to present few problems of
applicability, Mr. MacMeekin said. These titles, he said, he expects
to treat rather briefly in the final report. He cautioned, however,
that study of these titles might reveal unanticipated issues. These
titles are title 3, The President; title 4, Flag and Seal, Seat of
Governnent, and the States; title 10, Arned Forces; title 13, Census;
title 14, Coast Guard; title 23, Highways; title 24, Hospitals and
Asylum; title 27, Intoxicating Liquors; title 32, National Guard;
title 36, Patriotic Societies and Observances; title 37, Pay and
Allowences of the Uniformed Services; title 38, Veterans Benefits;
title 43, Public Lands; and title 50, War and National Defense.

Mr. MacMeekin said that substantial amounts of research and
writing are still necessary if adequate treatment is to be given
eight titles of the Code (in addition to the three titles previously
nentioned for which research is now in progress). Most of those
eight titles, he said, are of importance to the Northern Mariana

-4-

Islands. ribe eight titles are title 16, Conservation; title 19,
Custans; title 20, Education; title 26, Internal Revenue Code'; title
29, Labor; title 46, Shipping; title 48, Territories and Possessions;
and title 49, Transportation.
Correspondence. Mr. MacMeekin told the Cmunission that the (953
Chair had wriEt-en President Reagan in April, notifying him of the
vacancy created by the death of Congressman Burton. In May majority
and minority members of the Committee on Interior and Insular Affairs
of the United States House of Representatives wrote the President
asking that Congressman Robert J. Lagoffarsino be appointed to that
vacancy. Shortly thereafter, Mr. Joseph, at the request of several
members of the Commission and after confirming the agreement of all
members, wrote the President to suggest the appointment of
Congressman Lagomarsino.

Mr. MacMeekin also reported that, in accordance with the
instructions given by the Ccmmission at its previous meeting, the
Chair in April had written to various Senators and Representatives
seeking funding for cperations be3pnd the summer of 1983.

Mr. MacMeekin said that, as instructed by the Commission, he had
sent letters on behalf of the Ccmmission to various members of the
United States Senate and House of Representatives urging inclusion of
a provision in any revision of the federal immigration and
nationality laws to ensure that the treatment of the Northern Mariana
Islands, as set forth in the Covenant, would not be altered. He
noted that no responses to those letters had been received. He said
he had also sent a letter to the governor of the Northern Mariana
Islands, again as instructed by the Commission, asking the governor
to identify specific provisions in the Internal Revenue Code of
particular concern to the Northern Mariana Islands, based on the
premise that the Code will apply in the Northern Mariana Islands.
Mr. MacMeekin said no response to this letter had been received.

Mr. Mac@ieekin reported that two resolutions of the Northern
Mariana Islands Legislature had been received since the last meetiN .
Senate Joint Resolution 3-23 supports the Commission's staff proposal
for a nonvoting delegate to the United States Congress frcm the
Northern Mariana Islands. Mr. Macgeekin noted that this resolution
erred in reciting that the staff prcposal had already been approved
by the Commission. House Joint Resolution 30, he said, asks the
Commission to request the National Labor Relations Board to delay any
decision on its jurisdiction over labor disputes in the Northern
Mariana Islands until the Commission has reccmmended whether the
National Labor Relations Act should apply in the Northern Mariana
Islands.

Personnel and office space. Mr. MacMeekin announced that the
Northern Mariana Islands office of the Commission had been closed as
planned. He noted that custody of Commission files and property in
the Northern Mariana Islands had been turned over to Canmission Vice
Chair Pedro A. Tenorio. He said he had also released one of the

-5-

Commission's attorneys in Washington, D.C. Me present staff, he
said consists of himself, attorney John Cutler, secretary Dianne
Brickey, and part-time clerk Michelle Monroe.
[961 Mr. MacMeekin notea that the Washington, D.C., offices of the
Commission had once again been relocated within the min Departffent
of the Interior building and are now in room 4447.

Budget. Mr. MacMeekin reported that figures provided by the
Department of the Interior, which handles the Canmission's
bookkeeping, showed that $154,000 %es available for Commission
expenditure as of October 1, 1983. He said he believed an error may
have been made and that funds available on that date may have been
closer to @180,000. He said he estimated that, if the @154,000
figure is accurate the Commission can continue operations until
mid-May 1984, if two additional neetings are held, or until early
July 1984, if only one additional meeting is held. If the Commission
had $180,000 rather than $154,000 as of October 1, 1983, an
additional two months of staff operations would be possible, he said.

Agenda.

The agenda proposed by the staff for this neeting was then
adopted by the Commission by consensus.

Staff Recommendations

Fishery Conservation and Management Act. Mr. MacMeekin
summarized the revised staff re commandation on the Fishery
Conservation and Management Act (FCMA), which would make the FCMA
inapplicable to the Northern Mariana Islands.

-motion. Mr. Pangelinan moved adoption of the revised staff
reccmneFd@ation. Me motion was seconded by Ivis. McPhetres.

-discussion. At the invitation of the Chair, Northern Mariana
Islands Senate Legal Counsel Woodworth read a position paper prepared
but not yet formally endorsed by the leadership of the Northern
Mariana Islands Senate. Me paper generally endorsed the revised
staff recomwendation, but sought modification of its conclusion that
the FCMA is now applicable in the Northern Mariana Islands. Mr.
TAbodworth said that the Cormission should be neutral on the issue of
the FCMA's current applicability and noted that, despite recent
legislation that appears to confirm the FCMA's applicability to the
Northern Mariana Islands, there is no territorial sea of the United
States adjacent to the Northern Mariana Isands to serve as a boundary
for a fishery conservation zone. Mr. MacMeekin suggested that the
text of the reccomndation could be rewritten to recognize the
existence of this argumant.

Mr. Pangelinan said the governor of the Northern Mariana Islands
has taken the position that the Northern Mariana Islands should be
represented on the TAbstern Pacific Pegional Fishery Management

-6-

Council. Mr. Borja said the Northern Mariana Islands should be
accorded observer status on the Council. Mr. Joseph noted that
fisheries information obtained at Council meetings by an official
observer could be very useful to the Northern Mariana Islands.

--motion--amendment. After further discussion of representation 1971
of the Northern Mariana Islands at the Wbstern Pacific Regional
Fishery Management Council, Mr. Borja moved to amend the staff
reccimmendation to allow the governor of the Northern Mariana Islands
to designate a person as an observer at the Council. The motion was
seconded by Ms. McPhetres, and passed.

-motion-amendment. Mr. Borja moved to amend section 3(b) of
the staff's proposed legislation to read:

All payments or other consideration received
pursuant to any agreement concluded under
the authority granted by subsection (a) of
this section and attributable to the taking
of fish, or to the right to take fish, by the
vessels of foreign nations within the fishery
conservation zone of the Northern Mariana
Islands shall be paid to the Government of
the Northern Mariana Islands.

The motion %es seconded by Mr. Pangelinan, and passed.

-motion to table. To give the Northern Mariana Islands Senate
time to endorse formally the position paper presented by Mr.
%bodworth, Mr. Pangelinan moved that the staff reccnmendation as
amended be tabled until the following day. The motion was seconded
by Ms. McPhetres, and passed.

Wagner-Peyser Act. Mr. MacMe_ekin summarized the staff
recammndation on the Wagner-Peyser Act. In response to a question
raised at the previous meeting of the Coamission, he explained how
Guam %es exempted from the general requirement of operating a
federally-approved unemployment campensation program under the law.
The federal-State unemployment compensation program, he said,
originally applied only to the fifty States and the District of
Columbia. Subsequent laws added, first, Puerto Rico and, later, the
Virgin Islands. No legislation to add Guam to the program has been
enacted, he said. Consequently, Guam need not have an unemployment
ccimpensation law in order to receive assistance under the
Wagner-Peyser Act.

-motion. Mr. Borja moved that the staff recammndation be
adopted. The motion was seconded by Ms. McPhetres.

-discussion. In response to a question frcrn Senator Tlenorio,
Mr. Macbbekin said enactment of the recommended legislation would not
require the Northern Mariana Islands to establish an unemployment
compensation program or to apply for grants available under the
Wagner-Peyser Art. Enactment of the legislation, he said, would

-7-

merely give the Northern Mariana Islands the option to apply for
those grants, an option it does not now have.

Mr. Woodworth said that the Northern Mariana Islands Senate
endorsed the recomnendation.
[981 -motion--adoption. The Camnission then passed the motion to
adopt the staff recaEihdation on the Wagner-Peyser Act.

Vessel Docunentation Act. Mr. MacMeekin summarized the revised
staff reccmiTendation on the Vessel Docuwmntation Act, again noting
that the staff reccmiTendation on the Act had been separated from the
staff recommendation on the Fishery Conservation and Management Act.
He explained the revised staff recommendation does not also address
the vessel naming laws, even though those laws will become
applicable to vessels of the United States in Northern Mariana
Islands waters if the Vessel Documentation Act is made applicable to
the Northern Mariana Islands, as recommended.

--discussion. Mr. Pangelinan stated that the vessel manning
requirements should not apply to the Northern Mariana Islands. Ms.
McPhetres asked about the advantages to the Northern Mariana Islands
if the Vessel Documentation Act were not applicable. Mr. Borja asked
why only fishing vessels were exempted from the domestic-hull
requirements in the staff draft. He also suggested that a
restrictive definition of "Northern Mariana Islands corporation"
should be added to prevent foreign interests from forming
corporations in the Northern Mariana Islands to take advantage of
provisions intended to benefit only the people of the Northern
Mariana Islands.

Mr. MacMeekin said that if the Vessel Documentation Act remains
inapplicable to the Northern Mariana Islands, the vessel naming laws
would also be inapplicable to the Northeni Mariana Islands vessels,
at least until termination of the trusteeship. He also said in that
case vessels of the Northern Mariana Islands would not enjoy
privileges afforded vessels of the United States. fie noted that
"vessels of the United States" are entitled to protection by the
United States when on the high seas. He agreed that a definition of
"Northern Mariana Islands corporation" should be added to the
proposed recommendation.

Ms. McPhetres and Mr. Borja each noted the inportance of
allowing foreign vessels to operate in the Northern Mariana Islands.
Mr. Pangelinan stated that the fishing vessel Olwol had fallen into
disuse because vessel manning requirements prevented use of alien
officers or crew. Senator Tenorio concurred in that assessment.

Mrs. Van Cleve said that United States-flag vessels are entitled
to certain benefits under treaties of the United States, including
access to foreign ports, lesser duties, and other economic benefits.

Mr. Pangelinan asked that the staff reccmmndation be expanded
by the staff to include further analysis of these questions. Mr.

-8-

Joseph determined that the consensus of the Cammission f avored Mr.
Pangelinan's request and the postponement of any Cannission action on
the staff reccmmendation to a subsequent meeting.

Nonvoting delegate. Mr. MacMeekin next summarized the revised
staff recommendation on legislation to provide the Northern Mariana [991
Islands a nonvoting delegate to the United States Congress. He said
the revised recommendation raised the clerk-hire allowance for the
delegate to correspond to recently-enacted legislation similarly
increasing the clerk-hire allowance for the nonvoting delegate frcm.
American Samoa. He said the revised recommendation also includes the
change directed by the Commission at its previous meeting, setting
the date for election of the delegate to coincide with Northern
Mariana Islands elections rather than with election to the United
States House of Representatives.

Mr. MacMeekin said that the staff recommendation is supported by
the governor and legislature of the Northern Mariana Islands.

The principal objection to the prcposal, Mr. MacMeekin said, is
likely to be that giving the Northern Mariana Islands a nonvoting
delegate to Congress creates an obstacle to eventual unification of
the Northern Mariana Islands and Gum, since such a unified territory
would likely be represented by only one delegate and the Northern
Islands would be reluctant to give up its separate representation.

-motion. Mr. Pangelinan moved that the revised staff
reccmmendYt-ir-on be adopted. Mr. Borja seconded the motion.

-discussion. Senator Tenorio suggested that the prcposed
legislation might conflict. with the Covenant, in that the Resident
Representative authorized by the Covenant represents the goverment
of the Northern Mariana Islands while the nonvoting delegate would
represent the pecple of the Northern Mariana Islands.

Mr. Pangelinan said that a nonvoting delegate would provide the
Northern Mariana Islands a voice in the goverment of the United
States, while the Resident RepresenlEa-tive is only a representative to
the government of the United States.

Mrs. Van Cleve noted that Puerto Rico's Resident Commissioner
represents the government of Puerto Rico in dealing with the
government of the United States and represents the people of Puerto
Rico in the United States Congress.

Ms. McPhetres and Mr. Pangelinan each suggested that the
proposed legislation not specify a two-year term for the nonvoting
delegate, since the Resident Representative's term might be changed
from two to four years by a forthcoxdng constitutional convention in
the Northern Mariana Islands.

After a brief discussion, the members of the Commission
concluded that the proposed legislation should not repeal Covenant
provisions authorizing the creation of the position of Resident
Representative.

-9-

In response to a question, Mr. MacKeekin said that the
recamnended legislation provided for a special election rather than
an interim appointment to fill any vacancy in the nonvoting delegate
position because legislation establishing nonvoting delegates for
Guan and American Samoa-on which this legislation is
[1001 modelled-provided for special election rather than interim
appointment.

-anendment and approval. By consensus, the Commission amended
the staff reccimmendation to delete specification of the length of the
nonvoting delegate's term of office and to allaii the length of that
term to be governed by the constitution and laws of the Northern
Mariana Islands. The motion to adopt the revised staff
reccmffendation, with the foregoing atTendirent, was then passed by
unanimous vote.

Federal banking laws. Mr. MacMeekin sumarized the staff
recamrmndation on the federal banking laws and related federal
housing laws contained in title 12 of the U.S. GDde. He also
explained the nine proposals for legislation contained in the
recormTendation. He said the United States Department of the
Treasury, including the Co-iTptroller of the Currency, and the Federal
Home Loan Bank Board had examined the recommendation and found no
problems with it. The United States Department of Housing and Urban
Development, he said, favors the proposed grant of authority to the
Secretary of Housing and Urban Developaent to raise- mortgage
insurance limits in the Northern Mariana Islands to reflect increased
construction costs there. He said that federal agency also suggested
the Northern Mariana Islands might be well-advised, because of its
small population, not to create a local banking system. Mr.
MacMeekin noted that whether the Northern Mariana Islands creates its
own banking system is not a question within the Commission's
jurisdiction.

Mr. MacMeekin said the Northern Mariana Islands House of
Representatives also supported the recomnendation.

--discussion. Mr. Borja askied why the proposed legislation did
not extend Farm Credit Administration programs to the Northern
Mariana Islands directly, rather than merely granting the Federal
Farm Credit Board discretionary authority to extend those programs to
the Northern Mariana Islands. Mr. Cutler explained that the staff
had followed, as a model, legislation granting the Board authority to
extend farm credit prograns to the Virgin Islands. The discretionary
approach %.as chosen for the Virgin Islands, he said, to allow the
Board to determine if extension was in fact feasible. Mr. Cutler
said the same approach seened appropriate for the Northern Mariana
Islands, where questions of feasibility would be even more likely to
arise.

Mr. Borja asked whether the provisions of chapter 29 of title
12, requiring depository institutions to disclose to the public
information on mortgage loans made, should be made applicable to the

_10-

Northern Mariana Islands. Mr. MacMeeekin said that the law only
applies to depository institutions in standard matropolitan
statistical areas and that the Northern Mariana Islands is unlikely
to be included in such an area in the foreseeable future.
Mr. Woodworth said the'Northern Mariana Islands Senate supports [101
the staff recommandation.

--iwtion-adoption. Mr. Thompson moved to adopt the staff
recomiTendation. ffFe-mtion was seconded by Ms. McPhetres, and
passed.

Federal securities laws. The staff recommendation on the
Secur@ities @Act of 1933 and the Securities Exchange Act of 1934 was
next summarized by Mr. MacMeekin. He noted that these laws now apply
in the Northern Mariana Islands, although firms of less than $100,000
in capitalization are generally exempt from the requirements of these
laws. The staff recomiffendation is for no change in the applicability
of these laws, he said.

Mr. Macmeekin said the staff recomn-endation has been supported
by the General Counsel of the Securities and Exchange Commission.

-motion-adoption. Mr. Borja moved to adopt the staff
recommendation. The motion was seconded by Mr. Pangelinan, and
passed.

Recommendations for future consideration. Mr. Joseph noted that
additional time was necessary to allow camirents from the public on
three staff recommendations. He invited commnts from Ccomission
members and others in attendance on those three recammndations,
which treat titles 5 (Goverment Organization and Employees), 39
(federal postal laws), and 41 (federal contract laws) of the United
States Code.

--federal postal laws. Mr. Borja asked whether federal postal
laws prohibit the mai7ing of advertising material related to
lotteries between the Northern Mariana Islands and other places in
the United States. Mr. MacMeekin said that such mailings are
prohibited and that the staff recommendation would only exempt from
the prohibition advertising materials for a qualified lottery if
those materials were mailed to an address within the Northern Mariana
Islands.

Mr. Woodworth asked whether a lottery run by the goverriment of
the Northern Mariana Islands would be subject to the postal
prohibitions. Mr. Macl4L-ekin said the State lotteries are generally
exempt from those prohibitions, but that he was not sure whether the
Northern Mariana Islands is considered a State for purposes of the
exemption.

-federal contract laws. Mr. Woodworth asked whether
construction of the new Northern Mariana Islands hospital and the
proposed federal building for the Northern Mariana Islands is
governed by federal contract laws. Mr. MacKeekin said he was not

_11-

sure if the hospital was f unded through grants to the Northern
Mariana Islands that had lost their federal character and so was not
sure whether its construction is covered by these laws. Mr.
Pangelinan said the construction of a federal building is still only
[1021 in exploratory stages.
Mr. Woodworth asked whether Covenant provisions do not require
applicability of the Walsh-Healy Act in the Northern Mariana Islands.
Mr. MacMeekin said that, regardless of the Covenant, the Act itself
gives the Secretary of Labor discretionary authority to exempt areas
fran application of the Act, and Secretary has exercised this
authority to exempt the Northern Mariana Islands.

Medicaid.

Mr. MacMeekin said that, in accordance with the instructions
given by the Comndssion at its previous meeting, the staff had
prepared and circulated for comment a study entitled "Solicitation of
Views on the Application of the Medicaid Progran in the Northern
Mariana Islands." He summarized the issues identified in the study,
and in six substantive responses to the study included in the
Commission's briefing material for this meting. He then asked for
Commission guidance as to its preferred outlines for a staff
recommendation on Medicaid. He said the Commission could consider
several alternatives: (1) it could make no recommendation; (2) it
could recommend that the Secretary of Health and Human Services be
granted authority to waive any Medicaid requirement otherwise
applicable to the Northern Mariana Islands, other than the "cap" and
percentage limitation; and/or (3) it could recommend specific
legislation on issues such as freedom to choose health care
providers, standards of inpatient care, and changing or removing the
cap or percentage limitation.

Discussion. Mr. Thompson, noting that he had administered the
Medicaid program in Hawaii, said he favored granting the Secretary of
Health and Rnan Services wide discretion to alter Medicaid
requirements applicable to the Northern Mariana Islands. He said the
program's requirEments are often quite complex.

Mr. Woodworth said the Northern Mariana Islands Senate favored
(1) exempting the Northern Mariana Islands from freedan-of -choice
requirements; (2) exempting the Northern Mariana Islands from
inpatient care standards; and (3) removal of the cap and percentage
limitations. Mr. Thompson asked when the new hospital, which would
alleviate standard-of-care problems, would be completed. Mr.
Pangelinan said that hospital construction is expected to require
twenty-four months.

The Conzission then postponed further discussion of Medicaid
issues until later in the meeting.

Borders survey.

Mr. MacMeekin then commented on the recently-circulated staff
study, "Borders: The Applicability of Federal Law to Imports to and

-12-

Exports from the Northern Mariana Islands--A Survey. He said the
purpose of the study was to acquaint readers with the present
applicability to the Northern Mariana Islands of the many federal
laws governing imports and exports. He said that little underlying
rationale appeared to control which laws include the Northern Mariana [1031
Islands as part of the United States and which treat the Northern
Mariana Islands as a foreign country. 9he study may generate
recommendations for changes in those laws, he said, as persons
discover how they are affected by those laws. He said- the study
already suggested to him the need for federal legislation allowing
the government of the Northern Mariana Islands to enforce federal
lads and to receive federal reimbursement for that enforcement. He
said that a recommendation on the livestock quarantine laws might
also be appropriate, since the nearest quarantine station to the
Northern Mariana Islands is more than three thousand miles away, in
Honolulu.

Mr. 'Vbodworth said that the study had been well received by
members of the Northern Mariana Islands Senate and should be useful
to the business ccimiunity. He suggested that any future draft
recognize the argument against the proposition that the Fishery
Conservation and Management Act is applicable to the Northern Mariana
Islands, the same argument he had outlined during discussion of that
lcw earlier in the meeting.

Recess.

The meeting recessed at 5:00 p.m. and reconvened November 30,
1983, at 9:35 a.m.

Staf f Reccmendation

Fishery Conservation and Management Act. In response to a
question from Mr. Joseph, Mr. Vbodworth said he had been unable to
obtain official Senate endorsement of the previously presented
statement of position with regard to the staff recommendation on the
Fishery Conservation and Management Act. Mr. Joseph suggested that
the staf f recommendation be modif ied to recognize the existence of
the argument previously outlined by Mr. Woodworth against present
applicability of the Fishery Conservation and Management Act. The
Commission merkibers agreed witli this suggestion.

---motion--adoption. The Cbim-dssion then passed the previously
offered motion to adopt the staff recaruiendation on the Fishery
Conservation and Management Act, with the amen&ients and changes to
the staff recamrendation already agreed upon.

Old Business.

Priorities. Mr. MacKeekin outlined the tasks remaining to be
accomplished by the Commission and its staff. He said that the staff
prepares two types of material: text that will be incorporated
directly into the Commission's next report to Congress and text in
the form of staff recommendation to be circulated for public comment,
revised in light of comments received, and then presented to the

-13-

Camnission for its approval. After the Cann-Lission approves staff
recamiendations, he said, they too are incorporated into the report.
Text not circulated in the form of staff reccmmndations will be
approved by the Commission only when submission of the entire report
to Congress is approved. Given the probable exhaustion of funds in
(1041 June 1983, he said, he feels it important to concentrate on the
preparation of text to be incorporated directly into the report. He
said that he has a large backlog of research draf ts ready to be
edited directly into the report. At the same time, he said, there
are good reasons to concentrate first on the preparation of
additional staff recommandat ions, since these must be circulated
early in order to allow sufficient time for public ccment. he said
that he felt the staff reccmmndation on Medicaid, for ex&nple,
should be quickly prepared and circulated.

Mr. MacMeekin also reiterated his desire to draft several
general recam-Le nda t ions to Congress, not tied to particular federal
laws. He said three areas for which general reccnumndations should
be prepared are the continuing trust status of the Commonwealth of
the Northern Mariana Islands after termination of the trusteeship,
the legal status of the (bvenant, and the desirability of clear
language in future federal laws to indicate geographic applicability.

Mr. MacMeekin said a third area in which Commission staff could
spend substantial time is in researching and preparing staff
recamrendations on specific identified problem areas not yet treated
in detail. He gave as examples the vessel manning laws, prohibitions
against airline passenger taxes, livestock quarantine laws, the
authority of the governaent of the Northern Mariana Islands to
enforce federal laws, and the need for the Northern Mariana Islands
to continue to receive essential air service.

Mr. MacMeekin referred to the resolution received on the
National Labor Relations Act. He noted that the Cbmn-Lission had
already decided not to give priority to this law, and said he felt
the Commission, because of the short time remaining for completion of
its work, should adhere to that decision.

Mr. MacMeekin noted the Ccmmission's previous decision, at its
March 1983 neeting, directing the staf f not to prepare a
recamiandation with respect to the Internal Revenue Code. He said
the application of the Internal Pevenue Code to the Northern Mariana
Islands is now the sLbject of intense debate among Northern Mariana
Islands goverment officials, organizations and private individuals
in the Northern Mariana Islands, the United States Departffents of
Treasury and Interior, and congressional staff manbers. He
questioned whether the Commission with its limited resources could
add anything to this debate and suggested that treatnent of the
Internal Revenue Code in the Ccnunission's report should be rather
cursory.

A final area in which staff work needs to be done, Mr. MacMeekin
said, is essentially administrative. The Ccmmission's bylaws, he
said, should be revised to give the Commission the ability to

-14-

function, if necessary, after the staff is released. He noted that
winding up staff cperations and determining the ultimate disposition
of the Commission's files will also take sane time.

Mr. MaclvL-ekin reiterated his goal of a complete, comprehensive
report, which he feels will have long-term usefulness to the [1051
Congress. An executive sumnary, he said, would enable readers to
obtain the Cbmmission's recam-e nda t ions without going through the
entire report.

Mr. MacMeekin said that conservative estimates indicate that
Ccmmission funds will be exhausted in late June or early July 1984.
To allcw time for final production and printing, he said, the
Commission should probably met in April 1984 to approve the report.

-discussion. Senator TL-norio canplimented the work of the
Commission, but said he did not think its work could be completed by
June 1984.

Mr. Thaupson and Ms. McPhetres stated that the Commission should
continue to function after June 1984, preferably with staff, but
without staff if necessary. Mr. Joseph said that the report
submitted in June should not be labelled as the final report and that
the Commission should continue in existence until its expiration one
year after termination of the trusteeship.

Mr. Joseph then said he thought the.general reccmmendations. on
the continuing trust status of the Ccmmonwealth of the Northern
Mariana Islands and on the sanctity of the Covenant were important.
Mr. Thompson expressed his agreement.

Ms. McPhetres said the staff should draft and circulate for
comment a recommendation on Medicaid, giving the Secretary of Health
and Hunan Services the authority to waive particular requirements of
the prograin for the Northern Mariana Islands. She suggested that the
draft not prcpose arry exemption from the freedom-of-choice
requirements.

Mr. Joseph said that the Vessel Documentation Act and the vessel
manning laws deserved priority treatment.

Ms. McPhetres asked that the sea grants progran be added to the
list of areas to be examined.

Mrs. Van Cleve explained that the camissions, studying the
applicability of federal law to Guam and the Virgin Islands did not
examine the Internal Revenue Code not only because of its complexity
but because Congress had recently studied its application to those
areas and enacted legislation on the subject. Mr. Mac@leekin said he
hoped that a description of the Covenant provisions and subsequent
legislation and reference to other studies that had been done would
constitute a sufficient treatffent. Ms. McPhetres said that the
Internal Revenue Code is one of the most important federal laws and
that how it applies to the Northern Mariana Islands is a matter of

-15-

some consequence. She said that at the very least the Commission
members should know what issues are involved, before they decide
whether the Commission should make reccnurendations to Congress on the
Internal Revenue Code. She asked that the staff prepare a paper
briefing the members on the issues involved in the application of the
[1061 Internal Revenue Code to the Northern Mariana Islands. Mr. Joseph
concurred in this request.

Mr. Woodworth suggested that the extent of the Northern Mariana
Islands control over submerged lands be added to the Commission's
list of priorities. He also asked that the Commission look into
legal issues arising out of the declaration by the United States of a
200-mile exclusive economic zone extending outward, in part, from the
Northern Mariana Islands. Mr. Joseph suggested that the sLbrrerged
lands question merited attention, but that time uould likely not be
available to study 200-mile zone issues. Mr. Pangelinan concurred.
Ms. McPhetres suggested the second question be looked at if time were
available.

Mr. MacMeekin asked that, as previously has been done, he be
given discretion to order priorities for the staff, taking into
account the views expressed by the Commission members at this meeting
and available time and resources. Mr. Joseph said that, if there was
no objection from the members, Mr. MacMeekin should so proceed. No
objections were raised.

New Business.

Implementation of Commission recommendations; continued funding.
Mr. Joseph said that without further funding the staff would have to
be released in June, but that the Commission itself would continue in
existence. He said that lack of resources will prevent Commission
members from doing very much to seek implementation of the
Commission's reccmmendat ions. Mr. MacMeekin pointed out that the
presence of Congressman Burton on the Commission and the familiarity
of Senate and House staff members with the Commission's work had
undoubtedly contributed to the enactment of legislation addressing
the recommendations in the Cbmmission's first interim report.

Mr. Pangelinan said the Northern Mariana Islands Resident
Representative could follow up on the Commission's reccnumndations,
but probably would not be able to prepare detailed testimony to
support the reccmirendations. Senator Tlenorio offered to work toward
implementation of the Commission's recommendations when he assumes
the office of Resident Representative. He also expressed his view
that there is much additional work the Cbrinission should do and
suggested that perhaps the Commission could receive funds from the
goverment of the Northern Mariana Islands. Mr. Macmeekin said he
did not believe the Commission could legally accept funds from the
goverment of the Northern Mariana Islands.

Mr. Pangelinan said additional federal funding should be sought
to extend the life of the Commission. Ms. McPhetres concurred. Mr.
Macrvieekin noted that the Commission may have reached the point where

-16-

further expenditures to analyze the applicability of federal laws to
the Northern Mariana Islands are not appropriate. After further
discussion, Mr. Joseph expressed the consensus of the members, asking
the staff to explore the possibility of obtaining further funding.

old Business (continued). [107]

Immigration. Mr. MacMeekin said that, after the Camnission at
its last meeting had approved the staff recommendation on the
immigration and nationality laws, ccmTL-nts on that recamriendation had
been received from the immigration and Naturalization Service. He
then summarized those caments. The Commission decided that the
issues raised by those canments had been adequately discussed before
approval of the recam-endation and that no changes in the
recommendation were varranted.

New Business (continued).

Cmnibus Territories legislation. Mr. MacMeekin said he thought
the Departffent of Justice would draft the presidential proclamation
to implement the citizenship provisions of the recently-enacted
Omnibus lbrritories legislation. He said he expected the
proclamation would not remove citizenship barriers to federal jury
service by citizens of the Northern Mariana Islands because of the
practical problem that juries are selected frcm. lists of persons
registered as voters, lists that do not include citizens of the
Northern Mariana Islands. He said he also expected inclusion of
language making clear that nothing in the proclamation grants
citizens of the Northern Mariana Islands the right to vote in federal
or State elections.

Mr. Joseph asked the staf f to issue a press release on the the
signing of the Omnibus TLerritories legislation by the President.

Appreciation.

On behalf of the Commission, Ms. McPhetres expressed the
appreciation of the CcauTdssion to the Council on Foundations for its
hospitality in hosting this meeting and, particularly, to Ms. Karen
Bates-Logan of the Council's staff for her assistance in making the
arrangements for the meeting.

Next Meeting.
Mr. MacMeekin suggested that the next meeting be set in
consultation with Congressman Lagoffersino's staff, on the assumption
the congressman would be appointed to the Commission. He sa id i f
funds run out at the end of June, the last neeting should probably be
in late April. He noted that Chief Judge Hefner of the Commonwealth
Court of the Northern Mariana Islands has suggested the next neeting
be held in the Northern Mariana Islands, since that is the location
most affected by the Commission's work. He said while he recognized
the value of Judge Hefner's suggestion, he thought the next
meeting-which will likely be the last ireeting of the
Comiission-should take place in Washington, where the Commission's
offices and files are located.

After further discussion, the Commission directed the Chair and
executive director to set the time and place for the next meting
after consultation with the other Comission members and with
particular regard for the desires of Congressman Lagomarsino.

[108] Adjournment.

The meeting was adjourned at 12:15 p.m.

CERTIFICATION

The minutes of the November 29-30, 1983, meeting of the
Northern Mariana Islands Commission on Federal Laws are set forth
above as adopted by the Comission at its meetinq of July 12, 1984.

Daniel H.-MacMeekin
Executive Director

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

MINUTES OF THE NINTH MEETIW.3

SANTA BARBARA, CALIFORNIA
JULY 12-@13, 1984 (1091

Conmission Chair James A. Joseph opened the ninth meting of the
Northern Mariana Islands Commission on Federal Laws in the
Supervisors Conference Room of the Santa Barbara County
Administration Building, 105 Anapanu Street, Santa Barbara,
California at 9:30 a.m.

Commissioners present, in addition to Mr. Joseph, were Jesus C.
Boria, Congressman Robert J. Lagomarsino, Agnes Manglona McPhetres,
Edward DLG. Pangelinan, Pedro A. Tenorio, and Myron Thompson. No
members were absent.

Opening Remarks.

Mr. Joseph welccmed the Commission members and members of the
public in attendance. Among those present were Donald C. Woodworth,
General Counsel to the Northern Mariana Islands Washington
Representative; Jeffrey Farrow, Senior Advisor to the Subcoratittee on
Insular Affairs of the U.S. House of Representatives Ccmmittee on
Interior and Insular Affairs; Jams P. Beirne, Professional Staff
Member of the U.S. Senate Ccmmittee on Energy and Natural Resources;
Thomas Dunmire, Staff Consultant for Territories and Pacific Affairs
of the U.S. House of Representatives Committee on Interior and
Insular Affairs; Jay S. Johnson, Assistant General Counsel for
Fisheries of the National Marine Fisheries Service in the Department
of Camierce's National Oceanic and Atmospheric Administration; Eugene
Gonzales, Secretary's Regional Representative, Region IX, Department
of Education; John Daugherty, Legislative Assistant to Congressman
Lagamarsino; David Collins, a private attorney from San Francisco,
California; and Jaime O'Leary, District Manager, Santa Barbara, for
the Social Security Administration, Department of Health and Human
Services.

Mr. Joseph noted that Congressman Lagamarsino had been appointed
to the Commission since its last meeting and welcomed him to the
Commission.

Ouorum, Notice of Meeting, and Approval of Minutes.

Mr. Joseph announced the presence of a quorum and that notice of
the meeting had been provided as required.

The minutes of the eighth meeting of the CaLUtission were
approved.

Report of the Executive Director.

Correspondence Mr. Daniel H. MacMeekin, the Commission's
executive director, reviewed the correspondence culminating in
[110] President Reagan's appointment of Congressman Lagomarsino to fill the
vacancy on the Commission created by the death of Congressman Phillip
Burton.

Mr. MacMeekin reported that, as instructed by the Commission at
its previous meeting, he had sent letters to the appropriate members
of the United States Congress seeking an additional $192,000 to allow
the Commission to continue operations until the summer of 1985.

Budget Mr. MacMeekin reported that figures provided by the
Department of the Interior, which handles the Catu, i ss ion I s
bookkeeping, show that $153,400 was available for Ccmmission
expenditure as of October 1, 1983. Of that amount, $107,900 had been
spent as of May 31, 1984, leaving $45,500 available for expenditure
as of that date. Mr. MacMeekin estimated that normal operating costs
for June and July would use $25,000 of that balance, that this
meeting would cost an additional $12,000, and that $5,000 should be
reserved for publication of the Commission's report. Accordingly, he
said, the Commission will have only about $3,000 for operations in
August 1984.

Mr. MacMeekin noted that earlier figures supplied by the
Department of the Interior showed an October 1, 1983, balance of
$180,500. He said that f igure is in closer proximity to his own
calculations and that the discrepancy between the two Department of
the Interior figures has never been explained. He noted that, if the
larger figure is correct, the Commission would have approximately
$30,000 for operations in August 1984 and thereafter. In any case,
he said, fiscal conservatism requires use of the lesser f igure for
planning purposes.

First interim report. Mr. MacMeekin reported that, with the
enactnv--nt of Public Law 98-213 and the issuance of Presidential
Proclamation 5207 of June 7, 1984, most of the recommendat ions in the
Catutission's first interim report to Congress have been adopted. He
said that the legislative language recommended by the Commission has
not been adopted verbatim, but the problems identified by the
Commission have been in large measure resolved. He noted that the
Commission staff had prepared the original draft of the presidential
proclamation. He then summarized the requirements of United States
citizenship listed in the interim report recommendations that had not
been removed for citizens of the Northern Mariana Islands by Public
Law 98-313 and Presidential Proclamation 5207. He said that the
Commission staff was not involved in the development of the
presidential proclamation after submitting the original draft to the
Office of Management and Budget, other than to answer questions about

- 3 -

the draft frcm various federal agency officials during the agency
review process. As a consequence, he said, he did not know why scme
statutes containing citizenship requirements included in the original
draft did not appear in the final version. He said hearsay
information suggested that the U.S. Department of State opposed fill]
provisions that would have allowed citizens of the Northern Mariana
Islands to enter the foreign service, to receive the benefits of
particular statutes providing federal protection and services to
United States citizens overseas, and to receive the benefits of
trans fer-of-of fender treaties with foreign nations (which allow
United States citizens in foreign jails to be transferred to Anerican
jails). He conjectured that the State Department opposition may have
been based on a fear that foreign countries might perceive treatment
of citizens of the Northern Mariana Islands as citizens of the United
States for these purposes as de facto annexation of the Northern
Mariana Islands by the United States prior to termination of the
trusteeship.

Mr. MacMeekin said the only explanation he could offer for
deletion of a provision that would have removed for citizens of the
Northern Mariana Islands a citizenship requirement for becaming a
VISTA volunteer is that the Executive Branch may have interpreted the
governing statute as not imposing a citizenship requirement. He said
that the statute was ambiguous on the point and had been included in
the Ccmmission's listing so that the aThiguity would not be resolved
adversely to citizens of the Northern Mariana Islands.

Mr. MacMeekin said he also had no explanation for the deletion
from the draft proclamation of a provision that would have excused
citizens of the Northern Mariana Islands fran paying certain taxes on
nonresident aliens, including a 20 percent minimum tax on the
disposition of real property in the United States by nonresident
aliens.

Mr. MacMeekin reported that, because of a practical problem, he
cmitted frcm the draft proclamation the Catmission's reccMmendation
to allow citizens of the Northern Mariana Islands to serve on federal
juries in the United States. He said he had learned, subsequent to
submission of the first interim report, that jury members are drawn
frcm voter registration lists. There is no practical way to develop
lists that include both citizens of the Northern Mariana Islands, who
are ineligible to vote in the United States, and registered voters.

The presidential proclamation, Mr. MacMeekin said, also added a
provision treating citizens of the Northern Mariana Islands as
citizens of the United States for purposes of the
diversity-of-citizenship jurisdiction of the federal courts. This
provision, included in neither the interim report nor the draft
proclamation, allows citizens of the Northern Mariana Islands to sue
(or to be sued by) citizens of other States or territories in federal
courts even when questions of federal law are not at issue.

- 4 -

Mr. MacMeekin noted that all United States citizenship
requirements listed in the interim report having to do with the
uniformed services and with eligibility for federal programs and
benefits have now been removed for citizens of the Northern Mariana
Islands.
(1121
Mr. Tenorio said that the goverment of the Northern Mariana
Islands is now seeking an exemption fr i provisions of the Clean Air
Act pursuant to the procedures of Publ-,, Law 98-213 implementing the
recam@L-ndation of the interim report on the Clean Air Act.

Progress. Mr. MacMeekin then reported on the progress of the
staff in addressing issues identified as high-priority concerns at
the previous meeting of the Ccrnmission. He called attention to the
materials prepared by the staff and circulated since that meeting:
the staff study, The Application of the Interral Revenue Code to the
Northern Mariana Islands: An Outline of Issues; the two alternative
draft staff reccmmendations on the Medicaid program; the second
revised draft staff reccmmendation on the vessel documentation laws,
now expanded to include the vessel crewing laws; and draft staff
recamnendations on enforcement of federal laws in the Northern
Mariana Islands and on submerged lands. He also noted that, pursuant
to the Ccmmission's instructions, mended bylaws had been drafted to
facilitate the continued functioning of the Camission after the
staff has been released and funds available have been spent. In
addition, he said, substantial work had been done on the
title-by-title survey of the United States Code for the second
interim report.

Recent legislative developments. Mr. MacMeekin next reported on
recent developments in Congress affecting the work of the Camission.
He said major amendments to the bankruptcy laws had been signed into
law on July 10, but that he did not know whether those amendments
include provisions recommended by the Cammission (and sent by letter
to the appropriate congressional ccmmittee chairmen) to ensure the
continued applicability of the bankruptcy laws to the Northern
Mariana Islands.

Mr. MacMeekin also noted the continued progress of the
Simpson-Mazzoli bill, which would make major changes in federal
immigration laws. He said that current versions of the bill do not
make the federal immigration laws applicable to the Northern Mariana
Islands. Worker identification requirements in the bill, however,
make more important the availability to citizens of the Northern
Mariana Islands of a document such as the special passport
reccmmended by the Ccmmission.

The Deficit Reduction bill awaiting the President's signature
contains at least three provisions of interest to the Ccomission.
The bill raises the annual limitation on federal Medicaid payments to

- 5

the Northern Mariana Islands. It repeals the 30% federal withholding
tax on passive income paid from United States sources to
non-resident aliens (and thereby eliminates the possibility of
establishing the Northern Mariana Islands as a financial center
channeling passive incane fran the United States to foreign countries
to avoid that tax). It also establishes foreign sales corporations (1131
(FSCs) to replace domestic international sales corporations (DISCs)
as tax-advantaged export firms, and makes the territories--including
the Northern Mariana Islands--favored locations for FSCs.

Finally, he said, omnibus territories legislation containing
provisions on the documentation of vessels in the Northern Mariana
Islands has recently been passed by the House of Representatives,

Second interim report. Mr. MacMeekin then summarized the
current status of work on the second interim report. He sa id that
the Ccmmission had now approved language for five of the forty-eight
active titles of the United States Code: title 8, Aliens and
Nationality; title 11, Bankruptcy; title 12, Banks and Banking; title
17, Copyrights; and title 35, Patents. In addition, he said, the
Commission had approved language treating part I of title 18, Crimes
and Criminal Procedure. For eleven additional titles, edited drafts
have been canpleted but not yet approved by the Commission. Those
eleven are: title 1, General Provisions; title 2, The Congress
(including the Cammission-approved recamiendation on a non-voting
delegate to Congress frcm the Northern Mariana Islands); title 3, the
President; title 4, Flag and Seal, Seat of Goverment, and the
States; title 5, Government Organization and Employees; title 9,
Arbitration; title 25, Indians; title 26, Internal Revenue Code;
title 39, Postal Service; title 41, Public Contracts; and title 45,
Railroads.

For sixteen additional titles, Mr. MacMeekin said, initial
research has been completed. Those titles are: title 7, Agriculture
(which also includes the Ccmmission-adopted recaamendation on land
grant colleges); title 15 (which also includes Cuiatission-adopted
language on the federal securities laws and on federal trademark
law); title 16, Conservation (which includes the Camnission-adopted
reccmmendation on the Fishery Conservation and Management Act); title
20, Education (which includes the CaTtmission-adopted recamnendation
on the Higher Education Act); title 21, Food and Drugs; title 22,
Foreign Relations and Intercourse; title 28, Judiciary and Judicial
Procedure (which includes the recanmendation on the Federal Tort
Claims Act in the Ccmmission's first interim report); title 29, Labor
(which includes the Conmissiorr-adopted recanmendation on the
Wagner-Peyser Act); title 30, Mineral Lands and Mining; title 31,
money and Finanoe; title 33, Navigation and Navigable Waters (which
includes the Canmission-adopted recommendation on the Rivers and
Harbors Act); title 40, Public 'Buildings, Property, and Works; title

- 6 -

42, The Public Health and %blfare (which includes the staff
recommendation on Medicaid and the recommendation on the Clean Air
Act in the Commission's first interim report); title 43, Public Lands
(which includes the staff recommendation on submerged lands); title
47, Telegraphs, Telephones, and Radiotelegraphs; and title 49,
[1141 Transportation.

Mr. MacMeekin said that substantial research is still needed
with respect to three titles: title 19, Customs Duties (although the
staff's Borders Survey contains scme of the necessary research);
title 46, Shipping (except for these parts already covered in the
revised staff recommendation on the vessel documentation and vessel
crewing laws); and title 50, War and National Defense.

Twelve additional titles and part of a thirteenth are not
expected to require detailed treatment. Those are: title 10, Armed
Forces (other than the already-adopted Commissiori recommendation on
nominations to the service academies); title 13, Census (except for
language already drafted on foreign trade statistics); title 14,
Coast Guard; parts II, III, and IV of title 18, Crimes and Criminal
Procedure; title 23, Highways; title 24, Hospitals and Asylums; title
27, Intoxicating Liquors; title 32, National Guard; title 36,
Patriotic Societies and observances; title 37, Pay and Allowances of
the Uniformed Services; title 38, Veterans' Benefits; title 44,
Public Printing and Documents (other than the already@adcpted
Commission recommendation on government depository libraries); and
title 48, Territories and Insular Possessions.

Mr. Macmeekin also reiterated his desire, expressed at previous
meetings, to draft three general recommendations for inclusion in the
second interim report. one such recommendation would urge
congressional deference to the sanctity of the Covenant. A second,
he said, would urge congressional recognition of a continuing trust
relationship between the United States and the Northern Mariana
Islands even after termination of the trusteeship. Finally, he said,
Congress should be encouraged to incorporate into legislative
drafting checklists a reminder to specify whether new legislation is
applicable to the Northern Mariana Islands (and other territories).

Mr. MacMeekin then said that, if additional funding is not
received, the comprehensive report outlined will need to be reduced
in scale. He said that, in that eventuality, he plans to include
only the already-drafted introduction and the recommendations already
adopted by the Commission set out one after the other in the format
in which they were adopted by the Commission.

Staff Recommendations.

Government organization and employees Ccmmission staff
attorney John Cutler summarized the draft staff recommendation on

- 7 -

title 5 of the United States Code, Goverment organization and
Employees. The draf t recommends no changes in the present
applicability of tile 5.

-motion-adoption. Congressman Lagcmars: ino moved to adopt the [1151
staff reccmmendation. The motion was seconded by Ms. McPhetres, and
passed.

Federal postal laws. Mr. Macmeekin summarized the revised draft
staff recamiendation on the federal postal laws contained in title 39
of the United States Code. He said the draft proposes that the
federal postal laws continue to apply to the Northern Mariana Islands
but that provisions in those laws making certain lottery materials
unmailable be modified to exempt mail to an address within the
Northern Mariana Islands for a lottery conducted in the Northern
Mariana Islands by a nonprofit organization for religious,
charitable, educational, or benevolent purposes. He noted that the
revised draft differed fran the earlier draft in only two minor
respects. First, the proposed legislative language was altered
slightly to better achieve its purposes. Second, language was added
to make clear that any lottery conducted by the goverment of the
Northern Mariana Islands is entitled to the exemption from
restrictions on mailing lottery material that is afforded State
lotteries.

--motion. Ms. McPhetres moved to adopt the revised staff
recari Wndat@ion. 7he motion was seconded by Mr. Borja.

--discussion. Mr. Borja noted that residents of the Northern
Mariana Islands often participate in church raffles on Guam while
residents of Guam participate in similar lotteries in the Northern
Mariana Islands. He suggested the exemption be expanded to include
materials mailed to either the Northern Mariana Islands or Guam for
lotteries conducted in either jurisdiction. Mr. macMeekin questioned
whether the Commission should make a recamiendation affecting Gum.
Congressman Lagomarsino said the exemption should not be expanded
without consulting representatives of Guam.

-motion-adoption The Commission then passed the motion to
adopt the revised staff recommendation on the federal,postal laws.

Federal contract laws. Mr. Cutler then sunmarized the draft
staff recommendation on the federal contracts laws, title 41 of the
United States Code. He noted that the draft proposes no changes in
current law.

--discussion. Discussion centered on the applicability of
federal procureaent laws to purchases by the government of the
Northern Mariana Islands when those purchases are made with funds
provided by the Federal Government. In particular, the question was

- 8 -

raised as to whether the construction of the new hospital on Saipan
is governed by federal procurement laws. The government of the
Northern Mariana Islands is the contracting party for the hospital
construction, which is being financed by federal funds. A recent
decision by the United States District Court for the District of
Columbia appears to hold that the hospital construction is subject to
federal procurEment laws. Mr. MacMeekin said that what legal
precedent is available on the point indicates that once federal funds
are transferred to a territory, they lose their federal character and
are no longer subject to provisions governing expenditure of federal
funds. He suggested a footnote be added to the reccinmendation citing
this legal precedent.

Mr. Donald Woodworth, General Counsel to the Northern Mariana
Islands Washington Representative, pointed out that the hospital
litigation had been filed only against the Secretary of the Interior
in an effort to halt the transfer of funds to the government of the
Northern Mariana Islands. Until that transfer is made, he noted, the
funds do not lose their federal character under the precedent
mentioned by Mr. MacMeekin.

Mr. Tenorio said that a decision in the hospital litigation has
held Office of Management and Budget Circular A-102 applicable to the
hospital project. Among other things, he said, Circular A-102
requires the Department of the Interior to approve any contract of
the goverment of the Northern Mariana Islands for the hospital
project in excess of $10,000. Mr. Tenorio said that this was
burdensome to the Northern Mariana Islands in that many construction
change orders would have to be approved in Washington, causing
considerable delay and extra expense. He said such a requirement
also conflicted with the principle of local self-govenrment set forth
in section 103 of the Covenant.

Mr. MacMeekin said that, in his experience, he was unaware that
such a requirement had been imposed in the past on either the
goverment of the Northern Mariana Islands or the government of the
Trust Territory of the Pacific Islands. Mr. Tenorio said that the
requirement is a departure from past practice.

Mr. Joseph suggested that the staff examine the questions raised
by application of Circular A-102 to contracts of the government of
the Northern Mariana Islands funded by the Federal Government if the
reqLt--sted funds for continued Ccimmission operations are received.

Congressman Lagcmarsino suggested that language be added to the
discussion of the Buy America Act to make clear that continuation of
the special treatment afforded the Northern Mariana Islands (and
Guam) by that Act is a matter of policy for Congress to decide.

- 9 -

--mtion--adoption. Ms. McPhetres moved to adopt the staff
recommendation with the addition of the footnote suggested by Mr.
Macmeekin and the language on the Buy knerica. Act suggested by
Congressman Lagomarsino. The motion was seconded by Mr. Thompson,
and passed.
[1171
Fishery Conservation and Management Act.

Mr. Joseph said that a request had been received from Mr. Jay S.
Johnson, Assistant General Counsel for Fisheries of the National
oceanic and Atmospheric Administration, part of the U.S. Department
of Commerce, to address the Commission with regard to the
Commission's previously adopted reccmrwndation on the Magnuson
Fishery Conservation and Management Act (FCMA). At the invitation of
Mr. Joseph, Mr. Johnson then addressed the Commission, urging the
Commission to rescind its recommendation. He said that the FCMA and
the exclusion of tuna from national fisheries jurisdiction are the
two cornerstones of American fisheries policy. He said the United
States does not recognize the jurisdiction of any nation to control
tuna unilaterally. In particular, he said, the United States is
opposed to the agreements entered 'into between island states in the
western Pacific--including the Federated States of Micronesia, the
Republic of Palau, and the Republic of the Marshall Islands--and
foreign fishing interests that grant those interests the right to
catch tuna in the exclusive economic zones of those states. He said
that, given this opposition, the State Department and the Department
of Camfferce will almost certainly oppose any proposed legislation to
allow the Northern Mariana Islands to sell tuna access rights.

Mr. Johnson suggested that, with respect to fish other than
tuna, the Northern Mariana Islands should attempt to keep foreign
fishing vessels out of Northern Mariana Islands waters and to develop
local fishing efforts and processing. He said the Northern Mariana
Islands does not have the infrastructure necessary to support its own
tuna fleet and processing, but that it can earn money by supporting
and selling services to foreign tuna vessels operating in Northern
Mariana Islands waters.

Mr. Johnson said that the United States is not opposed in
principle to the concept of access fees, if those fees are paid
pursuant to a regional international tuna treaty. He suggested that
the Northern Mariana Islands should await the conclusion by the State
Department of an international tuna agreEment for the western Pacific
similar to that recently concluded (but not yet ratified) between the
United States and various Central American nations for the eastern
Pacific. Under that agreement, he said, tuna fishing fleets pay fees
to each coastal state based on the tuna tonnage caught in the waters
of that state. He noted that enforcement is facilitated under this
type of arrangement because each fishing vessel or fleet, so that its
costs are not higher than its competitors, has an interest in
ensuring that its competitors pay all fees due. By contrast, he

- 10 -

said, payment of an access fee not related to the amount of f ish
caught-as is done under the arrangement, for example, between the
Republic of the Marshall Islands and Japanese fishing
interest s@--encour ages overf ishing since f ishing vessels will try to
(118] maximize. their catch and thus their returns once they have paid the
access fee.

Mr. Johnson Emphasized that, because tuna travel great
distances, no single nation can control and manage the species. He
said that, consequently, international agreements are necessary to
manage tuna and, in the absence of such agreement, the value of the
resource may decline. He said there is some evidence that the
Western Pacific tuna stock has been decreasing, noting that several
United States tuna vessels have returned from the western Pacific to
the west coast of the United States.

Mr. Johnson said that United States tuna policy has been called
opportunistic because the United States tuna fleet traditionally
operates in waters distant from the United States. He added that, as
a matter of policy, the United S *tates is likely to continue to back
the United States tuna industry*

Mr. Johnson said that, for fish other than tuna, permit fees
paid by foreign vessels under the FCMA for access to the exclusive
economic zone are paid to the treasury of the United States, but are
set aside from general revenues. He said that the United States
would be likely to oppose any effort to return to the Northern
Mariana Islands fees paid under the FCMA for access to waters
adjacent to the Northern Mariana Islands because allowing the
Northern Mariana Islands to receive those fees would establish a
precedent for Alaska to make a similar claim. He said that most
foreign fees paid under the FCMA are for access to the fisheries
adjacent to Alaska.

Mr. Johnson also pointed out that returning F014A permit fees to
the Northern Mariana islands would not bring large sums of money to
the Northern Mariana Islands because the fish foreign vessels are
principally interested in catching near the Northern Mariana Islands
is tuna, which is not subject to the FCMA.

Mr. Johnson attributed the Commission's, recommendation on the
FCMA to the strong "sovereign pride" of the Northern Mariana Islands
and the desire of the Northern Mariana Islands to receive same
revenues from local marine resources. He said that the Northern
Mariana Islands was more likely to achieve its goals if the FCMA
rEmained applicable. He said the most promising means of obtaining
fisheries revenues for the Northern Mariana Islands is through the
receipt of foreign tuna fishing fees paid pursuant to a regional. tuna
agreement. He said that such an agreement is also the best way to
manage and conserve the tuna stock. He said that the National
Oceanic and Atmospheric Administration, the parent agency of the

- 11 -

National Marine Fisheries Service, within the Department of Ccmmerce,
would encourage inclusion of persons from Pacific insular areas on
United States delegations charged with negotiating such an agreement.

Congressman Lagcmarsino pointed out that, even though the FCMA
is now applicable, surveillance of foreign fishing vessels in waters [1191
near the Northern Mariana Islands appeared to be a problem. Mr.
Johnson said that foreign vessels in those waters are required to
carry United States observers (unless they are fishing only f or tuna)
and noted that local persons could be deputized to monitor foreign
fishing within the United States exclusive economic zone.

Mr. Tenorio said that, to his knowledge, the United States
government does very little to patrol the exclusive economic zone
adjacent to the Northern Mariana Islands. He said that evidence has
been found that foreign fishing vessels have sent landing parties
onto some of the uninhabited islands of the Northern Mariana Islands.
Mr. Johnson said that the Department of Cam-werce is looking for means
of increasing FCMA enforcement generally and is seeking legislation
that would transfer foreign permit fees received under the FCMA to
the Coast Guard and the National Marine Fisheries Service for
enforcement purposes.

Ms. McPhetres asked how the Northern Mariana Islands could
derive scime benefit fran the exploitation of tuna in adjacent waters.
Mr. Johnson said that, if a regional tuna agreement provided for
payment of fees to the United States, the United States could enact
legislation providing for distribution of those revenues to the
Northern Mariana Islands in proportion to the amount of tuna caught
in waters adjacent to the Northern Mariana Islands.

Mr. Macmeekin asked whether residents of the Northern Mariana
Islands, under a regional tuna agreement, would have to pay fees for
tuna caught in waters adjacent to the Northern Mariana Islands. Mr.
Johnson said that the agreement could provide that citizens or
nationals of the United States would pay no fees for tuna caught in
those waters.

Mr. MacMeekin said he knew of no precedent for legislation that
would allow fees received in the national treasury to be earmarked to
particular political subdivisions, such as the Northern Mariana
Islands. He also said that privileges and immunities guarantees
applicable to the Northern Mariana Islands would prevent the Northern
Mariana Islands fran restricting fishing by vessels fr(n other
American jurisdictions unless vessels of the Northern Mariana Islands
were similarly restricted. Mr. Johnson said that scme restrictions,
such as limitations on vessel size, cculd apply equally to vessels
fran any jurisdiction but in fact favor vessels fran the Northern
Mariana Islands.

12 -

Mr. MacMeekin noted that the Commission's jurisdiction is
limited to making recommendations to Congress while it is the
Executive Branch that negotiates tuna agreements. He questioned
whether the Commission should recom:mend to Congress that Congress
[120] direct the Executive Branch to negotiate a treaty.

Congressman Lagomarsino said that, if the FCMA is made
inapplicable to the Northern Mariana Islands, Coast Guard
surveillance of Northern Mariana Islands waters would be likely to
become even less frequent than it is now.

Mr. Woodworth said he saw no problem with the Commission
recommending that Congress direct the Executive Branch to negotiate a
regional tuna agreemnt since the FCKA itself directs the Executive
Branch to negotiate fishing agreements.

Mr. Woodworth also said that any Commission recam-Lendation
should recognize the sovereign interests of the Northern Mariana
Islands; should require the delegation of enforcement powers to the
Northern Mariana Islands, with provisions for federal payment of the
costs of enforcemnt; and should require that the Northern Mariana
Islands be permitted to participate as part of the United States
delegation in negotiation of a regional tuna agreement.

Mr. Tenorio suggested that the Commission urge the Department of
State to begin negotiations toward a regional tuna agreement pursuant
to its existing authority under the FCMA.

Mr. Pangelinan recommended that the Commission retain the
recommendation already made and not withdraw that recommendation
unless progress toward a regional agreement is seen.

In response to a question, Mr. Johnson said that the regional
tuna agreement for the eastern Pacific area had been sent to the
Senate but had not yet been ratified.

Mr. Thompson said he favored asking Congress to provide
increased Coast Guard surveillance of waters adjacent to the Northern
Mariana Islands.

Further discussion of the FCMA was then deferred until the
following day.

Staff Recommendations (continued).

Medicaid., Mr. MacMeekin summarized the original staff
recommendation on Medicaid and the subsequently prepared alternate
recommendation. He said the Health Care Financing Administration,
which administers the Medicaid program, supports the original
recommendation. He noted that the recently@passed Deficit Reduction

13 -

Act has raised the ceiling on annual federal Medicaid payments to the
Northern Mariana Islands. Congressman Lagcmarsino suggested that
Congress is unlikely to consider soon new legislation changing that
ceiling when it has so recently been changed. I
-motion--adoption. CongresEman Lagcmarsino moved to adopt the (1211
original staff recamrie-ndation, with the addition of the
discussion--but not the proposed legislative language--on the effects
of the ceiling on referrals and on participation in enhanced-ffetch
programs fran the alternate staff recam-nendation. The motion was
seconded by Mr. Pangelinan, and passed.

Enforcement of federal laws. Mr. MacMeekin then summarized the
staff recam-i-andation on enforcement of federal laws in the Northern
Mariana Islands. He suggested the addition of legislative language
making clear that in the event of a conflict between the government
of the Northern Mariana Islands and the federal agency responsible
for enforcement of a particular federal law, the federal agency's
views control. He also noted that the extent of federal liability
for torts ccmmitted by agents of the government of the Northern
Mariana Islands in enforcing a federal law is not addressed in the
recamiendation. He said that, rather than try to fashion a rule to
cover all such situations, any such questions of liability should be
decided by the courts in accordance with established legal precedent.

Mr. MacMeekin said the Department of Justice had expressed
opposition to the staff reccmmendation on two grounds. First, he
said, the Department noted that the Marianas Political Status
Commission during the negotiation of the Covenant had opposed
inclusion of a provision that would have required the governor of the
Northern Mariana Islands to enforce federal laws in the Northern
Mariana Islands. Second, he said, the Department expressed the view
that allowing an elected governor to enforce federal law would
violate the Appointments Clause of the United States Constitution.
Mr. MacMeekin said that the Marianas 'Political Status Canmission had
opposed a mandatory requirEment that the governor of the Northern
Mariana Islands enforce federal laws, but had not taken a position on
a grant of authority permitting the governor to enforce those laws.
With respect to the Appointments Clause argument, Mr. MacMeekin noted
the current authority of the elected governors of Guam and the Virgin
Islands bo enforce federal laws in those jurisdictions. Even though
that authority was first granted when those governors were appointed
by the President, by and with the advice and consent of the Senate,
he said that the constitutional authority of Congress over the
territories is sufficient to sustain the legislation proposed in the
staf f recammendation.

-motion--adoption. Mir. Tenorio moved to adopt the staf f
reccmmendation. Congressman Lagomarsino suggested that cannients on

14 -

the substance of the Department of Justice arguments be included in
the text of the reccmmendation. Mr. Tenorio modified his motion to
incorporate the suggestion by Congressman Laganarsino. The motion as
modified was seconded by Ms. McPhetres, and passed.
[1221
Vessel documentation. Mr. MacMeekin summarized the second
revised staff recommendation on the vessel documentation laws, now
expanded to include vessel crewing laws as well.

-discussion. Congressman Lagamarsino noted that the House of
Representatives has recently passed omnibus territories legislation
that includes provisions on vessel documentation and, consequently,
is unlikely to deal soon with the same subject matter again. Mr.
MacMeekin suggested that the staff recomxendation. could be tabled and
brought up again later if the amnibus legislation does not take care
of the problem.

-motion to table Mr. Thcmpson moved to table without
prejudice the second revised staff recamiendation on the vessel
documentation and vessel crewing laws. The motion was seconded by
Ms. McPhetres, and passed.

Subimerged lands. Mr. MacMeekin summarized the staff
recamnendation on submerged lands.

--wtion--ad22tion. Congressman Lagomarsino moved to adopt the
staff recamnendat ion. The motion was seconded by Mr. Thcmpson, and
passed.

Wagner-Peyser Act.

Mr. MacMeekin said that an error had been found in the
previously adopted recaTimendation on the Wagner-Peyser Act. He said
the recommendation concludes that the Act applies to the Northern
Mariana Islands by operation of section 502(a)(2) of the Covenant.
In fact, it applies by operation of section 502(a)(1), he said. As a
consequence, the Northern Mariana Islands does not need the
legislative language proposed in the recanmendation to receive
treatment under the Act equivalent to that afforded Guam. He asked
that the recaTimendation be corrected accordingly.

motion-adoption. Mr. Thompson moved to correct the error as
explained by Mr. MacMeekin. The motion was seconded by Mr.
Pangelinan, and passed.

Bylaws Amendments.

Mr. MacMeekin presented the text of the bylaws incorporating
proposed amendments to allow the Catutission to continue to function
without staff or budget. He noted that he had also included other
minor changes in the text of the bylaws to reflect actual Commission
practice or to improve the style.

- 15 -

motion-adoption. Ms. McPhetres moved to adopt the proposed
amendments to the bylaws. The motion was seconded by Congressman
Lagamarsino, and passed.
Disposition of Commission files. [1231
Ms. McPhetres proposed that the Commission's files on Saipan be
transferred to the Northern Marianas College, which has been
designated as the official repository of archives of the goverrment
of the Northern Mariana Islands. Mr. macmeekin said that federal law
may dictate the disposition of the Commission's files. He said that
virtually all materials in the Commission's files on Saipan are
duplicates of materials in the Ccmmission's files in Washington, D.C.

Ms. McPhetres said that the college has adequate facilities for
secure storage of the files. She also noted that she has been
approached by persons seeking access to the files.

Mr. Pangelinan said that the files are secure in the custody of
the lieutenant governor, Mr. Tenorio. Mr. Joseph suggested that the
Commission allow Mr. Tenorio and Ms. McPhetres to decide between
themselves where the files should be located pending dissolution of
the Commission. Mr. Joseph's suggestion was adopted by consensus.

Recess.

The meeting recessed at 4:15 p.m. and reconvened July 13, 1984,
at 9:10 a.m.

Fishery Conservation and Management Act (continued).

Mr. MacMeekin restated the issues involved in deciding whether
to apply the Magnuson Fishery Conservation and Management Act (FCMA)
to the Northern Mariana Islands. He said the Commission's current
recanmendation has the virtue of focussing congressional attention on
the problem but is unlikely to be implemented. If the Commission
recamx--nds no change in the law, it advises Congress what the
Executive Branch should do, and can do, under current law: increase
surveillance of waters adjacent to the Northern Mariana Islands, in
part by deputizing officials of the government of the Northern
Mariana Islands to assist in that effort; and negotiate a regional
tuna agreement encompassing the Northern Mariana Islands, along the
lines of the Eastern Pacific agreement described by Mr. Johnson. Mr..
Macmeekin questioned the extent to which the Commission, charged with
recommending changes in federal laws, should recommend Executive
Branch actions that can be achieved under existing law.

Congressman Lagomarsino said that a Commission recommendation
without specific proposals for legislative changes could provide a
basis for congressional action.

16 -

Mr. Borja said he was reluctant to alter the Ccmmission's
current recamTendation because of the substantial time and ef fort
already expended in formulating that recanmendation and because
public and private interests in the Northern Mariana Islands would
not have the opportunity to canment on changes in the reccmmendation.
[1241
Mr. Woodworth agreed that the general thrust of the
recommendation should not be changed but suggested separating the
non-controversial tuna reccmmendations fran the controversial FCMA
provisions. He suggested that the FCMA should be the subject of one
reca-nmendation and tuna fisheries the subject of a second
reccmmendation. He then suggested the reccmmendation on the FCMA
need not be reported until after the legislature of the Northern
Mariana Islands has been consulted.

Congressman Lagamarsino endorsed the idea of dividing the
current recamiend6tion into two separate reccmmenda t ions, one on the
FCMA and the other on tuna.

motion-adoption. Mr. Thompson moved that the present FCMA
recaTmendation be divided into two separate recamnendat ions, one on
the FCMA and the other on tuna, and that the Commission also
reccmrrend to Congress that surveillance of the waters adjacent to the
Northern Mariana Islands be increased. The motion was seconded by
Ms. McPhetres, and passed.

Internal Revenue Code.

Mr. MacMeekin then summarized the staf f analysis on applying the
Internal Revenue Code to the Northern Mariana Islands. He said that
the analysis makes no reccmmendat ions, but is designed to acquaint
the Ccmmission members with issues involved in applying the Code to
the Northern Mariana Islands.

Mr. MacMeekin noted that the Covenant requires application of
the Internal Revenue Code to the Northern Mariana Islands.

Discussion. Ms. McPhetres said the Ccmmission should take no
position on the applicability of the Code to the Northern Mariana
Islands. Mr. Borja said the Commission should affirmatively support
the Covenant provisions on the Code. Mr. Tenorio suggested that the
Ccmmission not address whether the applicability of the Code should
be changed.

Mr. Joseph said that the consensus of the Ccmmission appeared to
be against recam'kending any changes in the applicability of the Code
at this time, noting that, if the Camission's funding is extended,
reccmmendations can be made at a later date. Congressman Lagomarsino
noted that the Camission could focus on amendments to the Code if
problems arise after the Code goes into effect in the Northern
Mariana Islands.

17 -

Congressman Lagamarsino then called attention to the letter of
Mr. Abel Olopai, included in the briefing materials for the meeting
and ccmmenting on the application of the Internal Revenue Code to the
Northern Mariana Islands. He suggested that the. executive director
be instructed to write Mr. Olopai, explaining to him that revenues
received under the "mirror" tax are paid to the government of the [1251
Northern Mariana Islands, not to the government of the United States,
as seems to be implied in Mr. Olopai's letter. Congressman
Lagcrnarsino's suggestion was adopted by consensus.

Second Interim Report.

Mr. MacMeekin again outlined the format in which he intended to
put the second interim report should additional funding for the
.Ccmmission not be secured. He said the already-drafted introductory
material would be followed by the reccmmendations adopted by the
Ccmmission, and that the title-by-title survey would be anitted. He
sa. id he would , still include the previously-planned documentary
supplement, but would cmit fran that separate volume the draft staff
recamiendat ions circulated for cam-ent. Mr. MacMeekin then asked for
the views of the Commission on whether its recammndations in the
report should be arranged according to their place in the United
States Code or according to the importance of each as seen by the
Ccmmission. He said that, if arranged by importance, he would favor
giving praninence to the recam-me nda t ions on a non-voting delegate, on
the Fishery Conservation and Management Act, on immigration and
nationality, and on creation of a special passport. Ms.. McPhetres
and Mr. Thcmpson said that the recommendations on land-grant colleges
and on the Higher Education Act should also be given praninence.

Mr. Beirne said that the CCILI[Lission should arrange its
reconmendations according to their placement in the United States
Code. He said that such an arrangement would prevent lack of
progress on a high-pri6rity but controversial recanmendation fran
deterring action on a lower priority noncontroversial recamnendation.

Mr. Pangelinan suggested the executive director be given the
authority to decide on the most appropriate arrangexrent, consulting
with congressional staff members and others as necessary. Mr.
Pangelinan's suggestion was adopted by consensus.

Priorities.

Mr. MacMeekin said that, if no additional funds are received,
the staff must devote all its efforts to ccmpletion of the second
interim report. He said that, if additional funds are available, he
would suggest giving high priority to title 15, Ccmmierce and Trade;
title 16, Conservation; title 26, the Internal Revenue Code; title
46, Shipping; and title 49, Transportation. He said title 19,
Custcms Duties, also deserves additional attention. He noted Mr.
Tenorio's earlier request that the staff look into Office of

- 18

Management and Budget Circular A-102 to determine whether the
Commission should make a recommendation in that area. He said he had
also received suggestions that the Commission propose recamnendations
to lift federal agricultural quarantine restrictions on the movemnt
of chickens into the Northern Mariana Islands and to allow the
[1261 Northern Mariana Islands to issue postage stamps. He said he did not
think the Northern Mariana Islands would be permitted to issue its
own stamps and suggested that the staff not work on any
recommendation to allow the Northern Mariana Islands to do so.

Mr. MacMeekin said he continued to give high priority to
draf ting the general recomnve nda t ions on the continuing trust
relationship between the United States and the Northern Mariana
Islands, on the sanctity of the Covenant, and on the need for
provisions on geographic applicability in legislation enacted by
Congress.

Mr. Beirne suggested, with regard to title 26, that a paper
should be prepared analyzing the effects of proposed tax reform
legislation on the Northern Mariana Islands. Mr. Borja suggested
that the Commission retain a tax expert as a consultant. Mr.
MacMeekin expressed skepticism about whether the advice a consultant
would give would justify the expenditure of Commission funds.
Congressman Tagomarsino said that free expert advice is available
from the staffs of the congressional committees concerned with tax
matters.

Mr. Joseph suggested that Mr. MacMeekin proceed in the manner
outlined, as time and resources permit. Mr. Joseph's suggestion was
adopted by consensus.

old Business.

Commission files (continued). Ms. McPhetres said that the
government of the Trust Territory of the Pacific Islands is
microfilming many United States government documents and suggested
that Commission docuwnts might be microfilmed as part of this
effort.

Mr. Pangelinan emphasized the need for easy access to Commission
files.

Mr. MacMeekin asked that the staff be given the authority to
arrange for final disposition of the Commission's files, and be
charged with ensuring the best possible access, both in the Northern
Mariana Islands and in Washington, D.C., consistent with federal law.
The Commission acceded to this request by consensus.

Funding. Mr. Beirne suggested that the Commission modify its
request for a fiscal year 1984 supplemental appropriation, increasing

the request to an amount sufficient to allow the Camission to
operate until the end of fiscal year 1985. He said the Canmission
should receive funds on a fiscal year basis and not through the
supplemental appropriations process. Mr. MacMeekin pointed out that
.a shift to a fiscal-year funding cycle presupposes the Commission [1271
might continue operations beyond the sLmmr of 1985. Mr. Beirne said
that predictions of how much work the Commission should do could
change during the coming year.

After discussion, the Camnission adopted Mr. Beirne's suggestion
by consensus and instructed the executive director to seek an
increase in the fiscal year 1984 supplemental appropriation request
to allow Camnission operations to continue until the end of fiscal
year 1985.

Executive committee.

Creation--mtion-adoption. Mr. Thompson moved to allow the
Chair to appoint an executive catutittee of the Commission, in
accordance with the newly-amended bylaws. the motion was seconded by
Mr. Pangelinan, and passed.

Appointment of members. Mr. Joseph appointed Congressman
Lagomarsino, Mr. Pangelinan, Mr. Tenorio, and himself to the
executive conmittee, with the proviso that any three of the four
could act as the executive committee.

Appreciation.

On behalf of the Ccmmission, Mr. Joseph expressed the
appreciation of the C *atutission to Congressman Lagcmarsino and his
staff and to the Santa Barbara County Board of Supervisors, for their
hospitality in making arrangements for this meting. Mr. Pangelinan
expressed for the Commission its appreciation to the staff in the
event this is the last Commission meting.

Next Meeting

Mr. Joseph tentatively set Washington, D.C. as the site of the
next -meting if funding of the Ccamission is secured for another
year. No date was set.

Adjournment.

The meeting was adjourned at 11:00 a.m.

CEPTIFICATION.

The minutes of the July 12, 1984, meeting of the Northern
Mariana Islands Commission on Federal Laws are set forth above as
adopted by the Ccmmission at its rmeting of May 81 1985.

Executive Director

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5817

[1281 MINUTES OF THE TEM MEETING

MSHINGION, D. C.

MAY 8, 1985

Cammission Chairman Benigno R. Fitial opened the tenth meeting
of the Northern Mariana islands Ccmmission on Federal Laws in rocm
7000 of the main building of the United States Department of the
Interior, 18th and C Streets, N.W., Washington, D.C., at 9:45 a.m.

Ccmmissioners present, in addition to Mr. Fitial, were Joel J.
Bergsma, Jesus C. Borja, Dewey L. Falcone, and Pedro A. Tenorio.
Camissioner Edward DLG. Pangelinan joined the meeting after the
recess for lunch. Congressman Robert J. Lagomarsino was unable to
attend due to the press of congressional business.

Opening Remarks.

Mr. Fitial welcaned the Commission members and members of the
public in attendance. He introduced the Ccmmission members and then
the Commission staff in attendance: Daniel H. MacMeekin, the
Executive Director; John Cutler, Staff Counsel; and Dianne Brickey,
the Caratission's principal secretary.

Others present during the course of the meeting were Marion
Blank Horn, Associate Solicitor for General Law in the U.S.
Department of the Interior; Ruth Van Cleve, of the office of the
Solicitor in the Department of the Interior; Lieutenant Ccrm*nander
Robin Blackwood, of the office of the Judge Advocate General, U.S.
Navy; Froilan C. Tenorio, Representative to the United States for the
Commonwealth of the Northern Mariana Islands; Donald C. Woodworth,
General Counsel to the Northern Mariana Islands Representative;
Herman Guerrero and Jams Mendiola, both of the office of the
Northern Mariana Islands Representative; and Robert Garland, an
attorney in private practive in Washington, D.C.

Quorum, Notice of Meeting, and Approval of Minutes.

Mr. Fitial announced the presence of a quorum and that notice of
the meeting had been provided as required.

The minutes of the ninth meeting of the Catutission were
approved.

Approval of Agenda.

The prcposed agenda prepared by the staff was adopted by
consensus of the Ccmmission.

Disposition of Commission's Saipan Files.

Mr. Borja recalled that, at its previous meeting, the Commission
had asked Mr. Tenorio and Ms. McPhetres to decide between themselves [1291
where the Commission's Saipan files should be located. Mr. Tenorio,
reported that he had since discussed the matter with Ms. McPhetres,
who is President of the Northern Marianas College, and agreed to
allow any f iles of interest to the college to be moved to the
college. Mr. Fitial said he had agreed with Ms. Ruth Tighe, the
librarian at the college, that the college library would be the best
location for the files. Mr. MacMeekin noted that the files under
discussion, now in the custody of Mr. Tenorio, were maintained by the
Northern Mariana Islands office of the Commission during its
existence from 1981 to 1983. He said the contents of these files are
entirely duplicated in the Commission's Washington, DO-C., files. The
latter files, he said, will go to the National Archives at the
conclusion of the Commission's operations.

Waiver of Meeting Requirement.

Mr. Fitial, exercising authority granted by section 2-2 of the
Commission's bylaws, waived the requirement for a second meting of
the Commission in 1984.

Report of the Executive Director.

History of the Comission. Mr. MacMeekin reviewed the history
of the Commission for the benef it of the new members of the
Commission. He described the Commission's methodology and summarized
the Caturission's work to date. He said that federal laws in four
areas have been particularly controversial in their application to
the Northern Mariana Islands. Those four areas, he said, are
taxation; citizenship and immigration; fisheries and marine
resources; and imports from the Northern Mariana Islands into the
United States. He said that the Commission had addressed each of
these areas except imports and that the staff had prepared a draft
recommendation on imports from the Northern Mariana Islands into the
United States. He noted that the staff' work did not directly address
the most controversial import issue, the imposition of quotas on
garments manufactured in the Northern Mariana Islands entering the
customs territory of the United States. He also noted that, wtii-le
the current working draft of the Commission's next report to Congress
discusses the application of federal tax laws in the Northern Mariana
Islands, the Commission has recammnded no legislation to alter the
application of those laws.

Discussion. Mr. Tenoric, said that the 1)rcposed compact of free
association for the other parts of the Trust Territory may conflict
with section 503(a) of the Covenant, which allows the Northern
Mariana Islands to control immigration into its territory. The

- 3 -

proposed compact, he said, grants citizens of the freely@-associated
states the right to enter the United States, which is apparently
defined to include the Northern Mariana Islands.
[1301
Mr. Ibnorio, also noted that, in restricting the entry into the
United States of garments manufactured in the Northern Mariana
Islands because alien labor is used to manufacture those garments,
the United States is indirectly restricting the right of the Northern
Mariana Islands to control immigration into its own territory. He
said that the obligations of the United States under the Covenant to
assist in the economic developiment of the Northern Mariana Islands
and, particularly, the obligation to allow goods produced in the
Northern Mariana Islands to enter the United States duty-free, have
been breached by the imposition of limits on the numbers of those
garments allowed to enter the United States.

Further discussion of the issues raised by Mr. Tenorio was
postponed until discussion of future priorities of the Commission
later in the meting.

Correspondence. Mr. MacMeekin pointed out, in the briefing
materials prepared for the meting, the February 19, 1985, letters of
appointment from President Reagan to Mr. Fitial, appointing him to
replace Jams A. Joseph as ch airman of the Commission, and to Mr.
Bergsma and Mr. Falcone, appointing them as members of the Commission
to replace Agnes M. McPhetres and Myron B. Thcmpson, respectively.
Mr. MacMeekin noted for the record that none of the replaced
Commission members had indicated to him any intention to challenge
the legal authority of the President to remove them from the
Commission.

Mr. MacMeekin also pointed out, in the briefing materials, the
July 20, 1984, letter he had sent to Mr. Abel Olopai, President of
the United Carolinian Association in the Northern Mariana Islands, as
instructed by the Commission at its previous meeting. The letter is
a response to comments received from Mr. Olopai on the Commission's
staff study, The Application of the Internal Revenue Code to the
Northern Mariana Islands, and calls to his attention that federal
income taxes derived Fr-cm the Northern Mariana Islands are paid into
the treasury of the Northern Mariana Islands, not the treasury of the
United States.

Budget. Mr. MacMeekin reported that, subsequent to the previous
meeting of the Commission, the Commission had received the requested
fiscal year 1984 supplemental appropriation of $192,000. He said
that these funds would allow the Commission to continue operations to
August 1985. He noted that the additional $25,000 requested after
the last meeting to allow operations to continue until September 30,
1985, had not been acted upon by the Congress.

Mr. MacMeekin reported that the new chairman of the Commission,
Mr. Fitial, after his appointment had written the appropriate menbers
of Congress seeking a fiscal year 1985 supplemntal appropriation in
the amount of $217,000. This amount, Mr. Macmeekin said, would be [131
sufficient to allow the Commission to operate until September 30,
1986. Mr. MacMeekin said that, pursuant to section 10 of the
Commission's bylaws, a mail ballot had been circulated among the
menbers to affirm the chairman's request. Six members favore d the
request while none were opposed. Mr. Pangelinan did not vote.

Mr. MacMeekin reported that the most recent accounting summary
received from the Department of the Interior showed that, as of
March 30,, 1985, the Commission had available approximately $96,,000.
He said that the figure was somewhat higher than anticipated. He
said that was fortunate since, immediately preceding the meting, he
had learned that the cost of printing the next report to Congress
would be about $23,000 rather the $8,000 Department of Interior
personnel had previously told him was a reasonable estimate. The
increase in funds available almost exactly covers the increase in
printing costs, he said.

Mr. Macmeekin noted that he allocates for each meeting of the
Commission approximately $12,000, while all other expenses (other
than printing costs) of the Commission are about $13,000 per month.
Consequently, he said, one meting of the Commission costs roughly
the same as one month of staff operations*

The estimate of $23,000 for publishing costs, Mr. MacMeekin
said, is based on, 700 copies of a report of about .620 pages and a
documentary supplement of about 340 pages.
Pr?gress. Mr. MacMeekin next reported on the progress of the
Comitission's work since the last meting. He said that draft staff
recamendations had been circulated on title 31 of the United States
Code, Money and Finance, and on title 15, Commerce and Trade. He
noted that title 15 is a particularly lengthy title of the Code, that
includes a wide variety of laws of importance to the Northern Mariana
Islands. Both drafts, he said, were now ready for consideration by
the Commission.

Also ready for Commission consideration, he said, were the three
general staff recommendations on the continuing trust relationshop
between the United States and the Northern Mariana Islands, on the
sanctity of the Covenant, and on the specification of geographic
applicability in all new federal legislation.

After the last meeting, Mr. MacMeekin said, the staf f prepared a
report incorporating only the Commission's recatut ndations and a
short introduction, to be submitted to Congress in August or
September 1984 in the event the requested additional. funding was not

- 5 -

forthcoming. Because additional funds were appropriated for the
Commission, this report was not submitted, he said. He noted that
the preparation of that draft had suggested a number of format
changes which the staff had now incorporated in the current working
11321 draft. The current draft, he said, includes a relatively detailed
introduction, the Commission's recam@iendat ions, and a title-by-title
survey of the United States Code. Mr. MacMeekin said. that the survey
incorporates all staff drafts approved by the Commission that do not
recommend specific legislation as well as draft language not
previously submitted to the Commission for its approval. Because the
priorities established by the Ccmmission have not called for
examination of every title of the Code, he said, the survey for some
titles notes that no staff research has been done on the title. For
other titles, he said, the survey notes that research had been done
but has not been compiled and edited for inclusion in the report. He
noted that the briefing materials prepared for this meeting include a
checklist of draft recommendations and other studies circulated for
comment by the Commission staff and a summary of the status of issues
and of titles of the United States Code not treated in detail in the
current working draft.

Mr. Macmeekin said that the major omissions in the current
working draft were treatments of title 46 of the Code, on Shipping;
title 19, on Customs Duties; title 47, on Telegraphs, Telephones, and
Radiotelegraphs; and title 49F on Transportation, particularly any
treatment of the Federal Aviation Act.

With respect to title 46, Mr. MacMeekin said, a second revised
draft staff recommendation on the vessel documentation and vessel
crewing laws had been prepared for consideration by the Commission at
its previous meeting, but the Commission had deferred action because
a bill then pending in Conqress would amend the legislation addressed
in that recommendation. The bill was subsequently enacted, he said,
and the staff recommendation had not yet been revised to take the new
legislation into account. In addition, he said, staff research on
the reminder of title 46 was largely complete, so that a draft staff
recommendation on the title could be circulated within a month or two
if additional funding for the Commission became available.

Mr. MacMeekin said that, with respect to title 19, two draft
recommendations had been sent out for comment the same day as the
meeting, but that the Commission would probably not be able to act
with respect to those drafts in a subseguent meeting unless
additional funding were received. He said that one draft, on import
quotas, was likely to be controversial while the other, on title 19
in general, was unlikely to cause argument.

Although the staff has completed much research on titles 47 and
49, Mr. macmeekin said, guite a bit of additional research on
specific issues needs to be done before draft staff recamnendations
on those titles are ready to be circulated for comment.

Mr. MacMeekin noted that, in the introduction, text still needed
to be written to carry the history of the Northern Mariana Islands
frcm the conclusion of the Second World War to the present. He also
noted that an inconsistency in the text, regarding the recommendation [1331
of legislation on federal court venue in certain environmental
lawsuits, needed to be resolved.

Finally, he said, there are a number of specific issues that
merit staff research and treatment in the report if time and funds
are available. He suggested that the special passport reccnmendation
could be augmented by the recomendation of legislation specifically
establishing the right of citizens of the Northern Mariana Islands to
enter and reside, and be employed in, the United States. He said
that the treatment of the Northern Mariana Islands as a "foreign"
rather than a "domestic" location for purposes of telecommunicat ions
tariffs from the United States merits investigation,, although that
investigation might reveal that legislation would be inappropriate.

Mr. MacMeekin said that the presidential proclamation
implementing Pub 1 ic Law 98-213, passed in response to the
Commission's first interim report, had not addressed the Commission's
recommendation that section 897 of the Internal Revenue Code be
amended to make clear that citizens of the Northern Mariana Islands
are not subject to federal taxes imposed on the sale of real property
in the United States by nonresident aliens and foreign corporations.
He said he thought the recam-endation might merit repetition in the
next report.

Two provisions in title 10, on the Armed Forces, also merit
investigation and, possibly, reccnurendations, Mr. MacMeekin said.
one provision governs whether the ;Northern Mariana Islands is a
foreign or dcrwstic location for military post exchanges and base
exchanges, which in turn determines the extent to which nonmilitary
persons may make purchases at those exchanges. The other provision
determines the extent to which civilian personnel of the Department
of Defense domiciled in the Northern Mariana Islands may be
periodically assigned to duty in the Northern Mariana Islands (or
nearby Guam).

Mr. MacMeekin said that the staf f had spent a fair amount of
tine in compiling and editing the current working draft. He noted
that the draft, consisting of about 1200 double-spaced pages had been
sent to the Cannission members before the meeting.

Budget (continued) --discussion. Mr. Tenorio suggested that the
Commission take affirmative action to secure additional funds. He
suggested a second letter to the appropriate members of Congress,
restating the Ccmmission's request for additional funding.

Mr. Bergsma said that the White House, by its appointment of new
members on the Commission, appears to have an interest in continuing
the work of the Commission. Mr. Falcone suggested that the White
(1341 House and other federal agencies be asked to support the continuation
of the. Commission's work. Mr. Tenorio reported that one member of
the congressional staff had told him that Congress would be unlikely
to support any request for additional funds if it were thought that
the new members of the Commission intended to re-examine all of the
previously-adopted recommendations.

Mr. Falcone suggested that Mr. Fitial, accompanied by Mr.
MacMeekin, should meet with Assistant Secretary of the Interior
Richard Montoya, to urge his support for continued funding for the
Commission. Mr. MacMeekin noted that the Assistant Secretary had
declined to support the earlier request for additional funding for
fiscal year 1984. Mr. Falcone also suggested that Mr. Fitial and any
other Commission members remaining in Washington after the meeting
attempt to meet with Congressman Lagomarsino and obtain his views on
how to obtain additional funding.

Staff Recommendations.

!@2nuson Fishea, Conservation and Management Act, Tuna
Fisheries, and Surveillance of Ocean Areas-imtion. Mr. go-rja moved
to adopt the revised staff recommendation on the Magnuson Fishery
Conservation and Management Act (FCHA) and the related staff
recommendations on tuna fisheries and on surveillance of ocean areas.
Mr. Bergsma seconded the motion.

--discussion. Mr. MacMeekin reviewed the history of the three
staff recommendat ions, noting that the Commission had already adopted
all three in principle. He recalled that the FCMA recommendation and
the tuna fisheries recommendation had previously been combined in a
single r\--camrendation but that, at the previous meeting, the
Commission had instructed the staff to separate the recamTendations
and to prepare the additional recommendation on surveillance of ocean
areas. He said that, because the Commission had previously adopted
all three recommendations in principle, it could limit itself at this
meeting to deciding whether the text prepared by the staff conforms
to the Commission's instructions. Alternatively, he said, the
Commission could reopen the recommendations for debate on the
substantive issues involved in each. He then summarized the three
recommendations and letters commenting on them received fran the U.S.
Department of Commerce, the Department of the Navy, and the
Department of Transportation. He said he thought that the FCMA
recommendation is unlikely to be enacted by Congress, but that the
other two recommendations stand reasonably qood chances of enactment.

Mr. Falcone asked whether the Commission should make the FCMA
recammendation if the chances of congressional implementation were

not good. Mr. MacMeekin said that the recommendation had been
adopted by the Commission after considerable debate, a public hearing
in the Northern Mariana Islands, and several successive staff drafts.
He also noted that the recommendation is strongly supported in the [1351
Northern Mariana Islands and that, even if Congress does not ' act,
there is value in presenting the position that has been adcptedo,
since the position has not been set forth elsewhere in a fom easily
accessible to Congress. Mr. Tenorio and Mr. Borja affirmed the
importance of the issue to the Northern Mariana Islands and the
support there for the Commission's current draft.

Mr. Fitial invited Lieutenant Commander Blackwood to address the
Commission. She said the Navy does not support the recommandation on
surveillance of ocean areas because, if it were enacted, the Coast
Guard might draw on Navy vessels for use in surveillance and thereby
restrict the Navy's ability to carry out its own mission.

Mr. Fitial then invited Mr. Woodworth to address the Commission.
Mr. Woodworth noted that the recommendation on tuna fisheries should
be favored by the United States tuna industry, since the
recamTendation does not contravene the federal policy in favor of
international regional management of tuna fisheries. He also said
that a regional tuna agreement could give the United States tuna
industry a campetive advantage in Northern Mariana Islands waters
since it might not have to pay fees required of foreign vessels in
those waters. He sa id that one reason the FC74A is so controversial
in the Northern Mariana Islands is that it did not become law until
shortly after the Covenant was approved by the U.S. Congress. Had it
been in existance during the negotiation of Covenant, he said, its
applicability certainly would have been resolved before agreement was
reached on the Covenant.

Mr. Bergsma suggested that reference to Mr. Woodworth's last
point be added to the FCKA recommendation. He also suggested the the
FCMA recommendation include references to the dollar value of the
sales of tuna fishery access rights by the other entities in the
Trust Territory. Mr. MacMeekin agreed that the FCMA recommendation
would be improved by.noting the post-Covenant enactment of the FCMA.
He said that references to the value of sales of tuna fishery access
rights were already included in the tuna fisheries recommendation,
and probably better belonged there than in the FCMA recommendation.

--motion-adoption. By consensus, the Commission agreed that
the FCMA recommendation should be modified by including reference to
the post-Covenant enactment of the FCMA, as suggested by Mr. Bergsma.

Mr. Fitial then asked for a roll-call vote on the three
recommendations. The motion to adopt all three recommendations, with
the modification of the FCMA recommendation as noted above, was

passed with all members present voting in favor thereof. Mr.
Pangelinan, who was not present at the time of the vote, later in the
meeting asked that the record reflect that, had he been present at
[1361 the time of the vote, he would have voted in favor of the motion.

Recess.

The meeting recessed for lunch at 1:15 p.m. and reconvened at
2:40 p.m. Mr. Pangelinan joined the other members of the Commission
when the meeting was reconvened.

Remarks by Ms. Horn.

Mr. Fitial invited Ms. Horn, the Associate Solicitor for General
Law in the U.S. Department of the Interior, to address the
Commission. Ms. Horn welcaned the members of the Commission to the
Department's building and complimented the Ccmmission and its staff
on the high quality of their work. She noted the close cooperation
of the Ccimmission's staff and Mrs. Van Cleve, who is studying the
applicability of federal laws to the territories and the Trust
Territory for the Department of the Interior.

Staff Recamendations (continued).

Title 31 of the United States Code, Money and Finance--iwtion.
Mr. Bergsma moved to adopt the staff recommendation on title 31 of
the United States Code, Money and Finance. The motion was seconded
by Mr. Borja.

--discussion. Mr. Cutler summarized the staff recamTendation,
noting that no adverse comments on the recommendation had been
received.

Mr. Bergsma asked whether the qovernment of the Northern Mariana
Islands should be required to hold public hearings as part of the
process of applying for certain federal block grants. Mr. Cutler
pointed out the benefits of public participation. Mr. MacMeekin
noted that agencies in the Northern Mariana Islands are already
experienced in meeting public hearing requirements for block grants
and that it would be difficult to supply a rationale for exempting
the Northern Mariana Islands fran a requirement applicable to all
other jurisdictions of the United States, regardless of their size.

--Mtion-egmtion. The Commission, by a roll-call vote, then
passea -the imotion to adopt the staff recommendation on Title 31 of
the United States Code, Money and Finance. All six members present
voted in favor of the motion.

Title 15 of the United States Code, Commerce and Trade-imotion.
Mr. Berqsma moved to adopt the staff recamendation on Title 15 of
the United States Code, Commerce and Trade. The motion was seconded
by Mr. Boria.

- 10 -

-discussion. Mr. Cutler summarized the staf f recammendation,
noting that--as with the previous recamendation--no adverse camments
had been received. Mr. Tenorio asked whether the provisions in title (1371
15 on the metric system would require the use of that system in the
Northern Mariana Islands. Mr. Cutler said that those provisions
permit, but do not require, the use of the metric system.

Mr. Bergsma asked whether motor vehicles not canplying with
provisions in title 15 requiring certain safety equipmnt could be
barred fram entry into the Northern Mariana Islands, since the
Northern Mariana Islands is not a part of the United States custams
territory. Mr. MacMeekin said that officials of the'Northern Mariana
Islands probably have the power to bar vehicles not camplying with
applicable federal law, al though enactment of a Northern Mariana
islands law specifically granting them that authority might be
advisable. He noted that the recammendation previously adopted by
the Ccmmission, on enforcement of federal laws in the Northern
Mariana Islands, is intended to make clear that Congress has granted
to officials of the Northern Mariana Islands the authority to enforce
federal law.

Mr. Borja asked whether, since recipients of loans guaranteed by
the Small Business Administration (SBA) are required to be citizens
of the United States, those loans are freely available in the
Northern Mariana Islands. Mr. MacMeekin said that the citizenship
requirement did not apply to all SBA loans but only to those loans
targetted to socially and economically disadvantaged groups.
Further, he said, while citizens of the Northern Mariana Islands are
affected by this requireffent, the requirement is imposed by
regulation and not by statute, so that it may be chanqed without
action by Congress. He said that SBA-quaranteed loans. are generally
available in the Northern Mariana Islands.

Mr. Fitial asked to what extent the CcmiTerce Clause of the
United States Constitution restricts the ability of the Northern
Mariana Islands to tax insurance - firms not incorporated in the
Northern Mariana Islands that sell policies there. Mr. MacMeekin
said that he could not ansuer that question without first doinc
j scme
research. He suggested that investigation of the constitutionality
of proposed Northern Mariana Islands tax legislation ought to be, in
the first instance at least,, the responsibility of the attorney
general of the Northern Mariana Islands or the counsel for the
legislature of the Northern Mariana Islands.

--motion-adoption. The Cammission by a roll-call vote, then
passed the motion to adopt the staff recommendation on title 15 of
the United States Code, CcrmTerce and Trade. All six members present
voted in favor of the motion.

[1381 General recommendations: the continuin@ trust relationship,
sanctity of F-he -Covenant, spe-c-11-fying rty. Mr.
geographic applicabiri
Macmeekin summarized the staff's general recam:mendations on the
continuing trust relationship between the United States and the
Northern Mariana Islands after termination of the United Nations
trusteeship, on the sanctity of the Covenant, and on specifying the
geographic applicability of federal statutes at the time of
enactment.

--mtion. Mr. Pangelinan moved to adopt the three general staff
recat;n- @ndaMions. The motion was seconded by Mr. Bergsma.

-discussion. Mr. Pangelinan said that the trust concept by
itself would not establish everything the Northern Mariana Islands
needs in its relationship with the United States. He noted the need
for a nonvoting delegate to the United States Congress and the
absence of a presidential vote for United States citizens residing in
the Northern Mariana Islands.

Mr. MacMeekin said that he envisioned the trust relationship as
an incomplete and not totally satisfactory response to the
less-than-ecrual treatment citizens of the United States residing in
the Northern Mariana Islands will receive after termination of the
trusteeship. If and when those citizens have the right to vote for
President and are represented by a voting member in the Senate and
House of Representatives, then the need for a special trust
relationship will disappear. He said that, in the meantirne, the
trust relationship may assist the Northern Mariana Islands in
defending itself when powerful political or economic intests seek
federal action detrimental to the Northern Mariana Islands.

Mr. Bergsma suggested that the recam-endation on the continuing
trust relationship be modified to note that, because the Northern
Mariana Islands will not be a State of the United States, citizens of
the United States residing in the Northern Mariana Islands will also
not enjoy those right enjoyed only by citizens of the several States.
By consensus, the members agreed that the recommendation should be
modified as suggested by Mr. Bergsma.

--mtion-adoption. The Commission, by a roll-call vote, then
passed the motion to adopt the general staff recammendations on the
continuing trust relationship, on the sanctity of the Covenant, and
on specifying the geographic applicability of federal laws, with the
modification of the text on the continuing trust relationship noted
above. All six members present voted in favor of the motion.

Resolutions of commendation.

Mr. Pangelinan moved that the Cammission adopt separate
resolutions cammendirig and thanking Jams A. Joseph, Agnes M. [1391
McPhetres, and Myron B. Thompson for their services to the
Cammission, with the texts to be prepared by the staff. The motion
was seconded by Mr. Tenorio, and was adopted by acclamation.

Second Interim Report.

Mr. MacMeekin proposed alternative courses of action for
submission of the Commission's next report to Congress, depending on
whether the Commission receives additional funds. He said -that, even
if additional funds are received, the Commission should submit a
report to the Congress in the summer of 1985. If no funds are
received, he said, the Commission will have to submit before current
funds are exhausted everything it intends to submit to Congress.

Mr. MacMeekin recommended that the current working draft, with a
few additions and some minor editorial improvements, together with
the proposed appendix and documentary supplement, be submitted as the
Commission's next report to Congress if additional funds are not
received. If funds are received, he suggested that all
already-adopted recanmendations be submitted to Congress with a short
introduction as soon as possible. This report, he said, would not
include the longer introduction, the title-by-title survey, the
appendix, or the documentary supplement, all of which would be
withheld for inclusion in a third report, to be submitted to Congress
probably in the late summer of 1986.

Mr. Falcone said that the Commission must operate on the
assurption it will not receive additional funds.

Mr. Tenorio reiterated his desire to address in the next report
the control of the Northern Mariana Islands over alien labor entering
its territory and the adverse affects on this control resulting from
the imposition of federal garment quotas. Mr. MacMeekin doubted that
these issues could be examined with sufficient care in time for
inclusion in any report to be submitted in the summer of 1985. Mr.
Panqelinan noted that the issues were complex and politically
charged, and should not be addressed hastily.

--motion-adoption. Mr. Falcone moved to adopt the current
working draft as the CUMIL91ission's second interim report to Congress
on the assumption' that no additional funds will be received, subject
to addition by the staff of a short history of the Northern Mariana
Islands subsequent to the second World War and of any recamnendat ions
subsequently adopted by the Commission and subject to such minor
editorial chancles as the staff deems necessary to improve the quality
of the report. The motion was seconded by Mr. Bergsma and passed,,
with all members present voting in favor.

13 -

--motion-adoption. Mr. Falcone moved to authorize the
executive director to submit to the members for approval by mail any
pending staff recamTendat ions, together with copies of comments
[1401 received with respect to any such recommendation. The motion further
provided that if no member's vote against the recommendation is
received by the executive director within 28 days after the ballot is
mailed, the recommendation will be deemed approved; but that if any
member votes against the recommendation, it will not be included in
the report as a recommendation of the Commission. The motion was
seconded by Mr. Borja and passed, with all members present voting in
favor thereof.

old Business.

Executive committee. Mr. MacMeekin reminded the members that
the membership of the executive committee was affected by the chanqe
in membership of the Commission. Mr. Fitial then reconstituted the
executive committee by appointing to it Mr. Bergsma, Mr. Borja, Mr.
Lagomarsino, Mr. Tenorio, and himself.

Second Interim Report (continued).

--motion-adoption. Mr. Bergsma moved that the Commission
submit a report to Congress in the summer of 1985 if additional
funding is received, the report to include all recommendations
adopted to date with a short introduction, but without the other
material now in the current working draft and without any documentary
supplement. To the recommendation on the immigration and
naturalization laws would be added a reference to further related
Commission work to be undertaken. The notion was seconded by Mr.
Tenorio and passed, with all members present voting in favor thereof.

Priorities.

Motion-ngsZion. Mr. Borja moved the adoption of the list of
priorities ovided in the briefing mterials (and summarized in the
executive director's report), with the addition of the immigration,
alien labor, and customs issues raised by Mr. Tenorio, as the quide
for staff work in the event additional funds are received. The
motion was seconded by Mr. Falcone and passed, with all members
present voting in favor thereof.

Next Meeting.

The members agreed that, if additional funds became available,
the date and location of the next meeting will be f ixed by the
chairman in consultation with the other members and the executive
director.

Adjournment.

The meeting was adjourned at 5:20 p.m.

CERTIFICATION

The minutes of the May 8, 1985, meetinq of the Northern Mariana
Islands Commission on Federal Laws are set forth above as adopted by
the Commission voting by mail pursuant to section 10 of the
Commission's bylaws. [141]

Daniel H. MacMeekin
Executive Director

COMMISSION CORRESPONDENCE
TO MEMBERS OF CONGRESS

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 30-5617

[1451

Honorable James mctiure FEB
Chairman
Subcommittee on Interior
Committee on Appropriations
U.S. Senate
1208 Dirksen Senate Office Building
Washington, D.C. 20510

Dear Senator McClure:

The Northern Mariana Islands Commission on Federal Laws has asked
me to urge you to support early funding, for the Saipan hospital
authorized by Section 202 of Public Law 96-205, of architectural and
engineering costs and, to the extent budgetary restrictions permit,
of construction costs. Because of your past leadership with regard
to the insular areas generally and health care in those areas specifically,
I know you are aware of the inadequate medical facilities presently
existent in the Northern Mariana Islands. The need for early construction
of a hospital which (unlike the present Dr. Torres hospital) can be
accredited was brought to this Commission's attention because the
government of the Northern Mariana Islands has found itself unable to
take advantage of some federal laws providing much-needed health-care
benefits because it lacks an adequate hospital. For example, the
Medicare and Medicaid programs cannot be made available in the absence
of an accredited medical facility.

Adequate health care is, of course, important everywhere, in
the Northern Mariana Islands just as in Guam and the Virgin Islands.
Good health care for the local populace is of primary importance.
But the Northern Mariana Islands are also heavily dependent on
tourism, already the largest employer in the private sector. Lack
of adequate hospital facilities is an obstacle to further development
of the tourist trade, since many prospective tourists will shun the
Northern Mariana Islands on learning of the level of health care
presently available.

Lack of adequate medical facilities also restricts economic
development in another way. Firms interested in investing in the
Northern Mariana Islands are apt to become reluctant to do so once
they discover the state of existing health care facilities available
to their personnel there.

2 -

The Commission is aware that the previous administration had
included funds for the hospital in its 'IFY 1982 budget request.
[1461 Because of the acute need for improvement in health care available
in the Northern Mariana Islands, the Commission urges that funds
be appropriated for the Saipan hospital in the FY 1981 Interior
supplemental appropriation to cover architectural and engineering
costs and, to the *extent possible, construction costs. The Commission
also urges that in no event should -funding for this critical project
be postponed beyond the fiscal year beginning October 1, 1981.

Sincerely,

@ames A. Joseph
Chair

identical Letter sent to:

1. Honorable Robert C. B)-rd
Subcommittee on Interior
Committee on Appropriations [1471
U.S. Senate
1208 Dirksen Senate Office Bldg.
Washington, D.C. 20510

2. Honorable Sidi@ey R. Yates
Chairman
Subcommittee on Interior
Committee on Appropriations
U.S. House of Representatives
B-308 Rayburn House Office Building
Washington, D.C. 20515

3. Honorable Joseph M. McDade
Subcommittee on Interior
Co=ittee on Appropriations
U.S. House of Repr'esentatives
B-308 Rayburn House Office Building
Washington, D.C. 20515

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-6617

James A. Joseph JUL 2 9 1982
Chair and
Comissioner
Pedro A. Tenorio
Vibe-Chair and
commissioner
Jesus C. Boria The Honorable Strom Thurmond
Commissioner Chairman, Committee on the Judiciary
Hon. Phillip Burton U.S. Senate
Commissioner Washington, D.C. 20510
Agnes M. McPhetres Re: Applicability of the federal
Commissioner bankruptcy laws to the
Edward DLG. Pangefinan Northern Mariana Islands
Commissioner
Myron B. Thompson Dear Senator Thurmond:
Commissioner
The Northern Mariana Islands Commission on Federal Laws was
created, pursuant to section 504 of the Covenant to Establish a
Daniel H. MacMeeWn Commonwealth of the Northern Mariana Islands in Political Union
Executve Director with the United States of America (Public Law 94-241, 48 U.S.C.
section 1681 note) "to survey the laws of the United States and
to make recommendations to the United States Congress as to
which laws of the United States not applicable to the Northern
Mariana Islands should be made applicable and to what extent and
in what manner, and which applicable laws should be made
inapplicable and to what @extent and in what manner."

The staff of the Commission has prepared for the
Commission's approval a recommendation chat the Commission in
turn recommend to the United States Congress the enactment of
legislation to ensure (1) thac the bankruptcy laws of the United
States presently apply in the Northern Mariana Islands and will
continue to apply pending termination of the trusteeship; and
(2) that bankruptcy court jurisdiction will continue to exist in
the Northern Mariana Islands after April 1, 1984. The present
applicability of the federal bankruptcy laws to the Northern
Mariana Islands was left in some doubt with the substantial
revision of those laws by Public Law 95-598, 92 Stat. 2549,
enacted on November 6, 1978. On June 28, 1982, the Supreme
Court announced its decision in Northern Pipeline Construction
Co. v. Marathon Pipe Line Co.,--U.S.--, 50 U.S.L.W. 4892 (No.
81-150), holding portions of Public Law 95-598 unconstitutional.
At its meeting on July 7, 1982, the Commission decided that the
recommendation of its staff should be sent to you with the
Commission's endorsement. I now enclose that recommendation in
the hope that Congress, in responding to the Northern Pipeline
decision, will also ensure the continued applicabil Ly of the

federal bankruptcy laws in the Northern Mariana Islands and the
continued existence of bankruptcy court jurisdiction in the Northern [1491
Mariana Islands.

Sincerely,

JaTms A. Joseph

Enclosure

xc: Members of the Ccimmission

Identical letter sent to:
The Honorable Peter W. Rodino, ir
United States House of RepresentaLves
2462 Ravburn House Office Building
Washington, D.C. 20515

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5017

[1501

ST"F RECOMNENDATION

ON THE

FEDERAL BANKRUPTCY LAWS

Recommendation. Legislation should be enacted to ensure (1)
that the bankruptcy laws of the United States presently apply in the
Northern Mariana Islands and will continue to apply pending
termination of the trusteeship; and (2) that bankruptcy court
jurisdiction will continue to exist in the Northern Mariana Islands
after April 1, 1984.
[1511
The statute. Article I., Section 8, Clause 4 of the United
States Constit7tion gives Congress the power to establish uniform
bankruptcy laws throughout the United States. Laws enacted pursuant
to this power are "for the benefit and relief of creditors and their
debtors in cases in which the latter are unable or unwilling to pay
their debts." Black's Law Dictionary 134 Oth ed. 1979). Bankruptcy
laws cover both voluntary and involuntary bankruptcy, and provide
generally for annulment of the bankrupt's debts in exchange for
distribution of most of the bankrupt's property to his or her
creditors. The bankrupt gains relief from the burden of debt that,
no matter how hard he or she labors, cannot be liquidated. The
creditors are each assured a fair share of whatever assets the
bankrupt can use to pay the debts. Society in general benefits
because the bankrupt's incentive to participate in productive
activity is restored and because disputes among creditors seeking
first satisfaction from the bankrupts' inadequate assets are
minimized.

Title 11 of the United States Code contains the bankruptcy laws
of the United States. Title 11 was substantially revised by Public
Law 95-598, 92 Stat. 2549, enacted on November 6, 1978.

Present applicability. For the bankruptcy laws to be
effecCiv-v-elyapplicable in the Northern Mariana Islands, two
conditions must be satisfied: First, a person residing in the
Northern Mariana Islands must be able under the laws to qualify as a
debtor eligible for discharge of his or her debts in bankruptcy.
Second, a court in the Northern Mariana Islands must be able to
administer and enforce the bankruptcy laws.

Whether a person residing in the Northern Mariana Islands is
able to qualify as a debtor eligible for discharge in bankruptcy is
uncertain. (This question is discussed in greater detail in Appendix
A to this recommendation.)

The District Court for the Northern Mariana Islands has the
power to administer and enforce the bankruptcy laws. That power will
expire on April 1, 1984, when administration and enforcement will be
transferred from federal district courts to new bankruptcy courts.
Through apparent oversight, Congress did not establish a bankruptcy
court for the Northern Mariana Islands to assume jurisdiction over
bankruptcy matters on April 1,* 1984. The lack of provision for a

bankruptcy court in the Northern Mariana Islands after April 1, 1984,
is discussed in greater detail in Appendix B to this recommendation.

(1521 Discussion. The federal bankruptcy laws should be applicable in
the Northern Mariana Islands.

The purposes of the federal ba nkruptcy laws could be served
instead by enactment of a local bankruptcy statute in the Northern
Mariana Islands. While the United States Constitution requires a
uniform federal law of bankruptcy, Congress almost certainly has the
power under the territorial clause, Article IV, Section 3, Clause 2
of the Constitution, to permit deviation from the rule of uniformity
for the Northern Mariana Islands. But the policy considerations that
supported adoption of the constitutional rule of uniformity support
application in the Northern Mariana Islands of the same bankruptcy
law that is applicable elsewhere in the United States. "The purpose
behind the [constitutional] grant of the bankruptcy [power] . . . was
to enable the new central government to eradicate the opportunities
for fraud and forum-shopping engendered by varying state insolvency
. . . laws . . . ... In re Penn Central Transportation Co., 384
F.Supp. 895, 915 (Spec. Ct., RRRA 1974). See generally 3 J. Story,
Commentaries on the Constitution of the United States, sections
1102-04 (1833); Perez v. Campbell, 402 U.S. 637, 656 (1971).

Over the years substantial thought and effort has brought the
federal bankruptcy laws into their present form. Development of a
local bankruptcy law for the Northern Mariana Islands would require a
large allocation of the limited resources of the island, another
reason for instead applying the federal law in the Northern Mariana
Islands.

Proposed legislative language. The following language, if
enacted by the U.S. Congress, would implement the staff's
recommendation to ensure (1) that the bankruptcy laws of the United
States presently apply in the Northern Mariana Islands and will
continue to apply pending termination of the trusteeship; and (2)
that bankruptcy court jurisdiction will continue to exist in the
Northern Mariana Islands after April 1, 1984:

An Act to clarify the applicability of the
bankruptcy laws of the United States
to the Northern Mariana Islands.

Be it enacted by the Senate and House of
Representatives of the United States of America in
Congress assembled, that the Northern Mariana Islands
shall be considered a part of the United States for
purposes of the bankruptcy laws of the United States.

Sec. 2. Section 2(a) of Public Law 95-157.(48
U.S.C. section 1694a(a)) is amended by inserting "and a
bankruptcy court" immediately after "jurisdiction of a
district court". [1531

This language might also be incorporated into a larger bill
embracing'other subjects as well.

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

(1541

APPENDIX A

Staff Recommendation on the Bankruptcy Laws:

ABILITY OF PERSONS

IN THE NORTHERN MARIANA ISLANDS

TO QUALIFY AS DEBTORS

UNDER THE FEDERAL BANKRUPTCY LAWS

There is some doubt whether a person residing in the Northern
Mariana Islands is able to qualify as a debtor eligible for discharge
in bankruptcy under the federal bankruptcy laws, Title 11 of the
United States Code. Section 109 of Title 11 provides:
Notwithstanding any other provision of this section, [1551
only a person that resides in the United States, or has
a domicile, a place of business, or property in the United
States., or a municipality, may be debtor under this title.

11 U.S.C.A. section 109 (1979).

If the Northern Mariana Islands are part of the United States,
section 109 presents no problem: A person residing in the Northern
Mariana Islands would be a resident of the United States eligible to
be a debtor under Title 11.

Title 11 does not contain a definition of "United States."
(See 11 U.S.C.A. section 101 (1979) ("Definitions").)* The new
bankruptcy law includes several references making apparent the
congressional intent that the law should apply in Guam and the Virgin-
Islands. Section 335 of Public Law 95-598 amends the Organic Act of
Guam to give the District Court of Guam the powers of a bankruptcy
court and to make the federal bankruptcy rules applicable there.
Section 336 amends the Revised Organic Act of the Virgin Islands in
a similar manner. Similar provisions under the prior bankruptcy laws
were considered sufficient to confirm the applicability of those
laws in the Virgin Islands by the court in Christensen v. Donovan,
168 F. Supp. 892 (D.V.I., 1958).

Under the logic of the Christensen ruling, the prior bankruptcy
laws would have been applicable to Guam. The prior bankruptcy laws

*Definitions contained in the now-repealed Title 11 are not helpful:

"Courts of bankruptcy" shall include the United States
district courts and the district courts of the Territories
and possessions to which this title is or may hereafter be
applicable.

"States" shall include the Territories and possessions
which this title is or may hereafter be applicable, Alaska,
and the District of Columbia.

11 U.S.C.A. section 1(10), (29) (repealed; reprinted 11 U.S.C.A. App.
(1979)). Other provisions of repealed Title 11 gave no clear
indication as to which Territories and possessions the title might
be applicable. In Perez v. Campbell, 402 U.S. 637, 656 (1971), the
Supreme Court read section 1(29), above, as making the bankruptcy
laws applicable to the "Territories". This conclusion seems to go
beyond the language of section 1(29).

thus would have been applicable to Guam and the several States. Under
Section 502(a)(2) of the Covenant, laws in existence on January 9, 1978,
[1561 and subsequent amendments to such laws will apply in the Northern
Mariana Islands if they are applicable to Guam and "of general application
to the several states." The now-repealed bankruptcy laws were in
existence on January 9, 1978. So, if the prior bankruptcy laws applied
on Guam, which they almost certainly did, they also applied in the
Northern Mariana Islands.

The new Title 11 is not, however, an amendment of the old Title
11. Section 401(a) of the new bankruptcy law, Public Law 95-598,
repealed the bankruptcy laws in effect on January 9, 1978. "'Repeal'
of a law means its complete abrogation by the enactment of a subsequent
statute, whereas the 'amendment' of a statute means an alteration in
the law already existing, leaving some part of the original still
standing." Black's Law Dictionary 1167 (5th ed. 1979) ("repeal").
(Some court decisions, however, have held that when a new statute
repeals and replaces a similar or almost identical previous statute,
the new statute may be treated as an amendment of the old. See,
for example, Bear Lake Irrigation Co. v. Garland, 164 U.S. 1, 11-13
(1896); In re Martin's Estate, 153 Cal. 225, 94 P. 1053, 1055 (1908)
and State-ex rel. O'Connell v. Meyers, 51 Wash. 2d 454, 319 P. 2d
828, 832 (1957) (amendment includes a complete change in the law,
so long as it is within the realm of the subject matter contained
in the act).)

The new bankruptcy law cannot be considered, independently of
the prior law, as applicable to the Northern Mariana Islands under
the formula of section 502 (a)(2) of the Covenant,- making applicable
to the Northern Mariana Islands federal laws in existence on
January 9. 1978, and their subsequent amendments which apply to
Guam and the several states. The new bankruptcy law had not yet
been enacted on January 9, 1978.

Independently of the Covenant, the new bankruptcy law could
be held applicable to the Northern Mariana Islands if an intent
on the part of Congress to make it applicable to the Northern
Mariana Islands could be shown. The Northern Mariana Islands do
not appear to have been mentioned at all in the legislative history
of Public Law 95-598, as reprinted in 1978 U.S. Code Cong. Adm. News
5787 et s-eq.

Support for the applicability of the new bankruptcy law in the
Northern Mariana Islands may be derived from section l(c) of Public
Law 95-157, 91 Stat. 1265, codified at 48 U.S.C.A. section 1694(c).
This provision, enacted on November 8, 1977--just one year prior to
enactment of the new bankruptcy law--, provides that "rules heretofore
or hereafter promulgated and made effective by the Congress or the

Supreme Court of the United States pursuant to (Title) 11 . . . shall
apply to the District Court for the Northern Mariana Islands . . . [1571
where appropriate, except as otherwise provided in articles IV and V
of the covenant . . . . 11 (Emphasis supplied.) That the bankruptcy
rules are to apply in the District Court for the Northern Mariana
Islands is evidence that Congress intended the bankruptcy laws to be
generally applicable in the Northern Mariana Islands.

According to information provided the Commission in March, 1981
by the Clerk of the District Court for the Northern Mariana Islands,
bankruptcy petitions in the Northern Mariana Islands are handled by
the United States Bankruptcy Court for the District of Hawaii. That
court instructs prospective Northern Mariana Islands petitioners to
send their petitions directly to the Bankruptcy Court in Hawaii.

As of March, 1981, only one petition for bankruptcy originating
in the Northern Mariana Islands appears to have been filed. Its
disposition is unknown.

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5017

[1581

APPENDIX B

Staff Recommendation on the Bankruptcy Laws

BANKRUPTCY JURISDICTION

IN THE NORTHERN MARIANA ISLANDS

AFTER APRIL 1, 1984

For the bankruptcy laws to be effectively applicable in the
Northern Mariana Islands, a court in the Northern Mariana Islands must
be able to administer and enforce those laws. Under existing law,
there likely will be no court able to do so after April 1, 1984.

Section 2 of Public Law 95-157, 48 U.S.C.A. section 1694a [1591
(Supp. 1980), creating the District Court for the Northern Mariana
Islands, provides in pertinent part, that "the District Court for
the Northern Mariana Islands shall have the jurisdiction of a district
court of the United States." Section 402(a) of the Covenant is to
similar effect. Section 1334 of Title 28, U.S.C.A. (1976), provides
that:

The district courts shall have original jurisdiction,
exclusive of the courts of the States, in all matters and
proceedings in bankruptcy.

Further, section l(c) of Public Law 95-157, 48 U.S.C.A. section
1694a (Supp. 1980), makes the Bankruptcy Rules applicable to the
District Court for the Northern Mariana Islands "where appropriate,
except as otherwise provided in articles IV and V of the covenant . . . .
(The legislative history of Public Law 95-157, as reprinted in 1977
U.S. Code Cong. & Adm. News 3307 et seq. makes no reference to
bankruptcy jurisdiction.)

After April 1, 1984, section 151(a) of Title 28 will read: "There
shall be in each judicial district, as an adjunct to the district court
for such district, a bankruptcy court which shall be a court of record
known as the United States Bankruptcy Court for the district." Public
Law 95-598, sections 201(a), 402(b) (1978). Thus, as of April 1, 1984,
a district court of the United States will not have bankruptcy
jurisdiction and the fact that the District Court of the Northern
Mariana Islands has the jurisdiction of a district court of the United
States will no longer serve, in and of itself, to give it bankruptcy
jurisdiction. Nor does the future section 151(a), quoted above, in
and of itself create a United States Bankruptcy Court for the Northern
Mariana Islands, since the Northern Mariana Islands does not constitute
a "judicial district." (The judicial districts enumerated in Chapter 5
of Title 28 include only districts with Article III courts and the
District of Puerto Rico; they do not include Guam, the Virgin Islands,
or the Northern Mariana Islands.) Public Law 95-598 specifically
amends the Organic Act of Guam and the Organic Act of the Virgin
Islands to give the District Court of Guam and the District Court
of the Virgin Islands, respectively, the "jurisdiction of a district
court and of a bankruptcy court of the United States." Section 335(a),
336(a). No similar amendment was made for the Northern Mariana Islands,
although this was almost certainly an oversight. (The new bankruptcy
law was enacted on November 6, 1978, just short of a year after the
November 8, 1977, legislation creating the District Court for the
Northern Mariana Islands.)

An argument in favor of the bankruptcy jurisdiction of the District
Court for the Northern Mariana Islands after April 1, 1984, may be
(1601 fashioned from section 403(b) of the Covenant, or the near-identical
provision in section 4(b) of Public Law 95-157:

Those portions of Title 28 of the United States Code
which apply to Guam or the District Court of Guam will be
applicable to the Northern Mariana Islands or the District
Court of the Northern Mariana Islands, respectively, except
as otherwise provided in this Article.

Public Law 95-598, the new bankruptcy law, creates a new Chapter 6,
"Bankruptcy Courts," in Title 28, Title 11, 92 Stat. 2657. (That
Chapter becomes effective on April 1, 1984. Id., Title IV, section
402(b), 92 Stat. 2682.) The Chapter will app-1-y to the District Court
of Guam by virtue of Section 335(a) of the new bankruptcy law, noted
above. And, by operation of section 403(b) of the Covenant (or section
4(b) of Public Law 95-157), Chapter 6 might also be said to "apply"
to the District Court for the Northern Mariana Islands. This argument
is weakened by the explicit provisions of Public Law 95-598, enacted
after creation of the District Court for the Northern Mariana Islands,
for establishment of post-April 1, 1984 bankruptcy-court jurisdiction
in Guam and the Virgin Islands. Why, the counter-argument goes, should
Congress not similarly have provided specifically for the Northern
Mariana Islands, rather than relying upon the formula of section 403(b)
of the Covenant (or section 4(b) of Public Law 95-157) to accomplish
its ends indirectly? Further, that section 403(b) of the Covenant
(or section 4(b) of Public Law 95-157) makes applicable to the Northern
Mariana Islands or the District for the Northern Mariana Islands those
portions of Title 28 which may in the future, after approval of the
Covenant, be applicable to Guam or the District Court of Guam is not
altogether certain. Section 403(b) of the Covenant (or section 4(b)
of Public Law 95-157) just as easily can be read as referring only to
those portions of Title 28 applicable to Guam or the District Court
of Guam as of the date of approval of the Covenant (or the date of
enactment of Public Law 95-157).

Northern Mariana Islands Commission on Federal Laws Washingtong D.C. 20240 (20) M-5617

James A. Joseph
Chair and
Commissioner APR 0 8 1983
Pedro A. Tenorio The Honorable James A. McClure [1611
wce-chiw and United States Senate
Commissioner SD-368 Dirksen Senate Office Building
Jesus C. Borla Mshington, D.C. 20510
Comm&sioner
Hon. Phillip Burton Dear Senator McClure:
Commissioner
Agnes M. McPhetres As you are aware, the Covenant to Establish a Commonwealth
Commissioner of the Northern Mariana Islands in Political Union with the
United States of Anerica (approved by Public Law 94-241, 90
Edward DLG. Pangelinan Stat. 263) provides in general that the immigration and
Commasioner naturalization laws of the United States shall not apply to the
Myron B. Thompson Northern Mariana Islands. As part of its examination of the
Commissioner desirability of applying particular federal laws to the Northern
Mariana Islands, this Commission at its March 29-30, 1983,
Daniel H. MacMeeldn meeting concluded that the inapplicability of the federal
Execuave Director immigration and-naturalization laws to the Northern Mariana
Islands should not be changed in any major respect. The
Commission instructed me to write youto urge that any bill to
revise the Immigration and Nationality Act (such as the bills
introduced by Senator Simpson and Representative Maz2Dli)
include a provision such as the following:

Nothing in this Act shall be deemed to alter any
provision of the Covenant to Establish a Commonwealth
of the Northern Mariana Islands in Political Union
with the United States of America (approved by Public
Law 94-241, 90 Stat. 263) .

Thank you for your consideration of this request.

Sincerely,

Daniel H. MacMeekin

xc: Members of the Commission

IDENrICAL LETTER 70:

The Honorable Jams A. McClure
United States Senate
SD-368 Dirksen Senate Ofc. Bldg.
Washington, D.C. 20510
[162] The Honorable J. Bennett Johnston
United States Senate
SH-136 Hart Senate Ofc. Bldg.
Washington, D.C. 20510

The Honorable Louell P. -Weid)wr Jr.
United States Senate
SR-315 Russell Senate Ofc. Bldg.
Washington, D.C. 20510

The Honorable Spark M. Matsunaga
United States Senate
SD-564 Dirksen Senate Ofc. Bldg.
Washington, D.C. 20510

The Honorable Robert J. Lagomarsino
United States House of Representatives
2332 Rayburn House Ofc. Bldg.
Washington, D.C. 20515

The Honorable Antonio B. W@n Pat
United States House of Representatives
2133 Rayburn House Ofc. Bldg.
Washington, D.C. 20515

IN REVORTHERN MARIANA ISLANDS
COMMISSION ON FEDERAL LAWS,
DECISION B-202206 OF
THE COMPTROLLER GENERAL OF THE UNITED STATES,
JUNE 16, 1982

OvLER 0
THE COMPTROLLER GENERAL
DECISION OF THE UNITED STATES
WASHINGTON. 0. C. 20548

NIT

FILE: B-202206 DATE: June 16, 1981 [1651

MATTER OF: Northern Mariana Islands Commission on
Federal Laws

DIGEST: The Tbrtlherri Mar:iaria Isla-ids Commission on
Federal Laws, although it receives its
appropriations from the Department of the
Interior, is an independent entity in the
Legislative Branch and not an Executive
Branch agency. Therefore, it is not subject
to administratively imposed hiring, travel,
or office equipment procurement freezes
applicable to Executive Branch agencies. As
an independent entity, its Executive Director
may sign purchase orders aid tcavel au@lhori-
zations. It may not, however, use Interior
Department forms.for those purchases since
it is not-a component of Interior. It may
not rent office space on its own unless it
receives a delegation from the General Serv-
ices Administration. The Federal Property
and Administration Services Act is applicable
to Federal entities in all branches of the
Government. 40 U.S.C. S 472 (1976).

'vie havo IhKzeri -i!:;ked several questions by the Northera *Mariana
Islands Commission on Federal Laws which explore its relatioQship
to the executive branch and, in particular, to the Department of
the Interior.

The Commission was established pursuant to the Covenant to
Establish a Commonwealth of the Northern Mariana Islands in Political
Union with the United States of America, which was enacted in Pub.
L. No. 94-241, approved March 24, 1976, 90 Stat. 263, 48 U.S.C.
� 1681 nt. (1976). Section 504 of this Covenant establishes the
Commission and its duties:

"The President will appoint a Commission on
Federal Laws to survey the laws of the United
States and to make recomrIeendations to the United
States Congress as to which laws of the United
States not applicable to the Northern Mariana
Islands should be made applicable and to what
extent and in what manner, and Which aaollcable
laws should be made inapplicable and to what
extent and in what manner. The Commission will
consist of seven persons (at least four of whom
will be citizens of the Trust Territory of the
Pacific Islands who are and have been for at least
five years domiciled continuously in the Northern

B-202206

Mariana Islands at the time of their appoint-
[1661 ments) who will be representative of the
federal, local, private and public interests
in the applicability of laws of the United
States to the Northern Mariana Islands. The
Commission will make its final report and
recommendations to the Congress within one
year after the termination of the Trusteeship
Agreement, and before that time will make such
interim reports and recommendations to the
Congress as it considers appropriate to facil-
itate the transition of the Northern Mariana
Islands to its new political status. In formu-
lating its recommendations the Commission will
take into consideration the potential effect
of each law on local conditions within the
Northern Mariana Islands, the policies embodied
in the law and the provisions and purposes of
this Covenant. The United States will bear the
cost of the work of the Commission."

The remainder of the provisions of Article V (sections 501 to 506) deal
with the applicability of present laws to the Northern Marianas.

A number of the issues raised by the Commission relate to the
applicability of restrictions on hiring, travel and equipment purchases
which were administratively imposed on the executive branch of the
Government. For the reasons discussed below, since the Commission is not
in our view an executive branch agency, these restrictions do not apply
to it.

The Commission consists of seven persons, the majority of whom must
be citizens of the Trust Territory of the Pacific Islands and must have
been domiciled on the Islands for at least five continuous years at the
time of their appointments. Among these persons must be at least one
person who can represent the Federal interest in the applicability of
the United States laws in the Northern Mariana Islands.

Under the heading "Territorial Affairs, Administration of Territories"
in the Department of the Interior and related agencies appropriation act,
1981, Interior receives appropriations to fund the Commission:

"For expenses necessary for the administra-
tion of Territories under the jurisdiction of the
Department of the Interior, $72,284,000, of which
(1) not to exceed $68,000,000 shall be available
for * * * expenses of the Northern Mariana Islands
Federal Laws Commission as authorized by law (Public

B-202206

Law 24-241, 90 Stat. 272), to remain available [167)
until expended; Pub. L. No. 96-514, approved
December 12, 1980, 94 Stat. 2957, 2968-2969.

In@addition to receiving the Commission's appropriation as part of
the lump sum provided for the administration of territories, the Depart-
ment of the Interior provides administrative services to the commission,
including personnel, procurement, payroll and travel services. Commission
expenses are charged to an account maintained on its behalf by Interior.
The arrangements with Interior are provided in the Commission's bylaws,
adopted May 7, 1980.

The placement of the Commission's appropriations within the Department
of Interior appropriation, without more, would argue in favor of its being
an agency within the executive branch. On the other hand, by virtue of
its maintaining a continuing trustee responsibility over the Islands until
they achieve Commonwealth status, Interior is the United States Government
agency in the best position to provide needed housekeeping services for
the Commission. Accordingly, we feel this practical consideration determined
the placement of the Commission's appropriations and, hence, that this place-
ment should not be controllina in determining its status.

Instead, we feel that the Commission's mission--reporting to the
Congress on laws of the United States which should be applicable in the
Northern Mariana Islands-is the major criteria. The Commission, although
its members are appointed by the President, does not answer either to the
Department of the Interior or to the President. Since its sole function
is to advise the Congress, we think it very clear that the Commission is
a legislative branch agency and not an executive branch agency.

As a legislative branch agency, any hiring, travel, and equipment
procurement freezes which may be administratively placed on executive
branch agencies do not apply to the Commission. For example, we note that
the Presidential memorandum of January 20, 1981, announcing a hiring freeze
was addressed to the heads of executive departments and agencies.

It appears to us that in making any future determinations of its
authorities to carry out its duties, the Commission should be treated just
like other independent agencies in the Legislative Branch. Therefore, its
Executive Director, if authorized by the Commission, may sign purchase orders
and travel authorizations. On the other hand, we see no authority for the
Cormission's proposal to use Interior Department purchase order forms since
it is not a component of Interior. (This would not prevent Interior itself
from making the purchases on the Commission's behalf as part of the admin-
istrative services it is required to perform for the Commission.)

B-202206

The Comiiission 1,-:3 Irinal is whether it may rent privately-owned
[1681 office space until space under the control of the General Services Mminis-
tration becomes available in July 1981 at the earliest. As an entity in
the Legislative Branch, funded entirely from appropriations, the Commission
is subject to substantially the same authorities and restrictions about
rental of space as -most Federal agencies and instrumentalities. The Federal
Property and Administrative Services Act applies to all three branches of
the Government. 40 U.S.C. S 472 (1976). Without specific authority to
rent space in its own name or that of the United States, we conclude that
the Commission should make arrangements for office space through the General
Services Administration, unless the GSA grants it a delegation of authority
pursuant to section 3(b) of the Reorganization Plan No. 18 of 1950, 64 Stat.
1270, 40 U.S.C. S 490 nt. (1976), or Interior obtains the necessary authority
on the Commission's behalf, as part of its administrative services pursuant
to section ll'of the Commission's bylaws.

Acting Comptroller General
of the United States

COMMISSION
STAFF PAPERS

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

[1711

BACKGROUND INFORMATION

ON THE LEGAL STATUS OF

THE NORTHERN MARIANA ISLANDS COMMISSION ON FEDERAL LAWS

April 9, 1981

BACKGROUND INFORMATION

ON THE LEGAL STATUS OF
[1721 THE NORTHERN MARIANA ISLANDS COMMISSION ON FEDERAL LAWS

Basic Documents--Authorization. The Northern Mariana Islands
Commission on Federal Laws was established by section 504 of the
Covenant to Establish a Commonwealth of the Northern Mariana Islands in
Political Union with the United States of America, Public Law 94-241,
90 Stat. 263 (1976). Section 504, in its entirety, reads:

The President will appoint a Commission on Federal Laws
to survey the laws of the United States and to make
recommendations to the United States Congress as to which
laws of the United States not applicable to the Northern
Mariana Islands should be made applicable and to what extent and
in what manner, and which applicable laws should be made
inapplicable and to what extent and in what manner. The
Commission will consist of seven persons (at least four of
whom will be citizens of the Trust Territory of the Pacific
Islands who are and have been for at least five years
domiciled continuously in the Northern Mariana Islands at the
time of their appointments) who will be representative of
the federal, local, private and public interests in the
applicability of laws of the United States to the Northern
Mariana Islands. The Commission will make its final report
and recommendations to the Congress within one year after
the termination of the Trusteeship Agreement, and before that time
will make such interim reports and recommendations to the
Congress as it considers appropriate to facilitate the transi-
tion of the Northern Mariana Islands to its new political
status. In formulating its recommendations the Commission
will take into consideration the potential effect of each law
on local conditions within the Northern Mariana Islands, the
policies embodied in the law and the provisions and purposes
of this Covenant. The United States will bear the cost of the
work of the Commission.

Noteworthy is that the Commission's sole function is to recommend
to Congress; it does not administer any law, make rules, or adjudicate.
Also of note is that the United States bears the cost of the work of
the Commission.

--Appropriation. The Commission's initial funding of $300,000 was
provided as a part of the fiscal 1980 appropriations by the U.S.
Congress to the Department of the Interior:

TERRITORIAL AFFAIRS

Office of Territorial Affairs
[1731
Administration of Territories

For expenses necessary for the administration of
Territories under the jurisdiction of the Department of the
Interior, $86,661,000, of which (1) not to exceed $82,589,000
shall be available for grants to the judiciary in American
Samoa for compensation and expenses, as authorized by law
(48 U.S.C. 1661(c)); grants to American Samoa, in addition
to curre nt local revenues, for support of governmental
functions; grants to Guam, as authorized by law (48 U.S.C.
1428-1428e; Public Law 95-134; 91 Stat. 1161, 1162, 1163;
Public Law 95-348; 92 Stat. 487, 488); grants to the
Government of the Virgin Islands as authorized by law (Public
Law 95-348, 92 Stat. 490); expenses of the Northern Mariana
Islands Federal Laws Comqiission as authorized by law (Public
Law 94-241, 90 Stat. 268); direct grants to the Government of
the Northern Mariana Islands as authorized by law (Public
Law 94-241, 90 Stat. 272), to remain available until
expended; . . .

P.L. 96-126, 93 Stat. 954, 969 (Nov. 27, 1979) (emphasis supplied).
The amount of $300,000 is specified in Congressional reports on P.L.
96-126. See H. Rep. No. 96-374, at page 47 (July 23, 1979); S. Rep.
No. 96-363 (Oct. 10, 1979). No reference to the nature of the
relationship between the Commission and Interior is found in these
reports. (An additional $10,000 was appropriated for the Commission in
the fiscal 1980 supplemental appropriation to Interior, and another
$15,000 in the fiscal 1981 appropriation.)

Bylaws. The Commission adopted bylaws at its first meeting, on
May 7, 1980. Provisions relevant to the juridical status of the,
Commission are these:

Section 3 - Office of the Commission.

There shall be Commission offices in Washington, D.C. and
the Northern Mariana Islands and in such other places, if any,
as determined by the Chair. The office in Washington, D.C. shall
be the repository of administration (sic) records of the
Commission.

Section 10 - Commission staff.

,There shall be an Executive Director of the Commission,
together with other staff, as necessary, appointed by the Chair,
subject to consultation with the Commission. No staff may be
terminated except for cause and with the approval of a majority

- 3 -

of the Commission members. Staff other than the Executive
Director shall report to the Chair through the Executive
[1741 Director.

Section 11 - Administrative and Personnel Services.

Administrative and Personnel Services, including provision-
ing of space, shall be provided by the Department of the
Interior.

Note, in connection with section 11, that, at the time the bylaws
were adopted, the Chair of the Commission was also Under Secretary of
Interior.

Practice--Employees. The Chair, in consultation with the members
of the Commission, hired an executive director of the Commission on
September 2, 1980. The executive director is a schedule A (attorney)
Civil Service employee with a term appointment not to extend beyond
December 31, 1982. The Commission also employs two other persons, both
of whom were selected by the executive director but appointed by or
with the approval of the Commission chair. The mechanics of hiring for
all Commission employees, including the executive director, were
handled through the agency of Interior's Office of Secretarial
Operations--Personnel. All employees are considered federal employees.

--Procurement, Payroll, and Travel. All Commission procurement,
payroll and travel are handled through the agency of Interior's
Administrative Officer for Territorial and International Affairs.

--Accounting. The Commission has been assigned an account number
by Interior. Commission expenditures are posted to this account by
Interior personnel.

--Space. The Commission's principal office, in Washington, D.C.,
is located in the main Interior building.

Precedents. Commissions frequently have been established to
advise Congress on legislation appropriate for particular territories
of the United States. Act of July 22, 1954, ch. 558, section 8, 68
Stat. 500 (Virgin Islands); Act of August 1, 1950, ch. 512, section 25,
64 Stat. 390 (Guam); Act of February 20, 1929, ch. 281, 45 Stat. 1253,
as amended by Act of May 22, 1929, ch. 6, 46 Stat. 4 (American Samoa);
Joint Resolution No. 55, July 7, 1898, 30 Stat. 750, 751 (Hawaii). In
an 1898 report, the House Committee on the Judiciary described the
status of such commissions, with particular reference to the Hawaii
commission established by Joint Resolution No. 55:

The duties of the commissioners appointed under the
statutes . . . are not continuing or permanent; they have no
place of business for the public use, or even for their own
use; they give no bond and take no oath. In fact, they are

mere agents appointed by direction of Congress for the
purpose of gathering information and making recommendations
for its use if the Congress sees fit to avail itself of the [1751
labors of the commission. The commissioners appointed under
these statutes or resolutions can not be compelled to attend
or act, and in the broadest sense they are mere agents of the
Congress. These commissioners are not to execute any standing
laws which are the rules of action and the guardians of rights,
nor have they the right or power to make any such law, nor can
they interpret or enforce any existing law.

[The commissioners] are persons designated by authority
of Congress to make certain investigations, inquiries, etc.,
or to conduct certain negotiations preliminary to and as a
basis for possible action by the Congress of the United
States or by one branch of it. They neither make law, execute
law affecting the rights of the people, nor perform judicial
functions. These commissioners are and are intended to be mere
advisory agents of the Congress of the United States. Their
investigations are confined to some particular matter or subject,
and they are not required to take an oath of office. They
have no power to decide any question or bind the Government or
do any act affecting the rights of a single individual citizen.

The acts performed are for the information of the Congress,
and it alone. Their suggestions or recommendations have no force;
they may or may not be adopted. To make their suggestions or
recommendations operative, bills or resolutions must be introduced
embodying the provisions recommended, or their substance, and
these must be enacted into law. If a treaty is recommended by
peace commissioners it must be submitted to the Senate and by it
ratified. The acts of such a commission do not bind the
President, Senate, or the Government. Then such commissioners
neither make, execute, nor interpret law. They do not possess or
exercise any of the sovereign power of the Government of the
United States.

That the Senate may feel that it ought to ratify or
approve the recommendations of such a commission can make no
difference, the fact remains that their acts are not binding
upon anyone or upon any departments of the Government.

If the Congress of the United States should see fit by
joint resolution to authorize the President to appoint ten
persons as commissioners, whose duties it should be to
investigate the condition of the people residing in Puerto
Rico and recommend laws suitable to their government, and
should appropriate money to pay the expenses of the commission,

would anyone contend that such commissioners when appointed
would become other than mere agents of the Congress for the
[1761 purposes specified? Would they possess or exercise legislative,
executive, or judicial functions or powers? Such commissioners
would possess the mere naked power to investigate and report,
and their action would conclude no one, nor would they execute
or interpret any law. Their action would not affect in the
slightest degree the personal or property rights of a
single citizen of the Republic. . . .

House Report No. 2205, 55th Cong. 3d Sess., as quoted in 1 Hinds,
Precedents of the House of Representatives section 493, at 608, 610-11
(1907).

The Northern Mariana Islands Commission on Federal Laws differs in
no material respect from the Hawaii commission or the hypothetical
Puerto Rico commission discussed in House Report No. 2205.

The Commission administers no law; it has no executive or
rule-making functions. The Commission only recommends, and its
recommendations are directed only to the Congress. In that respect, it
is similar to the National Commission on Air Quality, the majority of
the members of which are appointed, just as are the members of this
Commission, by the President. Public Law 95-95, section 313, 91 Stat.
785 (1977), as amended by Public Law 95-190, section 14(a) (81) and
(82), 91 Stat. 1404 (1977). Congress has classified that commission as
part of the legislative branch. See Public Law 96-19, section 4(b)(1),
.93 Stat. 37 (1979), 2 U.S.C.A. section 701(e) (Supp. 1980).

The heading under which appropriations are made to the Commission
is irrelevant to its juridical status. Eltra Corp. v. Ringer, 579 F.2d
294, 301 (4th Cir. 1978).

The Commission has no rule-making or adjudicative functions within
the meaning of the Adminsitrative Procedure Act.

Because the Commission reports only to Congress, unlike many
commissions which report to the President or to the President and
Congress, it is not an advisory committee within the meaning of the
Federal Advisory Committee Act, Public Law 92-463, 86 Stat. 770 (1972)
as amended. (The Federal Advisory Committee Act applies only to
entities which render advice to the President or agencies or officers
of the Federal Government. Section 3(2). The U.S. Congress is not
such an agency and its members are not officers of the Government.
Liberation News Service v. Eastland, 426 F.2d 1379, 1382 (2d Cir.
1970); Gates v..'Schlesinger, 366 F. Supp. 797 (D.D.C. 1973).)

Even commissions relatively large in size depend on federal

agencies for administrative support. Thus, the Commission on
Governmental Operations (the "Hoover Commission") wrote in an early
report: (1771

The Commission also determined that an expensive
administrative staff and a heavy overhead expense could
not be justified. Therefore, rather than organize a
payroll section, a supply section, a fiscal section, a
budget section, a personnel section, and the other usual
administrative organizational units, the Commission arranged to
get these services from other Government agencies on'a
reimbursable basis.

Commission on Organization of the Executive Branch of the Government,
Progress Report to the Congress, December 31, 1954, at pages 3-4.

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

[1781

A Survey of

Rights and Duties of United States Citizenship,

As provided in the United States Code,

With Notes on Extending those Rights and Duties

To Citizens of the Northern Mariana Islands

Prior to Termination of the Trusteeship

September 1, 1981

Introduction.

Citizens of the Northern Mariana Islands will become citizens of
the United States, unless they choose to become U.S. nationals, at
termination of the present trusteeship.* The date for termination of [1791
the trusteeship remains uncertain.

Already citizens of the Northern Mariana Islands are treated as
though they were U.S. citizens for some purposes. For example, the
Immigration and Naturalization Service allows citizens of the
Northern Mariana Islands to enter and leave the United States just as
do U.S. citizens. Public Law 96-351, enacted September 15, 1980,
allows citizens of the Northern Mariana Islands to enter enlist in
the U.S. Armed Forces. Presidential Proclamation 4568 dated
May 9, 1978, suspends application of the U.S. citizenshp requirement
for jury service to allow citizens of the Northern Mariana Islands to
serve as jurors in the District Court for the Northern Mariana
Islands (although not in other federal courts).

This survey attempts to catalog all provisions in the United
States Code that attach particular rights or duties to U.S.
citizenship. The purpose of the survey is to aid in identifying
those rights or duties which should be extended to citizens of the
Northern Mariana Islands prior to termination of the trusteeship.

Scope.

In making this survey, the following sources were examined:

(1) The 1976 edition of the United States Code;

(2) Supplement I to the 1976 Code, issued in
1977; and

(3) All later public laws enacted by the U.S.
Congress until conclusion of the 96th Congress in
December 1980.

All statutes listed in the survey have been checked for
subsequent amendment or repeal through conclusion of the 96th
Congress in December 1980.

*Covenant to Establish a Commonwealth of the Northern Mariana
Islands in Political Union with the United States of America
(hereinafter, lithe Covenant"), approved by Public Law 94-241, 90
Stat. 263 (1976), Sections 301-03, 1603.

Methodology.

[1801 The survey was accomplished with the use of the JURIS legal
research computer, which was instructed to search the above-listed
sources for all statutes containing the word "citizen" or any variant
thereof ("citizenl" in JURIS parlance) or the word "alien" or any
variant thereof ("alienl"). Each of the statutes found was then read
to determine whether it contained a meaningful distinction based on
U.S. citizenship. (Many statutes culled by the computer referred to
other uses of the identifying words, for example, "senior citizens",
11promotion of good citizenship," and "alienation of land".) All
statutes found to contain such distinctions are included in the
listing below.

Comprehensiveness.

The "alien" and "citizen" searches may not have identified all
possible distinction in the United States Code between U.S. citizens
and other persons. No search has been made for such terms as "United
States person," "domestic corporation," or "foreign corporation,"
which might identify other such distinctions. Nonetheless, the
present listing is believed to be rather complete. A search for the
term "noncitizen" or variants thereof, for example, yielded no
additional references.

Descriptions.

The brief descriptions of the operation of the statutes listed
herein give only the gist of each statute as it relates to U.S.
citizenship. A statute may impose requirements additional to U.S.
citizenship or it may allow exceptions to citizenship requirements,
with such additions or exceptions not noted in this listing. It may
also include other provisions having nothing to do with citizenship,
which likewise are not noted here.

Recommendations For Legislation.

Draft recommendations for treatment of citizens of the Northern
Mariana Islands as citizens of the United States for purposes of
particular statutes prior to termination of the trusteeship have been
prepared as separate documents. An asterisk (*) preceding a statute
in this survey indicates that statute is included in such a
recommendation.

The survey, organized by title and section of the United States
Code, follows:

TITLE 1. GENERAL PROVISIONS.
[No provisions.] [1811

TITLE 2. THE CONGRESS.

2 U.S.C. section 6 reduces representation in the U.S. House of
Representatives of States that deny or abridge rights of U.S.
citizens to vote.

2 U.S.C. section 169 allows the Library of Congress to employ up
to fifteen aliens without regard to prohibitions of employment of
aliens in appropriation acts.

*2 U.S.C. section 44le prohibits nonresident aliens from making
contributions to political campaigns'for Federal office.

TITLE 3. THE PRESIDENT.

[No provisions.]

TITLE 4. FLAG AND SEAL, SEAT OF GOVERNMENT, AND THE STATES.

[No provisions.]

TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES.

*5. U.S.C. section 552a (a)(2) limits the protections of the
Privacy Act to U.S. citizens and resident aliens.

5 U.S.C. section 5102 (c)(11) exempts from the requirements of
civil service position classification positions outside the United
States occupied by noncitizens.

*5 U.S.C. section 5342 (c) requires that certain blue-collar
civil service employees entitled to compensation at prevailing wages
in a particular area, within the several States or the District of
Columbia, be residents of one of the States or the District of
Columbia or a U.S. citizen unless the Secretary of Labor certifies no
such resident or citizen is available.

*5 U.S.C. section 5343 (a)(5) requires the Office of Personnel
Management to establish wage schedules and rates for U.S. citizen
prevailing-rate employees who are employed outside the United States,
its territories and possession, or the Trust Territory of the Pacific
Islands.

*5 U.S.C. section 5561 requires that missing Federal employees,

to be eligible for continued full pay and certain allowances, be
citizens or nationals of the United States or aliens admitted for
[1821 permanent residence in the United States.

*5 U.S.C. section 5595 (a)(2)(iii) excludes from the definition
of employees entitled to severance pay on involuntary separation from
the civil service aliens employed outside the several States, the
District of Columbia, or the Canal Zone.

*5 U.S.C. section 5912 allows U.S. citizens employed by the
United States in a foreirg-ncountry to be furnished living quarters
and utilities in a Government owned or rented building.

*5 U.S.C. section 5922 (a) limits the payment of overseas
differentials and allowances to civil service employees who are U.S.
citizens unless payment to a noncitizen is authorized specifically by
another statute.

.5 U.S.C. section 5924 (4)(B) authorizes payment of college
travel expenses for dependents of U.S. citizens who are civil service
employees stationed in the Canal Zone, among others. (The Canal Zone
was terminated as a juridical entity by the Panama Canal Treaty of
1977.)

*5 U.S.C. section 6301 (2)(viii) excludes aliens employed
outside the United States from civil service annual and sick leave
benefits.

5 U.S.C. section 6310 allows heads of agencies to grant leave
with pay, not in excess of the amount of annual and sick leave
available to citizens, to alien employees outside the United States.

*5 U.S.C. section 7103 (a)(2), added by section 701 of Public
Law 95-454, the Civil Service Reform Act of 1978, enacted
October 13, 1978, excludes aliens employed outside the United States
from civil service collective bargaining, grievance, and other labor
rights.

*5 U.S.C. section 7532 (c) gives civil service employees
suspended from employment for reasons of national security who are
U.S. citizens certain notice and hearing rights.

5 U.S.C. section 8137 allows the Secretary of Labor to modify
the compensation payable to certain non-resident alien employees for
injuries sustained in civil-service employment.

5 U.S.C. section 8138 removes certain minimum limits on monthly

pay used to compute death and disability benefits for noncitizen
civil-service employees injured outside the United States.
[1831
*5 U.S.C. section 8171 makes citizens or residents of the United
States or its territories or possessions employed by nonappropriated
fund instrumentalities (such as post exchanges) ouside the United
States eligible for compensation for4ork-related injuries pursuant
to the provisions of the Longshoremen's and Harbor Workers'
Compensation Act (Chapter 18 of Title 33, U.S.C.).

*5 U.S.C. section 8172 allows compensation for work-related
injuries to be establishe3-by regulation for employees of
nonappropriated fund instrumentalities outside of the United States
who are not citizens or residents of the United States or its
territories or possessions.

5 U.S.C. section 8331 (1)(j) includes among federal employees
entitled to retirement benefits certain aliens employed by the United
States and subsequently employed by a foreign government at the
expense of the United States to protect or further U.S. interests.

5 U.S.C. section 8335 (c), as amended by Public Laws 95-256,
enacted April 6, 1978, and 96-70, enacted September 27, 1979,
specified time of mandatory retirement for certain U.S. citizens
employed by the Panama Canal Commission.

*5 U.S.C. section 8501 (1)(D) excludes in determining for civil
service unemployment beneTTts, employment of non-citizens outside the
United States, Puerto Rico, and the Virgin Islands.

*5 U.S.C. section 8701 (a) excludes from participation in the
federal employees life insurance program persons who are not citizens
or nationals of the United States who are employed outside the United
States and the Panama Canal Zone.

*5 U.S.C. section 8901 (1) excludes from partici pation in the
federal employees health insurance program persons who are not
citizens or nationals of the United States who are employed outside
the United States or the Panama Canal Zone.

TITLE 6. SURETY BONDS.

6 U.S.C. section 7 requires companies issuing surety bonds
required by federal law to appoint agents in each State or Territory
where it issues such bonds and requires that the agent be a citizen
of that State or Territory (and, thus, a citizen of the United
States).

TITLE 7. AGRICULTURE.
[1841 *7 U.S.C. section 1704 Q) allows U.S. citizens to purchase, for
dollars, foreign currencies accumulated from the sale of agricultural
commodities overseas, if those currencies are in excess of U.S.
government needs.

*7 U.S.C. section 1736d cuts off assistance agreements for the
sale of agricultural commodities to foreign countries that
expropriate property owned by U.S. citizens.

*7 U.S.C. section 1922 requires recipients of certain
agricultural real estate laons to be U.S. citizens. But see section
1996, below.

*7 U.S.C. section 1934, added by section 113 of Public Law
95-334, the Agricultural Credit Act of 1978, enacted August 4, 1978,
requires recipients of certain loans to low-income farm owners to be
U.S. citizens.

*7 U.S.C. section 1941 (a) requires recipients of certain
agricultural operating loans to be U.S. citizens. But see section
1996, below.

*7 U.S.C. section 1961 (a) requires recipients of certain
agriculture and aquaculture disaster loans to be U.S. citizens. But
see section 1996, below.

7 U.S.C. section 1996, added by section 20) of Public Law
96-438, enacted October 13, 1980, to amend the Consolidated Farm and
Rural Development Act (Public Law 87-128), allows aliens lawfully
admitted for permanent residence to obtain loans authorized under
sections 1922' 1941, and 1961, above.

*7 U.S.C. section 2015 M (Supp. I) excludes most aliens not
lawfully admitted for permanent residence in the United States from
participation in the food stamp program.

7 U.S.C. section 2020 (e)(18), added by section 118 of Public
Law 96-249, the Food Stamp Act Amendments of 1980, enacted
May 26, 1980, requires State food stamp plans to provide for
immediate reporting to the Immigration and Naturalization Service of
denial of food stamps to aliens ineligible to receive food stamps
because unlawfully present in the United States.

7 U.S.C. sections 3501-08, added by Public Law 95-460, the
Agricultural Foreign investment Disclosure Act of 1978, enacted
October 14, 1978, require "foreign persons" to report their

transactions in and holdings of agricultural land in the United
States. Section 3508(3)(A)(ii), however, excludes from the
definition of "foreign person" citizens of the Northern Mariana [1851
Islands.

TITLE 8. ALIENS AND NATIONALITY.

[Citizens of the Northern Mariana Islands are treated by the
Immigration and Naturalization Service as American citizens for
purposes of inspection on entry into the United States.

In general, the immigration and naturalization laws of the
United States do not apply to the Northern Mariana Islands. See
section 503(a) of the Covenant.

The entire title treats the rights of aliens entering or within
the United States and the process by which an alien becomes a U.S.
citizen. The title also specifies who is a U.S. citizen at birth.]

*8 U.S.C. section 1103 requires that the Commissioner of
Immigration and Naturalization be a U.S. citizen.

*8 U.S.C. section 1104 (b) (Supp. 1) requires that the Assistant
Secretary of State for Consular Affairs be a U.S. citizen.

8 U.S.C. section 1151 excludes from numerical limitations on the
admission of aliens into the United States the children., spouse, or
parents of a U.S. citizen.

8 U.S.C. section 1151a excludes from numerical limitations on
the admission into the United States of immigrant aliens, lawfully
admitted for permanent residence and returning from temporary visits
abroad, the children, spouse, or parents of a U.S. citizen.

8 U.S.C. section 1152 (c) excludes from numerical limitations on
the admission into the United States from colonies of foreign states
aliens who are the children, spouse, or parents of a U.S. citizens.
Subsection (e) provides preferential treatment in the issuance of
certain visas for specified relatives of U.S. citizens.

8 U.S.C. section 1153 (a) allocates visas among aliens subject
to numerical limitations by country of origin according, in part, to
their relationship to U.S. citizens.

8 U.S.C. section 1154 (a) authorizes U.S. citizens to petition
for classification of an alien as an immediate relative or other
relative entitled to preference in admission into the United States.

8 U.S.C. section 1182 (b) exempts from certain literacy
requirements for immigrating aliens specified relatives of U.S.
[1861 citizens. Subsection (h) allows the discretionary admission of
aliens convicted of certain crimes if they are related to U.S.
citizens and their nonadmission would result in extreme hardship for
a relative who is a U.S. citizen. Subsection W allows the
discretionary admission of certain immediate relatives of U.S.
citizens despite prior fraud, misrepresentation, or perjury in
procuring a visa entering the United States.

8 U.S.C. section 1184 (d) authorizes admission into the United
States of nonimmigrant aliens in order to marry, on the petition of
their U.S. citizen-fiancees or fiances.

8 U.S.C. section 1185 as amended by section 707 of Public Law
95-426, the Foreign Rela ns Authorization Act, Fiscal Year 1979,
enacted October 7. 1978, prohibits the movement of aliens into or out
of the United States unless according to law and forbids U.S.
citizens to enter or leave the United States without a valid
passport.

8 U.S.C. section 1201 (c) allows an immigrant visa issued to a
child adopted by a U.S. citizen overseas to be valid for up to three
years rather than the normal four months.

8 U.S.C. section 1222 authorizes detention of aliens arriving in
the United States afflicted with certain diseases or physical or
mental disabilities.

8 U.S.C. section 1223 authorizes the temporary removal and
detention of aliens from vessels or aircraft bringing them into the
United States for examination and inspection to determine their
eligibility to enter the United States.

8 U.S.C. section 1224 permits physical and mental examinations
of all aliens arriving in the United States.

8 U.S.C. section 1225 authorizes inspection and detention for
further inquiry of all persons seeking to enter the United States,
and temporary or permanent exclusion of aliens not entitled to enter.

8 U.S.C. section 1226 governs proceedings for exclusion of
aliens. ,

8 U.S.C. section 1227 authorizes immediate deportation from the
United States of aliens excluded from admission into the United
States or entering the United States illegally.

8 U.S.C. section 1251 (a) enumerates the grounds for deportation
of an alien from the United States. Subsection (f) excludes from
deportation, on grounds of excludability at time of entry for fraud [1871
or misrepresentation in procuring a prior visa or prior entry into
the United States, aliens who are the spouse, parent, or child of a
U.S. citizen.

8 U.S.C. section 1252 specifies procedures for apprehension and
deportation of aliens.

8 U.S.C. section 1254 allows suspension of deportation in
certain instances of an alien who is the spouse, parent, or child of
a U.S. citizen.

8 U.S.C. section 1281 requires listing of all alien crewman of
any vessel or aircraft on arrival in the United States from outside
the United States and on departure from the United States.

8 U.S.C. section 1282 forbids alien crewmen from landing in the
United States except by permit.

8 U.S.C. section 1283 requires the hospitalization of alien
crewmen afflicted with certain diseases and disabilities.

8 U.S.C. section 1285 forbids employment of aliens afflicted
with certain diseases or disabilities on vessels or aircraft carrying
passengers between U.S. and foreign ports.

8 U.S.C. section 1301 requires an alien to be registered and
fingerprinted before a visa may be issued.

8 U.S.C. section 1302 requires registration of all unregistered
aliens in the United States.

8 U.S.C. section 1303 authorizes special regulations for
registration of certain enumerated categories of aliens.

8 U.S.C. section 1304 (e) requires aliens in the United States
to carry with them at all times proof of alien registration.

8 U.S.C. section 1305 requires aliens in the United States to
keep the Attorney General informed of their current address.

8 U.S.C. section 1306 makes criminal certain willful violation
of the alien registration requirements.

8 U.S.C. section 1325 establishes criminal penalties for illegal
entry by an alien into the United States.

- 10 -

8 U.S.C. section 1326 establishes criminal penalties for illegal
reentry into the United States by an alien previously deported.
[1881 8 U.S.C. section 1351 authorizes fees for nonimmigrant visas.

*8 U.S.C. section 1355 (a) requires concessionnaires at
immigration stations to be U.S. citizens.

8 U.S.C. section 1357 (a) gives officers and employees of the
Immigration and Naturalization Service the power to arrest aliens
without an arrest warrant and to interrogate aliens and persons
believed to be aliens.

8 U.S.C. section 1360 requires the Immigration and
Naturalizatio Service to maintain a central file of all aliens
admitted into or excluded from the United States.

8 U.S.C. section 1401 declares certain children born outside the
United States, one or both parents of whom is a U.S. citizen, to be
U.S. citizens at birth.

8 U.S.C. section 1401a declares certain children born outside
the United States, one parent of whom is a U.S. citizen who served in
the U.S. Armed Forces between 1941 and 1952, to be U.S. citizens at
birth subject to loss of such citizenship if certain conditions are
not met.

8 U.S.C. section 1403 declares children (1) born in the Panama
Canal Zone of parents one or both of whom is a U.S. citizen, or (2)
born in the Republic of Panama of.such parents if one or both was
employed by the U.S. government or the Panama Railroad Company, to be
U.S. citizens.

8 U.S.C. section 1430 eases residency requirements for
natuia-lization of aliens who are spouses or surviving spouses of U.S.
citizens.

8 U.S.C. section 1431 grants automatic naturalization to natural
children of parents, one whom is a U.S. citizen, on naturalization
of the other parent.

8 U.S.C. section 1433 allows naturalization of natural children
born outside the United States without any period of residency in the
United States if one or both parents is a U.S. citizen.

8 U.S.C. section 1435 eases naturalization requriements for
former U.S. citizens who lost their citizenship by reason of marriage
to an alien spouse.

8 U.S.C. section 1438 eases naturalization requirements for [1891
former U.S. citizens who lost their citizenship by reason of service
in the armed forces of a foreign country allied with the United
States during World War II.

8 U.S.C. section 1446 requires affiants supporting a petitioner
for naturalization to be U.S. citizens.

8 U.S.C. section 1481 governs loss of nationality by U.S.
citizens.

8 U.S.C. section 1555 authorizes the Immigration and
Naturalization Service to employ interpreters and translators who are
not U.S. citizens.

TITLE 9. ARBITRATION.

9 U.S.C. section 202 excludes from enforcement, under the
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, arbitration agreements entirely between U.S. citizens unless
the agreement has a reasonable relation to one or more foreign
states.

TITLE 10. ARMED FORCES.

*10 U.S.C. section 311 limits membership in the militia of the
United States, including the National Guard, to U.S. citizens or
persons who have declared their intention to become U.S. citizens.

*10 U.S.C. section 312 (a)(8) exempts from militia duty mariners
in the "sea service" of a U.S. citizen.

*10 U.S.C. section 351 allows the President to arm American
vessels to protect U.S. citizens and their property or commercial
interests from the application of force by a foreign government.

*10 U.S.C. section 510 requires, in general, that members of
reserve components of the U.S. armed forces be citizens or lawfully
admitted permanent residents of the United States.

*10 U.S.C. section 532 (a)(1), added by section 104 of Public
Law 96-513, the Defense Officer Personnel Management Act, enacted
Recember 12, 1980, requires that officers in the Regular Army,
Regular Navy, Regular Air Force, or Regular Marine Corps be U.S.
citizens.

*10 U.S.C. section 591 requires, in general, that no person be

- 12 -

appointed as a Reserve in the U.S. armed forces unless a U.S. citizen
or lawfully admitted permanent resident of the United States.
[1901 *10 U.S.C. section 1486 allows the Secretary of Defense to
provide on a reimbursable basis mortuary services for certain U.S.
citizens who die outside the United States.

10 U.S.C. section 1584 exempts from laws prohibiting employment
of aliens by the United States aliens employed in research and
development activities of a military department if their employment
is determined to be necessary by the Secretary of that department.

*10 U.S.C. section 2004 requires officers of the armed forces
eligible for detail as law students to be U.S. citizens.

*10 U.S.C. section 2031 (b)(1), as amended by Public Law 95-358,
enacted September 8, 1978, requires, to establish or maintain a unit
of the Junior Reserve Officers' Training Corps, that the unit contain
at least 100 eligible U.S. citizens or nationals.

*10 U.S.C. section 2104 requires persons eligible to receive
advanced training in the Senior Reserve Officers' Training Corps to
be U.S. citizens.

*10 U.S.C. section 2107 (b)(1) requires members of the Senior
Reserve officers' Training Corps to be U.S. citizens in order to be
eligible for appointment in the reserve of an armed force and thus
eligible for special financial educational assistance.

*10 U.S.C. section 2107a (b)(1), added by section l(c)(1) of
Public Law 96-357, enacted September 24, 1980, requires cadets
appointed to the Reserve Officers' Training Corps at certain military
junior colleges to be U.S. citizens.

*10 U.S.C. section 2122 requires U.S. citizenship as a condition
of eli7g-ibility for participation in an armed forces health
scholarship program.

*10 U.S.C. section 2272 limits to U.S. citizens contracts for
furnishing certain aircraft parts winning design competitions for the
encouragement of aviation.

*10 U.S.C. section 2279 prohibits aliens employed by the
contractors mentioned in section 2272, above, from contact with the
plans or specifications for or with the aircraft part being
furnished, except with the written consent of the Secretary of the
military department to which the part is being furnished.

- 13 -

*10 U.S.C. section 2545, (a), added by Public Law 95-492, enacted
October 20, 1978, authorizes the Secretary of Defense to provide
transportation on a reimbursable basis to U.S. citizen delegates (1911
coming from outside the.United,States to triennial meetings of the
National Council of the Girl Scouts of the United States of America.

'10 U.S.C. section 2668 allows the Secretary of a military
department to grant easements across military lands to citizens of
any State, Territory, Commonwealth, or possession (and, by
implication, only to U.S. citizens) among others.

10 U.S.C. section 2669 allows the Secretary of a military
department to grant easements across military lands for gas, water,
and sewer pipelines to citizens of any State, Territory,
Commonwealth, or possession (and, by implication, only to U.S.
citizens) among others.

10 U.S.C. section 3253 limits enlistment in the Army to U.S.
citizens or persons lawfully admitted for permanent residence in the
United States. Public Law 96-351, 94 Stat. 1161 (1980), permits a
citizen of the Northern Mariana Islands to enlist in the Army upon
declaration in writing of intent to become a U.S. citizen upon full
implementation of the Covenant.

*10 U.S.C. section 4308 (a)(2) limits to U.S. citizens
eligibility for instruction in marksmanship under the auspices of the
Secretary of the Army.

*10 U.S.C. section 4348 requires U.S. Military Academy Cadets
who are U.S. citizens or nationals to agree to complete the course of
instruction and to serve as officers in the armed forces for a
stipulated period after graduation.

'10 U.S.C. section 4771 allows the Secretary of the Army to
accept gifts of land from U.S. citizens for use as aviation fields.

*10 U.S.C. section 6019 requires all officers of all vessels of
the United States to be U.S. citizens.

*10 U.S.C. section 6911 (a) limits participation in the Navy's
aviation cadet program to U.S. citizens.

'10 U.S.C. section 6957 prohibits persons from foreign countries,
with certain exceptions, from attending the U.S. Naval Academy.

*10 U.S.C. section 6958 requires candidates for the U.S. Naval
Academy nominated by the Secretary of the Navy from the Regular Navy,

- 14 -

the Regular Marine Corps, the Naval Reserve, or the Marine Corps
Reserve to be U.S. citizens.
[1921 *10 U.S.C. section 6959 requires U.S. Naval Academy midshipmen
who are U.S. citizens or national to agree to complete the course of
instruction and to serve as officers in the armed forces for a
stipulated period after graduation.

10 U.S.C. section 7435 prohibits foreign citizens from having
any interest in a lease of naval fuel reserves if the country of
their citizenship denies U.S. citizens the right to lease public
lands in that country.

10 U.S.C. section 7473 allows the Navy to employ aliens with
special technical or scientific knowledge or experience not readily
obtainable from a citizen, notwithstanding laws prohibiting payment
of compensation to aliens.

10 U.S.C. section 7672 allows naval prize courts to restore
recaptured vessels to their foreign owners if the owner's government
in similar circumstances would restore a vessel to the ownership of a
U.S. citizen.

10 U.S.C. section 8255 limits enlistment in the Air Force to
U.S. citizens or persons lawfully admitted for permanent residence in
the United States. Public Law 96-351, 94 Stat. 1161 (1980), permits
a citizen of the Northern Mariana Islands to enlist in the Air Force
upon declaration in writing of intent to become a U.S. citizen upon
full implementation of the Covenant.

*10 U.S.C. section 8257 requires Air Force aviation cadets to be
U.S. citizens.

*10 U.S.C. section 9348 requires U.S. Air Force Academy cadets
who are U.S. citizens or nationals to agree to complete the course of
instruction and to serve as officers in the Air Force for a
stipulated period after graduation.

10 U.S.C. section 9771 allows the Secretary of the Air Force to
accept gifts of land from U.S. citizens for use as aviation fields.

TITLE 11. BANKRUPTCY.

[No provisions.]

TITLE 12. BANKS AND BANKING.

*12 U.S.C. section 72, as amended by section 2 of Public Law

- 15

95-369, the International Banking Act of 1978" enacted
September 17, 1978, requires, in general, directors of a national
bank to be U.S. citizens. [1931

*12 U.S.C. section 619 requires, in general, the majority of the
stock in the corporations organized to engage in international or
foreign banking or financial operations, or banking or financial
operations in a U.S. dependency or possession, to be held by U.S.
citizens.

*12 U.S.C. section 1427 (a) requires directors of Federal home
loan banks to be U.S. citizens.

*12 U.S.C. section 1812 specifies that the Board of Directors of
the Federal Deposit Insurance Corporation shall consist of the
Comptroller of the Currency and two U.S. citizens appointed by the
President with the advice and consent of the Senate.

*12 U.S.C. section 1813 (m)(2), as added by section 6(c)(4) of
Public Law 95-369, the International Banking Act of 1978, enacted
September 17, 1978, includes within the term "insured deposit,",for.
purposes of the laws insuring bank deposits, deposits by U.S.
citizens or residents in U.S. branches of foreign banks.

*12 U.S.C. section 2222 (b) requires members of boards of
directors of farm credit district boards to have been U.S. citizens
for at least ten years.

*12 U.S.C. section 2242 requires members of the Federal Farm
Credit Board to have been U.S. citizens for at least ten years and
requires the representative of the Secretary of Agriculture on the
Baord to be a U.S. citizen.

12 U.S.C. section 3101 (1), added by section l(b)(1) of Public
Law 95-369, the International Banking Act of 1978,'enacted
September 17, 1978, defines an "agency" of a foreign bank in the
United States for purposes of the laws governing foreign bank
participation in U.S. markets, as an office at which deposits may not
be accepted from U.S. citizens or residents.

TITLE 13. CENSUS.

*13 U.S.C. section 22 requires all permanent officers and
employees of the Bureau of the Census to be U.S. citizens.

TITLE 14. COAST GUARD.

[1941 *14 U.S.C. section 371 (a) requires Coast Guard aviation cadets
recruited from civilian life to be U.S. citizens.

*14 U.S.C. section 500 (b) authorizes the award of life-saving
medals outside U.S. waters if the rescuer or the person rescued is a
U.S. citizen or if the rescue is from a vessel or aircraft owned or
operated by U.S. citizens.

*14 U.S.C. section 706, added by section 1 of Public Law 96-322,
requires that temporary members of the Coast Guard Reserve be U.S.
citizens.

*14 U.S.C. section 823 limits membership in the Coast Guard
Auxiliary to U.S. citizens.

TITLE 15. COMHERCE AND TRADE.

15 U.S.C. section 77 allows the President to cause detention of
vessels discriminating'. because required to do so by a belligerent
country, in favor of or against U.S. citizens residing in neutral
countries during a war in which the United States is not engaged, and
prescribes penalties for discrimination against vessels or citizens
of any belligerent counry that discriminates against U.S. vessels or
citizens.

15 U.S.C. section 78g prohibits U.S. citizens from purchasing
U.S. securities on credit unless specified requirements are met.

15 U.S.C. section 78dd-2 prohibits U.S. citizens from bribing
foreign officials for business purposes.

15 U.S.C. section 78ff penalizes persons who are U.S. citizens,
nationals, or residents or who are otherwise subject to the
jurisdiction of the United States and who, as employees or agents of
a regulated firm, bribe foreign officials for businesss purposes.

15 U.S.C. section 144 (a) requires the majority of the
incorporators of a China Trade Act corporation to be U.S citizens.
Subsection (c) prohibits such a corporation from owning or operating
a vessel unless the controlling interest in the corporation is owned
by U.S. citizens.

15 U.S.C. section 149 requires a majority of the directors, the
president, and the treasurer of a China Trade Act corporation to be
U.S. citizens resident in China.

- 17 -

15 U.S.C. section_278g (c), enacted on October 15, 1980 as part
of Public Law 96-461, permits the National Bureau of Standards to
employ aliens as scientific or engineering personnel, notwithstanding (1951
statutory prohibitions against Government payment of compensation to
aliens.

15 U.S.C. section 1124 prohibits importation of goods infringing
trademarks registered in the United States, or in foreign countries
giving similar protection to citizens of the United States.

*15 U.S.C. section 1126 M provides that U.S. citizens or
residents shall receive all benefits afforded by the United States to
foreign citizens pursuant to international trademark conventions.

*15 U.S.C. section 2509 M requires that recipients of certain
federally-guaranteed loans for the development of electric and hybrid
vehicles be U.S. citizens.

TITLE 16. CONSERVATION.

16 U.S.C. section 5 allows U.S. citizens to obtain rights-of-way
through national park lands for power and communications facilities.

*16 U.S.C. section 19f includes on the Board of the National
Park Foundation "no less than six private citizens of the United
States appointed by the Secretary of the Interior."

16 U.S.C. section 79 allows the Secretary of the Interior to
grant to U.S.-citizens rights-of-way for public utilities through
certain public lands and national parks. "

16 U.S.C. section 80 protects preexisting rights of U.S.
citizens in the Kings Canyon National Park.

16 U.S.C. section 420 allows U.S. citizens to obtain
rights-of-way through military and other reservations for power and
communications facilities.

*16 U.S.C. section 4601-6a (a)(4) authorizes issuance of free
permits to enter national parks and recreation areas to persons over
sixty-two years of age who are U.S. citizens or domiciliaries.
Paragraph (5), added by section 9(2) of Public Law 96-344, enacted
September 8, 1980, offers the free permit to blind or permanently
disabled persons who are U.S. citizens or domiciliaries.

*16 U.S.C. section 463 (a) limits membership on the National
Park System Advisory Board to U.S. citizens.

- 18 -

*16 U.S.C. section 468b requires the six general trustees of the
National Trust for Historic Preservation to be U.S. citizens.
[1961
*16 U.S.C. section 742c (b)(7) requires applicants for certain
commercial fishery loans from the U.S. government to be U.S. citizens
or nationals.

16 U.S.C. section 781 forbids U.S. citizens to take undersize
commercial sponges in the Gulf of Mexico or the Straits of Florida.

*16 U.S.C. section 797 (e) requires recipients of Federal Power
Commission licenses to be U.S. citizens. The same subsection
expressly extends the jurisdiction of the Commission to streams and
other bodies of water in "the Territories".

*16 U.S.C. section 831a (e) requires members of the board of
directors of the Tennessee Valley Authority to be U.S. citizens.

16 U.S.C. section 1100a-3 excludes from the definition of
vessels not permitted to land or transfer certain fish vessels
acquired by a U.S. citizen or resident alien before October 27, 1971.
(By its terms the chapter containing this section expires on
October 27, 1977.)

*16 U.S.C. section 1106 permits the Roosevelt Campobello
International Park Commission to employ U.S. and Canadian citizens.

16 U.S.C. section 1432 (g) limits to U.S. citizens and certain
other persons subject to U.S. jurisdiction the applicability of
regulations governing areas outside the United States designated as
marine sanctuaries.

*16 U.S.C. section 1821 (c)(2)(G) requires a foreign nation
permitted to fish in the U.S fishery conservation and management zone
and its vessels to agree to reimburse U.S. citizens for any loss of
or damage to their fishing vessels, gear, or catch caused by any
fishing vessel of that nation.

16 U.S.C. section 2402 (16), added by section 306) of Public
Law 95-541, the Antarctic Conservation Act of 1978, enacted
October 28, 1978, defines "U.S. citizen," for purposes of the Act, as
including a U.S. citizen or national. Subsection (15) defines
"United States" to include "the Trust Territory of the Pacific
Islands, including the Government of the Northern Mariana Islands.""

16 U.S.C. section 2403, added by section 4 of Public Law 95-541,
above, makes unlawful @-ertain activities by U.S. citizens, wherever
located, that are injurious to Antartic wildlife.

16 U.S.C. section 2406, added by section 7 of Public Law 95-541,
above, authorizes the Secretary of State to require U.S. citizens to
give advance notification of expeditions to or within the Antarctic. [1971
16 U.S.C. section 2802 (5), added by section 3(5) of Public Law
96-362, the National Aquaculture Act, enacted September 26, 1980,
defines a "person" eligible to receive a grant or contract under the
Act as an individual who.is a U.S. citizen or national or a citizen
of any State. "State" is defined in subsection (8) to include the
Commonwealth of the Northern Mariana Islands.

TITLE 17. COPYRIGHTS.

*17 U.S.C. section 104 (b) (Supp. I) grants protection for
published works under the U.S. copyright laws to, among other
categories, works of which one or more authors is a national or
domiciliary of the United States.

TITLE 18. CRIMES AND CRIMINAL PROCEDURE.

18 U.S.C. section 7 defines, for purposes of enforcing U.S.
criminal laws, the special maritime and territorial jurisdiction of
the United States to include vessels and aircraft owned in whole or
in part by U.S. citizens when on the high seas or within the
admiralty and maritime jurisdiction of the United States but beyond
the maritime jurisdiction of any particular state.

18 U.S.C. section 9 defines "vessel of the United States" for
purposes of enforcing U.S. criminal laws to include any vessel owned
in whole or in part by a U.S. citizen.

18 U.S.C. section 241 makes criminal conspiracies to deprive
U.S. citizens of their riihts. (The protection is expressly limited
to U.S. citizens. Baldwin v.'Franks, 120 U.S. 678 (1887).)

*18 U.S.C. section 243 makes criminal discrimination against
U.S. citizens eligible for jury service on account of race, color, or
previous condition of servitude.

*18 U.S.C. section 245 (b)(5) make's criminal interference or
attempted interference with the right's of any U.S. citizen
encouraging others to enjoy the rights to vote, to benefit from or be
employed by federal programs, to serve on federal juries, or, free
from racial discrimination, to receive a public education, to benefit
from or be employed by a State, to use the services of a labor

- 20

organization, hiring hall, or employment agency, to travel using
[1981 facilities of interstate commerce, or to enjoy public accommodations.
18 U.S.C. section 546 makes criminally liable citizens or
domiciliaries of the United States participating in the ownership and
control of U.S. vessels used for smuggling.

18 U.S.C. section 757 makes criminal procuring the escape of
enemy aliens apprehended or interned by the United States.

18 U.S.C. section 911 makes criminal false and willful
representation of oneself as a citizen of the United States.

18 U.S.C. section 953 makes criminal private correspondence by
U.S. citizens with a foreign government with the intent of
influencing that government in relation to a dispute or controversy
with the United States. (Applications for redress of injury are
excepted.)

18 U.S.C. section 958 makes criminal acceptance by a U.S.
citizen of a commission to serve a foreign government in war against
a nation with which the United States is at peace.

18 U.S.C. section 963 allows the President, during a war in
which the United States is neutral, to seize armed vessels owned by
U.S. citizens.

18 U.S.C. section 1015 makes criminal false or fraudulent
statements in connection with immigration or naturalization matters.

18 U.S.C. section 1081 defines "American vessel,1' for purposes
of the laws prohibiting use of American vessels as gambling ships, as
including any vessel owned, operated, or controlled by one or more
U.S. citizens.

18 U.S.C. section 1082 makes criminal the operation of gambling
ships by U.S. citizens or residents or anyone on an American vessel.

18 U.S.C. section 1585 makes criminal involvement by U.S.
citizens or residents in the slave trade.

18 U.S.C. section 1586 makes criminal service on vessels in the
slave trade by U.S. citizens or residents.

18 U.S.C. section 1652 makes criminal piracy by U.S. citizens
against the United States or U.S. citizens.

18 U.S.C. section 1653 makes criminal piracy by aliens against

21 -

the United States or U.S. citizens when in violation of a treaty
between the United States and the state of which the alien is a
subject. (1991

18 U.SC. section 1654 makes criminal acts of privateering by
U.S. citizens against U.S. citizens outside the limits of the United
States.

18 U.S.C. section 2381 makes criminal treason by persons "owing
allegiance to the United States."

18 U.S.C. section 3042 permits arrest and removal of U.S.
citizens or nationals, who commit offenses against laws of the United
States, from countries in which the United States exercises
extraterritorial jurisdiction.

18 U.S.C. section 3045 permits warrants of arrest for violation
of the internal revenue laws to issue on complaint of a private
citizen approved by a U.S. attorney. (No law has been found on
whether the "private citizen" must be a U.S. citizen.)

18 U.S.C. section 3183 permits extradition of U.S. citizens or
nationals from countries in which the United States exercises
extraterritorial jurisdiction on request of a State, territory, or
possession.

*18 U.S.C. section 4001 (a) prohibits imprisonment or detention
of U.S. citizens by the United States except pursuant to an Act of
Congress.

*18 U.S.C. section 4100 (b) (Supp. D provides that only U.S.
citizens or nationals may be transferred from foreign to U.S. jails
under transfer-of-offender treaties.

18 U.S.C. section 4212 authorizes release from prison and
deportation of aliens eligible for parole who are subject to
deportation.

*18 U.S.C. section 4321 requires the four presidential
appointees to the Board of Advisers for the Federal Reformatory for
Women to be U.S. citizens.

18 U.S.C. App. (Unlawful Possession or Receipt of Firearms)
section 1202 (a) makes criminal possession of firearms by persons
who, having been U.S. citizens, have renounced their citizenship or
who are aliens illegally or unlawfully in the United States.

- 22

TITLE 19. CUSTOMS DUTIES.

[2001 19 U.S.C. section 128 exempts from a discriminating ad valorem
duty goods imported in non-U.S. vessels if the vessel is owned by
U.S. citizens and, before leaving an American port, becomes
registered as a vessel of the United States.

19 U.S.C. section 131 exempts, from the requirement that goods
only be imported in vessels of the United States or of their country
of origin, vessels owned by U.S. citizens that before leaving an
American port become registered as vessels of the United States.

*19 U.S.C. section 1330 (a) requires members of the United
States International Trade Commission to be U.S. citizens.

*19 U.S.C. section 1498 (a)(8) allows the Secreta 'ry of the
Treasury to prescribe regulations for entry into the United States of
personal effects of U.S. citizens who have died in a foreign country.

*19 U.S.C. section 1526(a) makes unlawful importation of
merchandise of foreign manufacture bearing a trademark owned by a
U.S. citizen and registered in the Patent and Trademark Office unless
the written consent of the trademark owner is produced at time of
entry.

19 U.S.C. section 1586 (c) penalizes masters of ships from
foreign ports who transfer prohibited merchandise to vessels of the
United States or to vessels owned by U.S. citizens or domiciliaries.
Subsection (e) penalizes U.S. citizens who, at any place in the world
assist in the entry or transhipment of prohibited foreign goods.

*19 U.S.C. section 1641 (a) requires customshouse brokers to be
U.S. citizens.

19 U.S.C. section 1703 W includes vessels of foreign registry
owned by U.S. citizens among "vessels of the United States" for
purposes of this section, providing for seizure and forfeiture of
vessels violating the anti-smuggling laws. (The section, however,
makes no other reference to vessels of the United States.)

19 U.S.C. section 1708 makes criminal participation by U.S.
citizens (or the master or crew of certain U.S. vessels) in loading
liquor on a vessel outside the United States for unlawful importation
into the United States.

*19 U.S.C. section 2462 (b)(4) and (6) restrict favorable trade
treatment otherwise available to a developing country if the country

- 23 -

has expropriated property of U.S. citizens or if the country fails to
enforce arbitral awards in favor of U.S. citizens.
[2011
19 U.S.C. section 2571 (9)(B), added by section 451(9)(B) of
Public Law 96-39, the Trade Agreements Act of 1979, enacted
July 26, 1979, defines "private persons" as U.S. citizens or
nationals, for purposes of authorizing measures to discourage private
persons from imposing product standards designed to inhibit
importation of foreign goods.

TITLE 20. EDUCATION.

20 U.S.C. section 46a permits the Smithsonian Institution to
employ aliens in scientific or technical capacities if no U.S.
citizens are available, notwithstanding statutory provisions
prohibiting payment of compensation to aliens.

*20 U.S.C. section 72 (a) requires the five general members of
the Trustees of the National Gallery of Art to be U.S. citizens.

*20 U.S.C. section 76h (a) requires the thirty general members
of the Trustees of the John F. Kennedy Center for the Performing Arts
to be U.S. citizens.

*20 U.S.C. section 77 (a) includes on the board of the National
Air and Space Museum three U.S. citizens appointed by the President.

*20 U.S.C. section 107a (a)(5) requires that blind persons
licensed to operate venTi7n-gfacilities in federal buildings be U.S.
citizens.

*20 U.S.C. section 901 authorizes employment of U.S. citizens as
teachers in overseas schools operated by the Department of Defense.

*20 U.S.C. section 955 (b) requires that twenty-six members of
the National Council on the Arts be appointed by the President, with
the advice and consent of the Senate, "from among private citizens of
the United States."

20 U.S.C. section 1091 (b) provides that permanent residents of
the Trust Territory of the Pacific Islands or of the Northern Mariana
Islands are eligible, to the same extent as U.S. citizens, for
certain college-level student assistance programs.

*20 U.S.C. section 1132 (b), added by Public Law 96-374, the
Education Amendments of 1980, enacted October 3, 1980, defines
"individuals" eligible to receive benefits under certain

international education programs as U.S. citizens or permanent
residents.
r2021
*20 U.S.C. section 1221-1 declares it to be national policy that
every citizen is entitled to an education to meet his or her full
potential without financial barriers.

TITLE 21. FOOD AND DRUGS.

21 U.S.C. section 955a(b), added by section l(b) of Public Law
96-350, enacted September 15, 1980, makes criminal knowing
manufacture or distribution, or possession with intent to manufacture
or distribute., of any controlled substance by a U.S. citizen on board
any vessel. Subsection (a) proscribes similar conduct by anyone on
board a vessel owned in whole or in part by U.S. citizens.

TITLE 22. FOREIGN RELATIONS AND INTERCOURSE.

22 U.S.C. section 212 limits the issuance of U.S. passports to
those owing allegiance to the United States., whether U.S. citizens or
not.

22 U.S.C. section 215 establishes fees for aliens' passport
visas.

*22 U.S.C. section 257 excludes U.S. citizens from the treaty
jurisdiction of foreign consuls over seamen in the United States
enforceable by U.S. courts. The section also requires persons
specially deputized by U.S. courts to arrest seamen in aid of a
foreign consul's jurisdiction to be U.S. citizens.

*22 U.S.C. section 258 requires immediate release of any seamen
arrested pursuant to the treaty jurisdiction of a foreign consul if
he is found to be a U.S. citizen; and prevents the enforcing court
from imprisoning a foreign seaman on the application of a foreign
consul if the rights and duties of a U.S. citizen are directly
affected by the matter in dispute.

*22 U.S.C. section 276c-2, added by section 4 of Public Law
95-612, enacted November 8, 1978, authorizes civil service benefits
for U.S. citizens employed as Executive Directors and Directors or
their alternates by various international development banks and
funds.

*22 U.S.C. section 283r requires the United States to oppose,
except in specified circumstances, loans by the Inter-American
Development Bank to countries which have expropriated property of
U.S. citizens.

*22 U.S.C. sectionlLi requires the United States to oppose,
except in specified circumstances ' loans by the International Bank
for Reconstruction and Development and the International Development [2031
Association to countries which have expropriated property of U.S.
citizens.

22 U.S.C. section 285g reserves the right of the United States
and its political subdivisions to tax the salaries of its citizens or
nationals paid by the Asian Development Bank.

*22 U.S.C. section 285o requires the United States to oppose,
except in specified circumstances, loans by the Asian Development
Bank to countries which have'expropriated property of U.S. citizens.

*22 U.S.C. section 287n requires U.S. representatives and
alternates to the General Conference of the United Nations
Educational, Scientific, and Cultural Organization to be U.S.
citizens.

*22 U.S.C. section 287p requires members of the National
Commission on Educational, Scientific, and Cultural Cooperation to be
U.S. citizens.

22 U.S.C. section 288b authorizes duty-free entry of baggage
belonging to alien officers and employees of international
organizations.

22 U.S.C. section 288d grants alien officers and employees of
international organizations the same privileges, exemptions, and
immunities from laws governing aliens in the United States as are
enjoyed 'by officers and employees of foreign governments in the
United States.

*22 U.S.C. section 288f preserves the authority of the Secretary
of State to withdraw privileges, exemptions, and immunities from laws
governing aliens in the United States from officers and employees of
international organizations who are nationals of any country that
does not provide corresponding privileges, exemptions, and immunities
to U.S. citizens.

*22 U.S.C. section 290g-1 (b) allows the Director representing
the United States in the African Development Fund, and his alternate,
to receive certain compensation and allowances if they are U.S.
citizens.

22 U.S.C. section 290g-7 reserves the right of the United States
and its political subdiVil"s"To-ns to tax the salaries of its citizens or
nationals paid by.the African.Development Fund.

*22 U.S.C. section 290g-8 requires the United States to oppose,
except in specified circumstances, loans.by the.African Development
[2041 Fund to countries which have expropriated property of U.S. citizens.

22 U.S.C. section 441 allows the President to proclaim a state
of war exists between specified foreign states if he finds such a
proclamation necessary.to protect the lives of U.S. citizens.

22 U.S.C. section 444 (b) permits transportation of refugee
children under the charge of U.S. citizens notwithstanding
now-repealed restrictions on wartime ship movements.

22 U.S.C. section 445 prohibits U.S. citizens from travelling on
any vessel belonging to a state proclaimed to be at war under section
441, above.

22 U.S.C. section 450 permits the President, during any war in
which the United States is neutral, to protect commercial interests
of U.S. citizens by requiring a bond of vessels on condition that
they not deliver war materials or men to states proclaimed to be at
war under section 441, above, or on condition that alien seamen not
be left in the United States longer than permitted by regulation.

22 U.S.C. section 451 permits the President, during any war in
which the United States is neutral, to protect commercial interests
of U.S. citizens by placing special restrictions on use of U.S. ports
and territorial waters by submarines or armed merchant vessels of a
foreign state.

22 U.S.C. section 456 defines U.S. citizen for purposes of the
neutrality law (including sections 441, 444, 445, 450, and 451,..
above).

22 U.S.C. section 463 requires armed vessels owned wholly or in
part by U.S. citizens to give bond before leaving U.S ports that they
will not engage in hostilities against any people with whom the
United States is at peace.

*22 U.S.C. section 526 requires protection of patent rights of
U.S. citizens and collection of royalties thereon in all contracts
for sale of war materials to other American republics.

*22 U.S.C. section 611 (b)(2) excludes from the definition of
"foreign principal," for purposes of the laws requiring registration,
of certain agents of foreign principals, persons who are U.S.
citizens domiciled in the United States. Subsection (d) excludes
from the definition of "agent of a foreign principal" certain news or
press services or associations the officers and directors of which

- 27 -

are U.S. citizens and at least 80% of which are beneficially owned by
U.S. citizens.
22 U.S.C. section 613 W exempts certain foreign officials from (2051
the requirement of registering as agents of foreign principals if
their duties are of public record in the Department of State, but
excludes from the exemption foreign officials who are U.S. citizens.

22 U.S.C. section 618 (c) makes aliens found in violation of
laws requiring registration of foreign agents subject to deportation.

*22 U.S.C. section 1448 (Supp. 1) authorizes the International
Communications Agency to provide assistance to certain libraries and
community centers abroad founded or sponsored by U.S. citizens.

*22 U.S.C. section 1451 (Supp. I) authorizes the loan of U.S.
Government employees who are U.S. citizens to foreign governments for
non-military purposes.

*22 U.S.C. section 1452 provides that U.S. citizens loaned to
foreign governments pursuant to section 1451, above, continue to be
treated as U.S. Government employees for purposes of compensation,
allowances, and benefits.

*22 U.S.C. section 1453 allows U.S. citizens loaned to foreign
governments pursuant to section 1451, above, to be appointed to
offices in 'such foreign governments as necessary .(but not to take an
oath of allegiance 'to that government).

22 U.S.C. section 1472 (3) authorizes payment of travel expenses
and per them of aliens, in connection with information and
educational exchange programs.

22 U.S.C. section 1474 authorizes for information and
educational exchange programs, employment of aliens as translators,
temporary admission of aliens into the United States, payment of
travel expenses of aliens employed abroad and their dependents to and
from the United States, payment of tort claims of aliens employed
abroad, contracts for services abroad by aliens, and payment of
expenses of preparing and transporting home the remains of persons
who die away from home while participating in such programs.

22 U.S.C. section 1621 defines "national of the United States"
for purposes of determining eligibility for adjudication of claims
against foreign governments pursuant to certain treaties.

22 U.S.C. section 1631g (a) limits eligibility for filing claims

- 28 -

based on certain pre-World War II debts to U.S. citizens and
residents.
[2061 22 U.S.C. section 1641 defines "national of the United States"
for purposes of determining eligibility for adjudication of claims
against foreign governments pursuant to certain treaties (distinct
from those mentioned under section 1621, above).

22 U.S.C. section 1641c authorizes the Foreign Claims Settlement
Commission to determine certain World War II claims of U.S. citizens
against Italy.

22 U.S.C. section 1642 defines "national of the United States"
for purposes of determining eligibility for adjudication of claims
against Czechoslovakia for nationalization of property.

22 U.S.C. section 1643a defines "national of the United States"
for purposes of determining eligibility for adjudication of claims
against Cuba or China for nationalization of property.

22 U.S.C. section 1644a defines "national of the United States"
for purposes of determining eligibility for adjudication of claims
against the German Democratic Republic for nationalization of
property.

22 U.S.C. section 1645a, added by Public Law 96-606, enacted
December 28, 1980, definpTlTnational of the United States" for
purposes of determining eligibility for adjudication of claims
against Vietnam for nationalization of property.

22 U.S.C. section 1731 requires that naturalized U.S. citizens
be afforded the same protections by the U.S. Government while in
foreign countries as is given native-born U.S. citizens.

*22 U.S.C. section 1732 requires the President to demand and to
take other steps for the release of U.S. citizens unjustly deprived
of their liberty by a foreign government.

22 U.S.C. section 1796 authorizes the President to appoint U.S.
citizens to the Joint Commission on Rural Reconstruction in China.

22 U.S.C. section 1971, as amended by Public Law 95-541, enacted
October 28, 1978, provides that the documentation or certification of
a vessel as a U.S. vessel shall not be affected, for purposes of the
protections of such vessels against seizures and other losses by
foreign countries, by command of the vessel by a person not a U.S.
citizen if the vessel is on a voyage for the purpose of fishing
beyond the U.S. fishery conservation zone.

*22 U.S.C. section 2103 (e) authorizes the President to create
committees composed entirely of U.S. citizens to advise him with [2073
respect to international cooperation in health and medical research.

*22 U.S.C. section 2151n-1 instructs the Secretary of State to
make every effort to seek the early release of U.S. citizens
unjustifiably held in foreign jails and to take steps to enhance the
protection and welfare of U.S. citizens imprisoned abroad.

*22 U.S.C. section 2174 authorizes the President to furnish
assistance to certain schools, libraries, and hospital centers abroad
founded or sponsored by U.S. citizens.

*22 U.S.C. section 2198 limits to U.S. citizens eligibility for
investment insurance provided by the Overseas Private Investment
Corporation.

*22 U.S.C. section 2351 (b)(4) requires the President to assist
U.S. citizens in obtaining just compensation for losses sustained or
payments exacted in violation of treaties for commerce, trade, or
taxes.

*22 U.S.C. section 2370 (a)(2) prohibits U.S. assistance to or
sugar quotas for Cuba unless Cuba takes appropriate steps to return
or provide compensation for property expropriated from U.S. citizens.
Subsection (c) prohibits assistance to the government of any country
indebted to any U.S. citizen or person for goods and services
furnished or ordered. Subsection (e) requires suspension of
assistance to countries which have expropriated property of U.S.
citizens abroad.

*22 U.S.C. section 2391 (c) authorizes the President to appoint
a U.S. citizen as Chairman of the Development Assistance Committee of
the Organization for Economic Cooperation and Development.

22 U.S.C. section 2394a requires the President to report to
Congress extortion or attempted extortion in return for permitting a
U.S. citizen corporation to do business by officials of foreign
countries receiving international security assistance from the United
States.

22 U.S.C. section 2395 M authorizes alien participants in
technical information and assistance programs to be admitted into the
United States.

*22 U.S.C. section 2396 (e) authorizes payment of certain
training costs of ForeiFn -Service personnel who are U.S. citizens and
who are assigned to positions in the foreign assistance program.

*22 U.S.C. section 2452 authorizes the President to finance
educational assistance for U.S. citizens and nationals in foreign
[2081 countries and to assist schools and institutions of higher learning
abroad founded, operated, or sponsored by U.S. citizens.

22 U.S.C. section 2456 (a)(2) gives preference to U.S. citizens
who are veterans for the educational assistance authorized under
section 2452, above, and requires due consideration to be given to
applicants from all geographical areas of the United States.

*22 U.S.C. section 2504 (a) requires Peace Corps volunteers to
be U.S. citizens or nationals.

*22 U.S.C. section 2505 requires Peace Corps volunteer leaders
to be U.S. citizens or nationals.

*22 U.S.C. section 2507 (b) authorizes the President to make
provision for training U.S. citizens, on a reimbursable basis, for
other programs similar to the Peace Corps.

22 U.S.C. section 2509 (a)(5) authorizes employment of aliens by
the Peace Corps within the United States. Subsection (b) authorizes
settlement of claims by persons not citizens or residents of the
United States based on the acts or omissions abroad of Peace Corps
employees or volunteers.

22 U.S.C. section 2669 authorizes the Secretary of State to
settle claims presented by foreign governments on behalf of their
nationals and to employ aliens abroad.

*22 U.S.C. section 2670 M (Supp. D authorizes the Secretary
of State to pay expenses incident to the relief, protection, and
burial of American seamen and alien seamen from U.S. vessels in
foreign countries and in U.S. Territories and possessions.
Subsection (g) authorizes the Secretary to pay the expenses incurred
in acknowledging the services of officers and crews of foreign
vessels and aircraft in rescuing American seamen, airmen, or citizens
from shipwreck or other catastrophe abroad or at sea. Subsection
(j), as amended by section 108 of Public Law 95-426, the Foreign
Relations Authorization Act, Fiscal Year 1979, enacted
October 7, 1978, authorizes the Secretary to provide emergency
medical assistance, dietary supplements, and other emergency
assistance to U.S. citizens incarcerated or destitute abroad and
unable to obtain such assistance otherwise.

22 U.S.C. section 2672 allows the Secretary of State to employ
aliens in connection with U.S. participation in certain international
activities.

- 31 -

22 U.S.C. section 2691 prescribes procedures, for handling
applications for nonimmigrant visas by certain excludible aliens.
(2091
*22 U.S.C. section 2701, added by section 2201 of Public Law
96-465, above, authorizes the Secretary to provide educational
assistance to meet the needs of children of U.S. citizens abroad who
are engaged in carrying out Government activities.

*22 U.S.C. section 2872 (b)(2) requires that the five voting
members of the Board for International Broadcasting be U.S. citizens.

*22 U.S.C. section 3306 (a), adde d by section 7(a) of Public Law
96-8, the Taiwan Relations Act, enacted April 10, 1979, authorizes
the American Institute of Taiwan to act as provisional conservator of
the personal estates of deceased U.S. citizens and to perform
services for U.S. persons normally performed by consular officers.

*22 U.S.C. section 3507 (d), added by section 407(d) of Public
Law 96-53, the international Development Cooperation Act of 1979,
enacted August 14, 1979, requires two-thirds of the members of the
Council on International Scientific and Technological Cooperation to
be U.S. citizens. Subsection (e) provides that members who are U.S..
citizens shall be deemed Government employees for purposes of
criminal prohibitions against bribery, graft, and conflicts of
interest.

22 U.S.C. section 3508 (d) provides that Fellows of the
Institute for Scientific and Technological Cooperation who are U.S.
citizens shall be deemed Government employees for purposes of
prohibitions against bribery, graft, and conflicts of interest.

*22 U.S.C. section 3623 (d), added by section 1113(d) of Public
96-70, the Panama Canal Act of 1979, enacted September 27, 1979,
requires that the Ombudsman of the Panama Canal Commission be a U.S.
citizen.

22 U.S.C. section 3646, added by section i206 of Public Law
96-70, above, authorizes payment of a cost-of-living allowance to
certain U.S. citizens employed by the Panamal Canal Commission and
previously employed by the Panama Canal Company or the Canal Zone
Government.

22 U.S.C. section 3647 (a), added by section 1207(a) of Public
Law 96-70, above, authorizes payment of college transportation
expenses of dependents of the U.S. citizens to whom reference is made
in section 3646, above.

*22 U.S.C. section 3649, added by section 1209(a) of Public Law

- 32 -

96-70, above, excludes from federal retirement, life insurance, and
(2101 health insurance benefits employees of the Panama Canal Commission
who are not U.S. citizens.

*22 U.S.C. section 3652 (a)(4), added by section 1212(a)(4) of
Public Law 96-70, above, authorizes the interchange of employees who
are U.S. citizens between.the Panama Canal Employment System and the
federal competitive service.

22 U.S.C. section 3672, added by section 1232 of Public Law
96-70, above, authorizes job placement assistance to certain U.S.
citizens who were employed by the Panama Canal Company or the Canal
Zone Government.

22 U.S.C. section 3751 (c), added by section 1341(c) of Public
Law 96-70, above, requires the President to assert the immunity of
U.S. citizens living in the former Canal Zone from retroactive
taxation by the Republic of Panama.

*22 U.S.C. section 3903, added by section 103 of Public Law
96-465, the Foreign Service Act of 1980, enacted October 17, 1980,
divides members of the Foreign Service into seven categories, one of
which is U.S. citizen personnel appointed pursuant to 22 U.S.C.
section 39431, section 303 of the Act.

*22 U.S.C. section 3941, added by section 301 of Public Law
96-465, above, requires that only U.S. citizens be appointed to the
Foreign Service, other than for service abroad as a consular agent or
as a foreign national employee.

*22 U.S.C. section 3952, added by section 312 of Public Law
96-465, above, requires' U.S. citizenship as a condition to commission
of a member of the Foreign Service as a diplomatic or consular
officer.

*22 U.S.C. section 3963, added by section 403 of Public Law
96-465, above, authorizes establishment of a salary schedule for
members of the Foreign Service who are U.S. citizens.

22 U.S.C. section 3968, added by section 408 of Public Law
96-465, above, authorizes establishment of local compensation plans
abroad for foreign nationals and U.S. citizens who are family members
of Government employees.

*22 U.S.C. section 3969, added by section 409 of Public Law
96-465, above, requires that consular agents who are U.S. citizens be
paid at least the U.S. minimum wage.

- 33 -

*22 U.S.C. section 3984 (b), added by section. 504(b) of Public
Law 96-465, above, requires assignment at least ortce every 15 years
of career Foreign Service members who are U.S. citizens to duty in [2111
the United States.

*22 U.S.C. section 4008, added by section 608 of Public Law
96-4561, above, authorizes mandatory retirement for substandard
performance of career Foreign Service members who are U.S. citizens.

22 U.S.C. section 4024 (a)(4)(B), added by section 704 of Public
Law 96-465, above, authorizes employmeqt of aliens as language
instructors, linguists, and other academic and training specialists
in the absence of suitably qualified U.S. citizens.

*22 U.S.C. section 4081, added by section 901 of Public Law
96-465, above, authorizes payment of certain rest and recuperation
travel expenses of members of the Foreign Service who are U.S.
citizens and members of their families.

*22 U.S.C. section 4083, added by section 903 of Public Law
96-465, above' requires members of the Foreign Service who are U.S.
citizens to take periodic leaves of absence in the United States.

*22 U.S.C. section 4084, added by section 904 of Public Law
96-465, above, authorizes medical examinations, i-noculations, and
vaccinations for members of the Foreign Service who are U.S. citizens
and members of their families.

*22 U.S.C. section 4131, added by section 1101 of Public Law
96-465, above, limits the availability of Foreign Service grievance
procedures to members who are U.S. citizens.

*22 U.S.C. section 4135 (a), added by section 1105 of Public Law
96-465, above, requires members of the Foreign Service Grievance
Board to be U.S. citizens.

*22 U.S.C. section 4193 gives consular officers the right to
receive protests or declarations made by or on behalf of U.S.
citizens.

*22 U.S.C. section 4195 requires consular officers to discharge
certain duties with respect to the personal estates left by U.S.
citizens who died, or at time of death were domiciled, within the
jurisdiction of the consular officer.

*22 U.S.C. section-4197 requires consular officers to carry out
lawful testamentary directiro-ns of a U.S. citizen who dies within his

34 -

or her jurisdiction with regard to personal property in the country
at time of death.
(2121 *22 U.S.C. section 4217 makes criminal embezzlement of personal
property of a U.S. citizen by a consular officer.

*22 U.S.C. section 4218 makes criminal false certification by a
consular officer that property belonging to fore-igners belongs to a
U.S. citizen.

TITLE 23. HIGHWAYS.

[No provisions.]

TITLE 24. HOSPITALS AND ASYLUMS.

24 U.S.C. section 196 authorizes the transfer to Saint
Elizabeth's Hospital in the District of Columbia of U.S. citizens
adjudged insane in the Canal Zone. (The Canal Zone was terminated as
a juridical entity by the Panama Canal Treaty of 1977.)

*24 U.S.C. section 196b authorizes the transfer to Saint
Elizab@e@ths 'Hospital in the District of Columbia of U.S. citizens or
nationals or nondeportable aliens who have been adjudged insane in
the Virgin Islands or, if permanent residents of the Virgin Islands,
elsewhere.

TITLE 25. INDIANS.

25 U.S.C. section 399 authorizes the Secretary of Interior to
lease to U.S. citizens certain mineral lands on Indian reservations.

TITLE 26. INTERNAL REVENUE CODE.

[The applicability of Title 26 to the Northern Mariana Islands
is treated specifically by sections 601 and 602 of the Covenant.]

26 U.S.C. section 2 (b)(2)(C) allows a taxpayer married to a
nonresident alien to be considered as single and thus eligible for
treatment as a head of a household. Subparagraph (b)(3)(A) provides
that a nonresident alien may not be treated as a head of a household.
Subsection (d) notes that the special rules of sections 871 or 877,
(see below) govern application of the basic income tax to nonresident
aliens.

26 U.S.C. section 32 (1) allows an income tax credit for taxes
withheld on income of nonresident aliens from sources within the
United States.

- 35 -

26 U.S.C. section 37 M prevents nonresident aliens from taking
the income tax credit for persons over 65.
[2131
26 U.S.C. section 42 (d) prevents nonresident aliens from taking
a general income tax credit available to other taxpayers under this
sections.

26 U.S.C. section 43 (c)(2)(Wiv) excludes from the definition
of "earned income" for pu-rposes of computing the earned-income tax
credit allowed under this section income received by nonresident
aliens from sources within the United States but not connected with
conduct of a trade or business within the United States.

26 U.S.C. section 48 (a)(2)(B)(vii) permits an investment tax
credit to U.S. citizens or U.S. corporations, but not to other
persons or corporations, on certain tangible personal property used
predominantly in possessions of the United States.

26 U.S.C. section 63 (e)(1)(B) Supp. I requires nonresident
aliens and U.S. citizens entitled to benefits under section 931 (see
below) to include in taxable income that portion of the unused zero
bracket allowance that exceeds itemized deductions. (In effect,
those persons are required to itemize deductions and are not
permitted to take the zero bracket allowance, formerly known as the
standard deduction.)

26 U.S.C. section 116 (c)(3), as amended by Public Law 96-223,
the Crude Oil Windfall Profit Tax Act, enacted April 2, 1980, limits
the partial exclusion from gross income of dividends of domestic
corporations by allowing nonresident aliens the exclusion only in
computing certain taxes imposed by sections 871 and 877 (see below).

26 U.S.C. section 152 (b)(3) defines "dependent" for income tax
purposes to exclude any individual not a citizen or national of the
United States unless the individual is a resident of the United
States or "a country contiguous" to the United States or is legally
adopted by a U.S. citizen or national taxpayer, a member of the
taxpayer's household, and has the taxpayer's home as his principal
place of abode.

26 U.S.C. section 176 allows domestic corporations to deduct
from gross income contrii@_utions for U.S.-citizen employees of foreign
subsidiaries participating in the U.S. social security program.

26 U.S.C. section 401 (d)(3)(B)(ii) excludes nonresident alien
employees not receiving earned income from sources within the United
States from the group of employees who must benefit from an

- 36 -

owner-employee trust forming part of a pension or profit-sharing plan
qualified for favorable tax treatment.
[2141
26 U.S.C. section 402 (a)(4) limits taxability of amounts
distributed by the United States Government from an employees' trust
to certain nonresident aliens in respect of services performed by an
employee of the United States Government.

26 U.S.C. section 404A (e)(2), added by section 2(a) of Public
Law 96-603, enacted December 28, 1980, defines a "qualified foreign
plan" for deferred compensation, payments into which by an employer
are deductible, as one in which 90% or more of the amounts paid are
attributable to the services of nonresident aliens.

26 U.S.C. section 406 allows domestic corporations to deduct
from gross income contributions for trust, annuity, pension,
deferred-compensation, and similar plans for U.S.-citizen employees
of qualified foreign subsidiaries.

26 U.S.C. section 407 allows domestic corporations to deduct
from gross income contributions for trust, annuity, pension, deferred
compensation, and similar plans for U.S. citizens employed outside
the United States by qualified domestic subsidiaries of the
corporation.

26 U.S.C. section 410 (b)(3)(C) excludes nonresident alien
employees not receiving earned income from sources within the United
States from the computation of whether a sufficient percentage of
employees benefit from a pension or profit-sharing trust to qualify
the trust for favorable tax treatment.

26 U.S.C. section 542 (c)(7) excludes from personal holding
companies subjected to the personal holding company income tax
certain foreign corporations owned entirely by nonresident aliens.

26 U.S.C. section 543 (b)(1)(C) excludes from gross income
subject to the personal holding company income tax certain income
received by certain foreign corporations owned entirely by
nonresident aliens.

2@6 U.S.C. section 545 (d) defines the taxable income of certain
foreign corporations owned entirely by nonresident aliens for
purposes of the personal holding company tax.

26 U.S.C. section 551 requires citizens or residents of the
United States to include in gross income the undistributed income of
foreign personal holding companies in which they own shares.

- 37

26 U.S.C. section 552 defines a "foreign personal holding
company," in part,-as a foreign corporation more than 50% of which is
owned by not more than five citizens or residents of the United [215)
States.

26 U.S.C. section 565 W allows corporations to deduct as
dividends from income certain amounts specified by shareholders, but
requires special treatment of amounts which, if paid in money, would
be subject to the withholding tax on nonresident aliens imposed by
section 1441 (see below).

26 U.S.C. section 861 defines what income is to be treated as
from sources within the United States. Citizenship and/or residency
in several instances distinguish, in whole or in part, income from
sources within the United States from income from sources outside the
United States.

26 U.S.C. section 864 defines a number of terms used in
determining whether income is from sources within the United States.
See section 861, above. Again, citizenship and/or residency are in
several instances key to the distinctions made.

26 U.S.C. section 871 imposes a 30% tax on income and capital
gains of nonresident aliens from sources within the United States.

26 U.S.C. section 872 delineates the items of income included in
the gross income of non-resident alien individuals.

26 U.S.C. section 873 limits deductions from gross income by
nonresident aliens.

26 U.S.C. section 874 requires nonresident aliens to file
accurate returns in order to claim available deductions and credits;
permits nonresident aliens to claim exemptions in certain
circumstances; and restricts the availability of the foreign tax
credit to aliens.

26 U.S.C. section 875 provides that nonresident aliens who are
members of a partnership or beneficiaries of a trust or estate shall
be treated as doing business in the United States if the partnership,
trust, or estate does business in the United States.

26 U.S.C. section 876 provides that aliens residing in Puerto
Rico shall not be treated as nonresident aliens.

26 U.S.C. section 877 provieds special tax treatment for
nonresident alien indivij-uals who lost U.S. citizenship in order to
avoid U.S. income, estate, or gift taxes.

- 38

26 U.S.C. section 879 specifies tax treatment of community
[2161 income received by a U.S. citizen or resident married to a
nonresident alien.

26 U.S.C. section 883 excludes from gross income of foreign
corporations earnings from operation of ships or aircraft or from
payments for temporary use of railroad rolling stock if the ship is
documented or the aircraft registered under the laws, or the rolling
stock is owned by a corporation, of a country according an equivalent
exemption to U.S. citzens and/or corporations. A similar exclusion
is allowed foreign entities owning a communication satellite system
if the United States participates in the system.

26 U.S.C. section 891 allows the President to double taxes on
citizens and corporations-.of a foreign country if he finds the laws
of that country impose discriminatory or extraterritorial taxes on
U.S. citizens and corporations.

26 U.S.C. section 893 exempts from income tax the wages, fees,
or salaries of employees of foreign governments or international
organizations unless the employees are citizens of the United States.

26 U.S.C. section 894 provides nonresident aliens shall not be
deemed to have a permanent establishment in the United States for
purposes of applying certain tax treaty exemptions related to income
not connected with a U.S. trade or business.

26 U.S.C. section 896 allows the President'. on finding a foreign
country discriminatorily taxes citizens of the United States or
domestic corporations not residents of that foreign country on income
from sources within that country, to impose a similar level of
taxation on income from sources within the United States of citizens
and corporations of that foreign country.

*26 U.S.C. section 897, added by Subtitle C of Title XI of
Public Law 96-499, enacted December 5, 1980, imposes certain taxes,
including a 20-percent minimum tax, on disposition of real property
in the United States by a nonresident alien or a foreign corporation.

26 U.S.C. section 901 allows a credit against U.S. income of
foreign taxes paid, the scope of the credit depending upon whether
the taxpayer is a U.S. citizen or a domestic corporation, a U.S.
resident, a resident alien, or a nonresident alien or foreign
corporation. Section 901 also allows the President to proclaim the
credit will be unavailable to citizens of a foreign country not
offering a similar credit to U.S. citizens residing in that country.

26 U.S.C. section 906 allows nonresident aliens and foreign

- 39 -

corporations a tax credit for taxes paid their country of citizenship
or residence (for individuals) or organization or domicile (for [2171
corporations) on income connected with conduct of a trade or business
within the United States.

26 U.S.C. section 911 allows to qualified citizens of the United
States an exclusion from gross income of certain amounts earned for
personal services while residing in camps in hardship areas outside
the United States.

26 U.S.C. section 913, added by section 203(a) of Public Law
95-615, the Tax Treatment Extension Act of 1977, enacted
November B. 1978,:allows deduction of certain expenses of living
abroad to U.S. citizens residing abroad and to U.S. citizens or
residents physically present in a foreign country for a specified
period.

26 U.S.C. section 931 allows exclusion from gross income of
qualified U.S.-citizen taxpayers of certain amounts earned in
possessions of the United States. (Guam, the Virgin Islands, and
Puerto Rico are not possessions for purposes of this section.)

26 U.S.C. section 932 provides that citizens of U.S. possessions
who are neither citizens nor residents of the United States shall be
taxed as though they were nonresident aliens.

26 U.S.C. section 933 provides special tax treatment for U.S.
citizens residing in Puerto Rico.

26 U.S.C. section 934 (c) provides special tax. treatment for
U.S. citizens residing in the Virgin Islands.

26 U.S.C. section 935 provides for coordination of United States
and duam individual income taxes, based in part upon whether the
taxpayer is a citizen of Guam but not of the United States. Under
section 601 W and W of the Covenant, references to Guam in
section 935 also refer to the Northern Mariana Islands.

26 U.S.C. section 996 (g) specifies the treatment to be given of
certain gains by and distributions to nonresident alien shareholders
of domestic international sales corporations.

26 U.S.C. section 1023 (d)(3) excepts, from certain limitations
on the valuation of property for purposes of calculating gain or loss
on the property's disposition, certain property acquired from a
decedent who, at the time of his death, was a nonresident alien.

.26 U.S.C. section 1303 W restricts income averaging to persons

- 40 -

who are citizens or residents of the United States throughout the tax
[2181 year.
26 U.S.C. section 1371 (a)(3) excludes from favorable tax
treatment offered certain small business corporations those which
have a nonresident alien as a shareholder.

26 U.S.C. section 1402 (b) provides that a resident of Puerto
Rico, Guam, or American Samoa who is not a U.S. citizen is not to be
considered as a nonresident alien for purposes of the tax on
self-employment income.

26 U.S.C. section 1441 requires withholding of tax on the gross
income of nonresident aliens from sources within the United States.

26 U.S.C. section 1451 allows qualified U.S. citizens or
residents to avoid deduction and withholding of a tax on certain
"tax-free covenant" bonds issued before 1934.

26 U.S.C. section 1491 imposes an excise tax on transfers of
property to foreign recipients by U.S. citizens or residents to avoid
U.S. income taxes.

26 U.S.C. section 2001 imposes a tax on the estates of decedents
who are citizens or residents of the United States.

26 U.S.C. section 2014 (h) allows the President to proclaim that
the credit against U.S. estate taxes for foreign death taxes paid may
be suspended for citizens of a foreign country residing in the United
States if that foreign country does not allow its U.,S.-citizen
residents a similar credit against its death taxes. Subsection (g)
provides that U.S. possessions shall be deemed foreign countries for
purposes of the foreign death tax credit.

26 U.S.C. section 2032A provides favorable treatment for estate
tax valuation of certain farm property belonging to a decedent who,
at time of death, was a citizen or resident of the United States.

26 U.S.C. section 2053 (d)(1) allows a deduction from the value
of the gross estate of foreign death taxes paid on property in the
gross estate of a U.S citizen or resident, located in that foreign
country, and transferred by the decedent for public, charitable or
religious uses.

26 U.S.C. section 2101 imposes a tax on the estates of decedents
neither citizens nor residents of the United States.

26 U.S.C. section 2102 allows credits against the tax imposed by

- 41

section 2101 for state death taxes, gift taxes, and taxes on prior
transfers, and provides an optional computation of the credit for
certain citizens of the United States. (See section 2209, below.) [2191

26 U.S.C. section 2103 defines the taxable gross estate of a
nonresident decedent not a citizen of the United States. as that part
of the gross estate situated within the United States.

26 U.S.C. section 2104 defines property within. the United States
of a nonresident decedent not a citizen of the United States to
include stock issued by a domestic corporation, debts of a U.S.
entity, deposits in a domestic commercial banking branch of a foreign
corporation, and certain other property.

26 U.S.C. section 2105 defines certain property of a nonresident
dece4ent not a citizen of the United States as property not within
the United States. Included are life insurance proceeds, deposits in
a foreign commercial banking branch of a domestic corporation, and
certain works of art on loan for exhibition in the United States.

26 U.S.C. section 2106 sets forth rules for determining the
taxab@le estate of a nonresident decedent not a citizen of the United
States.

26 U.S.C. section 2107 imposes the estate tax imposed on U.S.
citizens or residents on nonresident decedents not citizens of the
United States who lost U.S. citizenship for the purpose of avoiding
U.S. income, estate, or gift taxes.

26 U.S.C. section 2108 allows the President to proclaim that
certain credits against U.S. estate taxes may be suspended for
citizens of a foreign country not residing in the United States if
that foreign country imposes a more burdensome tax than that imposed
by the United States on the transfer of property of U.S.-citizen
decedents not residing in that foreign country.

26 U.S.C. section 2201 reduces estate taxes on the transfer of
estat-es of decedent U.S. citizens or residents killed in combat or
combat-related activity while, in the U.S. armed forces.

26 U.S.C. section 2208 provides that U.S.-citizen decedents
residing in U.S. possessir-o-ns shall be considered for estate-tax
purposes as U.S. citizens unless U.S. citizenship was acquired solely
by reason of citizenship of, or birth or residence within, that
posession.

26 U.S.C. section 2209 provides that U.S.-citizen decedents
residing in U.S. possessions shall be considered for estate-tax

- 42 -

purposes as nonresidents not citizens of the United States if U.S.
citizenship was acquired solely by reason of citizenship of, or birth
[2201 or residence within, that possession.
26 U.S.C. section 2501 imposes a tax on gifts and provides that
the tax not apply to transfers of intangible property by a
nonresident not a citizen of the United States (unless within 10
years prior to the transfer citizenship was lost for the purposes of
avoiding income, estate or gift taxes). "Citizen" and "nonresident
not a citizen of the United States," for U.S. citizens residing in
U.S. possessions, are defined as in sections 2208 and 2209, above.

26 U.S.C. section 2505 allows to U.S. citizens and residents an
aggregate lifetime credit against the tax on gifts.

26 U.S.C. section 2511 provides that property of a nonresident
donor not a citizen of the United States shall not be subject to the
gift tax unless the property is situated within the United States;
and deems shares in a domestic corporation or debt obligations of a
U.S. entity to be situated within the United States.

26 U.S.C. section 2513 allows a gift by one spouse to a third
party to be considered as a gift one-half from each spouse if both
spouses are citizens or residents of the United States.

26 U.S.C. section 2522 allows a deduction in computing the
amount of taxable gifts of gifts made for charitable or similar
purposes. Deductible gifts by nonresidents not citizens of the
United States are generally restricted to those made to U.S.
organizations and/or for use in the United States. (Deductible gifts
by citizens or residents of the United States are less restricted.)

26 U.S.C. section 2523 allows a deduction in computing the
amount of taxable gifts of gifts made by a U.S. citizen or resident
to the donor's spouse.

26 U.S.C. section 2614(b) defines property of a nonresident not
a citizen of the United States subject to the tax on certain
generation-skipping transfers in the same way such property is
defined for purposes of the estate (if tfie transferor is deceased) or
gift (if the transferor is alive) taxes, that is, generally, by
whether or not the property is situated within the United States.

26 U.S.C. section 3121 defines "employment" for purposes of the
Federal Insurance Contributions Act to include services performed
outside the United States by a U.S. citizen for an American employer;
defines "American vessel" as including any vessel the crew of which
is employed solely by one or more citizens of the United States;

- 43 -

defines an "American employer" as including an individual who is a
resident of the United States, a partnership if two-thirds or more of
the partners are U.S. residents, and a trust if all the trustees are r.2211
U.S. residents, and allows a domestic corporation to include
U.S.-citizen employees working outside the United States for a
foreign subsidiary in the U.S. social security insurance system.

26 U.S.C. section 3231 provides that, for purposes of railroad
retirement taxes, an individual not a citizen or resident of the
United States shall not be deemed in the service of an employer while
working outside the United States if the employer is required by the
laws of that place to employ, in whole or in part, citizens thereof;
and defines "compensation" to exclude remuneration paid certain
nonresident aliens temporarily in the United States.

26 U.S.C. section 3304 (a)(14) provides that state unemployment
compensation plans, contributions to which may be taken as a credit
against the federal unemployment tax, may not pay benefits on the
basis of services performed by aliens not permanently residing in the
United States under color of law; and states rules applicable to
determination of the eligibility of an alien to receive benefits.

26 U.S.C. section 3306 defines "employment," for purposes of
federal unemployment taxes, as including any service by a U.S.
citizen as an employee of an American employer, unless specifically
excepted, and defines "American employer" and American vessel" in the
same manner as those terms are defined in section 3121, above.

26 U.S.C. section 3401 defines "wages"subject to federal
withholding of income tax to exclude services by a U.S. citizen or
resident and by certain nonresident aliens for a foreign government
or an international organization, and certain services by U.S.
citizens in Puerto Rico or in U.S. possessions.

26 U.S.C. section 3402 (f)(6) limits the number of exemptions a
nonresident alien may claim in determining income taxes to be
withheld by his employer.

26 U.S.C. section 4372 defines insured persons or risks in terms
of U.S. ciitzenship or residence for purposes of applying the excise
tax imposed by section 4371 on certain insurance policies issued by
foreign insurers.

26 U.S.C. section 4404 limits application of the excise tax on
wagers, in part, to wagers placed by one person in the United States
with another who is a citizen or resident of the United States, or to
wagering pools or lotteries conducted by a citizen resident of the
United States.

44 -

26 U.S.C. section 6012 (a)(1)(c) (Supp. I) requires nonresident
aliens and U.S. citizens entitled to benefits under section 931 (see
[2221 below) to file income tax returns if their taxable income for the
year exceeds $750, regardless of certain exceptions from that
requirement for which they might be qualified but for their status.
Subsection (a)(5) requires every estate or trust of which a
nonresident alien is a beneficiary to file an income tax return.
Subsection (a) also permits the Secretary of the Treasury by
regulation to exempt certain nonresident aliens from the requirement
of filing a return.

26 U.S.C. section 6013 prescribes rules for filing joint income
tax returns when a nonresident alien is married to a citizen or
resident of the United States.

26 U.S.C. section 6015 W prohibits a joint declaration of
estimated income by a husband and wife, one of whom is a nonresident
alien. Subsection M exempts from the requirement of declaring
estimated income nonresident aliens unless they are subject to
withholding, have income connected to a trade or business in the
United States, or reside in Puerto Rico.

26 U.S.C. section 6017 exempts nonresident aliens from the
requirement of filing self-employment tax returns.

26 U.S.C. section 6018 distinguishes between citizens or
residents of the United States and noncitizens not residents of the
United States in the value of a decedent's estate sufficient to
require filing of an estate tax return by the executor.

26 U.S.C. section 6042 (b)(2) excludes from the definition of
"divi7de-nds" for which an information return must be filed payments to
nonresident aliens not engaged in trade or business within the United
States.

26 U.S.C. section 6044 (b)(2) provides that cooperatives need
not file information returns on patronage dividends paid to
nonresident aliens not engaged in a trade or business within the
United States.

26 U.S.C. section 6046 requires U.S. citizens or residents
owning or acquiring stock in a foreign corporation to file a
specified form of return.

26 U.S.C. section 6049 (b)(2) excludes from the definition of
"interest" for which an information return must be filed payments to
nonresident aliens not engaged in trade or business within the United
States.

- 45

26 U.S.C. section 6072 (c) allows certain nonresident aliens to
file returns later than other individuals. [2231
26 U.S.C. section 6073 (a) establishes a presumption as to the
date j-eclarations of estimated tax must be filed by certain
nonresident aliens.

26 U.S.C. section 6075 (b)(4) allows certain nonresidents not
citizens of the United St s to file gift tax returns at a later
date than other persons.

26 U.S.C. section 6091 provides a different place for filing of
returns by nonresident aliens and certain U.S. citizens residing
outside the United States, among others.

26 U.S.C. section 6096 (a) prevents nonresident aliens from
designating $1 of their taxes due to be paid to the Presidential
Election Campaign Fund.

26 U.S.C. section 6104 W allows citizens to inspect certain
required annual reports of private foundations.

26 U.S.C. section 6166 allows an extension of time for payment
of estate taxes when the estate of a deceased.citizen or resident of
the United States consists largely of a closely held corporation.

26 U.S.C. section 6166A allows an alternate extension of time
for payment of estate taxes when the estate of a deceased citizen or
resident of the United States consists largely of a closely held
corporation.

26 U.S.C. section 6428 W prohibits nonresident aliens from
receiving a partial refund of 1974 individual income taxes available
to other taxpayers.

26 U.S.C. section 6851 (c) allows the Secretary of the Treasury
to waive for citizens of the United States or its possessions certain
requirements imposed on persons believed to be departing the United
States or removing property from the United States for purposes of
avoiding U.S. income tax laws.

26 U.S.C. section 7325 requires certain appraisers of property
seizid under provisions of Title 26 to be U.S. citizens.

26 U.S.C. section 7422 MM allows an alien to sue for a tax
refund notwithstanding limitations on an alien's right to sue imposed
by section 2501 of title 28 (see below).

26 U.S.C. section 7456 W empowers the Tax Court to require
production of records by nonresident alien petitioners.
(2241 26 U.S.C. section 7701 (30) defines "United States person" for
purposes of the Internal Revenue Code to include, among others, a
citizen or resident of the United States.

TITLE 27. INTOXICATING LIQOURS.

[No provisions.]

TITLE 28. JUDICIARY AND JUDICIAL PROCEDURE.

28 U.S.C. section 1251 (b)(3.) gives the U.S. Supreme Court
original but not exclusive jurisdiction over all actions or
proceedings by a State against citizens of another State or against
aliens.

28 U.S.C. section 1332 gives U.S.' district court jurisdiction
over diversity of citizenship cases including, among others, suits
between citizens of different States (defined to include
"Territories") or between citizens of a State and citizens of a
foreign country.

28 U.S.C. section 1335 allows interpleader actions in district
courts if the adverse claimants are of diverse citizenship, as
defined in section 1332, above.

*28 U.S.C. section 1343 gives the district courts jurisdiction
over suits for damages due to the unlawful deprivation of any right
or privilege of a U.S. citizen by an act in furtherance of a
conspiracy to deprive the person of his civil rights or, under color
of State law, of any right, privilege, or immunity secured by the
Constitution or any Act of Congress providing for equal rights of
citizens or of all persons within the jurisdiction of the United
States. 1

*28 U.S.C. section 1344 gives the district courts jurisdiction
to decide certain election disputes where title to office is at issue
because of the denial of the rights of U.S. citizens to vote on
account of race, color, or previous condition of servitude.

28 U.S.C. section 1350 gives to district courts original
jurisdiction over civil actions by aliens for torts committed in
violation of the law of nations or a treaty of the United States.

28 U.S.C. section 1357 gives the district courts jurisdiction

- 47 -

over actions to enforce the right of U.S. citizens to vote in any
State.
*28 U.S.C. section 1391 provides th at diversity of citizenship [2251
cases may be brought only in the judicial district where all
plaintiffs or all defendants reside, or in which the claim arose, but
that aliens may be sued in any judicial district.

*28 U.S.C. section 1443 permits removal from State to federal
courts of-civil actions or criminal prosecutions (1) against any
person who is denied or cannot enforce in the State court a right
under any law providing for equal civil rights of all U.S. citizens
or persons within U.S. jurisdiction; or (2) for an act under color of
any law providing for equal rights, or a refusal to act on grounds of
inconsistency with such a law.

28 U.S.C. section 1603 defines "agency or instrumentality of a
foreign state," for purposes of determining its immunity from suit in
courts of the United States as an entity not a citizen of a State of
the' United States, as defined in section 1332, above.

28 U.S.C. section 1821 (e), as amended by Public Law 95-535,
forbids payment of certain court per them and mileage fees to aliens
paroled into the United States for prosecution or to deportable
aliens.

*28 U.S.C. section 1861 provides, in part, that it is "the
policy of the United States that all citizens shall have the
opportunity to be considered for service on grand and petit juries in
the district courts of the United States, and shall have an
obligation to serve as jurors when summoned for that purpose." See
comment under section 1865, below.

*28 U.S.C. section 1862 provides that no citizen shall be
excluded from grand or petit jury service on account of race, color,
religion, sex, national origin, or economic status. See comment
under section 1865, below.

*28 U.S.C. section 1863 provides that a district court's plan
for random jury selection, if it provides for a jury commission,
shall provide for the appointment of a citizen or citizens to'that
commission.

*28 U.S.C. section 1865 requires that jurors be citizens of the
United States. Presidential Proclamation 4568, dated May 9, 1978,
suspends until termination of the trusteeship application of this
requirement to jury service in the District Court for the United
States.

48 -

28 U.S. C. section 1872 provides that in all original actions at
law against U.S. citizens in the U.S. Supreme Court, issues of fact
[2261 shall be tried by a jury.

28 U.S.C. section 2502 limits the right of foreign citizens to
file suits in the Court of Claims to citizens of countries which
accord a similar right to citizens of the United States.

28 U.S.C. App.--Rules of Court of Claims--Rule 92 (c) provides
for the issuance of a subpoena in certain circumstances if a citizen
or resident of the United States fails to respond to a letter
rogatory. (A letter rogatory is a formal inquiry sent under
authority of the court to a person in a foreign country.)

TITLE 29. LABOR.

*29 U.S.C. section 633a (a) exempts aliens employed outside the
United States from the prohibition of age discrimination in federal
employment.

*29 U.S.C. section 834 (e), added by section 2 of Public Law
95-524, the Comprehensive Employment and Training Act Amendments of
1978, enacted October 27, 1978, forbids discrimination against
participants in programs under the Act but limits participation to
U.S. citizens and nationals, lawfully admitted permanent resident
aliens, and lawfully admitted refugees and parolees. "State" is
defined, in section 802(25) of Title 29, to include the Northern
Mariana Islands and the Trust Territory of the Pacific Islands.

*29 U.S.C. section 993 (b)(1)(c), added by section 2 of Public
Law 95-524, above, limits membership in the Young Adult Conservation
Corps to citizens or lawful permanent residents of the United States
or lawfully admitted refugees or parolees. The term "State" as used
in this section is defined to include the Northern Mariana Islands.
29 U.S.C.A. section 802(25) (Supp. 1980). Section 802 does not
define "United States". Nonetheless, the applicability of the law to
the Northern Mariana Islands requires treatment of citizens of the
Northern Mariana Islands as U.S. citizens to accomplish the purposes
of the law in the Northern Mariana Islands. The Young Adult
Conservation Corps in fact enrolls citizens of the Northern Mariana
Islands in the Northern Mariana Islands. A technical amendment is
advisable, particularly to clarify the eligibility of citizens of the
Northern Mariana Islands who desire to enroll at locations outside
the Northern Mariana Islands.

29 U.S.C. section 1003 (b)(4) exempts from requirements of the
Employee Retirement Income Security Act pension plans maintained
outside the United States primarily for the benefit of nonresident

49 -

aliens . "United States" is defined to include the several States and
Guam by section 100200) of title 29. By virtue of section 502(a)(2)
of the Covenant, the act is thus applicable in the Northern Mariana [2271
Islands, so pension plans in the Northern Mariana Islands are covered
by the Act.

*29 U.S.C. section 1321 (b)(7) exempts pension plans maintained
outside the United States primarily for the benefit of nonresident
aliens from benefit protection provided by the Pension Benefit
Guaranty Corporation. (The subchapter containing section 1321 does
not define "United States", as does the subchapter containing section
10033. above.)

TITLE 30. MINERAL LANDS AND MINING.

30 U.S.C. section 22 declares lands containing mineral deposits
owned by the United States open to exploration, occupation, and
purchase by citizens of the United States and persons who have
declared their intention to become U.S. citizens.

30 U.S.C. section 49 (a) extends U.S. mining laws to Alaska and
restricts certain mining rights to U.S. citizens and persons who have
declared their intention to become U.S. citizens.

30 U.S.C. section 71 restricts the right of entry to certain
unappropriated federal coal lands to U.S. citizens and persons who
have declared their intention to become U.S. citizens.

30 U.S.C. section 181 limits the disposition of certain mineral
lands owned by the United States to U.S. citizens.

*30 U.S.C. section 185 (r)(4) requires pipeline owners who are
also lessees of U.S. oil lands to carry, as a common carrier, the oil
of any citizen (among other entities) also operating such a lease or
purchasing gas or oil but not owning a pipeline.

*30 U.S.C. section 323 allows citizens of the United States to
use any invention, discovery, or process covered by certain.patents
related to the production of synthetic liquid fuels when those
patents have been acquired by the Secretary of the Interior.

30 U.S.C. section 1015 restricts to U.S. citizens the lease of
public lands for geothermal steam development.

30 U.S.C. section 1402 (a), added by section 3 of Public Law
96-283, the Deep Seabed Hard Mineral Resources Act, enacted
June 28, 1980, disclaims assertion of U.S. sovereignty over the deep

- 50 -

seabed but exercises its jurisdiction over U.S. citizens with respect
to exploitation of hard mineral resources of the deep seabed.
[2281 30 U.S.C. section 1403 (14), added by section 4(14) of Public
Law 96-283, above, defines "U.S. citizen" for purposes of that law.
The term does not include citizens of the Northern Mariana Islands
prior to termination of the trusteeship.

30 U.S.C. section 1411 (a), added by Public Law 96-283, above,
forbids exploration for or recovery of deep seabed hard minerals by
U.S. citizens without a license. Paragraph (b)(1) authorizes the
granting of licenses to U.S. citizens engaged in exploration prior to
the effective date of the Act. Paragraph (b)(2) authorizes emergency
suspension of such exploration for specified reasons. Subsection (c)
forbids U.S. citizens from interfering with licensed activities and
requires them to exercise reasonable regard for interests of other
states in their exercise of the freedoms of the high seas.

30 U.S.C. section 1412 (b)(2), added by section 102(b)(2) of
Public Law 96-283, above, makes licenses and permits for exploration
and exploitation of deep seabed hard mineral resources exclusive as
against other U.S. citizens. Subparagraph (c)(1)(F) requires
licensees or permittees to be U.S. citizens.

30 U.S.C. section 1413 (a)(1), added by section 103(a)(1) of
Public Law 96-283, above, allows any U.S. citizen to apply for a
license for exploration for, or for a permit for recovery of, deep
seabed hard minerals.

30 U.S.C. section 1419 (c), added by section 109(c) of Public
Law 96-283, a ove, provides for preparation of environmental impact
statements with respect to ocean areas in which U.S. citizens are
expected to undertake exploration for or commercial recovery of deep
seabed hard minerals.

30 U.S.C. section 1425 (b), added by section 115(b) of Public
Law 96-283, above, requires transferees of deep seabed hard mineral
exploration licenses and exploitation permits to be U.S. citizens.

30 U.S.C. section 1441, added by section 201 of Public Law
96-283, above, declares the intent of Congress that any international
agreement on deep seabed hard minerals to which the United States
becomes a party must assure U.S. citizens nondiscriminatory access to
such minerals and protect rights of U.S. citizens accruing prior to
the agreement.

30 U.S.C. section 1442, added by section 202 of Public Law
96-283, above, continues in effect provisions of the law for

51 -

licensing of exploration for and exploitation of deep seabed hard
minerals by U.S. citizens not inconsistent with any future
international agreement on such minerals to which the United States [2291
becomes a party. The section also encourages continuation of such
ventures begun before entry into force of such an international
agreement.

30 U.S.C. section 1461, added by section 301 of Public Law
96-283, above, makes unlawful certain acts or omissions by U.S.
citizens or other persons subject to U.S. jurisdiction in connection
with exploration for or exploitation of deep seabed hard minerals.

*30 U.S.C. section 1522 (b)(7), added by section 622(b)(7) of
Public Law 96-294, the Energy Security Act, enacted June 30, 1980,
requires U.S. citizenship as a condition for eligibility for certain
insurance on investments in geothermal resources.

TITLE 31. MONEY AND FINANCE.

*31 U.S.C. section 492a allows U.S. disbursing officers in
foreign countries where satisfactory banking facilities are not
available to cash checks drawn on the Treasurer of the United States
for the accommodation of any person who is a U.S. citizen.

*31 U.S.C. section 699b requires federal employees in the
continental United States paid from appropriated funds to be U.S.
citizens. This provision is frequently reenacted. See 31 U.S.C.A.
section 699b (Supp. 1980).

31 U.S.C. section 700 excepts from the requirement of section
699b, above, personnel employed by the Department of Defense.

*31 U.S.C. section.711 (1) makes a permanent indefinite annual
appropriation for payment of the proceeds of the personal estates of
American citizens who die abroad to the legal representatives of the
deceased.

31 U.S.C. section 750 exempts bonds and obligations of the
United States owned by nonresident aliens not engaged in business in
the United States from taxation by the United States, States,
possessions, or local taxing authorities.

31 U.S.C. section 1121 requires the Secretary of the Treasury to
require U.S. citizens or residents or persons in the United States
doing business in the United States to maintain records or to file
reports on certain foreign financial transactions.

31 U.S.C. section 1241 (b)(2) requires States to allow

- 52 -

11citizens" to comment on proposed uses and budgets for federal
revenue-sharing funds. (The reference is probably to state
[2301 citizenship.)

TITLE 32. NATIONAL GUARD.

*32 U.S.C. section ,313 requires that a person be a U.S. citizen
to be ell-gMble for appoin-tment as an officer of the National Guard.

TITLE 33. NAVIGATION AND NAVIGABLE WATERS.

33 U.S.C. section 8 allows U.S. citizens the right to travel
certain rivers in Alabama free from toll.

*33 U.S.C. section 382 allows the President to order seizure of
vessels committing piratical acts against U.S. citizens.

*33 U.S.C. section 383 allows merchant vessels owned in whole or
in part by U.S. citizens to resist pirates and to capture their
vessels.

33 U.S.C. section 391 authorizes advancement on the docket of
trials for violation of certain navigation laws by persons employed
on vessels owned in whole or in part by U.S. citizens.

33 U.S.C. section 702d-1 allows the Secretary of the Army to
grant certain easement rights to U.S. citizens over the Bonnet Carre
Spillway and Floodway on the Mississippi River.

*33 U.S.C. section 909 (g) limits foreign-resident beneficiaries
to specified relatives of aliens for whom death benefits are paid
under the Longshoremen's and Harbor Workers' Compensation Act. The
Act covers certain injuries on or adjacent to the navigable waters of
the United States. 33 U.S.C. 903(a). "United States" is defined to
include, "in a geographical sense" "the several States and
Territories." Id. section 902(9). The Act thus would cover injuries
on or adjacent to navigable waters of Guam. Under section 502(a)(2)
of the Covenant, the Act would apply to the Northern Mariana Islands
as well.

33 U.S.C. section 1321 (a)(17), as added by paragraph (b)(2) of
Public Law 95-576, enacted November 2, 1978, asserts the jurisdiction
of the United States over U.S. citizens for purposes of determining
the geographical reach of prohibitions against discharge of oil or
hazardous substances in certain ocean areas.

*33 U.S.C. section 1365 allows "any citizen" to file certain
civil actions to enforce the Federal Water Pollution Control Act.

53 -

Most citizen-suit provisions permit "any person" to file suit. This
provision might be given a similar construction.
*33 U.S.C. section 1502 (5) defines "citizen of the United [2311
States7 -for purposes of the Deepwater Port Act.

*33 U.S.C. section 1503 (g) limits to U.S. citizens the issuance
of licenses for the ownership, construction, and operation of a
deepwater port.

33 U.S.C. section 1517 (i)(1) allows the Attorney General to
represent citizens, presumably U.S. citizens, as a class to recover
for damages sustained from oil discharged into the marine environment
in connection with deepwater port operations.

(There is no Title 34 in the current U.S. Code.]

TITLE 35. PATENTS.

35 U.S.C. section 119 treats the date of filing of a patent
application in a foreign country as the date of its filing in the
United States if the foreign country accords reciprocal treatment to
applications filed in the United States or to applications by
citizens of the United States. Amendment of this section to treat
citizens of the Northern Mariana Islands as U.S. citizens before
termination of the trusteeship could complicate patent applications
by persons not citizens of the Northern Mariana Islands since a
foreign country might negate the reciprocity provision for all U.S.
citizens by failing to accord rights to the citizens of the Northern
Mariana Islands. Since Northern Mariana Islands patent applications
are apt to be few in number and, in most instances, first filed with
the United States., amendment of the section does not seem worthwhile.

TITLE 36. PATRIOTIC SOCIETIES AND OBSERVANCES.

*36 U.S.C. section 25 limits membership on the governing board
of the Boy Scouts of America to U.S. citizens.

*36 U.S.C. section 34 limits membership on the National Council
of the Girl Scouts of America to U.S. citizens.

36 U.S.C. section 45 allows membership in the American Legion to
any person who served T7the U.S. armed forces during'certain wars or
hostilities or to U.S. citizens who served in the armed forces of any
U.S. ally during those wars or hostilities.

36 U.S.C. section 67e (SupR. I) allows membership in AMVETS
(American Veterans) to any person who served in the U.S. armed forces

- 54

between 1940 and 1975 or any U.S. citizen who served in the armed
forces of any U.S. ally during that period.
[2321
36 U.S.C. section 83 gives the purpose of the United States
Blind Veterans of World War I as assisting U.S. citizens who lost
their sight in war. Active membership is restricted, by section 85
of Title 36, U.S.C., to "American veterans" of World War I.

36 U.S.C. section 90e allows membership in the Disabled American
Veterans to any person who was disabled in war while serving in the
U.S. armed forces or to any U.S. citizen disabled while serving in
the forces of a U.S. ally during such a war period.

36 U.S.C. section 97 limits membership in the American War
Mothers to U.S. citizens.

*36 U.S.C. section 121, added by section 306 of Public Law
95-479, the Veterans' Disability Compensation and Survivors' Benefits
Act of 1978, enacted October 18, 1978, requires superintendents and
assistant superintendents of cemeteries operated by the American
Battle Monuments Commission to be U.S. citizens.

36 U.S.C. section 125 allows the American Battle Monuments
Commission to cooperate with U.S. citizens, among others, in the
erection and maintenance of war memorials outside the United States.

36 U.S.C. section 177 requires aliens to stand at attention when
the flag is being hoisted, lowered, or passed in review or in a
parade. (Citizens are to do the same but with right hand over
heart.)

36 U.S.C. section 1157 limits membership in the Paralyzed
Veterans of America to U.S. citizens.

TITLE 37. PAY AND ALLOWANCES OF THE UNIFORMED SERVICES.

[No provisions.]

TITLE 38. VETERANS' BENEFITS.

38 U.S.C. section 109 (b) allows certain U.S. citizens who
served in the armed forces of U.S. allies in World War II to receive
veterans' vocational rehabilitation and home loan benefits.
Subsection (c)(1) allows certain U.S. citizens who served in the
armed forces of Czechoslovakia or Poland during World War I or World
War II in armed conflict against enemies of the United States to
receive veterans' medical care.

- 55 -

*38 U.S.C. section 235 allows overseas employees of the
r-
Veterans Administration who are U.S. citizens certain pay and
allowances. [2331

*38 U.S.C. section 624 (b) allows the Veterans' Administration
to furnish necessary medical care for the service-connected
disability of an otherwise eligible veteran who is a U.S. citizen
sojourning or residing abroad.

38 U.S.C. section 1002 allows interment in national cemeteries
of deceased veterans and of any citizen of the United States who
served in the armed forces of a wartime ally of the United States
during that war.

38 U.S.C. section 3103 (c) excepts aliens from loss of certain
veterans' ".)eneiits on discharge or dismissal from the armed forces
for enumerated reasons.

38 U.S.C. section 3108 prohibits payment of gratuitous benefits
by the Veterans' Administration to any alien located in territory
,under control of an enemy of the United States.

*38 U.S.C. section 4105 (b) restricts to citizens of the United
States certain appointments in the Department of Medicine and Surgery
of the Veterans' Administration.

38 U.S.C. section 4114 (6) allows appointment of non-citizens to
the Department of Medicine and Surgery without regard to section
4105, above, when it is not possible to recruit qualified U.S.
citizens.

TITLE 39. POSTAL SERVICE.

[No provisions.]

TITLE 40. PUBLIC BUILDINGS, PROPERTY, AND WORKS.

*40 U.S.C. section 71a (b)(2) authorizes appointment of five
11citizen members" to the Rational Capitol Planning Commission. The
other members of the Commission serve ex officio, so 11citizen" may
mean merely that the member is not an official but a member of the
general public; under such a reading these members would not be
required to be U.S. citizens.

40 U.S.C. section 782 prevents persons disqualified by section
310 of title 47 (see below) from holding radio station licenses, that
is, aliens, from owning, operating, or controlling certain long-lines
communications facilities in Alaska formerly owned by the United

- 56

States. Allowing citizens of the Northern Mariana Islands to hold
radio station licenses under section 310 would remove the bar imposed
[2341 by this section.

TITLE 41. PUBLIC CONTRACTS.

41 U.S.C. section 49 prohibits defense contractors from denying
employment for failure to produce a birth certificate to anyone who
can produce an honorable discharge certificate from the U.S. armed
forces, unless that certificate shows its holder may have been an
alien when the certificate was issued.

TITLE 42. THE PUBLIC HEALTH AND WELFARE.

*42 U.S.C. section 204 requires that commissioned officers in
the Public Health Service be U.S. citizens.

42 U.S.C. section 209 (h) allows aliens to be employed as
consultants or appointed to fellowships by the Public Health Service.

42 U.S.C. section 252 requires the Surgeon General to provide
facilities for physical and mental examinations of aliens as required
by the immigration laws.

42 U.S.C. section 259 (a) requires that alien convict drug
addicts subject to deportation be deported upon discharge from a
Public Health Service drug treatment hospital.

42 U.S.C. section 295f-1 (Supp. I) provides that, in counting
third-year medical students for purposes of computing the amount of
certain grants to medical schools, students not U.S. citizens who
were not second-year students in the school shall not be counted,
while second-year U.S.-citizen students who were previously enrolled
in foreign medical schools shall be counted.

42 U.S.C. section 295g-2 authorizes grants to U.S. schools of
medicine and osteopathy to train U.S. citizens enrolled in foreign
medical schools before October 12, 1976, to permit them to complete
their education at U.S. medical schools.

*42 U.S.C. section 295g-8 (d)(12) authorizes grants for the
training of U.S. citizens from foreign health professions schools to
enable them to enroll in residency programs in the United States.

*42 U.S.C. section 302 (b)(3) requires States receiving federal
grants for old-age assistance and medical assistance to the aged to
impose no citizenship requirement on eligibility for assistance that
would exclude U.S. citizens. The subchapter containing this section

- 57 -

was repealed effective January 1, 1974, except with respect to Guam,
Puerto Rico, and the Virgin Islands. Public Law 92-603, section (2351
303(a), (b), 86 Stat. 1484 (1972). While the section is thus not
applicable to the Northern Mariana Islands, rights of citizens of the
Northern Mariana Islands residing in Guam, Puerto Rico, or the Virgin
Islands would be expanded were they treated as U.S. citizens.

*42 U.S.C. section 304 halts payments for old-age assistance or
medical assistance to the aged if a State alters a previously-
approved plan so the citizenship condition set forth in section
302(b), above, no longer obtains. The repeal discussed under section
302(b) also includes this section.

*42 U.S.C. section 402 W suspends old-age, survivors, and
disability insurance benefits to aliens who are outside the United
States unless they are citizens of a country which allows equivalent
benefits to qualified U.S. citizens outside that country, except in
certain specified circumstances.

42 U.S.C. section 403 W considers certain nonresident aliens
engaged in trade or business on Guam (and certain other specified
territories) as engaged in noncovered remunerative activity outside
the United States for purpose of reducing the monthly social security
benefits to which they are entitled.

42 U.S.C. section 410 (a) defines "employment," in determining
eligibility for federal old age, survivors, and disability insurance
benefits to include, among other relations, employment of a U.S.
citizen outside the United States by a foreign subsidiary of a
domestic corporation which has entered into an agreement to include
the employee within the U.S. social security system pursuant to
section 31210) of Title 26, above. Specifically excluded from the
definition of "employment" is service on a vessel or aircraft that is
not an American vessel or aircraft by a person who is not a citizen
of the United States if the person is employed on the vessel or
aircraft when outside the United States. Also specifically excluded
are certain services performed by nonresident aliens temporarily in
the United States.

Subsection (c) defines an "American vessel" as including an
undocumented vessel, the crew of which is employed solely by one or
more U.S. citizens, residents or corporations.

42 U.S.C. section 411 (b) defines "self-employment" income for
purposes of determining eligibility for federal old-age, survivors,
and disability insurance benefits to exclude earnings of nonresident
aliens but to include earnings of residents of Puerto Rico, the
Virgin Islands, Guam, and American Samoa who are not U.S. citizens.

- 58

Subsection (c) includes in the definition of "trade or business"
employment of a U.S. citizen by a foreign government or
[2361 instrumentality or an international organization in the United
States.

42 U.S.C. section 417 (h) allows certain U.S. citizens who
fought in the armed forces of a country at war with a country with
which the United States was at war during World War 11 to receive
certain veterans' benefits.

*42 U.S.C. section 426a (a)(4) allows certain U.S. citizens and
residents over 65 to receive hospital insurance benefits although
otherwise not entitled to those benefits.

*42 U.S.C. section 428 (a)(3) allows certain uninsured U.S.
citizens and residents over 72 to receive specified monthly cash
benefits. The benefits are not available if the person is receiving
benefits under Supplemental Security Income program, and may not be
paid to a person residing outside the 50 States and the District of
Columbia.

42 U.S.C. section 431 allows certain benefits to be paid U.S.
citizens of Japanese ancestry held in U.S. Government internment
camps during World War II.

*42 U.S.C. section 1202 (b)(2) requires States receiving federal
grants for aid to the bF17ndto impose no citizenship requirement on
eligibility for assistance that would exclude U.S. citizens. The
subchapter containing this section was repealed effective
January 1, 1974, except with respect to Guam, Puerto Rico, and the
Virgin Islands. Public Law 92-603, section 303(a), (b), 86 Stat.
1484 (1972). See comment regarding section 302(b) of Title 42,
above.

*42 U.S.C. section 1204 halts payments for aid to the blind it a
State alters a previously-approved plan so the citizenship condition
set forth in section 1202(b), above, no longer obtains. The repeal
discussed under section 1202(b) also includes this section.

*42 U.S.C. section 1313 authorizes reimbursable temporary
assistance to certain needy U.S. citizens or dependents of U.S.
citizens returned or brought from foreign countries.

*42 U.S.C. section 1352 (b)(2) requires States receiving grants
for aid to the permanently and totally disabled to impose no
citizenship requirement on eligibility for assistance that would
exclude U.S. citizens. The subchapter containing this section was
repealed effective January 1, 1974, except with respect to Guam,

- 59 -

Puerto Rico, and the Virgin Islands. Public Law 92-603,
section303(a), (b), 86Stat. 1484 (1972). See comment regarding [2371
section 302(b) of Title 42, above.

*42 U.S.C. section 1354 halts payments for aid to the
permanently and totally disabled if a State alters a
previously-approved plan so the citizenship condition set forth in
section 1352(b), above, no longer obtains. The repeal discussed
under section 1352(b) also includes this section.

*42 U.S.C. section 1382c (a)(1)(B) requires that an "aged,
blind, or disabled individual",eligible for'supplemental security
income assistance be a resident of the United States and a U.S.
citizen or a permanent resident alien. Paragraph (f)(3), added by
section 504 of Public Law 96-265, the Social Security Disability
Amendments, enacted June 9, 1980, provides that, for purposes of
determining the eligibility of an alien, certain income and resources
of the alien's sponsor (if any) and the sponsor's spouse are deemed
income and resources of the alien.

Section 502(a)(1) of the Covenant provides that the chapter
containing this section, Title XVI of the Social Security Act "shall
apply to the Northern Mariana Islands . . . as it applies to the
several States." Citizens of the Northern Mariana Islands in the
Northern Mariana Islands already receive supplemental security
income.

42 U.S.C. section 1382j, added by section 504 of Public Law
96-265, above, specifies formulae and procedures for attributing the
income of an aliens' sponsor to the alien for purposes of determining
eligibility for supplemental security income.

*42 U.S.C. section 1395i-2 (a)(3) limits to residents of the
United States who are citizens or lawfully admitted permanent
resident aliens who have resided in the United States for five years
eligibility for aged and disabled hospital insurance benefits for
certain otherwise uninsured individuals.

*42 U.S.C. section 1395o (2) limits eligibility for
supplementary medical insurance benefits for the aged and disabled to
residents of the United States 'who are U.S. citizens or lawfully
admitted permanent resident aliens who have resided in the United
States for five years.

*42 U.S.C. section 1396a (b)(4) requires States receiving
medicaid grants to impose no citizenship requirement on eligibility
for assistance that would exclude U.S. citizens. The Northern
Mariana Islands Student Services Coordinator on Guam on

June 26, 1981, told Commission staff that otherwise eligible citizens
of the Northern Mariana Islands have been denied Medicaid on Guam on
[2381 citizenship grounds.

*42 U.S.C. section 1484 (f)(3) requires domestic farm laborers
to be citizens or legal residents of the United States for purposes
of an insurance program for loans for providing housing for domestic
farm labor.

*42 U.S.C. section 1652 (b) limits recipients of compensation
for di7sa-bility or death of nonresident aliens employed by defense
contractors at U.S military bases outside the United States to
specified dependents and allows or requires the Secretary of Labor to
pay one-half the compensation benefits in a lump sum. The exclusive
remedy for compensation for injury to or death of persons employed at
military bases on Guam, in the Northern Mariana Islands, or in the
Trust Territory is provided by this law. See section 1651(a) and (c)
of Title 42.

*42 U.S.C. section 1701 (c) limits benefits payable to surviving
dependents on the death outside the United States of an employee of a
contractor with the United States if that employee is neither a U.S.
citizen nor a resident of the United States or Canada.

*42 U.S.C. section 1869 limits award of National Science
Foundation scholarships and graduate fellowships to U.S. citizens or
nationals.

*42 U.S.C. section 1881 (c) limits award of the National Medal
of Science to persons who are U.S. citizens or nationals or who are
lawfully admitted permanent resident aliens who have filed
applications for petitions for naturalization.

*42 U.S.C. section 1922 limits certain Department of Justice
youth medals for character or service to U.S. citizens.

*42 U.S.C. section 1971 (a)(1) declares the right of all U.S.
citizens to vote in public elections without distinction of race,
color, or previous condition of servitude.

*42 U.S.C. section 1973 prohibits the use of voting
qualifications or prerequisites to deny or abridge the right of any
U.S. citizen to vote on account of race, color, or membership in a
language minority group.

*42 U.S.C. section 1973a (b) requires courts, on application of
the Attorney General or an aggrieved person, to set aside the use of
tests or devices used in violation of section 1973, above.

61 -

*42 U.S.C. section 1973b provides for suspension of literacy
tests for voting by U.S. citizens in specified circumstances and
guarantees voting rights of U.S. citizens who are members of language [.2391
minorities.

*42 U.S.C. section 1973h (a) declares that the constitutional
right 7 -citizens to vote is abridged by required payment of poll
taxes as a precondition to voting.

*42 U.S.C. section 1973aa (a) prohibits denial of the right of a
U.S. citizen to vote in any Federal, State, or local election through
use of a literacy or educational test, a requirement of good moral
character, or by proving qualifications through the voucher of other
persons.

42 U.S.C. section 1973aa-1 prohibits durational residency
requirements on the right of U.S. citizens to vote for the President
and Vice President; and requires that States allow absentee
registration and voting in such elections.

*42 U.S.C. section 1973aa-la sets forth various requirements to
enforce the rights of citizens of language minorities to participate
in the electoral process.

42 U.S.C. section 1973cc, as amended by section 7 of Public Law
95-593, amending the Overseas Citizens Voting Rights Act of 1975,
enacted November 4, 1978, requires States to permit absentee
registration for voting by persons in the U.S. Armed Forces and
Merchant Marine and their spouses and dependents who are U.S.
citizens. "States" is not defined in the subchapter containing this
section.

42 U.S.C. section 1973dd-I extends to otherwise-qualified U.S.
citizens residing outside the United States the right to vote in any
Federal election in the State of last domicile. "State" is defined
in section 1973dd to include the 50 States and Guam, while "United
States" is defined by the same section to include the 50 States and
Guam but to exclude the Trust Territory of the Pacific Islands.

42 U.S.C. section 1973dd-2 requires States to allow absentee
registration and voting by qualified U.S. citizens residing outside
the United States. See comment under section 1973dd-1, above.

*42 U.S.C. section 1975c authorizes the Civil Rights Commission
to investigate denial of the right of U.S. citizens to vote by reason
of fraud or discrimination.

42 U.S.C. section 1982 guarantees to all U.S. citizens equal

62 -

rights in receiving, owning, and conveying real property. Section
805 of the Covenant, restricting Northern Mariana Islands land
(2401 ownership to persons of Northern Mariana Islands descent, as a more
specific and a more recently enacted statute !might be construed to
supercede section 1982 with respect to land in the Northern Mariana
Islands. Should legislation be sought defining U.S. citizens to
include citizens of the Northern Mariana Islands for purposes of
section 1982, the Covenant's section 805 restrictions might be
brought into question. When citizens of the Northern Mariana Islands
become U.S. citizens at termination of the trusteeship, they will
have the rights guaranteed by section 1982.

*42 U.S.C. section 1983 provides a remedy for damages to any
U.S. citizen or person within the jurisdiction of the United States
denied, under color of State or Territorial law, any rights,
privileges, or immunities secured by the Constitution or laws of the
United States. Under the Trusteeship Agreement the United States has
"full powers of . . . jurisdiction" over the Northern Mariana
Islands, so the remedy afforded by this section may already be
available in the Northern Mariana Islands. But see Thompson v.
Kleppe, 424 F. Supp. 1263 (D. Hawaii 1976), holding the remedy
unavailable because the Trust Territory is not a State or Territory.

*42 U.S.C. section 1985 provides a remedy for damages to any
U.S. citizen injured by a conspiracy to obstruct justice with the
intent to deny him the equal protection of the laws or, by force,
intimidation, or threat, to deny him his right to support the
election of a qualified candidate in a Federal election.

*42 U.S.C. section 20OOe-1 provides that the equal employment
opportunities laws do not apply to employers with respect to
employment of aliens outside any state. "State" is defined to
include the several States and Guam. 42 U.S.C. section 2000e(i).
Under section 502(a)(2) of the Covenant, "State" would also include
the Northern Mariana Islands. The Equal Employment Opportunities
Commission concurs in this conclusion. This section would thus not
except employment of aliens in the Northern Mariana Islands from the
equal employment opportunity laws. Note, however, that
discrimination on the basis of citizenship is not forbidden by the
equal employment opportunity laws. See sections 20OOe-2 and 20OOe-3
of Title 42.

The equal employment opportunity laws do apply to employers with
respect to employment of U.S. citizens outside of any state.

42 U.S.C. section 20OOe-16 prohibits the Federal Government from
discriminating in employment on the grounds of race, color, religion,
sex, or national origin except with regard to aliens employed outside

- 63 -

the United States. "State" under the law includes the Northern
Mariana Islands. See comment under section 20OOe-1, above. The law
thus bars federal discrimination on the forbidden grounds in the [2411
Northern Mariana Islands, but does not bar federal discrimination
outside of the United States against citizens of the Northern Mariana
Islands.

*42 U.S.C. section 2133 (d) prohibits an alien from obtaining a
commercial nuclear energy license.

*42 U.S.C. section 2134 (d) prohibits an alien from obtaining
licenses for medical, industrial, commercial, or research uses of
nuclear energy.

42 U.S.C. section 2473 (c)(10) allows the Administrator of the
National Aeronautics and Space Administration to employ aliens
without regard to statutory prohibitions against payment of
compensation to aliens.

*42 U.S.C. section 3631 provides criminal penalties for
interference with the rights of a U.S. citizen to fair housing or in
assisting others to obtain fair housing.

*42 U.S.C. section 4954 (c) implies that only citizens or legal
residents of the United States may become VISTA volunteers.

42 U.S.C. section 5816 (h) authorizes the Administrator of the
(since-abolished) Energy Research and Development Administration to
employ persons who are not citizens of the United States in expert,
scientific, technical, or professional capacities.

*42 U.S.C. section 5841 (a)(1) requires that members of the
Nuclear Regulatory Commission be U.S. citizens.

*42 U.S.C. 5906 (b)(2)(A) requires the members of the boards of
directors of joint Federal-industry corporations established for
nonnuclear energy research and development to be U.S. citizens.

*42 U.S.C. section 5919 (p)(1), added by section 207(b) of
Public Law 95-238, the Department of Energy Act of 1978--Civilian
Applications, enacted February 25, 1978, requires recipients of
federal loan guarantees for certain synthetic fuels facilities and
municipal organic waste energy generation facilities to be U.S.
citizens. "United States" is defined by subsection (p)(1) to include
the 50 States and Guam, but the statute was enacted after
January 9, 1978. Consequently, the statute is not, applicable to the
Northern Mariana Islands by virtue of section 502(a)(1) or (2) of the
Covenant.

- 64 -

*42 U.S.C. section 6391 requires the President (or his delegate)
in allocating petroleum products or electrical energy among classes
[2421 or users to give consideration to the need to foster reciprocal and
nondiscriminatory treatment by foreign countries of U.S. citizens
engaged in commerce in those countries.

*42 U.S.C. section 7141 (f)(1), added by section 641 of Public
Law 95-619, the National Energy Conservation Policy Act, enacted
November 9, 1978, requires minority members eligible for certain
Department of Energy assistance to be U.S. citizens. To be eligible,
persons of Northern Mariana Islands descent would have to be
considered as of Oriental descent and U.S. citizens.

*42 U.S.C. section 8712 (d), added by section 16(d) of Public
Law 96-294, the Energy Security Act, enacted June 30 1980, requires
members of the Board of Directors of the United Stat;s Synthetic
Fuels Corporation to be U.S. citizens. Section 870206) defines
"State" for purposes of the part containing this provision to include
the Commonwealth of the Northern Mariana Islands.

*42 U.S.C. section 8779 (b)(4), added by section 179(b) of
Public Law 96-294, above, requires that technology, patents, and
trade secrets developed by certain projects in the Western Hemisphere
outside the United States assisted by the U.S. Synthetic Fuels
Corporation be available to U.S. citizens.

*42 U.S.C. section 9101 (a)(3), added by section 2(a)(3) of
Public Law 96-320, the Ocean Thermal Energy Conversion Act, enacted
August 3, 1980, declares as a purpose of the Act the authorization
and regulation of the construction, location, ownership, and
operation of ocean thermal energy conversion plantships by U.S.
citizens. Although section 910205) defines "State" to include the
"Commonwealth of the Northern Mariana," section 910208) defines
"United States citizen" so as apparently to exclude citizens of the
Northern Mariana Islands.

*42 U.S.C. section 9111 (a), added by section 101(a) of Public
Law 96-320, above, requires U.S. citizens to obtain a license to own,
construct, or opecate an ocean thermal energy conversion facility.
Subsection (c) authorizes the issuance of such licenses to U.S.
citizens. Subsection M requires the issuance of such licenses to
qualified U.S. citizens. see comment under section 9101, above..

*42 U.S.C. section 9118 (e)(2)(C), added by section 108(e)(2)(C)
of Public Law 96-320, above, requires that ocean thermal energy
conversion facilities be manned by U.S. citizens or aliens lawfully
admitted for permanent residence, except in specified circumstances.
See comment under section 9101, above.

- 65 -

42 U.S.C. section 9151, added by section 301 of Public Law
96-320) above., makes unlawful certain acts and omissions by U.S. [2431
citizens or nationals or other persons subject to U.S. jurisdiction
in violation of provisions of the Ocean Thermal Energy Conversion
Act. See comment under section 9101, above.

42 U.S.C. section 9601 (19), added by subsection 10109) of
PUblic Law 96-510, the Comprehensive Environmental Response,
Compensation, and Liability Act, enacted December 11, 1980, provides
that U.S. citizens are subject to the jurisdiction of the United
States for purposes of the Act, wherever they may be. Subsection
(27) defines "United States" to include the Commonwealth of the
Northern Mariana Islands.

TITLE 43. PUBLIC LANDS.

43 U.S.C. section 145 allows the Secretary of the Interior to
auction and sell certain improved public lands to U.S. citizens.

43 U.S.C. section 161 allows a U.S. citizen or a person who has
filed under the naturalization laws a declaration of intention to
become a U.S. citizen to make a homestead entry on. certain public
4ands in Alaska.

43 U.S.C. section 164 provides that a homestead entryman under
section 161, above, must be a U.S. citizen before a patent tcr the
homestead land will be granted.

43 U.S.C. section 168 allows any female U.S. citizen to obtain
an Alaska land patent, notwithstanding her marriage to an alien, if
that alien is entitled to become a citizen of the United States.

43 U.S.C. section 177 allows U.S. citizens to gain title to
certain public lands in New Mexico through adverse possession at the
discretion of the Secretary of the Interior upon payment of a
specified fee.

43 U.S.C. section 178 allows the Secretary of the Interior to
grant a patent to certain public lands in New Mexico continguous to a
Spanish or Mexican land grant to U.S. citizens in adverse possession
upon payment of a specified fee.

43 U.S.C. section 185 allows heirs who are U.S. citizens to
continue prosecution of the contest of a preemption, homestead, or
timber culture entry in Alaska.

43 U.S.C. section 186 allows U. S. citizens who served with
allied armies in World War I the preferred right of entry accorded

66 -

veterans of the U.S. armed forces under the homestead or desert-land
laws, with respect to public lands in Alaska.
[2441 43 U.S.C. section 190 allows Indians located on public lands
prior to 1884 to have the same homestead rights as U.S. citizens with
respect to land in Alaska.

43 U.S.C. section 231 allows leaves of absence from homestead
lands in Alaska in specified circumstances if the entryman is a U.S.
citizen.

43 U.S.C. section 272a allows U.S. citizens who served with
allie@'d -armies in World War I to receive the preferential treatment
accorded veterans of the U.S. armed forces with respect to homestead
patents to public lands in Alaska.

43 U.S.C. section 296 allows qualified U.S. citizens to
relinquish homestead lands acquired before December 29, 1916, to
exchange those lands for a larger stock-raising homestead. The
section now applies only in Alaska.

43 u.s.C. section 315b limits the issuance of public land
grazing permits to U.S. citizens or those who have declared their
intention to become such under the naturalization laws.

43 U.S.C. section 321 restricts to U.S. citizens, or those
persons who have declared their intention to become such under the
naturalization laws, the right to enter and subsequently acquire
public desert lands in the western United States by irrigating those
lands.

43 U.S.C. section 329 restricts to U.S. citizens the right to
acquire public lands in the western United States under desert-land
laws.

*43 U.S.C. section 364c limits membership on advisory committees
to the Board on Geographic Names to U.S. citizens.

43 U.S.C. section 375 allows certain excess public lands
improved by federal reclamation projects to be auctioned and sold to
U.S. citizens.

43 U.S.C. section 398 requires that all U.S. citizens be given
an equal opportunity to subscribe to interest-bearing certificates of
indebtedness issued to finance completion of certain Government
reclamation projects begun before June 26, 1910.

43 U.S.C. section 682c limits the lease or sale of small tracts

- 67 -

of public land in Alaska to persons who are U.S. citizens or who have
filed declarations of intention to become such under the
naturalization laws. [2451

43 U.S.C. section 687a allows U.S. citizens to purchase certain
public lands in Alaska.

43 U.S.C. 687c authorizes the Secretary of the Interior to lease
public lands in Alaska to U.S. citizens for fur farming.

43 U.S.C. section 897 requires the Secretary of the Interior to
issue patents to U.S. citizens, or to persons who have declared their
intention to become U.S. citizens, for land purchased from a railroad
out of lands erroneously certified or patented to the railroad by the
United States.

43 U.S.C. section 898 allows U.S. citizens, or persons who have
declared their intention to become U.S. citizens, to purchase
unoccupied public lands thought erroneously to have been included in
a railroad land grant and in fact sold to those citizens or persons
by the railroad.

43 U.S.C. section 906 allows U.S. citizens or persons who have
declared their intention to become U.S. citizens who are bona fide
purchasers in posession of certain lands included in railroad land
grants but subsequently returned to the United States to purchase
those lands from the United States.

43 U.S.C. section 942-6 allows the Secretary of the Interior to
grant t'o U.S. citizens rights-of-way over certain public lands in
Alaska for the construction of wagon roads or tramways.

43 U.S.C. section 956 allows the Secretary of the Interior to
permit the use of rights-of-way through certain public lands to U.S.
citizens for canals, reservoirs, and mining and timbering roads.

43 U.S.C. section 957 allows the Secretary of the Interior to
permit the use of rights-of-way through certain public lands to U.S.
citizens for purposes of generating, manufacturing, or distributing
electric power.

43 U.S.C. section 959 allows the Secretary of the Interior to
permit the use of rights-of-way through certain public lands to U.S.
citizens for various purposes.

43 U.S.C. section 961 allows the grant of easements across
certain public lands to I citizens for electric power and
communications facilities.

68 -

43 U.S.C. section 966 allows grant of a right-of-way for a
petroleum products pipeline through public lands in Arkansas to U.S.
citizens.
(2461
43 U.S.C. section 967 reiterates the U.S. citizenship
requirement for applicants for an Arkansas pipeline right-of-way.
See section 966, above.

43 U.S.C. section 992 allows the Secretary of the Interior to
sell to U.S. citizens iT-P-Ossession prior to September 21, 1922,
certain public lands in Arkansas previously designated erroneously as
water-covered.

43 U.S.C. section 993 contains provisions similar to section
992, above, but with respect to lands in Louisiana.

43 U.S.C. section 994 contains provisions similar to section
992, above, but with respect to lands in Wisconsin.

43 U.S.C. section 1062 requires a U.S. attorney, on affidavit of
a U.S. citizen that public lands are being enclosed without title, to
bring suit to remove the enclosure.

*43 U.S.C. section 1356, added by section 208 of Public Law
95-372J. the Outer Continental Shelf Lands Act Amendments of 1978,
enacted September 18, 1978, requires that vessels and rigs used for
exploration, development, and recovery of oil and gas on the outer
continental shelf of the United States be crewed by U.S. citizens or
aliens lawfully admitted for permanent residence in the United States
unless no such persons are qualified and available.

43 U.S.C. section 1425 limits individuals qualified to purchase
certain public lands to U.S. citizens or persons who have declared
their intention to become U.S. citizens.

43 U.S.C. section 1602 (b) requires that Alaskan natives, for
purposes of Alaskan native claims settlement, be U.S. citizens.

43 U.S.C. section 1717 provides that no public land may be sold,
exchanged, or donated to any person who is not a U.S. citizen.

*43 U.S.C. section 1841, added by section 401 of Public Law
95-372, above, requires commercial fishermen to be U.S. citizens in
order to obtain compensation from the Fishermen's Contingency Fund
for damages to or loss of fishing gear and resulting economic losses
attributable to oil and gas exploration, development, and production
on the outer continental shelf of the United States.

- 69 -

TITLE 44. PUBLIC PRINTING AND DOCUMENTS.

44 U.S.C. section 2504 allows the National Historical [2471
Publications and Records Commission to cooperate with and encourage
other entities in collecting, preserving, editing, and publishing the
papers of outstanding U.S. citizens.

TITLE 45. RAILROADS.

45 U.S.C. section 231 (d)(3) states, for purposes of determining
coverage under the railroad retirement laws, that an individual not a
citizen or resident of the United States is not deemed in the service
of an employer when rendering service outside the United States to an
employer who is required under the laws of that place to employ, in
whole or in part, citizens or residents thereof. Subsection (h)(6)
excludes from the definition of compensation certain remuneration
received by non-resident aliens temporarily present in the United
States.

45 U.S.C. section 351 incorporates definitions similar to those
in section 231, above, for purposes of determining coverage under the
railroad unemployment insurance laws.

*45 U.S.C. section 543 (a)(1) requires that directors of the
National Railroad Passenger Corporation be U.S. citizens. Subsection
(d) requires officers of the corporation to be U.S. citizens.

TITLE 46. SHIPPING.

46 U.S.C. section 11 restricts issuance of U.S. certificates of
registry to vessels wholly owned by U.S. citizens. This section is
repealed effective July 1, 1982. Presidential Proclamation 4726,
dated February 21, 1980, suspends until termination of the
trusteeship application of this requirement for foreign-built fishing
vessels owned by citizens of the Northern Mariana Islands or owned by
or in the custody of the Northern Mariana Islands,Government.

46 U.S.C. section 12 allows U.S. consular officers to issue
provisional certificates of registry to vessels abroad purchased by
U.S. citizens. This section is repealed effective July 1, 1982.

46 U.S.C. section 13 allows foreign-built vessels owned by U.S.
citizens on Februa@y 1, 1920, or by the United States on
June 5, 1920, and sold to U.S. citizens to engage in coastwise trade
so long as they continue to be owned by U.S. citizens.

46 U.S.C. section 14 allows vessels wrecked on U.S. coasts to be

- 70 -

registered if purchased and given substantial repairs in a U.S.
shipyard by U.S. citizens.
[2481 46 U.S.C. section 22 requires the master of a vessel, if present
in the district of registry at the time of registry, to appear at the.
registry and attest to his U.S. citizenship. This section is
repealed effective July 1, 1982.

46 U.S.C. section 35 permits a U.S. vessel sold or transferred
outside the United States in whole or in part to a U.S. citizen to be
documented anew outside the United States. This section is repealed
effective July 1, 1982.

46 U.S.C. section 61 forbids issuance of documentation
certifying any vessel to be a U.S. vessel if it is not either
registered as a U.S. vessel or wholly owned by U.S. citizens. This
section is repealed effective July 1, 1982.

46 U.S.C. section 65b, added by section 104 of Public Law No.
96-594, enacted December 24,, 1980, requires that a vessel, to be
eligible for documentation, be owned by a U.S. citizen (or citizens).
This section becomes effective on July 1, 1982. Presidential
Proclamation 4726, dated February 21, 1980, suspends until
termination of the trusteeship application of U.S. vessel
documentation laws for foreign-built fishing vessels owned by
citizens of the Northern Mariana Islands or owned by or in the
custody of the Government of the Northern Mariana Islands.

46 U.S.C. section 98 requires vessels belonging to U.S. citizens
to carry, for reasonable compensation, monies and securities of the
Government.

*46 U.S.C. section 121 imposes a tonnage tax on any vessel
entering the United States-from a foreign port if any officer of the
vessel is not a U.S. citizen; exempts from another tonnage duty
unregistered vessels owned by U.S. citizens if the vessel is
registered before it leaves port.

46 U.S.C. section 122 exempts coasting and fishing vessels
belong to U.S. citizens from tonnage duties.

46'U.S.C. section 128 exempts from the "light money" tonnage
duties 1-m-posed on foreign-registered vessels those vessels owned by
U.S. citizens that before leaving port become registered as U.S.
vessels.

46 U.S.C. section 129 exempts from the "light money" tonnage
duties documented but unregistered vessels owned by U.S. citizens.

- 71 -

46 U.S.C. section 141 allows the President to proclaim that
"foreign discriminating duties of tonnage" are suspended, in whole or
in part, for vessels of a foreign country according similar treatment [2491
to vessels owned by U.S. citizens.

46 U.S.C. section 144 allows the President to suspend the right
of free passage through the St. Marys Falls Canal for vessels owned
by citizens of a foreign government that by imposition of tolls or
otherwise unduly burdens the passage of U.S. citizens in specified
parts of the St. Lawrence and Great Lakes waterways.

46 U.S.C. section 146 exempts from a discriminating ad valorem
duty on goods imported in vessels not vessels of the U.S. goods
imported in vessels owned by U.S. citizens if the -vessel before
leaving port becomes registered as a U.S. vessel.

46 U.S.C. section 170 (13) allows any collector of customs, on
the sworn information of any "reputable" U.S. citizen, to detain
vessels violating the laws or regulations regarding the carriage of
explosives or dangerous substances.

*46 U.S.C. section 221-limits vessels enjoying the benefits and
privileges of a vessel of the United States to those owned by U.S.
citizens or corporations, and requires that the master and all
officers of such vessels be U.S. citizens.

46 U.S.C. section 236 allows the President to suspend the
requirement that all watc@F officers of U.S. vessels be U.S. citizens
if he sees such suspension as meeting the needs of foreign commerce.

*46 U.S.C. section 242 requires that registered staff
officers--pursers, surgeons, and professional nurses--in the United
States merchant marine be U.S. citizens.

46 U.S.C. section 316 (a) prohibits vessels not wholly owned by
U.S. citizens from towing vessels, other than vessels of foreign
registry or vessels in distress, from point to point within the
United States.

*46 U.S.C. section 325 provides for the forfeiture of any
licensed vessel on its transfer, in whole or in part, to a person
who, at the time of transfer is not a U.S. citizen and resident.

46 U.S.C. section 332 exempts from licensing fees canal boats
and barges, built in the United States and owned by U.S. citizens,
not carrying passengers and not engaged in foreign commerce. This
section is repealed effective July 1, 1982.

- 72

46 U.S.C. section 354 requires the master of a vessel belonging
[2501 to U.S. citizens to deposit his register on arrival at a foreign port
with any U.S. consul there, to be returned on his departure after
payment of consular fees and showing compliance with the laws
relating to discharge of seamen in a foreign country.

46 U.S.C. section 666 requires every vessel belonging to a U.S.
citizen and engaged in foreign commerce or trade between the U.S.
Atlantic and Pacific Coasts to carry a cheat of medicines.

*46 U.S.C. section 672a requires, after June 25, 1936, all
licensed officers and pilots and 75% of the crew of every U.S. vessel
to be U.S. citizens.

46 U.S.C. section 713 provides that any person commanding a
vessel belonging to a U.T_ citizen shall be deemed the master
thereof.

46 U.S.C. section 802 provides that, to be a U.S. citizen for
purposes of the Shipping Act, a corporation must be controlled and
directed by a majority of persons who are U.S. citizens.

46 U.S.C. section 808 allows registry, enrollment, and licensing
of any vessel purchased, chartered, or leased from the Secretary of
Commerce by a U.S. citizen; permits such vessels, even if
foreign-built, to engage in coastwise trade; restricts the subsequent
transfer of such vessels to persons who are not U.S. citizens; and
provides for forfeiture of vessels transferred in violation of those
restrictions.

46 U.S.C. section 813 authorizes the Federal Maritime Commission
to investigate certain u@`Tair or discriminatory shipping practices by
persons not U.S. citizens.

*46 U.S.C. section 834 authorizes the Secretary of the Treasury
to deny port clearance to any vessel able but refusing to receive
cargo tendered by a U.S. citizen for shipment to a subsequent port of
call.

46 U.S.C. section 835 restricts the transfer to foreign registry
and sale or charter to foreign citizens of vessels owned by U.S.
citizens during war or national emergency.

46 U.S.C. section 861 declares the policy of the United States
to have a merchant marine owned and operated privately by U.S.
citizens.

46 U.S.C. section 864 authorizes the Secretary of Commerce to

sell certain,World War I merchant vessels owned by the United States
A
to U.S. ci,tizens.
[2511
46'U.S.C. section 865 allows sale of the vessels to which
referbnce is made in section 864, above, to aliens if they cannot be
sol:@'-to U.S. citizens.

46 U.S.C. section 866 allows sale or charter of the vessels to
which reference is made in section 864, above, to U.S. citizens who
agree to establish and maintain certain regular steamship lines.

46 U.S.C. section 876 (4) prohibits the Secretary of Commerce
from establishing any rule or regulation that favors vessels owned by
the United States over U.S. vessels owned by U.S. citizens.

46 U.S.C. section 883 forbids the use of vessels in the
coastwise trade other than those built and documented in the United
States and owned by U.S. citizens. Section 503(b) of the Covenant
provides that the coastwise laws of the United States will not apply
to the Northern Mariana Islands, except to activities of the U.S.
Government and its contractors in the Northern Mariana Islands,
unless the U.S. Congress after termination of the trusteeship enacts
legislation to make them applicable.

46 U.S.C. section 883-1 defines U.S. citizen for purposes of the
laws restricting coastwise trade and fishing to vessels owned by U.S.
citizens to include certain corporations controlled and the majority
interest of which are owned by U.S. citizens. See comment on section
883, above.

46 U.S.C. section 922 (a) requires that mortgage of a U.S.
vessel be only to a U.S. citizen or certain governmental entities as
mortagagee.

46 U.S.C. section 961 prohibits the assignment of rights under a
mortgage of a U.S. vessel to any person not a U.S. citizen; transfer
of any evidence of indebtedness secured by such a mortgage to any
person not a U.S. citizen; or sale by court order of any U.S. vessel
to any person not a U.S. citizen.

*46 U.S.C. section 1132 (a) requires that all officers of
vessels documented under U.S. laws be U.S. citizens and that all crew
members of any cargo vessel that has received a U.S. construction or
operating subsidy be U.S. citizens. Subsections (b) and (c) require
any passenger vessel that has received a U.S. construction or
operating subsidy to have a crew 90% of whom are U.S. citizens with
the remaining 10% being stewards admitted for permanent residence or
who have declared their intent to become U.S. citizens. Section 3(b)

- 74 -

of Public Law 96-453 amends section 905 of the Merchant Marine Act,
1936, 46 U.S.C. section 1244, to add a definition of the United
[2521 States that includes the Northern Mariana Islands. This definition
applies throughout the Act, sections 1101-1295g of Title 46.
"Citizen of the United States" also is defined, by section 1244(c),
but in a way that does not necessarily preclude a reading that
includes citizens of the Northern Mariana Islands within the
definition. But see comment under section 1274, below, treating
citizens of the Northern Mariana Islands as distinct from U.S.
citizens for purposes of the Act.

*46 U.S.C. section 1151 allows U.S. citizens to receive certain
ship-construction subsidies. See comment under section 1132, above.

46 U.S.C. section 1152 (g) allows the Secretary of Commerce to
sell to U.S. citizens certain vessels previously acquired by him.
See comment under section 1132, above.

46 U.S.C. section 1158 protects 'vessels owned by U.S. citizens
and registered under U.S. law from competition by certain obsolete
vessels sold by the Secretary of Commerce to other persons. See
comment under section 1132, above.

*46 U.S.C. section 1159 allows U.S. citizens to receive certain
subsidies and loans for the construction of new vessels. See comment
under section 1132, above.

*46 U.S.C. section 1160 allows U.S. citizens to turn over
certain tankers and obsolete vessels to the Secretary of Commerce in
return for cash payments to be made to a shipyard for construction of
a replacement vessel. See comment under section 1132, above.

46 U.S.C. section 1161 allows U.S. citizens to set aside certain
earnings, indemnities, and proceeds received, in connection with
operation of a vessel, toward the acquisition, construction,
reconstruction, or reconditioning of a vessel, with the sums so set
aside to receive favorable tax treatment. See comment under section
1132, above.

*46 U.S.C. section 1171 allows U.S. citizens to receive
operating subsidies for certain vessels used in an liessential service
of the foreign commerce" of the United States or in off-season
cruises. See comment under section 1132, above.

46 U.S.C. section 1175 (c) protects existing essential service
routes served by U.S. citizens from competition by an additional
vessel receiving an operating subsidy unless the Secretary, after

- 75 -

notice and hearing to all parties, determines existing service to be
inadequate. See comment under section 1132, above.
(2531
46 U.S.C. section 1177 allows U.S. citizens owning or leasing
eligible vessels to enter into an agreement with the Secretary of
Commerce for establishment of a capital construction fund for the
purpose of providing replacement, reconstructed, or additional
vessels, said fund to receive favorable tax treatment. See comment
under section 1132, above.

46 U.S.C. section 1177-1 defines "eligible vessel" for purposes
of section 1177, above, to include certain small fishing vessels
owned by U.S. citizens. See comment under section 1132, above.

46 U.S.C. section 1181 (c) prohibits transfer to foreign
registry of vessels covered by an operating-differential subsidy
contract which the United States has defaulted on or cancelled
without just cause if there is outstanding indebtedness to any U.S.
citizen secured by the vessel. See comment under section 1132,
above.

46 U.S.C. section 1195 allows employment of certain U.S.
Department of Commerce vessels on trade routes not adequately served
by existing steamship lines owned or operated by U.S. citizens. See
comment under section 1132, above.

*46 U.S.C. section 1213 (a) requires U.S. citizens to be given
preference for construction-differential subsidy, operating
differential subsidy, and related contracts. See comment under
section 1132, above.

46 U.S.C. section 1227 protects U.S. citizens operating common
carriers on established trade routes to or from U.S. ports from
unfair or discriminatory practices by contractors receiving
operating-differential subsidies or charterers of certain vessels
acquired by the Department of Commerce, in agreement or concert with
another carrier. See comment under section 1132, above.

46 U.S.C. section 1242 allows the Secretary of Commerce, in
times of national emergency or to secure the national defense, to
requisition, purchase, or charter vessels owned by U.S. citizens.
See comment under section 1132, above.

*46 U.S.C. section 1273 allows the Secretary of Commerce to
guarantee certain ship mortgage payments for U.S. citizens. See
comment under section 1132, above.

*46 U.S.C. section 1274 requires that the obligation secured by

- 76 -

the mortgage allowed by section 1273, above, be related to the
construction, reconstruction, or reconditioning of a vessel owned by
[2541 U.S. citizens. See comment under section 1132, above. Paragraph
(a)(2), as amended by section 220(3) of Public Law 96-561, enacted
December 22, 1980, allows guarantee of mortgage payments to finance
the construction, reconstruction, reconditioning, or purchase of
research vessels or commercial fishing vessels by citizens of the
Northern Mariana Islands.

*46 U.S.C. section 1279c, (a), added by section 203(a) of Public
Law 96-320, the Ocean Thermal Energy Conversion Act, enacted
August 3, 1980, authorizes loan guarantees for construction of
commercial demonstration ocean thermal energy conversion facilities
owned by U.S. citizens. See comment under section 9101 of Title 42,
above.

*46 U.S.C. section 1281 requires that "American vessels," for
purposes of determining eligibility for war risk insurance, be owned
by U.S. citizens. See comment under section 1132, above.

*46 U.S.C. section 1283 permits war risk insurance coverage to
extend to., among other interests, foreign-flag vessels owned by U..S.
citizens, and cargos for which U.S. citizens bear the risk of loss.
See comment under section 1132, above.

*46 U.S.C. section 1295, added by section 1301 of Public Law
96-453, the Maritime Education and Training Act of 1980, enacted
October 15, 1980, authorizes the Secretary of Commerce to provide
maritime education and training to U.S. citizens. See comment under
section 1132, above.

*46 U.S.C. section 1295b (b)(1)(A), added by section
1303(b)(1)(A) of Public Law 96-453, above, requires that nominees for
appointment to the U.S. Merchant Marine Academy be U.S. citizens or
nationals. The subsection also authorizes, however, nomination of
residents of the Northern Mariana Islands by the Governor of the
Northern Mariana Islands. Subparagraph (b)(3)(F) of this section
requires U.S. citizens selected for appointment to apply for
midshipman status in the U.S. Naval Reserve before being appointed.
Subsection (c) authorizes the Secretary of the Navy to appoint U.S.
citizens appointed as cadets at the U.S. Merchant Marine Academy as
midshipmen in the U.S. Naval Reserve. Paragraph (e)(1) requires
appointees who are U.S. citizens to agree to complete the course of
instruction and to fulfill certain obligations after graduation.
Subsection (g) authorizes conferral of a bachelor of science degree
on U.S. citizens who meet certain conditions and pass an examination
for a merchant marine officer's license. See comment under section
1132, above.

- 77
*46 U.S.C. section 1295c (f)(2), added by section 1304(f)(2) of f2551
Public Law 96-453, above, requires a State maritime academy, to
receive certain federal subsidies, to admit a determined number of
U.S. citizens from States and territories other than those supporting
the academy. Paragraph (g)(1) authorizes incentive payments to U.S.
citizens enrolled in State maritime academies. Subsection (h)
authorizes appointment of U.S. citizens attending State maritime
academies as midshipmen in the U.S. Naval Reserve. See comment under
section 1132, above.

*46 U.S.C. section 1295e (a), added by section 1306(a) of Public
Law 96-453, above, requires that members of the U.S. Maritime Service
be U.S. citizens. See comment under section 1132, above.

46 U.S.C. section 1354 penalizes U.S. citizens engaging in the
slave trade.

46 U.S.C. section 1356 prohibits any U.S. citizen or resident
from owning an interest in any vessel used in the slave trade and
provides for forfeiture of any such interest.

TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS.

47 U.S.C. section 17 prohibits ownership, operation, or control
of telegraph or cable lines in Alaska by persons not U.S. citizens.

*47 U.S.C. section 154 (b) requires members of the Federal
Communications Commission to be U.S. citiz 'ens. The Acting Deputy
General Counsel of the Commission, in a letter to this Commission
dated July 2, 1981, has advised that allowing citizens of the
Northern Mariana Islands to be treated as U.S. citizens for purposes
of this requirement presents a policy question on which the Office of
the General Counsel at the Federal Communications would not make any
recommendation.

*47 U.S.C. section 222 (d) prohibits the Federal Communications
Commission from approving the,merger of telegraph carriers if more
than one-fifth of the stock of the resulting carrier will be owned by
aliens.

*47 U.S.C. section 303 (1)(1) limits the issuance of radio
station operators' licenses to U.S. citizens or nationals or to
citizens of the Trust Territory of the Pacific Islands "presenting
valid identity certificates issued by the High Commissioner of such
Territory." On May 1, 1981, Commissioner Edward DLG. Pangelinan, in
his capacity as Representative to the United States of the
Commonwealth of the Northern Mariana Islands, formally requested
President Reagan to exercise his authority under section 1004(a) of

- 78

the Covenant to suspend this citizenship requirement as it applies to
citizens of the Northern Mariana Islands until termination of the
[2561 trusteeship.

*47 U.S.C. section 310 W requires that grantees or holders of
broadcast, common-carrier, or aeronautical radio station licenses be
U.S. citizens. The Acting General Counsel of the Federal
Communications Commission, in a letter to this Commission dated
March 16, 1981, has advised that the Federal Communications
Commission would have no objection to amendment of this section to
allow citizens of the Northern Mariana Islands to hold such licenses
before termination of the trusteeship. on May 1, 1981
Commissioner Edward DLG. Pangelinan, in his capacity as
Representative to the United States of the Commonwealth of the
Northern Mariana Islands, formally requested President Reagan to
exercise his authority under section 1004(a) of the Covenant to
suspend this citizenship requirement as it applies to citizens of the
Northern Mariana Islands until termination of the trusteeship.

47 U.S.C. section 327 allows U.S. citizens publishing newspapers
in foreign countries to use Navy radio stations for transmission of
press messages at commercial rates if no commercial service is
available.

*47 U.S.C. section 396 (c)(2) requires that members of the board
of directors of the Corporation for Public Broadcasting be U.S.
citizens.

*47 U.S.C. section 733 (a) requires that members of the board of
directors of the Communications Satellite Corporation be U.S.
citizens. Subsection W requires that officers of the corporation
be U.S. citizens.

*47 U.S.C. section 734 W limits alien ownership of stock in
the Communications Satellite Corporation. Amendment of section 310
of this title to allow citizens of the Northern Mariana Islands to
hold radio station licenses (see above) would cause citizens of the
Northern Mariana Islands to be treated as U.S. citizens for purposes
of this section.

TITLE 48. TERRITORIES AND INSULAR POSSESSIONS.

48 U.S.C. section 733 includes in the body politic of Puerto
Rico such U.S. citizens as may reside there.

48 U.S.C. section 733a provides that all U.S. citizens who
reside in PuerFo--R'ivc-ofor one year shall be citizens of Puerto Rico.

- 79 -

*48 U.S.C. section 737 protects the rights, privileges, and
immuni7ties of U.S. citizens in Puerto Rico to the same extent as if
Puerto Rico were a State. [2571
48 U.S.C. section 874 requires all officials of Puerto Rico (or
of the Puerto Rican judici ry?) to be U.S. citizens.

48 U.S.C. section 892 requires the Resident Commissioner of
Puerto Rico to be a U.S. citizen.

48 U.S.C. section 1392 extends the jurisdiction of Virgin
Islands courts to all cases in which a U.S. citizen is a party.

48 U.S.C. section 1405p limits voting in Virgin Island elections
to persons who are U.S. citizens. See also 48 U.S.C. section
1542(a), below.

48 U.S.C. section 1406a gives the District Court of the Virgin
Islands jurisdiction over crimes on the high seas on any vessel
belonging in whole or in part to a U.S. citizen.

48 U.S.C. section 1411 allows the President to consider
unclaimed islands containing guano deposits if discovered and
peacefully possessed by U.S. citizens to be considered as part of the
United States.

43 U.S.C. section 1414 limits to U.S. citizens the right of
occupying and exploi@ing the guano islands to which reference is made
in section 1411, above.

48 U.S.C. section 1415 limits to U.S. citizens the right to
purchase or use guano from the guano islands to which reference is
made in section 1411, above.

48 U.S.C. section 1422 requires that the Governor and Lieutenant
Governor of Guam to have been U.S. citizens for at least five years
immediately preceding election.

48 U.S.C. section 1423f requires that members of the Guam
legislature be U.S. citizens.

48 U.S.C. section 1459 provides that only U.S. citizens may vote
:)r hold ;T-fice in any organized territory of the United States; and
)rotects U.S. citizens from denial of the rights to vote or hold
)ffice on account of race, color, or previous condition of servitude.

48 U.S.C. section 1501 limits to U.S. citizens and to aliens who

- 80 -

have declared their intention to become 'U.S. citizens the rights to
acquire and own land in the territories of the United States.
[2581 148 U.S.C. section 1503 allows aliens who have inherited or
foreclosed on land to hold title for up to ten years notwithstanding
the prohibition of section 1501, above.

48 U.S.C. section 1508 applies to the District of Columbia the
restrictions on alien ownership of land applicable in the
territories. See sections 1501 and 1503, above.

48 U.S.C. section 1509 limits to U.S. citizens and to aliens who
have declared their intention to become U.S. citizens the right to
homestead public lands in Hawaii and to U.S. citizens the right to
own such lands or hold or lease them more than five years after
entry.

48 U.S.C. section 1510 prohibits the transfer of public lands in
Hawaii to aliens, with specified exceptions.

48 U.S.C. section 1542 (a) limits to U.S. citizens the right to
vote in the Virgin islands. See also 48 U.S.C. section 1405p, above.

48 U.S.C. section 1543 requires all officials of the government
of the Virgin Islands to be U.S. citizens.

48 U.S.C. section 1572 (b) requires all members of the Virgin
.Islands legislature to be U.S. citizens.

48 U.S.C. section 1591 requires the Governor and Lieutenant
Governor of the Virigin Islands to have been U.S. citizens for at
least five years immediately preceding election.

48 U.S.C. section 1713 requires the nonvoting Delegates from
Guam and the Virgin Islands to the U.S. House of Representatives to
have been U.S. citizens for at least seven years prior to their
election.

48 U.S.C. section 1733 (b), added by section 3(b) of Public Law
95-556, requires the nonvoting Delegate from American Samoa to the
U.S. House of Representatives to have been a U.S. citizen for at
least seven years prior to election.

TITLE 49. TRANSPORTATION.

*49 U.S.C. section 1301 (3) limits "air carriers," for purposes
of the Federal aviation program, to U.S. citizens. "United States"
is defined by subsection (38) to include "the several States . . .

81 -

and the several Territories and possessions." under section
502(a)(2) of the Covenant, that definition, to the extent that it (2591
determines the applicability of the Federal aviation program, would
make the program applicable to the Northern Mariana Islands. The
rights, privileges, immunities and liabilities and duties of "air
carriers" are set out throughout Chapter 20, sections 1301-1542 of
Title 49, dealing with the Federal aviation program.

*49 U.S.C. section 1304 extends to all U.S. citizens a public
right to freedom of transit through navigable U.S. airspace. See
comment under section 1301, above.

*49 U.S.C. section 1321 (b) limits membership on the Civil
Aeronautics Board to U.S. citizens. See comment under section 1301,
above. The Board will be terminated and this section@will become
ineffective on January 1, 1985.

*49 U.S.C. section 1341 (b) requires the Administrator of the
Federal Aviation Administration to be a U.S. citizen. See comment
under section 1301, above.

'@,49 U.S.C. section 1342 (b) requires the Deputy Administrator of
the Federal Aviation Administration to be a U.S. citizen. See
comment under section 1301, above.

*49 U.S.C. section 1371 (d)(4), as amended by section 9 of
Public Law 95-504, the Airline Deregulation Act of 1978, enacted
October 24, 1978, allows U.S. citizens operating intrastate air
common carriers to establish joint services and fares with other air
carriers and foreign air carriers. See comment under section 1301,
above.

*49 U.S.C. section 1388 (Supp. I) allows the Civil Aeronautics
Board to grant to certain U.S. citizens certificates of public
convenience and necessity for all-cargo air services. See comment
under section 1301, above.

*49 U.S.C. section 1401 limits aircraft eligible for U.S.
regisCr-ation to those owned by U.S. citizens, by aliens lawfully
admitted for permanent residence, and by certain foreign corporations
organized and doing business in the United States. See comment under
section 1301, above.

*49 U.S.C. section 1422 allows the Secretary of Transportation
to prohibit or restrict the issuance of airman certificates to
aliens.

*49 U.S.C. section 1533 allows the Secretary of Transportation

to provide aviation insurance, if such insurance is not commercially
[2601 available on reasonable terms and conditions, on certain cargo owned
by or the risk of loss of which is on U.S. citizens as well as
against other risks. See comment under section 1301, above.

TITLE 50. WAR AND NATIONAL DEFENSE.

50 U.S.C. section 855 'makes subject to deportation aliens
convicted of violating certain internal security laws.

*50 U.S.C. section 1801 (i), added by section 101(i) of Public
Law 95-511, the Foreign Intelligence Surveillance Act of 1978,
enacted October 25, 1978, defines "United States person" for purposes
of protections afforded by the Act as including U.S. citizens and
aliens lawfully admitted for permanent residence. "United States" is
defined by subsection (j) to include, when used in geographical
sense, the Trust Territory of the Pacific Islands.

TITLE 50--APPENDIX

*50 U.S.C. App._section 2 defines "enemy" and "ally of enemy"
for purposes of the law forbidding trade with either to exclude U.S.
citizens not residing in the territory of a nation with which the
United States is at war. The same section defines "United States,, to
apparently only in a geographical sense, to include "all land and
water, continental or insular, in any way within the jurisdiction of
the United States" including areas occupied by U.S. military or naval
forces. This definition probably does not expand similarly the
definition of "United States" for purposes of determining who is a
U.S. citizen, since Congress no doubt did not intend the populace of
enemy territory occupied by the U.S. armed forces to be treated as
U.S. citizens.

*50 U.S.C. App. section 8 (b) gives any U.S. citizen the right
to abrogate any contract entered into with an enemy or ally of an
enemy prior to beginning of a war or within thirty days after the
beginning of a war.

50 U.S.C. App. section 9 (b) allows the return of certain seized
World War I alien property to certain former U.S. citizens married to
enemies.

*50 U.S.C. App.__section 10 allows U.S. citizens, on approval of
the Pi-esident, to pay taxes or fees required by, or file applications
with, an enemy, or an ally of an enemy in connection with patents,
copyrights, and trademarks; and allows the President to grant to any
U.S. citizen a license to use patents, copyrights, or trademarks
owned by an enemy or an ally of an enemy.

- 83 -

*50 U.S.C. App. section 12 limits sale of alien property to
purchasers who are U.S. citizens, unless the President determines
otherwise; and prohibits resale to a person not a U.S. citizen. f2611

50 U.S.C. App. section 21 protects naturalized U.S. citizens
presumed to have been expatriated from loss of property under the
alien property laws upon a showing of loyalty.

50 U.S.C. AEp. section 32 allows return of alien property to
certain enemy corporations owned, before vesting of the property and
continuously thereafter, by U.S. citizens to U.S. citizens resident
in enemy territory and to U.S. citizens who lost, through marriage to
a foreigner, but later reacquired U.S. citizenship. The section also
allows U.S. citizens or residents to institute attachment proceedings
against such property.

50 U.S.C. App. section 34 limits to U.S. citizens or residents
and certain other persons the payment of debts out of property taken
by the Alien Property Custodian from the debtor.

50 U.S.C. App. section 453 requires all male citizens and
residents of the United States except certain nonimmigrant aliens to
register for the draft. (Section 466 of Title 50 Appendix defines
"United States" "when used in a general sense" to include the several
States and Guam (among other areas). This geographical definition
would not appear to enlarge the definition of U.S. citizens in
section 453 to include citizens of the Northern Mariana Islands.)

50 U.S.C. App. section 455 prohibi ts local selective service
boards from ordering induction into the armed forces of aliens who
have been in the United States less than one year.

*50 U.S.C. App. section 460 (b)(3) forbids denial to any U.S.
citizen of membership on a selective service local board or appeal
board on account of sex; and requires members of local and appeal
boards to be U.S. citizens.

*50 U.S.C. App. section 514.extends to U.S. citizens serving in
the armed forces of a U.S. wartime ally the benefits of the Soldiers'
and Sailors' Relief Act, suspending civil legal proceedings against
certain persons in the U.S. armed forces.

*50 U.S.C. App. section 572 extends to U.S. citizens serving in
the armed forces of a U.S. wartime ally certain rights and exemptions
related to their tax liabilities.

50 U.S.C. App. section 1737 (a) limits to U.S. citizens the

84 -

right to purchase from the United States certain World War II surplus
vessels.
(2621
50 U.S.C. App. section 1738 (a) limits to U.S. citizens the
right to charter from the United States certain World War II surplus
vessels.

50 U.S.C. App. section 1739 allows sale by the United States to
aliens of certain World War II surplus vessels if no U.S. citizen
wants to buy the vessel on the same terms and conditions.

50 U.S.C. App. se ction 1740 requires that U.S. citizens be
preferred over non-citizens in offering certain U.S. World War II
surplus vessels for sale or charter.

50 U.S.C. App. section 1741 permits the exchange of vessels
owned by U.S. citizens for a credit against purchase from the United
States of certain World War II surplus vessels.

50 U.S.C. App. section 1745 (c) permits certain World War II
surplus vessels sold or chartered to U.S. citizens to engage in
coastwise trade despite foreign registry during the Second World War.

*50 U.S.C. App. section 2004 allows benefits to certain U.S.
citizens captured by the Japanese Government during World War II or
by hostile forces during the Korean War or the Vietnam conflict.
(Quaere: Are any citizens of the Northern Mariana Islands possibly
eligible for Vietnam benefits under this Act?]

50 U.S.C. App. section 2014 allows payment of prisoner-of-war
benefits to U.S. citizens who served in allied armed forces during
World War II.

50 U.S.C. App. section 2015 limits to U.S. citizens certain
benefits for merchant seamen imprisoned or interned during World War
Ii.

50 U.S.C. App. section 2017 (c) defines "nationals of the United
States" eligible for payment of certain World War II losses to
include U.S. citizens.

50 U.S.C. App. section 2017c allows U.S. citizens who lost
citizenship through marriage to a foreign citizen but who
subsequently regained U.S. citizenship to be eligible for payment of
certain World War II losses.

- 85 -

50 U.S.C. App. section 2316 allows U.S. citizens to study in
India with funds paid by India for emergency food aid from the United
States. [2631

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5817

[2641

BORDERS:

The Applicability of Federal Law

Th Imports to and Exports from

The Northern Mariana Islands

-- A Survey

ERRATA

November 1983

Page 7: Delete the fourth line through the ninth line on the
page anU-Ebstitute the following:

customs territory of the United States duty@free if 70
percent or less of the value of the product (whether
manufactured, produced, or grown) derives from foreign [2651
materials. Public Law 98-67, S 214(a)(1)(A) (1983). See
Senate Report 94-433, The Covenant to Establish a
Commonwealth of the Northern Marl-ana Islands 81 (1975). If
more than 70 percent of the value of the product derives
from foreign materials, the product is subject to the usual
duties. For certain textile, apparel, canned tuna,
petroleum, and watch products, only 50 percent or less of
the value of the product may be derived from foreign
materials. Public Law 98-67, S 214(a)(1)(B).

Page 10: The section entitled "Imports by returning residents
of thi@ 'United States." should be revised to read as follows:

Imports by returning residents of the United States.
Item 813.31 of the RevisM Tariff Schedules of the Unit-;J
States allows returning residents of the United States to
import duty@free goods valued at not more than $400 or, if
arriving from the Virgin Islands, Guam, or American Samoa,
not more than $800 (of which no more than $400 shall be the
value of goods acquired elsewhere than in those insular
possessions). Section 603(c) of the Covenant provides that
imports from the Northern Mariana Islands into the customs
territory of the United States will receive the same
treatment as iq:)orts from Guam. Accordingly, returning
residents of the United States arriving frcm the Northern
Mariana Islands may inWrt duty-free goods valued at not
more than $800 (of which no more than $400 shall be the
value of goods acquired elsewhere than in the Virgin
Islands, Guam, American Samoa, or the Northern Mariana
Islands). Goods acquired in the Northern Mariana Islands
are also treated as goods acquired in Guam for returning
residents of the United States arriving from the Virgin
Islands, Guam, and American Samoa, that is, as goods from
insular possessions and not as goods from a foreign country
subject to a duty"free maximum value of $400.

P22e 10: The section entitled "Gifts" should be revised to read
as foll-lows:

Gifts. Section 1321 of title 19, U.S.C., authorizes
the Secretary of the Treasury to allow persons in the
United States to receive duty6-free gifts valued at not more
than $100 sent frcm persons in the Virgin Islands, Guam,
and American Samoa. Flor gifts from other areas outside the

customs territory of the United States, the maximum value
of such gifts is $50. Regulations implementing the
F2661 Secretary's authority are found in sections 10.152 and
10.153 of title 19, C.F.R. (1983).

Imports from the Northern Mariana Islands to the
customs territory of the United States are to receive the
same treatment as imports from Guam. Covenant 9 603(c) .
Accordingly, persons in the customs territory of the United
States may receive gifts valued at not more than $100 sent
from persons in the Northern Mariana Islands.

Page 31, line 1: Insert a period (.) after "United States".

11
Page 33, third line from bottom of page: "the" should be The

Page 48, fourth paragraph, line 12: "(1976." should be
"(1976).".

Page 48, fourth paragraph, line 19: Delete the quotation mark.

Page 69: Insert the following paragraphs immediately above the
headi7n-g'wE-N-FbRcEmENT OF THE IMPORT AND EXPORT LAWS . . .":

As part of the Caribbean Basin Economic Recovery Act
(CBERA) of 1983, Congress made clear that producers in the
insular possessions of the United States could seek the
imposition or modification of duties or quotas to protect
themselves from serious economic injury from foreign
competition. Public Law 98-67, S 214(f); House Report
98-266, at 23 (1983). The International Trade Comission
is also required by that legislation, in assessing whether
increased imports have caused injury to domestic industry,
to consider the effects of , the increased imports on
industries,in the insular possessions as Aell. Id.

The Northern Mariana Islands is not an insular
possession of the United States at this time, so producers
in the Northern Mariana Islands are not directly protected
by the CBERA provisions from serious injury due to import
competition. Further, the CBE.?A was enacted after
January 9, 1978, the effective date of section 502(a)(2) of
the Covenant. Since its provisions did not protect
producers on Guam on that date, section 502(a)(2) does not
operate to entitle producers in the Northern Mariana
Islands to seek relief from the competition of foreign
imports. See also House Report 98-266, at 22 (1983).

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

[2671

BORDERS:

The Applicability of Federal Law

To Inports to and Exports frcm

The Northern Mariana Islands

A Survey

OCTCBER 1983

Sumary Table of Contents

Page
[2681 Detailed table of contents . . . . . . . . . . . . . . . . . ii

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 1

IMPORT AND EXPORT LAWS OF THE UNITED STATES . . . . . . . . . 3

LAVE AFFECTING IMPORTS ONLY, OR IMPCRTS AND EXPORTS . . 3
Customs laws . . . . . . . . . . . . . . . . . . . 3
Laws regulating specific goods (or other
specific things) . . . . . . . . . . . . . . . . 15
General restrictions enforcing particular
statutes . . . . . . . . . . . . . . . 51

LAWS AFFECTING EXPORTS ONLY . . . . 62

TRADE ADJUSTMENT ASSISTANCE o . . o 68

ENFORCEMENT OF THE IMPORT AND EXPORT LAWS OF THE UNITED
STATES IN THE NORTHERN MARIANA ISLANDS . . . . . . . . 69

CONCLUSION . . . . . . . . . . o . . . . . . . 72

Detailed Table of Contents

Page
Summary table of contents . . . . . . . . . . . . . . . . . . i [2691

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 1

IMPORT AND EXPORT LAWS OF THE UNITED STATES . . . . . . . . 3

LAWS AFFECTING IMPORTS ONLY, OR IMPORTS
AND EXPORTS . . . . . . . . . . . . . . . . . . . . . 3
Customs laws . . . . . . . . . . . . . . . . . . . 3
The Revised Tarif f Schedules of
the United States . . . . . . . . . . . . 6
--tuna . . . . . . . . . . . . . . . . 7
--watches . . . . . . . . . . . . . . 8
Foreign trade 2Dnes . . . . . . . 8
Agricultural products . . . . . . 9
Countervailing duties . . . . . . . . . . . 9
vessel restrictions . . . . . . . . 9
Emergency supplies . . . . . . . . . 10
Imports by returning residents of the
United States . . . . . . . . . . . . . . 10
Gifts . . . . . . . . . . . . . . . . . . . 10
Trade fair imports . . . . . . . . . . . . 10
Automotive products fran Canada . . . . . . 11
Construction materials for
deepwater ports . . . . . . . . . . . . . 11
Tonnage duties and light money . . . . . . 11
Discriminating duties . . . . . . . . . . . 12
Criminal penalties and forfeitures . . . . . 12
--illegal entry of goods . . . . . . . 12
--compromise of claim by customs
officer . . . . . . . . . . . . . 15
--anuggling vessels . . . . . . . . . 15

Laws regulating specific goods (or other
specific things) . . . . . . . . . . . . . . . 15
Agricultural and textile products . . . . . 16
Agricultural iteps . . . . . . . . . . . . 16
--nursery stock . . . . . . . . . . . 16
--seeds . . . . . . . . . . . . . . . 17
--plant varieties . . . . . . . . . . 18
--honeybees . . . . . . . . . . . . . 18
--plant pests . . . . . . . . . . . . 19
--noxious weeds . . . . . . . . . . . 19
-animals affected by or
exposed to communicable
disease . . . . . . . . . . . . . 19
--biological products . . . . . . . . 22

Page

Alcoholic beverages, narcotics, and
tobacco . . . . ' * * * * * ' * * * * 22
-alcoholic @ev*erages . . . . . . . . 22
[270) --narcotics and dangerous drugs . . . 24
--tobacco . . . . . . . . . . . . . . 24
Art works and cultural property . . . . . . 25
Boats and boating equipment . . . . . . . . 25
Consumer products . . . . . . . . . . . . . 26
Energy products . . . . . . . . . . . . . . 26
-natural gas . . . . . . . . . . . . 26
--petroleum. products . . . . . . . . . 28
-nuclear energy materials and
equipment . . . . . . . . . . . . 28
Firearms, switchblades, and explosives. . . 29
--firearms . . . . . . . . . . . . . . 29
--switchblade knives . . . . . . . . . 30
--explosives . . . . . . . . . . . . . 30
Fisheries products . . . . . . . . . . . . . 30
--Northern Pacific halibut . . . . . . 30
--whale products . . . . . . . . . . . 30
--tuna from inter-American
waters . . . . . . . . . . . . . . 31
--North Pacific fisheries
products . . . . . . . . . . . . . 31
--fisheries conservation and
management . . . . . . . . . . . . 32
--fish caught from foreign-flag
vessels . * * * * . * - - - - 32
Floods, drugs, and cosmetics, and dentures . 33
-adulterated, misbranded, or
otherwise illegal products. . . . 33
--food and dairy products mislabelled
as to origin . . . . . . . . . . . 33
--perishable foods . . . . . . . . . . 33
--fruits and vegetables . . . . . . . 34
-rice . . . . . . . . . . . . . . . . 34
--wheat and wheat flour . . . . . . . 34
--sugar . . . . . . . . . . . . . . . 35
--tea . . . . . . . . . . . . . . . . 35
--poultry . . . . . . . . . . . . . . 35
--meat . . . . . . . . . . . . . . . . 35
--dairy products . . . . . . . . . . . 36
--eggs . . . . . . . . . . . . . . . . 36
--dentures . . . . . . . . . . . . . . 36
Furs. . . . * - ' * * * . . . . . . . . . 37
Ga-nblim,, devices and parap@ernalia. . . . . . 37
--ganbling devices . . . . . . . . . . 37
--lottery tickets . . . . . . . . . . 37

- iv -

Page

--wagering and bookmaking
paraphernalia . . . . . . . . . . 37
Hobby items . . . . . . . . . . . . . . . . 38 [2711
Mobile homes . . . . . . . . . . . . . . . . 38
Money, securities, gold, and silver . . . . 39
--money and negotiable
securities. . o . . o . o . . 39
-gold and silver . . o . . . . . . o 39
--counterfeit obligations and
securities . . . . . . . . o . . . 40
Motor vehicles . . . . . . . . . . . . . . . 40
-information disclosure . . . . . . . 40
--safety standards. . o . . o . . 41
--fuel economy standards . . . . . . . 41
--excise taxes . . . . . . . . . . . . 41
-air pollution control
standards . . . o . o . o o . 42
Obscene and hm-oral items . o . . . . . . . 42
Pesticides, chemicals, hazardous
substances, and biological products . . . 43
--pesticides. . . . . . . . . . . 43
--chEmicals . . . . . . . . . . 43
--hazardous Lu@sLnces. 43
--white phosphorus matches . . . . . . 44
--biological products 44
Publications . . . . . . . . . . . . . . . . 44
-copyrighted works ... . . . . . . . 44
--foreign political propaganda . . . . 45
Recreational fishing and archery equipment. 45
Television sets, radio transmitters, and
other electronic products . . . . . . . . 45
--electronic products . . . . . . . . 45
--television sets . . . . . . . . . . 46
--radio transmitters . . . . . . . . . 46
Te-xtiles . . . . . . . . . . . . . . . . . . 46
--wool products . * * * * * * * ' * * 47
--flammable fabrics . . . . . . . . . 47
War materials . . . . . . . . . . . . . . . 48
Wildlife . . . . . . . . . . ... . . . . . . 49
-bald and golden eagles . . . . . . . 49
--migratory birds . . . . . . . . . . 49
--irarine mammals . . . . . . . . . . . 50
--endangered species . . . . . . . . . 50
--wildlife illegally caught or in
improperly labelled packages . . . 50
--injurious wildlife . . . . . . . . . 51
--wild mammals and birds imported
in violation of foreign law . . . 51

Page

General restrictions enforcing particular
[272] statutes . . . . . . . . . . . . . . . . . . . . 51
Protection of coomrce . . . . . . . . . . . 52
-unfair competition . . . . . . . . . 52
--prison-made goods . . . . . . . . . 52
-antitrust . . . . . . . . . . . . . 53
--retaliatory restrictions . . . . . . 53
-trademarks . . . . . . . . . . o . . 53
--false representations . . . . . . . 54
--fair packaging and labelling. . . . 54
Floreign policy . . . . . . . . . . . o . . . 55
-neutrality . . . . . . . . . . . . . 55
--international trade agreements. . . 55
--the Trade Expansion Act
of 1962 . . . . . . . 55
--the Trade Act of 1974 . 55
--- the Trade Agreements Act
of 1979 . . . . . . 57
--United Nations economic sanctions 57
--Wban trade embargo . . . . . . . . 58
--trading with the enemy . . . . . . . 58
Quarantine and inspection . . o . . . . . . 58
Excess federal property . . . . . o . . . . 59
Noise control . . . . . . . . . . . . o . . 59
Iq)ort and export statistics . . . . . . . . 59

LAM AFFECTING EXPORTS ONLY . . . . . . . . . . . . . . 62

Export controls . . . . . . . . . . o . . o . 62
Agricultural products . . . . . . . . . . . . . 63
-subsidies . . . . . . . . . . . . . . o . 63
--reports . . . . . . . . . . . . . . . . . 64
-tobacco seeds and plants . . . . . . . . . 64
--apples and pears . . . . . . . . 65
-grapes and plums . . . . . . . . . . . . . 65
--timber . . . . . . . . . . . . . . . . . . 66
--dairy products . . . . . . . . . . . . . . 66
Energy supplies . . . . . . . . . . . . . . . . . 66
Armed vessels . . . . . . . . . . . . . . . . 67
Arms, liquors, and narcotics to the Pacific
Islands . . . . . . . . . . . . . . . . . 67
Letters . . . . . . . . . . . . . . . 67

TRADE AWUSDIENT ASSISTANCE . . . . . . . . . 68

- vi -

Page

ENFORCEMENT OF THE IMPORT AND EXPORT LAWS OF THE UHTED
STATES IN THE NORniERN MARIANA ISIANDS . . . . . . . . . . 69 [273]
The authority of the Goverment of the Northern
Mariana Islands to enforce federal law . . . . . . . . 70
Paying for enforcenent of federal law in the Northern
Mariana Islands . . . . . . . . . . . . . . . . . . . 72

CONCWSION . . . . . . . . . . . . . . . . . . . . . . . . . 72

BORDERS:

The Applicability of Federal Law

To Imports to and Exports from
[274] The Northern Mariana Islands

A Survey

INTRODUCTION

The United States has different borders for different Purposes.
One set of lines on a map indicates the areas over which the United
States claims sovereignty, to the exclusion of all other nations in
the world. A distinct set of lines delineates the area into which
foreign goods may not be imported without payment of a tariff to the
government of the United States. These or yet other lines define the
areas in which particular laws of the United States are effective.

on executing and approving the Covenant to Establish a
Commonwealth of the Northern Mariana Islands in Political Union with
the United States of America (approved by Public Law 94-241,
March 24, 1976, 90 Stat. 263; hereafter, "the Covenant"), the people
of the Northern Mariana Islands and the people of the United States
agreed that the borders of the United States 1ADuld be redrawn to
include the Northern Mariana Islands for many purposes. For other
purposes, it was agreed, the Northern Mariana Islands would remain
outside the boundaries of the United States.

More than one hundred different federal statutes regulate in one
way or another the movement of things across the borders of the
United States. (Yet other statutes--the immigration and nationality
laws--control the movement of people across the national boundaries
of the United States. Those statutes are not examined in this
survey.) To determine which of those statutes include the Northern
Mariana Islands as part of the United States and which do not,
examination of each of those statutes and of pertinent provisions of
the Cbvenant is necessary. This survey sets forth the results of
such an examination. The survey lists all federal laws directly
affecting the movement of goods and other things across the national
boundaries of the United States. Each law is briefly described, but
persons directly affected by a law are encouraged to refer to the law
itself, since the short description here necessarily omits important
information about the law and its operation. Often, too, more
detailed information about the law will be found in regulations
issued by the federal agency administering the law. (These
regulations are first published in the Federal Register and then
cxxnpiled in the Code of Federal Regulations.) A conclusion is then
given as to whether the Northern Mariana Islands is within or without
the boundaries of the United States for purposes of the law.

A particular law governing the movement of goods and other
things* across the borders of the United States may affect only
imports into the United States; it may affect only exports from the
United States; or it may affect both imports and exports. Further, [2751
the sme law may or may not also contain provisions regulating the
movement of goods within the boundaries of the United States.
Consequently, determining that the Northern Mariana Islands is not
within the United States for purposes of a particular law governing
imports does not mean the law has no effect on the Northern Mariana
Islands. For, while imports into the Northern Mariana Islands will
not be covered by that law, exports from the Northern Mariana Islands
to the United States are imports into the United States subject to
the law.

Likewise, even though the Northern Mariana Islands is outside
the United States for purposes of a law controlling exports, exports
from the United States to the Northern Mariana Islands are subject to
that law. Even when the Northern Mariana Islands is considered as
part of the United States for purposes of a law regulating imports
and exports of a particular commodity, other provisions of the same
law may regulate movement of that ccmmodity within the United States
and, thus, between the Northern Mariana Islands and other parts of
the United States.

Categorizing the various federal statutes affecting imports into
and exports from the United States is not easy. The statutes serve a
wide variety of purposes, fran raising revenue for the United States
Treasury to protecting consumers against adulterated foods, and from
protecting wildlife to carrying out the foreign policy of the United
States. The goods regulated range from honeybees to mobile homes,
and frcm whale products to tea. Various branches of the Federal
Government, including the DepartiTents of Agriculture, Commerce,
Health and Human Services, Interior, Justice, Transportation, and
Treasury, are involved in enforcing one or another of these laws.
Persons affected by the laws vary as widely as do the laws
themselves: importers, exporters, agriculturists, pharmacists,
conservationists, automobile dealers, consumers, and manufacturers,
among others, are touched by the provisions of one or more of these
statutes.

Federal laws affecting the movement of goods and other things
across boundaries of the United States are classified here first
between:

(a) those affecting imports only or imports and
exports,

(b) those affecting exports only.

*The tern -Trgc-o-ds'1 would not include noxious weds or injurious
wildlife; thus, "goods or things."

The first group is further sLbdivided into (1) laws raising customs
revenues, (2) laws regulating specific goods (or other specific
things), and (3) general restrictions enforcing particular statutes.
[2761 The survey also examines laws related to, but not directly
regulating, the flow of goods across national borders, those having
to do with trade adjustment assistance. Finally, certain problems of
enforcing applicable federal laws in the Northern Mariana Islands are
examined.

IMPORT AND EXPORT LAWS OF THE LINITED STATES

LAWS AFFECTING IMPORTS ONLY, OR IMPORTS AND EXPORTS

Customs laws.

Customs are duties or taxes imposed by a nation on goods
imported to or exported fram that nation. Marriott v. Brune, 50 U.S.
632 (1850). The customs laws of the Unit@d States, generally found
in title 19 of the United States (bde, include tariff rates and
classifications, iff@Fort restrictions, and various other measures
related to international trade. The United States Custcms Service, a
part of the Department of the Treasury, is responsible for
administration of the customs laws.

Article I, Section 8, Clause 1 of the United States Constitution
requires that "all Duties, Imposts and Excises shall be uniform
throughout the United States." This provision, however, has been
held to require uniformity only throughout the States aimitted into
the Union. Downes v. Bidwell, 182 U.S. 244 (1901). Congress is thus
not required--ET-t-he--C-o-ns-tir-tution to include the Northern Mariana
Islands within the area in which all duties, imposts, and excises are
uniform.

Sections 603, 604, and 605 of the Covenant treat expressly the
applicability of federal customs laws to the Northern Mariana
Islands:

Section 603. (a) The Northern Mariana Islands will
not be included within the custom territory of the United
States.

(b) The Government of the Northern Mariana Islands
may, in a manner consistent with the international
obligations of the United States, levy duties on goods
inported into its territory fran any area outside the

custcms territory of the United States and impose duties on
exports from its territory.*
[2771
(c) Imports from the Northern Mariana Islands into
the customs territory of the United States will be subject
to the sane treatment as imports from Guam into the customs
territory of the United States.

(d) The Goverment of the United States will seek to
obtain from foreign countries favorable treatment for
exports fran the Northern Mariana Islands and will
encourage other countries to consider the Northern Mariana
Islands a developing territory.

Section 604. (a) The Government of the United
States may levy excise taxes on goods manufactured, sold or
used or services rendered in the Northern Mariana Islands
in the sane manner and to the same extent as such taxes are
applicable within Guan.

(b) The Goverment of the Northern Mariana Islands
will have the authority to impose excise taxes upon goods
manufactured, sold or used or services rendered within its
territory or upon goods imported into its territory,
provided that such excise taxes imposed on goods imported
into its territory will be consistent with the
international obligations of the United States.

Section 605. Nothing in this Article will be deemed
to authorize the Government of the Northern Mariana Islands
to impose any customs duties on the property of the United
States or on the personal property of military or civilian
personnel of the United States Government or their
dependents entering or leaving the Northern Mariana Islands
pursuant to their contract of employment or orders
assigning them to or from the Northern Mariana Islands or
to impose any taxes on the property, activities or
instrumentalities of the United States which one of the
several States could not impose . . . .

*Cbngress may delegate to the Northern Mariana Islands the power
to impose tariff duties on imports into the Northern Mariana Islands.
See Miranda v. Puerto Rico, 101 F.2d 26 (1st Cir. 1938); Pan American
Standard Brands, 177 F. Supp. 769, 773 (Custcms Ct. 1959): In
approving section 603(b) of the Covenant, Congress has delegated that
power to the Northern Mariana Islands. (Footnote added by Commission
staff.)

The Marianas Political Status Commission, in its
Section-by-Section Analysis of the Cbvenant,* concluded that:

it is to the advantage of the Northern Marianas to be
(2781 outside the customs territory [of the United States] , for
it permits the Northern Marianas to have a duty-free port.
This Will mean lower consumer prices in the Northern
Marianas and will also encourage the tourist business. It
means that goods will enter the Marianas subject to duties
imposed by the local government rather than subject to the
duties which are imposed by the federal goverrment. This
is an important element of local self-governmant and
assures that the duties can be tailored to local
conditions.

Another commentator notes that,

. . . In addition, [the Marianas] are free to levy
duties on exports or imports from non-U.S. sources
independent of the United States schedule of duties. Thus,
duties may be custom tailored to meet local needs and need
not impose too great a burden on Marianas residents who
must, of necessity, rely to a considerable extent on
imports.

Liebman, Income Tax Incentives for Investment in the Northern Mariana
Islands, 2 University of Hawaii Law Ke-view 389, 396 (1981).
Collection costs, however, "lilwly would exceed revenues fran the
duties at the current level of imports." Id. at 396 n.43.**

*The Analysis is reprinted in Hearings on the Covenant to
Establish the Commonwealth of the Northern Mariana Islands before the
Subcommittee on Territorial and Insular Affairs of the House
Committee on Interior and Insular Affairs, 94th Cong., 1st Sess. 626
(1975) and in Hearings on the Northern Mariana Islands before the
Senate Committe'e on Interior and Insular Affairs, 94th Gong., 1st
Sess. 356 (1975).

**The Northern Mariana Islands may be precluded frcin levying
duties on goods that may enter the customs territory of the United
States from foreign countries duty-free. Should the Northern Mariana
Islands attempt to levy a duty on such goods, the importer could
merely first enter the goods into the United States and then ship
them to the Northern Mariana Islands. Section 603(b) of the Covenant
prevents the Northern Mariana Islands fran levying duties on goods
imported from the United States. See generally Miranda v. Puerto
Rico, 101 F.2d 26, 28 (1st Cir. 1938).

Because of the treatment afforded the Northern Mariana Islands
in the Covenant, laws of the United States having to do with tariffs
and import quotas generally should be presumed inapplicable to the
Northern Mariana Islands. But even if inapplicable to the Northern [2791
Mariana Islands, those lags may have effects in the Northern Mariana
Islands. Lcaws of the United States related to tariffs and import
quotas are as follows:

The Revised Tariff Schedules of the United States.* General
Headnote 1 to the Revised Tariff Schedules provides that "all
articles imported into the customs territory of the United States
from outside thereof are subject to duty or exempt therefrom as
provided" in the General Headnotes and the Revised Tariff Schedules.
The Northern Mariana Islands, as noted above, is outside the customs
territory of the United States. Covenant S 603(a) . See also General
Headnote 2 of the Revised Tariff Schedules. Accordingly, articles
imported into the Northern Mariana Islands are not subject to duty
(or exempted therefrom) as provided in the General Headnotes and
Revised Tariff Schedules.

Articles exported to the customs territory of the United States
from the Northern Mariana Islands are, however, subject to duties and
exemptions as provider] in the Revised Tariff Schedules. Section
603(c) of the Covenant provides that such articles will receive the
same treatment as articles exported to the customs territory of the
United States from Guam, which is also outside the customs territory
of the United States.** General Headnote 3(a) to the Revised Tariff

*These schedules, formerly published at section 1202 of title
19, U.S.C., are now published as a separate document available from
the Superintendent of Documents.

"Neither the Revised Tariff Schedules nor any specific
provision of the Covenant govern duties on articles moving between
the Northern Mariana Islands and Guam, both of which are outside the
customs territory of the United States. The Marianas Political
Status Commission, in its Sect ion- by-Sect ion Analysis of the
Covenant, noted that "there will be no guarantee that Guam's goods
will enter [the] Northern Marianas duty free or that Northern
Marianas goods will enter Guam duty-free." That Commission then
recorded its expectation "that appropriate arra'ngements can be
developed with Guam to assure the economic development of both areas
in an appropriate manner."

Carriers of merchandise into Gum must deliver a cargo manifest
to the Government of Guam before they can unload. 15 C.F.R. S 30.81
(1983).

- 7 -

Schedules governs the treatment of articles exported to the customs
territory of the United States frcm Guam and other insular
possessions. In general, such articles may be imported into the
customs territory of the United States duty-free "if 50 percent or
[2801 less of the value of the product (whether manufactured, produced, or
grown) derives from foreign materials." Senate Report 94-433, The
Covenant to Establish a Commonwealth of the Northern Mariana Islands
81 (1975). If more than 50% of the value of the product derives from
foreign materials, the product is sLbject to the usual duties.

Section 703(b) of the Covenant turns over to the Northern
Mariana Islands goverment the proceeds of "all custans duties . . .
derived from the Northern Mariana Islands" as well as "the proceeds
of all taxes collected under the internal revenue laws of the United
States on articles produced in the Northern Mariana Islands and
transported to the United States, its territories or possessions."*
Under section 602 of the Covenant, the Northern Mariana Islands
goverment may in turn rebate taxes collected under the United States
internal revenue laws. Because section 703(b) treats "customs
duties" and "taxes collected under the internal revenue laws" as
distinct categories, the rebate authority under section 602 does not
authorize the Northern Mariana Islands goverment to rebate custans
duties received from the United States under section 703(b).

-tuna. Canned tLna not packed in oil imported into the
customs terrTt-oFy of the United States is charged a 6 percent ad
valorem duty, so long as the total quantity of a canned tuna impor@j
in a year does not exceed 20 percent of the total amount of canned
tuna packed within the United States during the preceding year. When
that quantity is exceeded, the ad valorem duty jumps to 12.5 percent.

Section 102 of Public Law 97-446, 96 Stat. 2329 (1983), makes
clear that shipments from- "insular possessions of the United States"
are not counted in determining the extent to which the tariff quota
has been filled. House Conference Report 97-989, at 37 (1982).
While Guam is an insular possession of the United States, the
Northern Mariana Islands cannot be considered as such prior to
termination of the trusteeship. Even though PLhlic Law 97-446

*In Puerto Rico v. Blumenthal, 642 F.2d 622 (1980), certiorari
denied, 451 U.S. 983 (1981), and Virgin Islands v. Blumenthal, 642
F.2d 641 (1980), certiorari denied, 451 U.S. 983 (1981), the United
States Court of Appeals for the District of Columbia Circuit narrowly
construed similar provisions in the organic acts for Puerto Rico and
the Virgin Islands to exclude excise taxes collected on gasoline
produced in those jurisdictions and shipped into the United States.

- 8 -

was enacted after January 9, 1978, its purpose was to make clear that
the law in effect prior to that date included Guam, among other
insular possessions, as a part of the United States and not as a
foreign country for purposes of determining the extent to which the [2811
tariff quota has been filled. Id. Accordingly, by operation of
section 502(a) (2) of the CoveriaE_t, shipments of canned tuna not
packed in oil form the Northern Mariana Islands to the United States
are not counted in determining the extent to which the tariff quota
has been filled.

Tuna is potentially a significant export from the Northern
Mariana Islands to the United States. Exports of tuna to the United
States from the Northern Mariana Islands, however, are governed by
General Headnote 3(a), discussed under The Revised Tariff Schedules
of the United States, above, and are little affected by the tarifF
quota.

-watches. The United States provides favorable tariff
treabrent watches manufactured in the insular possessions of the
United States, subject to an adjustable annual quota that is
allocated among the Virgin Islands, Guam, and Anerican Samoa. Public
Law 97-446, S 110, 96 Stat. 2329 (1983). See Senate Report 97-564,
at 12-14 (1982). Section 603(c) of the Covenant provides that
"[i]mports from the Northern Mariana Islands into the customs
territory of the United States will be subject to the sage treatmnt
as imports from Guam into the customs territory of the United
States." Thus, the Northern Mariana Islands would appear to be
entitled to a portion of the annual quota equal to that of Guam.
Public Law 97-446, enacted after approval of the Covenant, makes no
provision, however, for allocation of a portion of the quota to the
Northern Mariana Islands. Accordingly, watches manufactured in the
Northern Mariana Islands are not entitled to the favorable tariff
treatment afforded by Public Law 97-446.

Foreign trade zones. Chapter 1A (sections 81a et seq.) of title
19, U.S.C., authorizes establishmnt of foreign trade zones. In a
foreign trade zone, business firms may import and assemble products
free of tariffs that would otherwise be imposed. Import duties are
levied when the goods leave the trade zone. If items are reexported,
no duties are paid. A foreign trade zone is, in effect, an area of
American soil legally defined as outside the customs territory of the
United States. Since the Northern Mariana Islands is already outside
that customs territory, no gain fran establishing a zone under title
19 is apparent:* A firm already can import and assemble products in

*The trade panel of the February 1980 Pacific Basin Development
Conference recanmended that the Northern Mariana Islands study the
possible creation of a foreign trade zone. Pacific Basin Development
Conference, Economic Growth and Development through Unity 236 (1980).

- 9 -

the Northern Mariana Islands free of United States tariffs. The f irm
can reexport those goods to anyplace other than the United States
without paying United States tariffs. And, because of General
Headnote 3(a), the firm, if the local value added is sufficiently
12821 high, may be able to enter the goods into the United States without
paying United States tariffs. Goods entering the United States from
a foreign trc-de zone always pay the full United States tariff.

Nricultural products. Section 624 of title 7, U.S.C.,
authorizes the President to impose fees or quotas on imported
articles found to threaten the United States agricultural price
support progran or other programs of the Department of Agriculture.
Section 610(f) of title 7 makes the chapter containing section 624
inapplicable to Guam. Section 624 consequently is also inapplicable
to the Northern Mariana Islands and articles imported into the
Northern Mariana Islands are not subject to fees or quotas imposed
under section 624. (Articles exported fran the Northern Mariana
Islands to the United States, however, would be subject to applicable
fees and quotas.)

Countervailing duties. Section 128 of title 19, U.S.C., imposes
a ten percent additional duty on goods imported into the United
States in foreign vessels? unless those vessels are exempted fran the
duty by treaty. Section 159.42 of title 19, C.F.R. (1983), provides
that this duty shall be imposed only on specific instructions of the
Commissioner of Customs. Neither the language of this law nor its
legislative history indicates whether territories or possessions of
the United States are to be treated as parts of the United States.
In the absence of any such indication, the United States is presumed
not to include those areas and, consequently, not to include the
Northern Mariana Islands.

vessel restrictions. Section 130 of title 19, U.S.C., subjects
to forfeiture goods imported into the United States in vessels other
,than vessels of the United States or of the country where the goods
%ere produced. The vessels are also subject to forfeiture. Section
131 exempts vessels and goods of any foreign nation that does not
similarly restrict vessels of the United States. Neither the
language of this lcw nor its legislative history indicates whether
territories or possessions of the United States are to be treated as
parts of the United States. In the absence of any such indication,
the United States is presumed not to include those areas and,
consequently, not to include the Northern Mariana Islands.

Section 1706 of title 19, U.S.C., prohibits the importation into
the United States of foreign goods subject to duties in vessels of
less than thirty tons, except under federal license. "United States"
is defined, for purposes of section 1706, to exclude Gum. 19 U.S.C.
S 1709(a). Accordingly, section 1706 does not apply to the
importation of goods into the Northern Mariana Islands.

- 10 -

Emergency suppl ies. Section 1318 of title '19, U.S.C., allows
the President Fo_ -authorize importation of food, clothing, and medical
supplies free of duty for use in emergency relief work. Section 1318
does not specify the places into which such importation free of duty [2831
may be permitted. "United States" is defined, however, for purposes
of part I and subtitle II of chapter 4 of title 19, which includes
section 1318, to exclude Guam. 'Me reasonable conclusion is that the
President's authority would extend only to lifting- duties imposed by
the United States on goods entering the customs territory of the
United States and would not reach duties imposed by the Northern
Mariana Islands pursuant to section 603(b) of the Covenant.

Imports by returning residents of the United States. Item
813.31 of the Revised Tariff Schedules of the United States allows
returning residents of the United States to import duty-free goods
valued at not more than $400 or, if arriving from the Virgin Islands,
Guam, or Afferican Samoa, not more than $800 (of which no more than
$400 shall be the value of goods acquired elsewhere than in those
insular possessions).

Since the $800 exemption is not applicable to goods acquired in
the Northern Mariana Islands under the terms of the Covenant, only
goods valued at not more than $400 may enter the customs territory of
the United States from the Northern Mariana Islands duty@free with
returning residents of the United States.

Gifts. Section 1321 of title 19, U.S.C., authorizes the
SecreT-ary of the Treasury to allow persons in the United States to
receive duty-free gifts valued at not more than $100 sent from
persons in the Virgin Islands, Guam, and American Samoa. Fbr gifts
from other areas outside the customs territory of the United States,
the maximum value of such gifts is $50. Regulations implementing the
Secretary's authority are found in sections 10.152 and 10.153 of
title 19, C.F.R. (1983).

Since t1he $100 exemption is not applicable to gifts from the
Northern Mariana Islands under the terms of the Covenant, only gifts
valued at not more than $50 may enter the customs territory of the
United States from the Northern Mariana Islands duty@-free.

Trade fair imports. Sections 1751 to 1756 of title 19, U.S.C.,
allow articles to be brought into the United States for use at a
federal ly-approved trade fair free of duty or internal revenue taxes
and without complying with certain labelling requirements of the
internal revenue laws and the Federal Alcohol Administration Act.
"United States" is not defined for purposes of these sections.
Duties are collected only on goods imported into the customs
territory of the United States. The Northern Mariana Islands is not
part of that customs territory. Covenant S 603(a). Nor is the
Northern Mariana Islands part of the United States for purposes of

the Federal Alcohol Administration Act. 27 U.S.C. S 211 (a) (1) . Sane
internal revenue laws are, however, applicable to the Northern
Mariana islands. Accordingly, there might be some slight benef it if
[2841 the Northern Mariana Islands were eligible for federal approval and
the exemptions conferred thereby. Trade fairs are a possible ffeans
of promoting tourism, the principal industry of the Northern Mariana
Islands.

Autcmotive products from Canada. Section 2001 to 2033 of title
19, U.S.C., anend the Tariff SaTe-dules of the United States to allow
the duty-free import into the United States frcm Canada of motor
vehicle equipment for use in the manufacture of motor vehicles in the
United States. Duties under the Tariff Schedules are imposed only on
entry into the customs territory of the United States. General
Headnote 1, Revised Tariff Schedules of the United States. The
Northern Mariana Islands is not within that customs territory.
Covenant S 603(a). Accordingly, sections 2001 to 2033 do not affect
the import of motor vehicle equipffent into the Northern Mariana
Islands from Canada.

Construction materials for deepwater Mrts. Section 1518 of
title 33, U.S.C.,. requires that duties and taxes be paid on foreign
articles used in the construction of a deepwater port "in accordance
with laws applicable to merchandise imported into the customs
territory of the United States." The customs laws do not otherwise
apply to deepwater ports licensed by the United States.

Deepwater ports are located off the coasts of the United States
but beyond the territorial seas of the United States, and are used
for transporting of oil "to any State." 33 U.S.C. S 1502(10).
"State" is defined to include the territories and possessions of the
United States. Id. S 1502(18). By operation of section 502(a)(2)
of the Covenant, the Northern Mariana Islands is a State for purposes
of section 1502.

The Northern Mariana Islands is outside the customs territory of
the United States. Covenant S 603(a). Nonetheless, section 1502
would require payment of duties and taxes on foreign articles used in
the construction of any deepwater port adjacent to the Northern
Mariana Islands.

Tonnage duties and light money. Section 121 of title 46,
U.S.C., imposes tonnage duties on certain foreign vessels entering
the United States. Section 128 imposes an additional tonnage duty,
called "light money" on the same vessels at entry into the United
States. Neither duty, however, is levied on the vessels of nations
which do not discriminate against the United States by imposing
similar duties.

- 12

Tonnage duties on vessels are considered as entirely independent
and distinct from customs duties levied on imported merchandise. The
Conquerorf 49 F. 99, 103-05 (S.D.N.Y. 1892), reversed on other
grounds, 166 U.S. 110 (1897). Vessels of more than 100 nations, [2851
including most of the major trading nations of the world, have been
exempted from payment of tonnage duties higher than those imposed on
vessels of the United States and from payment of light money. 19
C.F.R. � 4.22 (1983).

Neither the language of these statutes nor their legislative
history indicate whether territories or possessions of the United
States are to be treated as parts of the United States. In the
absence of any such indication, the United States is presumed not to
include those areas and, consequently, not to include the Northern
Mariana Islands.

Discriminating duties. Section 146 of title 46, U.S.C., imposes
a discriminat ng ad valorem duty on goods imported in foreign vessels
unless by treaty or act of Cbngress those vessels are entitled to
treatment equivalent that afforded vessels of the United States. If
the President finds a foreign country does not impose a
discriminating duty'on vessels or goods of the United States, he may
suspend the duty on the goods of that nation. 46 U.S.C. � 141.
Neither the language of this law nor its legislative history
indicates whether territories or possessions of the United States are
to be treated as parts of the United States. In the absence of any
such indication, the United States is presumed not to include those
areas and, consequently, not to include the Northern Mariana Islands.

Criminal penalties and forfeitures--illegal en@a of goods.
Section 541 to 552 of title 18, U.S.C., impose criminal penalties for
various violations of law related. to entry of goods into the United
States. "United States" is defined, in several of those sections for
the purpose of each such section alone, to exclude Guam. See
sections 542 (entry of goods by means of false statements), 544
(relanding of goods), and 545 (smuggling goods into the United
States) . These sections accordingly do not apply to the entry of
goods into the Northern Mariana Islands. Section 547, imposing
criminal penalties for receiving or depositing goods in a building on
a boundary line between the United States and a foreign country,
patently has no application to the Northern Mariana Islands where no
sLrh building could exist.

The applicability or nonapplicability to the Northern Mariana
Islands of sections 541, 543, 546, and 548 to 552 is less obvious.

Section 541 imposes criminal penalties for entering goods
falsely classified as to weight or value, or by payment of less than
the amount of duty legally due. Section 543 of title 18 imposes
criminal penalties on "officers of the revenue" who "admit to entry"

- 13

goods on paynent of less than the duty legally due. "Entry" is,
presumably, entry into the United States for purposes of sections 541
and 543. "United States" is defined, for purposes of title 18, to
include all places subject to the jurisdiction of the United States.
[2861 18 U.S.C. S 5. Guam is thus part of the United States for purposes
of section 541 and 543. By operation of section 502(a) (2) of the
Covenant, section 541 also would impose criminal penalties for
entering false ly-class if ied goods into the Northern Mariana Islands.
Similarly, section 543 vould impose criminal penalties on officers of
the revenue who allow entry of goods into the Northern Mariana
Islands on payment of less than the legal duty.

The Northern Mariana Islands, however, is outside the customs
territory of the United States. Covenant S 603(a). Any
classification of goods entering the Northern Mariana Islands and any
duties on those goods will be imposed under the lews of the Northern
Mariana Islands, not under the laws of the United States. %bile it
is possible for local law to be enforced by federal criminal
penalties, the more likely conclusion is that sections 541 and 543
apply only to entry of goods into the customs territory of the United
States. Similarly, the "officers of the revenue", to whom reference
is made in section 543, are most likely only such officers who are
employees of the United States. Because of these ambiguities,
legislative clarification may be desirable.

Section 546 of title 18 imposes criminal penalties for smuggling
goods into foreign countries that by their laws reciprocally penalize
violations of laws of the United States respecting the custom
revenue. Thus, the law does not directly affect persons moving goods
in and out of the Northern Mariana Islands. Complicated questions,
however, could arise.* It might be necessary to determine whether
"laws of the United States respecting the customs, revenue" includes
laws of the Northern Mariana Islands enacted under the authority of
section 603(b) of the Covenant. (Note that the Covenant is a law of
the United States.) If it is concluded that customs laws of the
Northern Mariana Islands are "laws of the United States respecting
the customs revenue," then it becomes necessary to examine the laws
of the particular foreign country to determine if its laws extend to
punishment of persons violating the customs laws of the 'tbrthern
Mariana Islands and thus ireet the reciprocity condition.

The better result is to conclude that the laws of a particular
foreign country need not punish violations of the Northern Mariana
Islands customs laws in order for reciprocity to exist. Otherwise,

*Based on the absence of headnotes following section 546 in the
current edition of United States Code Annotated, prosecutions under
this section appear to be infrequent.

14 -

persons who have violated the antismuggling laws of a foreign country
could escape prosecution under section 546 because the foreign
country, in a good-faith effort to accord reciprocity, had failed to
take into account the special situation of the Northern Mariana [2871
Islands in enacting its own legislation imposing penalties for
violation of the laws of the United States respecting the customs
revenues.

To achieve this better result, it is necessary to first conclude
that Northern Mariana Islands customs laws are not "laws of the
United States respecting the custans revenues." Since there is at
least colorable argument to the contrary, clarifying legislation may
be desirable.

Section 548 of title 18 imposes criminal penalties for t ampering
with goods in bonded warehouses. Section 549 of title 18 imposes
criminal penalties for tempering with goods in customs custody or
under custorm seal. Section 550 of title 18 imposes criminal
penalties for filing false claims for refund of duties. Section 551
of title 18 imposes criminal penalties for concealing or destroying
invoices or other papers relatirrg to merchandise imported into the
United States, after a demand for inspection thereof by "the
collector of any collection district." As with sections 541 and 543,
above, the intent of sections 548, 549, 550, and 551 is to protect
the customs revenues of the United States, derived from duties on
goods entering the customs territory of the United States. As noted,
that custams territory does not include the Northern Mariana Islands.
Sections 548, 549, 550, and 551 can also be read as enforcing the
local customs laws of the Northern Mariana islands.

Section 552 of title 18 imposes criminal penalties on any
officer, agent, or employee of the United States who aids in the
violation of "any of the provisions of law" against importing obscene
or treasonous books and articles. Section 552 clearly applies only
to persons working for the United States government, and does not
apply to employees of the Northern Mariana Islands goverment. If a
federal law prohibits importation of the proscribed materials into
the United States and includes the Northern Mariana Islands as part
of the United States, employees of the United States aiding in
violation of that law are sLbject to section 552's penalties. More
complex is whether "any of provisions of law" against importing the
proscribed materials would include provisions in the laws of the
Northern Mariana Islands. Because legal principles call for narrow
reading of criminal statutes, section 552 should be read not to reach
employees of the United States who aid in violation of provisions in
the custcms laws of the Northern Mariana Islands restricting
importation of obscene or treasonous books and articles. Because a
court of law almost certainly would reach this conclusion,
legislative clarification is unnecessary.

15 -

In summary, sections 541 to 552 of title 18 all should he
regarded as inapplicable to the importation of goods into the
Northern Mariana Islands or the payment of duties to the Northern
Mariana Islands. (The Northern Mariana Islands, in establishing its
[2881 own customs duties under section 603(b) of the Oovenant, may also
enact its own legislation to enforce collection of those duties.)
For the most part, no changes are necessary in sections 541 to 552 to
establish their inapplicability to the Northern Mariana Islands. For
sections 541, 543, and 546, legislation clarification is appropriate.

The Commission has agreed to recamTend to Congress that federal
criminal penalties for violation of the custans laws of the United
States, as set forth in sections 496, 541-552, 1364, and 1915 of
title 18, U.S.C., not apply to the entry of goods or articles into
the Northern Mariana Islands nor to the export of goods or articles
therefran.

-canpranise of claim by custans officers. Section 1915 of
title 18, U.S.C., imposes criminal penalties on officers of the
United States who compromise or attEmpt to ccmpromise any claim of
the United States arising under the customs laws. By the language of
the statute, officers of the Northern Mariana Islands are not subject
to criminal penalties and a compromise of a claim of the government
of the Northern Mariana Islands is not conduct forbidden by the
statute.

-smuggling vessels. Section 1703 of title 19, U.S.C., subjects
to forfeiture vessels used "to defraud the revenue or to smuggle any
merchandise into the United States." "United States" is defined, for
purposes of section 1703, to exclude Guam. 19 U.S.C. S 1709(a).
Accordingly, vessels smuggling merchandise into the Northern Mariana
Islands are not subject to forfeiture. Under the strict construction
given forfeiture statutes, section 1703 also would not apply to fraud
against the government of the Northern Mariana Islands.

Laws regulating specific goods (or other specific things).

Many federal laws regulate imports and, in many cases, exports
of specific goods or things. The laws are here grouped, for ease of
reference, under the following headings:

Agricultural and textile products (see also
Foods, drugs, cosmetics, and dentures;
Textiles)
Agricultural itEms
Alcoholic beverages, narcotics, and tobacco
Art works and cultural property
Boats and boating equipment
Consumer products
Energy products

- 16 -

Firearms, switchblades, and explosives
Fisheries products
Foods, drugs, cosmetics, and dentures (see
also Agricultural and textile products; (2891
Alcoholic beverages, narcotics, and
tobacco)
Furs
Gambling devices and paraphernalia
Hobby items
M@bile hcnes
Money, securities, gold, and silver
Motor vehicles
obscene and immoral items
Pesticides, chemicals, hazardous substances,
and biological products
Publications (see also Obscene and immoral
items)
Recreational fishing and archery equipment
Television setsf radio transmitters, and
other electronic products
Textiles (see also Agricultural and textile
products)
War materials
Wildlife

The categories set forth are not, of course/ the only possible
categories among which the statutes could have been distributed.
Further, many statutes could be classified just as easily in one
category as in another.

Agricultural and textile products. Section 1854 of title 7,
U.S.C., authorizes the President to negotiate international
agreEments limiting importation of specified agricultural and textile
products into the United States. "United States" is not specifically
defined. under section 104 of the Cbvenant, the United States has
the authority to conduct all matters relating to foreign affairs
affecting the Northern Mariana Islands. Mether importation of a
particular product into the Northern Mariana Islands would be limited
by sLrh an agreEment TAould be governed by the terms and intent of
that agreement.

Agricultural itEms--nursery stock. Section 154 of title 7,
U.S.C., forbiTs importation of nursery stock (plant seeds, bulbs,
cuttings, etc.) into the United States except by permit. Section 157
requires packages of nursery stock imported into the United States to
met certain labelling requirEments. Section 159 allows the
Secretary of Agriculture to restrict the import into the United
States of other plants and plant materials to keep out plant diseases
and pests. Section 160 authorizes prohibition of the import of
nursery stock into the United States from insect-infested localities.

"United States" is not defined in these provisions, but section 159
and other sections of the original 1912 legislation make clear the
law was intended to apply to the "Territories" of the United States.
12901 See 7 U.S.C. SS 156, 158, 159, 161, and 163.
Regulations of the Department of Agriculture for enforcement of
these provisions and other laws define "United States" to include the
several States and Guam. 7 C.F.R. S 352.101) (1983). Under this
administrative definition, these laws--by virtue of section
502(a)(2)--control imports into the Northern Mariana Islands as well.
Accordingly, section 154 forbids impDrtation of nursery stock into
the Northern Mariana Islands without a federal permit.

The Animal and Plant Health Inspection Service of the Department
of Agriculture has implemented the Nursery Stock Quarantine Act* (of
which section 154 of title 7 is a part), the Federal Plant Pest Act,
and other legislation in canbined regulations. See 7 C.F.R. parts
300 et seq. of particular interest among these regulations are
sections 318.82 et seq., governing the movement of plants and plant
materials from du__@rfi to other pEwts of the United States. (Note,
however, that under section 502(a)(2) of the Oovenant, the Northern
Mariana islands is to be treated not like Guam, but like the States
of the Union.)

Section 319.37-2 of title 71 C.F.R. (1983), pranulgated under
the authority of the same legislation, prohibits importation into the
United States of a wide variety of plants ar-O plant products (subject
to certain exceptions). "United States" is defined, for purposes of
section 319.37-2, specifically to include the Northern Mariana
Islands. 7 C.F.R. S 319.37-1 (1983). Among the plant articles
prohibited are all parts except seeds from all species of the genus
Areca, which includes the betel nut palm. Betel nut seed is ccmmonly
imported to the Northern Mariana Islands fram the Yap and Palau
Islands. Only the seed, however, is imported.

Coconuts for planting purposes may only be imported into the
United States (including the Northern Mariana Islands) after issuance
of a federal permit. Id. S 319.37-3(a)(4).

--seeds. Sections 1581 et sec. of title 7, U.S.C., prohibit
importation into the United States of agricultural seeds that are
adulterated, mislabelled, or otherwise unfit for seeding purposes.
"United States" is defined for purposes of these sections to exclude
Guam. 7 U.S.C. S 1561(a)(1). Consequently, the import prohibitions
are not made applicable to the Northern Mariana Islands by operation

*This Act is also known as the Plant Quarantine Act.

18 -

of the Covenant and do not restrict the movement of agricultural
seeds into the Northern Mariana Islands from foreign countries.
Other provisions of the Federal Seed Act, of which sections 1581 [2911
et seq. are a part, apply to transactions in interstate cv-mrerce.
See 7 U.S.C. SS 1571 et seq. "Interstate caw*erce" is defined to
include commerce origi6a-ting or terminating in "any . . . Territory
[or] possession." 7 U.S.C. S 1561(a)(3)(A). The provisions of the
Act applicable to interstate commerce are thus applicable to Gucam..
and, under section 502(a)(2) of the Covenant, to the Northern Mariana
Islands. Consequently, imports into the Northern Mariana Islands
from foreign countries are not covered by the Act, but seeds moving
into the Northern Mariana Islands from the United States or into the
United States from the Northern Mariana Islands are subject to the
Act's controls on interstate commerce in seeds. Seeds moving into
the United States from the Northern Mariana Islands are also subject
to the importation prohibitions. See 7 U.S.C. S 1561(a)(10).

-plant varieties. Section 2483(a) of title 7, U.S.C., provides
that certificates of plant variety protection issued by the Secretary
of Agriculture entitle the breeder to the right to exclude others
from importing or exporting that variety during the period of
protection. Section 2541 provides that the import or export of
varieties without the owner's permission is an infringement of the
owner's protection. "United States" is defined to include the
territories and possessions of the United States. Id. S 2401 (b) .
Guam is such a territory or possession. Accordingly, B7 operation of
section 502(a)(2) of the Covenant, plant breeders in the Northern
Mariana Islands may obtain protection under sections 2483(a) and
2541, and imports into or exports fram the Northern Mariana Islands
of protected plant varieties without proper authorization may be
prevented by the owner.

--honeybees. Sections 281 and 282 of title 7, U.S.C., prohibit
(with some exceptions) importation into the United States of
honeybees and honeybee semen, in order to protect the United States
honeybee population from diseases and parasites and to protect the
genetic integrity of that population. The territorial extent of the
for purposes of this law is not defined by the law. United States
Department of Agriculture regulations implementing the law, however,
define "United States" to include the several States and Guam. 7
C.F.R. 5 322.6 (1983). Under this administrative definition, the
prohibitions against honeybee imports, by virtue of section 502(a)(2)
of the Covenant, control imports into the Northern Mariana Islands as
well. Accordingly, sections 281 and 282 prohibit the importation of
honeybees or honeybee semen into the Northern Mariana Islands.

- 19 -

-Elant pests. Section 147a of title 7, U.S.C., authorizes the
Secretary of Agriculture to control the spread of plant pests. The
Secretary is also authorized to provide for inspection of plants or
plant products being exported from the United States, and their
(2921 certification as free frcm plant pests. Although "United States" is
not defined for purposes of section 147a, subsection (d)(3) of
section 147a defines "State," for purposes of the section, to include
the territories and possessions of the United States. The inclusion
of territories and possessions as "States" is strong evidence of
congressional intent that the territories and possessions be
considered part of the United States for purposes of section 147a.
Guam is a territory or possession of the United States and is thus
part of the United States for purposes of this section. So, by
virtue of section 502(a)(2) of the Covenant, is the Northern Mariana
Islands. Accordingly, the Secretary's authority under section 147a
extends to the Northern Mariana Islands.

The Animal and Plant Health Inspection Service of the Department
of Agriculture has implemented the Federal Plant Pest Act (of which
section 147a is a part), the Nursery Stock. Quarantine Act and other
legislation in combined regulations. See the discussion of these
regulations under the heading Agricultural items--nursery stock,
above.

-noxious weeds. Section 2803 of title 7, U.S.C, generally
prohibits the movement into or within the United States of noxious
weeds. "United States" is defined, for purposes of section 2803, to
include the territories and possessions of the United States. 7
U.S.C. S 2802(d) and (f). Guam is a territory or possession of the
United States. Section 2803 is thus applicable to Guam and, under
section 502(a)(2) of the Covenant, to the Northern Mariana Islands.
Accordingly, section 2803 prohibits the movenent of noxious weeds
into or within the Northern Mariana Islands.

--animals affected by or exposed to ccgrmunicable disease.
Sections 101 to 135b of title 21, U.S.C., set forth various neasures
for preventing the introduction and spread of contagious livestock
and poultry diseases. Section 101 authorizes the President to
suspend the importation into the United States of any class of
animals in order to protect animals in the United States against
infectious or contagious diseases. Section 102 allows the Secretary
of Agriculture to quarantine livestock imported into the United
States. Section 103 prohibits importation into any port in the
United States of animals other than prescribed quarantine ports.
Section 104 prohibits importation of diseased livestock. Section 105
authorizes inspection of imported animals described in sections 101
to 104 and of animals intended for export. Sections 101, 102 103,
104, and 105 originally were enacted as part of the Act of
August 30, 1890, c.839, 26 Stat. 414.

- 20 -

In 1955 the House and Senate and the Department of Agriculture
assumed each of these sections included the authority to prevent the
spread of disease into the Virgin Islands.* Further, section 104
authorizes an exception from the prohibition for cattle infested with (2931
or exposed to ticks imported fram the British Virgin Islands to the
Virgin Islands of the United States. The clear implication of this
provision is that in its absence section 104's prohibition would
apply to imports of diseased livestock into the Virgin Islands.**
The status of the Virgin Islands, both now and in 1954 uhen this
exception vas added to section 104, is essentially the same as that
of Guam Both %ere then and are now organized but unincorporated
territories of the United States. If sections 101, 102, 103, 104,
and 105 apply to the Virgin Islands, they also apply to Guam in the
absence of evidence of a contrary congressional intent. By operation
of section 502(a)(2) of the Cbvenant, these sections also apply to
livestock imported to or, in the case of section 105, exported from
the Northern Mariana Islands. Section 103, prohibiting importation
except at prescribed quarantine ports, may cause difficulties for the
Northern Mariana Islands because the nearest quarantine port to the
Northern Mariana Islands is Honolulu, more than 3000 miles away.
Livestock from Australia, New Zealand, and other areas relatively
close to the Northern Mariana Islands should not have to make the
journey to the Northern Mariana Islands via Honolulu.

Section 111 authorizes the Secretary of Agriculture to issue
regulations to prevent the spread of poultry and animal diseases
"from a foreign country into the United States or from one State or
Territory of the United States or the District of Columbia to
another," and to seize weat, hides, animal feed and bedding, and
other materials camiM fram an infected foreign country. Section 113
authorizes the Secretary of Agriculture to adopt rreasures necessary
to prevent the exportation of diseased livestock or poultry "frcm any
port of the United States to any port in a foreign coLuitry." Section
120 authorizes the Secretary of Agriculture to issue regulations
concerning "the exportation and transportation of (diseased]
livestock and/or live poultry fran any place within the United States
. . . and through any State or Territory . . . and to foreign

*See House Report 1295, 84th Cbrig., .2d Sess. (1955), rreprinted
at 1956 U.S. Code Cong. & Ad. News 2206.

**And, in fact, the provision was inserted because the prior law
was seen as contributing to a severe meat shortage in the Virgin
Islands. See letter from Assistant Secretary of the Interior Lewis
to Senator Butler, Chairman of the Committee on Interior and Insular
Affairs, November 30, 1953, quoted in Senate Report 1271, 83d Cong.,
2d Sess. (1954), reprinted at 1954 -U.S. Code Cong. & Ad. News 2585,
2597, 2601-03.

- 21 -

countries." Section 111 was part of the Act of February 2, 1903,
c.349, 32 Stat. 791. Sections 113 and 120 were amended by that Act.
In 1955 the House and Senate and the United States Department of
[2941 A?riculture assumed that the 1903 Act included the Virgin Islands
within the United States.* As with sections 101, 102, 103, 104, and
105, above, if sections 111, 113, and 120 apply to the Virgin
Islands, in the absence of evidence of a contrary congressional
intent, they also apply to Guam. Accordingly, by virtue of section
502(a)(2) of the (bvenant, sections 111, 113, and 120 apply to the
Northern Mariana Islands.

Section 112 authorizes the Secretary of Agriculture to establish
regulations to prevent the spread of livestock and poultry diseases
along borders between the United States and fDreign countries and
along lines of transportation "fr(xn all parts of the United States to
ports from which livestock and/or live poultry are exported." There
appear to be no regulations implementing section 112 now in effect.
The authority granted the Secretary by section 112 appears
sufficiently broad to allow implementing regulations to treat the
Northern Mariana Islands as part of the United States if necessary to
prevent the spread of livestock and poultry diseases. The Secretary
also has discretionary authority to extend to the Northern r4ariana
Islands any program administered by the Department of Agriculture.
48 U.S.C. 1469d(c). Regulations implementing section 112 that treat
the Northern Mariana Islands as part of the United States are thus
well within the Secretary's authority.

Section 113a prohibits the introduction of live foot-and-mouth
disease virus into "the mainland of the United States." Neither Guam
nor the Northern Mariana Islands is part of the mainland of the
United States. Accordingly, section 113a does not prohibit the
introduction of the virus into the Northern Mariana Islands.

Section 134c authorizes the Secretary of Agriculture to prohibit
or regulate the movement of any animals into the United States if
necessary to protect the livestock and poultry of the United States
from communicable disease. (Those regulations are found in part 92
of title 9, C.F.R. (1983).) "United States" is defined, for purposes
of section 134c, to include Guam. 21 U.S.C. S 134(c). By operation
of section 502(a)(2) of the (bvenant, the Secretary's authority
extends to movement of animals into the Northern Mariana Islands.

Section 135 allows animals to be brought to an international
quarantine station within the United States notwithstanding other
laws to prevent the spread of disease, and subsequently to be moved
to other parts of the United States if such movement will not spread

*See House Report 1295, 84th Gong., 2d Sess. (1955), reprinted
at 1956 U.S. Code Gong. & Ad. News 2206.

- 22 -

disease. Section 135a makes a violation of the antismuggling law (18
U.S.C. S 545) the unauthorized bringing of animals to the quarantine
station or movement from the quarantine station to other parts of the
United States, "including Guam." Thus, while the antismuggling law 12951
does not apply to Guan, unauthorized movement of animals frcm the
quarantine station to Guam does trigger the criminal penalties
imposed by that law. By operation of section 502(a)(2) of the
Covenant, section 135a also imFoses the penalties of the
antismugggling law on the unauthorized movement of animals frGM the
quarantine station to the Northern Mariana Islands.

Section 1306 of title 19, U.S.C., prohibits importation into the
United States of livestock from countries where rinderpest or
foot-and-mouth disease exist. "united States" is defined, for
purposes of this prohibition, to exclude Guam. 19 U.S.C. S 1401(h).
tinder section 502 of the Covenant, then the Northern Mariana Islands
is not part of the United States for purposes of section 1306.
Accordingly, importation of livestock from countries where rinderpest
or foot-and-mouth disease exist into the Northern Mariana Islands is
not barred by this statute.

--biological products. Section 152 of title 21, U.S.C.,
prohibits importaM@n 'into the United States of any virus, serum,
toxin, or analogous product for use in treatment of domestic animals
(1) without a permit, or (2) that is worthless, contaminated,
dangerous, or harmful. "united States" is not defined in this
statute. Regulations issued to implement the statute also do not
define "United States." See 9 C.F.R. chapter 1, subchapter E (1981).
Those regulations do give soiw indication of an intent to afford the
protections of the statute to territories of the United States. See
9 C.F.R. �� 103.3, 114.1 (1983). Further section 151 of title 21,
enacted by the sane Act of Congress as section 152, prohibits the
preparation or sale of such products "in any place under the
jurisdiction of the United States." Congress no doubt also intended
the ban on importation imposed by section 152 to include importation
"into any place under the jurisdiction of the United States." Guam
is under the jurisdiction of the United States. Accordingly, by
operation of section 502(a)(2) of the Covenant, the importation of
veterinary biological products into the Northern Mariana Islands is
subject to the restrictions of section 152.

Alcoholic beverages, narcotics, and tobacco--alcoholic
beverages. Section 1263 of title 18, U_.S.C., imposes criminal
penalt- for shipping liquor "into any place within the United
States" without an accompanying invoice or other document containing
certain information, as to consignee, nature of contents, and
quantity. "United States" is defined, for purposes of title 18, to
include all places subject to the jurisdiction of the United States.
18 U.S.C. S 5. Guam is subject to the jurisdiction of the United
States. Accordingly, by operation of section 502(a)(2) of the

- 23

C
Covenant, section 1263 imposes criminal penalties for shipping liquor
into the Northern Mariana Islands without the required documentation.
Section 3615 of title 18 provides for forfeiture of such liquor.
(2961 Section 1707 of title 19, U.S.C., subjects to forfeiture
alcoholic liquors imported into the United States in vessels of less
than 500 tons without a federal certificate. Section 1708 imposes
criminal penalties on the master and crew of such vessels. "United
States" is defined, for purposes of sections 1707 and 1708, to
exclude Guam. 19 U.S.C. S 1709(a) . Accordingly, sections 1707 and
1708 do not apply to importation of alcoholic liquor into the
Northern Mariana Islands.

Section 5001 of title 26, U.S.C., imposes an excise tax on all
distilled spirits imported into the United States. Section 5041 of
title 26 imposes an excise tax on all wine imported into the United
States. Section 5051 imposes an excise tax on all beer im1ported into
the United States. (The same taxes are also imposed on the same
items when sold by domestic manufacturers.) Section 604(a) of the
Covenant allows the United States to "levy excise taxes on goods
. . . sold . . . in the Northern Mariana Islands in the same manner
and to the same extent as such taxes are applicable within Guam."
"Importation," for purposes of sections 5001, 5041, and 5051 is
defined as bringing an article into the United States frcFn a source
outside the United States. See 26 C.F.R. S 48.0-2(a) (4) (i) and
(a)(10) (1982). "United States" is defined, for purposes of the
entire Internal Revenue Code, to include only the several States and
the District of Columbia. 26 U.S.C. S 7701(9). "United States" is
also defined by administrative regulation, for purposes of sections
5001, 5041, and 5051, to include only the several States and the
District of Columbia. 27 C.F.R. SS 251.11 (1982). Accordingly, the
excise taxes levied by these sections do not apply to distilled
spirits, wine, or beer imported into (or sold in) Guam or the
Northern Mariana Islands.

Section 122 of title 27, U.S.C., prohibits the transportation of
alcoholic beverages into "any State, Territory, or District of the
United States, or any place noncontiguous to but subject to the
jurisdiction thereof" for use contrary to the law of that State,
Territory, District or place. Gum is not contiguous to the United
States but is subject to the jurisdiction of the United States.
Thus, by operation of section 502(a)(2) of the Covenant, if the
Northern Mariana Islands prohibits the possession, use, or sale of
certain alcoholic beverages, section 122 prohibits transportation of
those alcoholic beverages into the Northern Mariana Islands.

Section 203 of title 27, U.S.C., forbids engaging in the
business of importing alcoholic beverages into the United States

without a federal pemi,t. "United States," as defined for purposes
of section 203, includes neither Guam nor the Northern Mariana
Islands. 27 U.S.C. S 211(4)(1). Accordingly, section 203 does not
require persons engaged in the business of importing alcoholic [2971
beverages into the Northern Mariana Islands to have a federal permit.

--narcotics and dangerous drugs. Sections 951 to 969 of title
21, U.S.C., strictly control importation of narcotics and
dangerous drugs into'both the United States and the customs territory
of the United States and their exportation from the United States.
"United States" is defined, for purposes of these sections, to
include all areas under the jurisdiction of the United States,
including the Trust Territory of the Pacific Islands. 21 U.S.C. SS
802(24), (26); 951. By operation of section 502 of the Covenant,
"United States" also includes the Northern Mariana Islands.
Consequently, importation of narcotics and dangerous drugs into the
Northern @briana Islands is subject to sections 951 to 966 as is
exportation from the Northern Mariana Islands (including exportation
into the customs territory of the United States). (Movement of
narcotics and dangerous drugs between the Northern Mariana Islands
and Guam is subject to other provisions of title 21. See sections
841 et seq.)

--tobacco. Section 376 of title 15, U.S.C., requires persons
importing cigarettes into a State to file certain information with
State tax officials. "State" is defined, for purposes of section
376, to exclude Guam. 15 U.S.C. S 375(6). Consequently, section 376
does not apply to persons importing cigarettes into the Northern
Mariana Islands.

Section 1333 of title 15, U.S.C., prohibits importation into the
United States of cigarettes the packages of which do not bear a
required health warning. "United States" is defined, for purposes of
section 1333, to include Guam. 15 U.S.C. S 1332(3). By operation of
section 502(a)(2) of the (bvenant, the Northern Mariana Islands is
also part of the United States for purposes of section 1333.
Accordingly, cigarettes imported into the Northern Mariana Islands
must bear on their packages the required warning.

Section 5701 of title 26, U.S.C., imposes excise taxes on
various tobacco products imported into the United States. (The same
taxes are also imposed on the sane items when sold by danestic
manufacturers.) Section 604(a) of the Covenant allows the United
States to "levy excise taxes on goods . . . sold . . . in the
Northern Mariana Islands in the same manner and to the same extent as
such taxes are applicable within Guam." "Iq)ortation," for purposes
of section 5701 is defined as bringing an article into the United
States frcm a source outside the United States. See 26 C.F.R.
S 48.0-2(a)(4)(i) (1982). "United States" is defined, for purposes
of the entire Internal Revenue Code, to include only the several
States and the District of Columbia. 26 U.S.C. S 7701(9). Further,

- 25

"importation" includes importation fran possessions of the United
States. 26 U.S.C. S 5702(l). "ImE@r_tation" thus does not include
importation into those possessions. See also id. S 5702(i) .
[2981 Accordingly, the excise taxes levied by section 5701 do not apply to
tobacco products imported into (or sold in) Guam or the Northern
Mariana Islands.

Art works and cultural Eroperty. Section 2092 of title 19,
U.S.C., prohibits importation into the United States of Certain
pre-Columbian sculpture and murals from Latin America. "United
States" is defined, for purposes of section 2092, to exclude Guam.
19 U.S.C. S 2095(2). Section 2092 consequently does not prohibit
importation of pre-Columbian art into the Northern Mariana Islands.

Sections 2601 et seq. of title 19, U.S.C., implauents the
Convention on CultuFa-1 Property. The President, upon request of
another nation party to the Convention, may restrict the import of
archeological or ethnological material taken from that otlier nation
in violation of its laws. These import restrictions apply to the
United States, defined to include "any territory or area the foreign
relations for which the United States is responsible." 19 U.S.C. S
2601(10). The United States is responsible for the foreign relations
of the Northern Mariana Islands. Trusteeship Agreement, Arts. 2-5,
10-11, 14; Covenant 5� 104, 1003(c). Accordingly, the President may
prohibit the import of archeological or ethnoloqical material into
the Northern Mariana Islands under section 2601 et seq. Section 2613
of title 19 provides that the prohibitions agairisT importation of
illegal ly-possessed cultural property will be enforced in the customs
territory of the United States and in the Virgin Islands by United
States custans officers and in other areas subject to United States
jurisdiction by persons designated by the President.

Boats and boating equipment. Section 1461 of title 46, U.S.C.,
prohibits importation into the United States of boats and boating
equipment not in ccrnpliance with federal safety standards. "United
States" is defined, for purposes of section 1461, to include
specifically "the Cbmimonwealth of the Northen-i Marianas." 46 U.S.C.
S 1452(10). Accordingly, section 1461 prohibits importation into the
Northern Mariana Islands of boats and boating equipment not in
compliance with federal safety standards.

Section 1322 of title 33, u.S.C., prohibits importation into the
United States of any marine sanitation device not complying with
federal regulations designed to prevent the discharge of untreated or
inadequately treated sewage in navigable waters. "United States" is
defined in subsection (a)(4) of section 1322 to include Gum (as well
as the Trust Territory of the Pacific Islands). Consequently, by
operation of section 502(a) of the Covenant, section 1322 prohibits
importation into the Northern Mariana Islands of noncomplying marine
sanitation devices.

- 26 -

Consumer products. Section 2066 of title '15, U.S.C., refuses
admission into the customs territory of the United States (as defined
in General Headnote 2 to the Revised Tariff Schedules of the United
States) of consumer products determined to be hazardous or not in [2991
compliance. with applicable product safety rules. The Northern
Mariana Islands is not within the customs territory of the United
States. Covenant S 603(a). Consequently, importation into the
Northern Mariana Islands of consumer products banned as unsafe in the
United States is not barred by section 2066. Section 2068 of title
15, however, bars importation into the United States of any consumer
product not in conformity with an applicable consumer product safety
standard or declared a banned hazardous product. "United States" is
defined, for purposes of section 2068, to include Guam. 15 U.S.C.
� 2052(10) and (14). By operation of section 502(a)(2) of the
Covenant, "United States" also includes the Northern Mariana Islands,
so importation of unsafe consumer products into the Northern Mariana
Islands is banned.

Section 6301 of title 42, U.S.C., forbids importation into the
customs territory of the United States of various consurrer products
that do not rreet federal energy-efficiency standards and labelling
requirements. Among the products covered are refrigerators,
freezers, clothes washers and dryers, kitchen ranges, air
conditioners, water heaters, and television sets. The Northern
Mariana Islands is not within the customs territory of the United
States. Covenant S 603(a). Consequently, section 6301 does not
prohibit importation of covered but noncomplying consumer products
into the Northern Mariana Islands. Note, however, that other
provisions prohibit the distribution in cxrmTerce of such products.
42 U.S.C. S 6302. "Commerce" is defined for purposes of section 6302
to include commerce "between a place in a State and a place outside
thereof." Id. � 6291(a)(17). "State" in turn is defined to include
any territ6i@ or possession of the United States. Id. S 6202(4) .
Guam is a territory or possession of the United -9-tates. Under
section 502 (a) (2) of the Covenant, section 6302 prohibits the
distribution of noncomplying products brought into the Northern
Mariana Islands from other parts of the United States or from foreign
countries.

Energy prod ucts-- natural gas. Section 717b of title 15, U.S.C.
forbids importation to or exportation from the United States of
natural gas without prior authorization of - @ the Federal Energy
Regulatory Commission. The Natural Gas Act, of which section 717b is
a part, does not def ine "United States" for purposes of the Act.
Section 2(4) of the Act, 15 U.S.C. S 717a(4), does define "State" to
include "arry organized Territory of the United States." Sections 20
and 22 of the Act, 15 U.S.C. SS 717s and 717u, give jurisdiction to
enforce the Act to "the United States courts of any Territory or
other place subject to the jurisdiction of the United States." These
provisions provide some evidence of a congressional intent that at

- 27 -

least the "organized Territories" and, perhaps, all "places subject
to the jurisdiction of the United States" be considere d part of the
United States for purposes of the prohibitions on the import and
[3001 export of natural gas.

If all places subject to the jurisdiction of the United States
are within the United States for purposes of section 717b, imports to
and exports from Guam are clearly within the section's prohibitions.
By operation of section 502(a) (2) of the Covenant, imports to and
exports from the Northern Mariana Islands would also be included.

If only "organized Territories" are within the United States for
purposes of section 717b, the applicability of the section to the
Northern Mariana Islands, by operation of section 502 (a) (2) of the
Covenant depends upon whether Guam is an "organized Territory," as
the term is used in the Natural Gas Act. Guam did not yet have an
organic act in 1938 when the Act was passed, and thus was not then
"organized." When it received its organic act in 1950, it became
"organized." See United States v. Standard Oil Co., 404 U.S. 558,
559 n.2 (1972).*

The tropical climate of the Northern Mariana Islands makes
unlikely the importation of natural gas for heating purposes. There
are at present no large-scale industrial users of natural gas in the
Northern Mariana Islands.

*Guam is not, however, incorporated. 48 U.S.C. S 1421a.
Incorporated territories are those predestined for Statehood. A
distinction is sometimes made between "Territory" and "territory,"
with the capitalized form deemed to apply only to incorporated
territories and the lower-case form deemed to mean only
unincorporated territories or used as a generic term, to include both
incorporated and unincorporated territorie@. See, for example, House
Report 93-507 (1973), reprinted at 1973 U.S. Code Cong. & Ad. News
2730, 2732; House Report 1521, 90th Cong., 2d Sess., Appendix (1968);
House Clommittee on Interior and Insular Affairs, Resource Materials
Used in the Preparation of the Report of the Commission on
AppliEE`tion ---I- pr
of Federa. Laws to Guam 182 (Committee int 1952); U.-S.
Department of State, Bureau of Intelligence & Research, United States
and Outlyirxg Areas 9 (Geographic Bulletin No. 5, April 1965). The
capitalized form, however, has been used so often to effbrace
unincorporated areas that whether or not the word is capitalized is
not a reliable indication of congressional intent. See, for example,
Public Law 90-201, � 2, 81 Stat. 584 (1967), 21 U.S.C. � 601(g);
United States v. Villarin Gerena, 553 F.2d 723, 724-26 (1st Cir.
f-977); Kanazawa Ltd. v._9Fu_ndUnlimitedF 440 F.2d 1239 (9th Cir.
1971); and Moreno Rios v. United States, 256 F.2d 68, 71-72 (1st Cir.
1958). See also Garcia v. Friesecke, 597 F.2d 284 (1st Cir. 1979,
certiorari denied; 444 U.S. 940 (1979). Indeed, the capitalized form
has been used on at least one occasion to include the Trust Territory
of the Pacific Islands. See 12 U.S.C. S 1772.

28 -

On the export side, at present no sources of commercial
quantities of natural gas are known to exist in the Northern Mariana
Islands.
[3011
--petroleum products. Sections 753 and 760g of title 15,
U.S.C., allow the PresiTe-nt by regulation to allocate all crude oil,
residual fuel oil, and refined petroleum products imported into the
United States. By Executive Order 12287, 3 C.F.R. 124 (1982),
controls previously instituted under these sect-ions were lifted.
(Petroleum products produced in the United States are also subject to
regulation.) Section 760b authorizes @the President by regulation to
establish a procedure whereby the United States Government becomes
the exclusive importer of petroleum products for resale in the United
States. See 10 C.F.R. part 218 (1983). "United States" is defined,
for purposes of section 753, to include the territories and
possessions of the United States. 15 U.S.C. S '752(7). Guam is a
territory or pDssession of the United States. By operation of
section 502(a)(2) of the Covenant, regulations issued under sections
753 and 760b would apply to importation of petroleum products into
the Northern Mariana Islands.

Section 4081 of title 26, U.S.C., imposes an excise tax on the
sale of imported gasoline by the importer. (The same tax is also
imposed on gasoline sold by dcmestic manufacturers.) Section 604(a)
of the Covenant allows the United States to "levy excise taxes on
goods . . . sold . . . in the Northern Mariana Islands in the same
manner and to the same extent as such taxes are applkcable within
Guam. " "Importation," for purposes of section 4081 is defined as
bringing an article into the United States from a source outside.the
United States. See 26 C.F.R. S 48.0-2(a)(4)(i) (1982). "United
States" is defined, for purposes of the entire Internal Revenue Code,
to include only the several States and the District of Columbia. 26
U.S.C. S 7701(9). Accordingly, the excise tax levied by section 4081
does not apply to imported gasoline sold in Guam or the Northern
Mariana Islands.

Section 4611 of title 26, U.S.C., imposes a tax on petroleum and
petroleum products entered into or exported from the United States.
"United States" is defined, for purposes of section 4611, to include
"the Commonwealth of the Northern Mariana Islands." 26 U.S.C.
� 4612(a)(4)(A). Accordingly, petroleum and petroleum products
imported into or exported from the Northern Mariana Islands are
subject1to the tax imposed by section 4611.

--nuclear energy materials and equipment. , Sections 2011 et seq.
of title 42, U.S.C., govern the import and Iexport of materi@J-s- aFid
equipment used for the production of nuclear energy. Fbr purposes of
these provisions, "United States" is defined to include "all
rI@erritories and possessions" of the United States. 42 U.S.C.
S 2014(bb). Guam is thus within the United States for purposes of

these provisions. By operation of section 502(a)(2) of the Covenant,
the controls imposed by sections 2011 et seq. apply to the
importation to and exportation from the NorEh-ern Mariana Islands of
(3021 materials and equipment used for the production of nuclear energy.*
Firearms, switchblades, and explosives-firearms. Under section
922 of title 18, U.S.C., engaging in the business of importing
fireams or ammunition without a license or transporting firearms or
amunition in interstate or foreign commerce without a license is
illegal. "State" is defined, for purposes of section 922, to include
the possessions of the United States. 18 U.S.C. S 921(a)(2). See
also id. S 922(a)(2)(C). Guan is thus a "State" for purposes of
secti(Tn- 922 and so, by operation of section 502(a)(2) of the
Covenant, is the Northern Mariana Islands. "Interstate or foreign
ccmmerce" includes commerce between any place inside a State and any
place 'outside that State. Any business importing firearms or
ammunition into the Northern Mariana Islands thus requires a federal
license.

Section 5844 of title 26, U.S.C., prohibits importation into the
United States "or any territory under its control or jurisdiction" of
any fireatm, except for certain specified purposes. Guam is under
the control and jurisdiction of the United States. Accordingly, by
operation of section 502(a)(2) of the Cbvenant, the importation of
firearms into the Northern Mariana Islands for other than the
specified purposes is prohibited by section 5844.

Section 4181 of title 26, U.S.C., imposes excise taxes on
firearms. (The same taxes are also imposed when firearms are sold by
domestic manufacturers.) Section 604(a) of the Covenant allows the
United States to "levy excise taxes on goods . . . sold . . . in the
Northern Mariana Islands in the same manner and to the same extent as
such taxes are applicable within Guam." Section 5801 imposes an
occupational tax on importers of firearms, and section 5802 requires
them to register with the Secretary of the Treasury. Section 5841
requires registration by the importer of all imported firearms.
Section 5842 requires importers to mark all imported firearms with a
serial number. Section 5843 requires importers to k--ep certain
records regarding imported firearms. "Importation," for purposes of
sections 4181, 5801, 5802, 5841, 5842, and 5843, is defined as
bringing an article into the United States from a source outside the
United States. See 26 C.F.R. � 48.0-2(a)(4)(i) (1982). "United
States" is defined, for purposes of the entire Internal Revenue Code,

*Movement of materials and equipment between the Northern
Mariana Islands and other parts of the United States is not subject
to the import-export controls, but is subject to other provisions of
the law. See, for example, 42 U.S.C. 9 2073(a).

- 30 -

to include only the several States and the District of Columbia. 26
U.S.C. S 7701(9). Accordingly, the excise tax levied on firearm by
section 4181 does not apply to firearms imported into (or sold in)
Guam or the Northern Mariana Islands and the requirements of sections [3031
5801, 5802, 5841, 5842, and 5843 do not apply to persons importing
firearms into Guam or the Northern Mariana Islands

-switchblade knives. Section 1242 of title 15, U.S.C.F
prohfEll-tsthe transpDrFaRion of switchblade knivas in interstate
cciwmrce. "Interstate commerce" is defined, for purposes of section
1242, to irean "commarce between any State, Territory, possession of
the United States, or the District of Columbia, and arry place outside
thereof." 15 U.S.C. S 1241 (a). Guam is a Territory or possession of
the United States, so importation of switchblade knives into Guam is
prohibited by section 1242. By operation of section 502(a)(2) of the
Covenant, importation of switchblade knives into the Northern Mariana
Islands is also prohibited.

-explosives. Section 842 of title 18, U.S.C., makes unlawful
engaging in the business of importing explosives without a federal
license or transporting explosives in interstate or foreign commerce
without a federal license. "State' is defined, for purposes of
section 842, to include the possessions of the United States. is
U.S.C. S 841(b). Guam is thus a "State" for purposes of section 842
and so, by operation of section 502 (a) (2) of the Covenant, is the
Northern Mariana Islands. "Interstate or foreign coamrce" includes
ccim-erce between any place inside a State and any place outside that
State, as well as commerce within any possession. Any movenent of
explosives into or within the Northern Mariana Islands thus requires
a federal license.

Fisheries prod ucts--Northern Pacific halibut. Section 773e of
title 16, U.S.C., prohibits bringing into @in_yplace subject to the
jurisdiction of the United States halibut caught in certain Northern
Pacific waters from vessels other than United States or Canadian
vessels or otherwise caLy-jht in violation of legislation implementing
a United States-Canada treaty for the preservation of the halibut
fishery of the Northern Pacific ocean and the Bering Sea, 5 U.S.T. 5,
T.I.A.S. 2900 (1954). Guam is subject to the jurisdiction of the
United States. Accordingly, by operation of section 502(a)(2) of the
Covenant, Northern Pacific halibut imported into the Northern Mariana
Islands is subject to the prohibitions of section 772e.

--whale products. Section 916c of title 16, U.S.C., prohibits
any person subject to the jurisdiction of the United States fran
importing or exporting whale products taken or processed in violation
of the International Convention for the Regulation of %baling, 10
U.S.T. 952, T.I.A.S. 4228 -(1959), to which the United States is a
signatory, and regulations issued thereunder. Persons in the
Northern Mariana Islands are sLbject to the jurisdiction of the

United States Trusteeship Agreement, Art. 3; Clovenant SS 101 ,
1003(c). Accordingly, section 916c is applicable to importation to
and exportation frcm the Northern Mariana Islands of whale products.
[3041 -tuna frcm inter-American waters. Section 957 of title 16,
U.S.C., prohibits any person from importing or exporting fish talean
in violation of regulations implementing the (bnvention fDr the
Establishment of an Inter-American Tropical Tuna Commission, 1 U.S.T.
230, T.I.A.S. 2044 (1950), to which the United States is a signatory.
Sections 955 and 957 of title 16 also prohibit entry into the United
States of f ish in any form taken, or from a country the vessels of
which are taking fish, from an area regulated under that Convention*
contrary to the Commission's conservation recammendations. Any
person subject to the jurisdiction of the United States is subject to
these prohibitions. 16 U.S.C. � 951 (d) . "United States@' is defined
to include all areas under the sovereignty of the United States and
the Trust Territory of the Pacific Islands. Id. 5 951 (e) . The
Northern Mariana Islands, now a part of the Trds-t Territory of the
Pacific Islands, will be under the sovereignty of the United States
on termination of the trusteeship. Covenant SS 101, 1003(c).
Persons in the Northern Mariana Islands are even now subject. to the
jurisdiction of the United States. Trusteeship Agreement, Art. 3.
Accordingly, persons in the Northern Mariana Islands are subject to
the section 957 prohibitions on importing and exporting fish taken in
violation of regulations implementing the Convention for the
Establishment of an Inter-Arrerican Tropical Tuna Commission. Entry
into the Northern Mariana Islands of f ish taken, or from a country
the vessels of which are taking f ish, from an area regulated under
that Convention contrary to the Commission"s conservation
recommendations is prohibited.

-North Pacific fisheries products. Section 1029 of title 16,
U.S.C., prohibits any person subject to the jurisdiction of the
United States frcm importing or exporting any fish taken in violation
of the International Convention for the High Seas Fisheries of the
North Pacific ocean, 4 U.S.T. 380, T.I.A.S. 2786 (1953), as amended,
30 U.S.T. 1095, T.I.A.S. 942 (1979), to wtiich the United States is a
signatory, or of statutes, regulations, and permits implementing that
convention. The convention provides a mechanism for allocating the
North Pacific salmon fishery among the United States, Canada, and
Japan. Persons in the Northern Mariana Islands are subject to the
jurisdiction of the United States. Trusteeship Agreement, Art. 3;
Covenant SS 101, and 1003(c). Accordingly, persons in the Northern
Mariana Islands are subject to the import and export prohibitions of
section 1029.

*The regul area, off the west coast of the United States and
Latin America, includes no waters within the Trust Territory of the
Pacific Islands or, indeed, west of 125 degrees west longitude, which
is considerably to the east of Havaii. See 50 C.F.R.
SS 280.1(g)(1982).

- 32 -

-fisheries conservation and management. Section 1825 of title
16, U.S.C., forbids importation into the United States of fish and
fish products fran fisheries of, or from, nations found to be
violating, or refusing to enter into, international fisheries [3051
agreements with the United States. Section 1857 of title 16
prohibits the importation or exportation of any fish taken in
violation of the Fishery Conservation and Management Act (the
FCMA)--of which sections 1825 and 1857 are a part-or any
international fishery agreement entered into under authority of the
FCMA, any regulation under authority of the FCMA or such an
agreement, or any permit under the FCMA.

Prior to January 12, 1983, the applicability of the FCMA to the
Northern Mariana Islands was the subject of litigation and much
controversy.* On that date Public Law 97-453 became effective. 96
Stat. 2481. That law amends the FCMA to provide the Northern Mariana
Islands voting membership on the TAbstern Pacific Regional Fishery
Management Council. Id. 9 5, amending 16 U.S.C. S 1852(a)(8). the
legislative history 6-fPublic Law 97-453 establishes that, whatever
the applicability of the FCMA to the Northern Mariana Islands prior
to passage of Public Law 97-453, the FCMA became clearly applicable
to the Northern Mariana Islands on January 12, 1983. House Report
97-549, at 17-18 (1982), reprinted in 1982 U.S. Code Cong. & Ad. News
4320, 4330-31.

The import and export prohibitions of sections 1825 and 1857
consequently bar imports to and exports frcin the Northern Mariana
Islands.

The Gommission has agreed to recimumnd to Congress that the
Northern Mariana Islands not be treated as part of the United States
for purposes of the FCMA.

--fish caught fran foreign-flag vessels. Section 251 of title
46, U.S.C., prohibits foreig-n-flag vessels fran landing fish in a
port of the United States, except pursuant to treaty. Section 503(b)
of the Covenant makes inapplicable to the Northern Mariana Islands
federal prohibitions against foreign vessels landing fish in the
United States. Accordingly, section 251 does not prohibit
foreign-flag vessels fran landing fish in the Northern Mariana
Islands.

*The Executive Director of the Ccimmission was previously
associated with the law firm representing the plaintiffs in
litigation asserting the inapplicability of the FCMA to the Northern
Mariana Islands, although he was not attorney of record for
plaintiffs.

Foods, drugs, and cosmetics-adulterated, misbranded, or
otherwise ill pFoaucts. Section 381 of title 21, U.S.C., fbFb_1_ds
importRI-on-into the United States of adulterated, misbranded, or
[3061 otherwise illegal foods, drugs, devices, and cosmetics. Although the
Food, Drug, and Cosmetic Act, of which section 381 is a part, does
not define "United States", it does define "State" to include any
territory or possession of the United States. 21 U.S.C. � 321(a)(1)
and (2). Gum is a territory or possession of the United States.
Thus, Gum and, by virtue of section 502(a)(2) of the Covenant, the
Northern Mariana Islands are States for purposes of the Act and
imports into the Northern Mariana Islands are covered by the Act.

Section 18 of title 21, U.S.C., authorizes the President to halt
the importation of dangerously adulterated food or drink into the
United States. Section 18 was enacted as part of the Act of August
30, 1890, c.839, 26 Stat. 414, the sane legislation discussed under
"Agricultural items--animals affected by or exposed to communicable
disease," above. In the earlier discussion, this legislation was
shown to be applicable to the Northern Mariana Islands. Section 18,
as part of the sane statute, should also be deemed to include the
Northern Mariana Islands as part of the United States, in the absence
of evidence of a contrary congressional intent. Accordingly, the
President, pursuant to section 18, may halt the importation of
dangerously adulterated food or drink into the Northern Mariana
Islands.

--food and dairy products mislabelled as to origin. Sections 16
I to "any State
and 17 of title 21, U.S.C., rohirbit the introduction in
or Territory of the United States or the District of Columbia" from
any other State or Territory or the District of food or dairy
products falsely labelled as to the State or Territory in which they
were made or grown. An early opinion of the Attorney General of the
United States held that these sections also bar hiftportation. of
foreign food or dairy products labelled as doffestic in origin. 24
Op. Attorney General 675, 679 (1903). Neither the language of this
law nor its legislative history indicates whether territories or
possessions of the United States are to be treated as parts of the
United States. In the absence of any such indication, the United
States is presumed not to include those areas and, consequently, not
to include the Northern Mariana Islands.

-perishable foods. Sections 4401 et seq. of title 7, U.S.C.,
implement the Agreement on the International Carriage of Perishable
Foodstuffs and on the Special Equipment to be Used for Such Carriage.
This Agreement requires that frozen foods and other perishable foods
be transported internationally only in containers meeting certain
standards. Equipffent used in sea voyages of more than 150 kiloweters
is exempted. The Secretary of Agriculture ensures compliance in the
United States. 7 U.S.C. S 4403. the Northern Mariana Islands is
included in the United States for purposes of these statutes by
specific reference. Id. S 4402(6).

34 -

-fruits and vegetables. Section 608e-1 of title 7, U.S.C.,
prohibits importation into the United States of a variety of fruits
and vegetables unless the fruit or vegetables rreet the terms or
conditions regulating grade, size, quality, or maturity contained in [3071
applicable Tmrketing orders issued by the Secretary of Agriculture.
The purpose of marketing orders is to stabilize agricultural markets,
minimize ruinous ccmpetition, and assure American farmers a fair
price for their product. See generally 7 U.S.C. S 602. Fruits and
vegetables subject to the import controls are tanatoes, raisins,
olives (other than Spanish-style green olives), prunes, avocados,
mangoes, limes, grapefruit, green peppers, Irish potatoes, cucumbers,
oranges, onions, walnuts, dates, filberts, table grapes, and
eggplants. The prohibition of section 608e-1 does not apply to
fruits and vegetables shipped into the continental United States
"frcm any Territory or possession!' where the law "has force and
effect." The law is applicable to all United States possessions
"except the Virgin Islands, American Samoa, the Canal Zone, and the
island of Guam." 7 U.S.C. S 610(f). The law is thus not applicable
to the Northern Mariana Islands. Accordingly, the named fruits and
vegetables may be imported into the Northern Mariana Islands
unrestrained by marketing orders issued by the Secretary of
Agriculture. (Note that exports from the Northern Mariana Islands to
the United States (though not to Guam) of any of these items must
comply with any applicable marketing order standards.)

-rice. Section 13801 of title 7, U.S.C., requires importers of
procE@s-sed rice to acquire- certificates entitling them to shares of
the national quota for rice production authorized by the Secretary of
Agriculture. The national quota is the amount the Secretary
estimates will be consumed in the United States, "including its
Territories and possessions" during the coming year. 7 U.S.C.
S 1380c. Section 1380p defines "United States" for purposes of these
rice import restrictions, however, to exclude Guam. Thus, rice
imported into Guam is not sLbject to these import restrictions.* The
restrictions, therefore, are not applicable to imports of rice into
the Northern Mariana Islands by the operation of the Oovenant.

--wheat and wheat flour. Section 1642 of' title 7, U.S.C.1
authorizes the President to regulate the importation or exportation
of wheat or wheat flour in order to implement the International Wheat
Agreement, 22 U.S.T. 820, T.I.A.S. 7144 (1971), to which the United
States is a signatory. The Agreement provides that each party will
implement the Agreement in all territories for the foreign relations

*But Guan is a Territory or possession, the rice consumption of
which must be taken into account in determining the national quota
under section 1380c.

- 35

of which it is responsible and that a party may declare that the
agreement Will not apply in specified overseas territories. The
United States is responsible for the foreign relations of the
Northern Mariana Islands. Trusteeship Agreement, Arts. 3, 10, 14;
[3081 Covenant SS 104, 1003(c). No declaration by the United States of a
decision not to implement the Agreement in the Northern Mariana
Islands is known to exist. Section 1642 should be construed
consistently with the Agreement. See Menominee Tribe v. United
States, 391 U.S. 404, 413 (1968). Accordingly, the Northern Mariana
Islands is part of the United States for purposes of section 1642,
subject to presidential regulation of wheat and wheat flour imports
and exports.

-sugar. Section 3602 of title 7, U.S.C., authorizes the
Presi7d-entto regulate the entry of sugar into the customs territory
of the United States in order to implement the International Sugar
Agreement, to which the United States is a party. 31 U.S.T. 5135,
T.I.A.S. 9664 (1980). The Northern Mariana Islands is not within the
customs territory of the United States. Covenant S 603(a).
Accordingly, the President's authority does not extend to sugar
entering the Northern Mariana Islands. Sugar produced in the
Northern Mariana Islands would, however, be subject to the
President's authority to regulate the entry of sugar into the customs
territory of the United States.

--tea. Section 41 of title 21, U.S.C., prohibits importation
into OTe-United States of tea not meeting federal quality and purity
standards. Neither the Tea Importation Act, 21 U.S.C. SS 41 et seq.,
nor the regulations issued thereunder, 21 C.F.R. part 1220 (19-827)-and
19 C.F.R. S 12.33 (1982), define "United States" for purposes of
section 41. References in the Act to the Tariff Schedules of the
United States, 21 U.S.C. S 41, and United States custamhouses, id.
SS 43, 44, make clear that section 41 prohibits the importaFir-on of
substandard tea only into the custans territory of the United States.
Accordingly, section 41 does not apply to the importation of tea into
the Northern Mariana Islands.

@2 Section 466 of title 21, U.S.C., prohibits
importationlt@i_yn; the United States of slaughtered poultry or poultry
products not in ocmpliance with federal wholesomeness standards.
"United States" is defined for purposes of section 466 to include
Guam. 21 U.S.C. � 453(c) and (d). By operation of section 502(a)(2)
of the Covenant, importation into the Northern Mariana Islands of
poultry products not meeting federal standards is also prohibited by
section 466.

-meat. Sections 612 to 624 of title 21, U.S.C., require live
or slaughtered me-at animals to be certified as to condition prior to
export. Section 620 prohibits importation of mat that is
adulterated, misbranded, or otherwise not in compliance with the law.

- 36 -

"United States" is defined, for purposes of these sections, to
include the States and Territories. 21 U.S.C. � 601(i). "Territory"
in turn is def ined to include Guam. Id . S 6 01 i(g) . Under section
502(a)(2) of the Covenant, the UniteF_ States also includes the [3091
Northern Mariana Islands, so exports from the Northern Mariana
Islands to third countries and imports to the Northern Mariana
Islands from third countries are covered hyy the provisions regarding
exports and imports. (Meat and mat animals shipped between the
Northern Mariana Islands and the rest of the United States are not
governed by these provisions but are subject to other neat inspection
requirements in title 21.)

--dairy products. Section 62 of title 21, U.S.C., prohibits
shipmnt of filled milk in interstate or foreign comfferce.
"Interstate or foreign ccmmerce," for purposes of section 62,
includes commerce between any possession and any point outside
thereof. 21 U.S.C. S 61 (b) . Guam is a possession of the United
States. By operation of section 502(a)(2) of the Covenant, section
62 also prohibits shipment of filled milk to and from the Northern
Mariana Islands. (The constitutionality of the Filled Milk Act-- of
which section 62 is a part-- was sustained in United States V.
Carolene Products, 304 U.S. 144 (1938), but has more recently been
brought into doubt by the decision in Milnot Co. v. Richardson, 350
F. Supp. 221 (S.D. Ill. 1972).)

Section 141 of title 21, U.S.C., prohibits the importation of
milk and crean into the United States without a federal permit.
Section 149 of title 21 defines "United States," for purposes of
section 141, to exclude Guam. Section 141 consequently does not
apply to importation of Talk or cream into the Northern Mariana
Islands.

-eggs. Section 1046 of title 21, U.S.C., prohibits importation
into the United States of eggs or egg products not in compliance with
federal wholesomeness, inspection, and labelling regulations.
"United States," for purposes of section 1046, is defined to exclude
Guam. 21 U.S.C. S 1033(y) and (z) . The Northern Mariana Islands
consequently is not part of the United States for purposes of section
1046, and that section does not apply to the importation of eggs or
egg products into the Northern Mariana Islands.

-dentures. Section 1821 of title 18, U.S.C., makes criminal
the transportation of dentures without the authorization of a
licensed dentist into a State or territory where local law prohibits
the supplying of dentures by persons other than licensed dentists.
"United States," for purposes of title 18, is defined to include all
places subject to the jurisdiction of the United States. 18 U.S.C.
� 5. Guam is subject to the jurisdiction of the United States.
Accordingly, by operation of section 502 (a) (2) of the Covenant,
section 1821 is applicable to dentures brought into the Northern
Mariana Islands.

- 37 -

Furs. Section 69d of title 15, U.S.C., prohibits importation
into 97eUnited States of furs and fur products that are misbranded
or falsely or deceptively invoiced. "United States," for purposes of
(3101 the prohibition, is defined to include the "Territories and
possessions of the United States" and thus includes Guam. By virtue
of section 502(a)(2) of the Covenant, the importation of furs and fur
products into the Northern Mariana Islands is also subject to section
69d. But the invoicing requirements, violation of which'this section
prohibits, are clearly not applicable to imports to jiorthern Mariana
Islands. The section refers specifically to the invoicing
requirements of the Tariff Act of 1930, 19 U.S.C. SS 1301 et seq.
Those requirements, set forth at sections 1481 et seq. of tft-ie 19,
are not applicable to imports into Guam. See T9- U.S.C. S 1401(h).
There thus is no rationale under the Covenant for their application
to the Northern Mariana Islands.

Section 1151 of title 16, U.S.C., prohibits the importation of
certain fur seals and fur seal products into any place subject to the
jurisdiction of the United States. 16 U.S.C. � 1159. Guam i s
subject to the jLwisdiction of the United States. Accordingly, by
operation of section 502(a)(2) of the Covenant, importation of fur
seals and fur seal products into the Northern Mariana Islands is
prohibited.

Gambling devices and paraphernalia-gambling devices. Section
1172 of title 15, U.S.C., prohibits transportation o gambling
devices, including slot machines, into any State other than a State
that has enacted legislation to make use of such devices legal.
Section 1177 requires forfeiture of gambling devices transported in
violation of section 1172. "State" is defined, for purposes of
sections 1172 and 1177, to include Guam. 15 U.S.C. � 1171(b). By
operation of section 502(a)(2) of the Covenant, "State" also includes
the Northern Mariana Islands and sections 1172 and 1177 apply to
shipment of gambling devices to the Northern Mariana Islands.

-lottery tickets. Section 1301 of title 18, U.S.C., imposes
criminal penaFt-Te-sfor bringing lottery tickets into the United
States. "United States," for purposes of title 18, is defined to
include all places subject to the jurisdiction of the United States.
18 U.S.C. S 5. Guam is subject to the jurisdiction of the United
States. Accordingly, by operation of section 502(a)(2) of the
Covenant, section 1301 imposes criminal penalties for bringing
lottery ticlets into the Northern @1ariana Islands.

The Commission has agreed to reccrmiend to Congress elimination
of these penalties for certain nonprofit lotteries in the Northern
Mariana Islands.

-wagering and bookmaking paraphernalia. Section 1953 of title
18, U.S.C., imposes criminal penalties for transportation in

- 38 -

interstate or foreign commerce of wagering or bookmaking
paraphernalia (except to States where the use of the particular
paraphernalia is lawful). "Interstate o3nmerce" is defined, for
purposes of title 18, to include "commerce between@ one State, [3111
Territory, Possession, or the District of Columbia and another State,
Territory, Possession, or the District of Columbia." 18 U.S.C. S 10.
"State" is defined to include the territories and possessions of the
United States. Id. S 1953(d)(1).* Gum is a Territory or Possession
of the United SEa-tes, so that commerce between Guam and either other
parts of the United States or a foreign country is embraced within
the term "interstate or foreign comnerce." By operation of section
502(a)(2) of the Covenant, section 1953 of title 18 of the United
States, also imposes criminal penalties for transporting wagering or
bookmaking paraphernalia in or out of the Northern Mariana islands.

Ho@by items. Sections 2101 and 2104 of title 15, U.S.C.,
prohibit importation into the United States and authorize forfeiture
of improperly marked imitation political and numismatic items. The
statute is intended to protect collectors of coins and of political
memorabilia (such as old political campaign buttons) . "United
States" is defined to include the States, the District of Columbia,
and the Ommnwealth of Puerto Rico. 15 U.S.C. S 2106M. This
definition, by excluding Guam and other territories, excludes those
areas from the geographic scope of the hobby protection laws. There
thus is no rationale under the Covenant for their application to the
Northern Mariana Islands, and imports of improperly marked imitation
political and numismatic items into the Northern Mariana Islands are
not prohibited by sections 2101and 2104.

Mobile homes. Section 5409 of title 42, U.S.C., forbids
importation into the United States of mobile horres not in compliance

*This definition, however, merely makes clear that
transportation of paraphernalia to territories and possessions where
its use is lawful does not violate the law. The exception also
applies to paraphernalia the use of which is lawful in the Northern
Mariana Islands. Section 1953 applied to Guam on the effective date
of section 502(a)(2), although the anrendment defining "State" was not
enacted until after that date. Under section 502(a)(2) of the
Covenant, anendments enacted after the effective date of section 502
to laws applicable to the Northern Mariana Islands on the effective
date of section 502 are also applicable to the Northern Mariana
Islands.

39 -

with federal construction and safety standards. Although "United
States" is not defined for purposes of section 5409, "State' is
defined to include Guam. 42 U.S.C. S 5402(12). The inclusion of
[3121 Guan as a "State" is strong evidence of congressional intent that
Guan be considered part of the United States for purposes of section
5409. By operation of section 502(a)(2) of the Covenant, section
5409 also prohibits importation into the Northern Mariana Islands of
mobile hones not in compliance with federal construction and safety
standards.

Money, securities, gold, and silver--money and negotiable
securities. Section 5316 of title 31, U.S.C., requires any person
transporting more than $5000 in ffoney or negotiable securities into
or out of the United States to file a report thereon with the
Secretary of the Treasury. Section 5314 of title 31 requires any
resident or citizen of the United States or any person in the United
States doing business therein to file certain reports on transactions
with foreign financial agencies. Section 5315 authorizes the
Secretary of the Treasury by regulation to require additional reports
on foreign currency transactions. "United States" is defined, for
purposes of these sections, to include those possessions of the
United States specified in regulations issued by the Secretary of the
Treasury. 31 U.S.C. S 5312(a)(5). The Secretary has defined "United
States" to include all territories and possessions of the United
States. 31 C.F.R. S 103.11 (1982). Guan is such a territory or
possession. By operation of section 502(a)(2) of the Covenant,
persons transporting money or negotiable instruments in and out of
the Northern Mariana Islands are subject to section 5316's reporting
requirements; and persons residing in the Northern Mariana Islands
and persons in the Northern Mariana Islands doing business there must
report foreign transactions as required by sections 5314 and 5315.

--gold and silver. Subsection (1) of section 95a of title 12,
U.S.C., authorMz@est@e President in tire of var to investigate,
regulate, or prohibit the import or export of gold or silver coins or
bullion, currency, or securities and to control importation or
exportation of any property in Which any foreign country or a
national thereof has any interest. (Section 95a was enacted as part
of the Trading with the Enemy Act during the First Tibrld,War.) Any
property subject to the jurisdiction of the United States is within
the authority granted the President. Id. "United States" is defined
to include any place subject to tlie- jurisdiction of the ' United
States. Id. S 95a(3). Guam is subject to the jurisdiction of the
United Sfa-tes. By operation of section 502 (a) (2) of the Covenant,
the President thus ney control imports to and exports from the
Northern Mariana Islands in exercising his authority under section
95a.

Section 294 of title 15, U.S.C., prohibits the importation,
exportation, or movement in interstate comnerce of falsely marked
gold or silver. Movement between the States and the Terribories and

- 40 -

possessions is specifically prohibited. The intent of the
prohibition, as shown by the language of the statute, is to include
the aarritories and possessions within the United States for purposes
of the statute. Guam is thus included and, by operation of section
502(a)(2) of the Covenant, so is the Northern Mariana Islands. [3131
Section 294 consequently prohibits the importation and exportation of
falsely marked gold and silver to and fran, the Northern Mariana
Islands and prohibits its movement betueen the Northern Mariana
Islands and other parts of the United States.

--counterfeit obligations and securities. Section 472 of title
18, U.S.C., imposes criminal penalties for bringing counterfeit
obligations or securities of the United States into the United
States. Section 474 of title 18 imposes criminal penalties for
bringing into the United States printing plates oz. stones that can be
used for printing obligations or securities of the United States and
for bringing into the United States photographs, engravings, or other
likenesses of obligations or securities of the United States.
Section 481 imposes criminal penalties for bringing into the United
States plates or stones useful for printing foreign obligations or
securities and for bringing into the United States photographs,
engravings, or other li)enesses of foreign obligations or securities.
Section 485 imposes criminal penalties for bringing into the United
States counterfeit coins or gold or silver bars. Section 490 imposes
criminal penalties for bringing into the United States counterfeit
United States coins of small denomination. Section 509 imposes
criminal penalties for bringing into the United States or any place
subject to the jurisdiction thereof plates or stones useful for
printing United States goverrment transportation requests or
photographs, engravings, or other like-nesses of such requests.

"United States" is defined, for purposes of title 18, to include
all places subject to the jurisdiction of the United States. 18
U.S.C. S 5. Guarn is subject to the jurisdiction of the United
States. Accordingly, by operation of section 502(a)(2) of the
Covenant, sections 472, 474, 481, 485, 490, and 509 impose criminal
penalties for bringing into the Northern Mariana Islands counterfeit
itEms, plates or engravings useful for counterfeiting, or
photographs, engravings, or other lilgenesses of the specified
documents.

motor vehicles-- information disclosure. Sections 1232 and 1233
of title 15, U.S.C., require each new automobile distributed in
commerce to bear a label containing specified information about the
automobile, including the manufacturer's suggested retail price.
"Distributed in cammercell is defined, for purposes of sections 1232
and 1233, to include delivery to ultimate purchasers in Guam, the
Trust Territories [sic] of the Pacific Islands, or any other place
under the jurisdiction of the United States. 1.5 U.S.C. S 1231(h).
Guam is under the jurisdiction of the United States. The law is thus

- 41 -

applicable to the Northern Mariana islands by operation of section
502(a) of the Covenant. Accordingly, new automobiles imported into
[3141 the Northern Mariana Islands mist bear the required labels.
-safety standards. Section 1397 of title 15, U.S.C., prohibits
importation into the United States of motor vehicles and motor
vehicle equipment not meeting United States safety standards. The
National Traffic and Motor Vehicle Safety Act, of which section 1397
is a part, does not define "United States," but does define "State"
to include Guam. 15 U.S.C. � 1391(8). The inclusion of Guam as a
"State" is strong evidence of congressional intent that Guam be
considered part of the United States for purposes of section 1397.
By virtue of section 502(a)(2) of the Covenant, "State" also includes
the Northern Mariana Islands, so the Northern Mariana Islands is part
of the United States for purposes of section 1397's prohibitions.

Section 1916 of title 15, U.S.C., prohibits importation into the
United States of any passenger motor vehicle not meting applicable
federal bumper standards. Although "United States" is not defined,
"State" is defined for purposes of section 1916 to include Guam.
15 U.S.C. S 1901(16). The inclusion of Guam as a "State" is again
strong evidence of congressional intent that Guam be considered part
of the United States for purposes of section 1916. By virtue of
section 502(a)(2) of the Covenant, "State" also includes the Northern
Mariana Islands, so the Northern Mariana Islands is part of the
United States for purposes of section 1916's prohibition against
importation of passenger automobiles not complying with applicable
federal bumper standards.

--fuel economy standards. Section 2006 of title 15, U.S.C.,
requires automobiles imported into the customs territory of the
United States to be labelled as to their fuel econmy. See also 15
U.S.C. S 2001(9) and (10). Section 2007 requires automobiles
imported into the custams territory of the United States to meet
federal fuel economy standards. The Northern Mariana Islands is not
within the custms territory of the United States. Covenant
S 603(a). Accordingly, automobiles imported into the Northern
Mariana Islands need not amply with the labelling and fuel economy
requirements of sections 2006 and 2007.

-excise taxes. Section 4061 of title 26, U.S.C., imposes an
excise tax on the sale of imported vehicles by the importer. Section
4064 of title 26 imposes a "gas guzzler" tax on the sale of imported
motor vehicles by the importer in inverse proportion to the fuel
ecorxny of those vehicles. Section 4071 imposes an excise tax on the
sale of imported tires and tubes by the importer. (The saw taxes
are also imposed on the same items when sold by domestic
manufacturers.) Section 604(a) of the. Covenant allows the United
States to "levy excise taxes on goods . . . sold . . . in the
Northern Mariana Islands in the same manner and to the same extent as

- 42

such taxes are applicable within Guam." "Importation," for purposes
of sections 4061, 4064, and 4071 is defined as bringing an article
into the United States from a source outside the United States. See
26 C.F.R. S 48.0-2(a)(4)(i) (1982). "United States" is defined, for [3151
purposes of the entire Internal Revenue Oode, to include only the
several States and the District of Columbia. 26 U.S.C. S 7701(9).
Accordingly, the excise taxes levied by sections 4061, 4064, and 4071
are not applicable to motor vehicles, tires, or tubes imported into
(or sold in) Guan and the Northern Mariana Islands.

-air pollution control standards. Section 7522 of title 42,
U.S.C., forbids importatTo-n-7-n-to the United States of any new motor
vehicle not certified as in o=pliance with federal air-pollution
control regulations. While "United States" is not defined for
purposes of section 7522, "State" is defined, by a 1977 amend:ment of
the law, to include specifically the Northern Mariana Islands. 42
U.S.C. � 7602(d). The clear intent of the 1977 amendment was to
include the Northern Mariana Islands within the coverage of the Clean
Air Act, of which sections 7522 and 7602 are a part. House PepDrt
95-294 (1977), at 341. Accordingly, section 7522 forbids importation
into the Northern Mariana Islands of new motor vehicles not certified
as in compliance with Clean Air Act standards.*

obscene and irmioral items. Section 1462 of title 18, U.S.C.F
imposes criminal penalties for bringing into the United States, or
any place subject to the jurisdiction thereof, obscene materials.
Guam is subject to the jurisdiction of the United States.
Accordingly, by operation of section 502(a)(2) of the Cbvenant, the
criminal penalties of section 1462 are applicable to persons bringing
obscene materials into the Northern Mariana Islands.

Section 1305 of title 19, U.S.C., bars importation into the
United States of items classified as imTmral. "United States" is
defined for purposes of this prohibition to exclude Guan. 19 U.S.C.
S 1404(h). Accordingly, the prohibition of section 1305 against
importation of immoral items into the United States does not bar
similar importations into the Northern Mariana Islands.

*In its January 1982 interim report to the United States
Congress, this Commission recommended that part A of title II of the
Clean Air Act, which contains section 7522, be made inapplicable to
the Northern Mariana Islands. The United States Environmental
Protection Agency has suspended enforcement of section 7522 in the
Northern Mariana Islands. Letter frcm Ann M. Gorsuch, Administrator,
United States Environmental Protection Agency to Carlos S. Camacho,
Governor of the Northern Mariana Islands (December 28, 1981).

- 43 -

Pesticides, chemicals, hazardous substances, and biological
products-- pest ic ides. Section 136o of title 7, U.S.C., controls the
import and export of pesticides and certain related devices to and
from the United States. "State" is defined, for purposes of section
[3161 136o, to include Guam and the several States. 7 U.S.C. � 136(aa) .
See also Pacific Construction Co. v. Branch, 428 F. , p
Supp. 727-28 (D.
Guam 1976), holding the legislation, of which section 136o is a part,
applicable to Guam. Under section 502(a) (2) of the Covenant, the
Northern Mariana Islands is also considered as part of the United
States for purposes of these controls.

-chemicals. Section 4661 of title 26, U.S.C., imposes a tax on
designated chemicals imported into the United States. "United
States" is defined, for purposes of section 4661, to include "the
Ccmmonwealth of the Northern Mariana Islands." 26 U.S.C. ��
4612(a)(4)(A); 4662(a)(2). Accordingly, the designated chemicals if
imported into the Northern Mariana Islands are subject to the tax
imposed by section 4661.

--hazardous substances. Section 1273 of title 15, U.S.C.,
forbids the importation into the United States of misbranded or
banned hazardous substances and restricts their export. The Federal
Hazardous Substances Act, of which section 1273 is a part, does not
define "United States." The Act does define "interstate commerce" to
include commrce between any territory and any place out 'side thereof
as well as camrerce within any unorganized territory. 15 U.S.C.
S 1261(b). "Territory" is defined to include "any territory or
possession" of the United States. Id. subsection (a). The United
States courts of the territories h5v-e jurisdiction to enforce the
Act. Id. S 1267. Thus, Congress intended territories and
possessions of the United States to be considered part of the United
States for purposes of the Act. Since Guam is a territory or
possession of the United States, imports and exports of hazardous
subjects to and fram Guan are controlled by section 1273. Under
section 502(a)(2) of the Covenant, imports and exports of hazardous
substances to and from the Northern Mariana Islands are similarly
subject to section 1273.

Section 1803, 1804, and 1808 of title 49, U.S.C., authorize the
Secretary of Transportation to issue regulations for the safe
transportation of hazardous materials. Materials defined as
hazardous include flammable, radioactive, explosive, corrosive,
poisonous, and other dangerous substances. See 49 C.F.R.
S 172.101 (1982). Pursuant to that authority, section 171.12 of
title 49, C.F.R. (1982), requires persons importing hazardous
materials into the United States to comply with certain labelling and
other safety requirements. "United States" is defined, for purposes
of these requirements, to include Guam. 49 U.S.C. S 1802(5) and (7);
49 C.F.R. S 171.8 (1982). By operation of section 502(a)(2) of the
Covenant, persons importing hazardous materials into the Northern
Mariana Islands must comply with these requirements.

- 44 -

Section 2612 of title 15, U.S.C., bars admission into the
customs territory of the United States (as defined in general
headnote 2 to the Tariff Schedules of the United States) of certain
toxic or hazardous chemicals. See also 15 U.S.C. S 2602M. . The [3171
Northern Mariana Islands is not within the custcxns territory of the
United States. Covenant S 603(a). Consequently, importation into
the Northern Mariana Islands of toxic or hazardous chemicals banned
in the United States is not barred. But the Toxic Substances Control
Act, of which section 2612 is a part, defines "United States" to
include specifically the Northern Mariana Islands. 15 U. S.C.
�260203) and (14). So, although the prohibitions of section 2612 do
not bar imports of toxic chemicals into the Northern Mariana Islands,
other provisions of the Act achieve essentially the sane result by
regulating the manufacture, processing, or distribution in commerce
of those chemicals in the United States. See id. SS 2604-2606.

--white phosphorous matches. Schedule 7, Part 9A, Headnote 1,
of the Revised Tariff Schedules prohibits importation into the United
States of white phosphorus matches. Other imported matches are
controlled to ensure that white phosphorus matches are not imported.
See 19 C.F.R. � 12.34 (1903). Imports into Guam and the Northern
Mariana Islands are not subject to the Revised Tariff Schedules. See
the discussion, The Revised Tariff Schedule of the United States,
above. Accordingly, the importation of white phosphorus matches into
the Northern Mariana Islands is not prohibited by Schedule 7, Part 9A
Headnote 1 of the Revised Tariff Schedules, and other match imports
are not subject to the controls implementing that prohibition.

--biolog ical products. Section 262 of title 42, U.S.C.,
prohibits bringing for _E@ife from a foreign country into a State or
possession of the United States any bioloqical product without a
federal license. Biological products include viruses, serums,
toxins, antitoxins, vaccines, and other items. (Section 262 also
prohibits bringing biological products for sale fran one State or
possession to another State or possession.) The Northern Mariana
Islands is defined as a "State" for purposes of section 262. 42
U.S.C. S 201(f). Accordingly, section 262 prohibits bringing
biological products into the Northern Mariana Islands for sale
without a federal license.

Publications--copyrighted works. Section 602 of title 17,
U.S.C., prohibits importation into the United States of works that
violate copyrights protected under United States copyright laws.
Guam is part of the United States for purposes of the copyright laws.
48 U.S.C. 9 1421n; 17 U.S.C. �101 ("United States" includes the
organized territories under the jurisdiction of the United States).
By operation of section 502 (a) (2) of the Cbvenant, the Northern
Mariana Islands is also part of the United States for purposes of the
ban on importation of infringing works.

Until July 1, 1986, section 601 of title 17, U.S.C., prohibits
importation into the United States of certain English-language

- 45

materials protected under United States ccpyright laws unless those
materials were printed in the United States or Canada. Guam is part
of the United States for purposes of the copyright laws. 48 U.S.C.
S 1421n; 17 U.S.C. S 101 ("United States" includes the organized
(3181 territories under the jurisdiction of the United States). By
operation of section 502(a)(2) of the Covenant, the Northern Mariana
Islands is also part of the United States for purpose of the ban on
importation of certain English- language materials not printed in the
United States or Canada. After July 1, 1986, the prohibition of
section 601 will no longer apply.

-foreign political propaganda. Section 614 of title 22,
U.S.C., imposes controls on the movement into and within the United
States of political propaganda by foreign agents. Section 614 is
applicable to movement of propaganda into and within "the
Territories, . . . the insular possessions, and all other places now
or hereafter subject to the civil or military jurisdiction of the
United States. 22 U.S.C. S 619; see also id. � 611 (m) . Guam is an
insular possession of the United States. -Kc-cordingly, by operation
of section 502(a) (2) of the 0:)venant, section 614 is applicable to
foreign political propaganda brought into the Northern Mariana
Islands.

Recreational fishing and archery equipment. Section 4161 of
title 26, U.S.C., imposes excise taxes on recreational fishing and
archery equipment. (The sa-ne taxes are also imposed on the same
items when sold by domestic manufacturers.) Section 604(a) of the
Covenant allows the United States to "levy excise taxes on goods
* * . sold . . . in the Northern Mariana Islands in the same manner
and to the same extent as such taxes are applicable within Guam."
"Importation," for purposes of sections 4161 is defined as bringinq
an article into the United States frorn a source outside the United
States. See 26 C.F.R. S 48.0-2(a)(4)(i) (1982). "United States" is
defined, for purposes of the entire Internal Revenue Code, to include
only the several States and the District of Columbia. 26 U.S.C.
S 7701(9). Accordingly, the excise taxes imposed by section 4161 do
not apply to recreational fishing and archery equipment imported into
(or sold in) Guam or the Northern Mariana Islands.

Television sets, radio tranEmitters, and other electronic
products-electronic products. Section 263h of title 42, U.S.C.,
prohibits iirtportati@@n @into the United States of any electronic
product not ccmplying with federal regulations designed to protect
the public from radiation emissions. "United States" is not defined
for purposes of section 263h, but "State" is defined, for purposes of
the subpart containing section 263h, specifically to include the
Northern Mariana Islands. 42 U.S.C. _q 263c(5); see also id.
S 201(f). Congress thus intended to prohibit importation of
nonccmplying electronic products into the Northen-i Mariana Islands.
(Regulations of the Food and Drug Administration implementing section
263h do not define "United States." 21 C.F.R. �� 1005.1-1005.3
(1982).) United States Customs Service regulations bar importation

- 46 -

of noncomplying electronic products into the customs territory of the
United States, but do not address enforcement in areas of the United
States outside the customs territory of the United States. 19 C.F.R.
12.90-12.91 (1983).) [3191
-television sets. Section 303 of title 47, U.S.C., authorizes
the Federal Communications Comiiission to require all television sets
imported into the United States to receive all United States
television broadcasting frequencies. The Commission has established
such a requirement. 47 C.F.R. � 15.65 (1982). "United States" is
defined, for purposes of section 303, to include "the Territories and
possessions of the United States." 47 U.S.C. 5 153(g) . Guam is a
Territory or possession of the United States. By operation of
section 502(a)(2) of the Covenant, section 303 and Federal
Communications Commission regulations prohibit importation into the
Northern Mariana Islands of television sets incapable of receiving
all United States television broadcasting frequencies (Section 329
of title 47, U.S.C., allows the Commission to obtain assistance from
officers or employees of other agencies of the federal government on
duty in any Territory or possession to carry out its duties.)

--radio transmitters. Section 2.1202 of title 47, C.F.R.
(1982), prohibits importation into the customs territory of the
United States of radio transmitters and other radiofrequency
devices-as defined at 47 C.F.R. S 2.801 (1982)-capable of causing
harmful interference to radio communications. Section 2.1202 %as
promulgated by the Federal Communications Commission pursuant to its
general rulemaking authority under sections 154(i) and 303(r) of
title 47, U.S.C. The Northern Mariana Islands is not within the
customs territory of the United States. Accordingly-, section 2.1202
does not apply to importation of radio transmitters and other
radiofrequency devices into the Northern Mariana Islands.

Ttxtiles. Section 70g of title 15, U.S.C., prohibits
impoi-tation into the United States of textile products not meting
certain labelling and invoicing requirements. "United States" is not
defined for purposes of this section, which is part of the Textile
Fiber Products Identification Act. See 15 U.S.C. S 70. Other
provisions of the Act apply to any textile products moved in
"comme-rce," and also specifically forbid importation into the United
States. See id. S 70a. "Commerce" is broadly defined to include
commerce betup@e_n or among the States, Territories, possessions of the
United States, and foreign countries. Id. � 70(k) and (1) Ctmmerce
to and from Guam is thus subject to tiTo-se provisions and so, under
section 502 (a) (2) of the Covenant, is ccnmerce to and from the
Northern Mariana Islands, whether or not the specific prohibition
against importation is applicable.

Implern-anting regulations define "United States," for purposes of
the Act, to include the Territories and possessions of the United
States. 16 C.F.R. S 303.1(d) (1983). Under this definition, the
Act's prohibitions on importations apply to textiles imported into

- 47

Guam. Under section 502 (a) (2) of the Covenant, the Act' s
prohibitions similarly are applicable to imports of textiles into the
Northern Mariana Islands. But the invoicing requirements, violation
of which this section prohibits, are clearly not applicable to
[3201 imports to Northern Mariana Islands. The section refers specifically
to the invoicing requirements of the Tariff Act of 1930, 19 U.S.C.
SS 1301 et seq. Those requirements, set forth at sections 1481 et
seq. of 17itl-e19, U.S.C., are not ap
.plicable to imports into Guam.
See 19 U.S.C. S 1401(h). There thus is no rationale under the
Covenant for their application to the Northern Mariana Islands.

-wool products. Section 68f of title 15, U.S.C., prohibits
impoit-ation into the United States of wool products not meeting
certain labelling and invoicing requirements. "United States" is not
defined for purposes of this section, which is part of the Wool
Products Labelling Act. See 15 U.S.C. S 68. Other provisions of the
Act apply to any wool products moved in "commerce" . See id. �� 68a,
68c. "Commerce" is broadly defined to include commerce between or
among the States, Territories, possessions of the United States, and
foreign cnuntries. Id. S 68(h) and (i) . Commerce to and from Guam
is thus subject to EFose provisions and so, under section 502(a) (2)
of the Covenant, is camrse-rce to and from the Northern Mariana
Islands. But the invoiciryg requirements, violation of which this
section prohibits, are clearly not applicable to imports to Northern
Mariana Islands. The section refers specifically to the invoicing
requirements of the Tariff Act of 1930, 19 U.S.C. �� 1301 et seq.
Those requirements, set forth at sections 1481 et seq. of tft-le 19,
U.S.C., are not applicable to imports into Guam. Sei@79 U.S.C.
S 1401 (h) . There thus is no rationale under the Oovenant for their
application to the Northern Mariana Islands.

-flammable fabrics. Section 1192 of title 15, U.S.C., forbids
importation into the United States or the movement in commerce
(including ccmmerce with foreign countries) of fabrics or fabric
products violating flammability regulations issued by the Consumer
Product Safety Commission. The Flammable Fabrics Act, of which
section 1192 is a part, does not define "United States." See 15
U.S.C. S 1191. "Commerce" is defined, however, to include CCRUTerce
between any territory or possession of the United States and either
any foreign country or any other part of the United States. Id.
subsections (b) and (c). Further, the Consumer Products Safety
Commission, charged with enforcing the Act, has defined "United
State s" to include "the Territories and Possessions of the United
States." 16 C.F.R. S 1608.1(c) (1982). Since Guam is a territory or
possession, bringing proscribed products into Guam from a foreign
country would violate the restrictions against movement in commerce,
whether or not such movement would also constitute importation into
the United States. Under section 502(a)(2) of the Covenant,
importation of fabrics and fabric products into the Northern Mariana
Islands is also movement in camrierce subject to section 1192.

- 48 -

Exports from the United States are generally exempt from the
Flannable Fabrics Act. 15 U.S.C.� 1202. Althouqh the Act does not
define "United States," the Cbnsumer Product Safety Commission, has
defined "export" to include exports from any territory or possession [3211
of the United States. 16 C.F.R. � 1602.2(b)(2) (1982). "Exports"
exempted by section 1201 thus include exports fran Guan and, by
operation of section 502(a)(2) of the Covenant, exports from the
Northern Mariana Islands.

War materials. Section 401 of title 22, U.S.C., authorizes
seizure and forfeiture of arms, munitions, or other articles exported
or attEmpted to be exported in violation of law. "United States" is
defined in the legislation of which section 401 was originally a part
to include all territory subject to the jurisdiction of the United
States. Act of June 15, 1917, c.30, title XIII, S 1, 40 Stat. 217,
231. Guam is subject to the jurisdiction 'of the United States.
Accordingly, by operation of section 502(a)(2) of the Covenant,
section 401 authorizes the seizure of illegal war material exports
froin the Northern Mariana Islands.

The principal laws controlling such exports are the arms export
control provisions of chapter 39 of title 22, U.S.C. (especially
section 2778), and the Export Aciministration Act of 1979, 50 U.S.C.
App. SS 2401 et seq.

Section 2778 of title 22, U.S.C., authorizes the President to
regulate the import as well as the export of arms, munitions, and
other defense articles. Section 2778 does not specify whether import
to or export from the United States includes only the moveffent of
goods into or out of United States custaiTis territory or includes
movement into or out of any area under the jurisdiction of the United
States. (A now-repealed subsection (d) of section 2778 provided that
the section "applies to and within the Canal Zone.") The legislative
history of section 2778 shows a congressional intent to exercise its
power to the fullest extent possible to control and restrain the
international trade in arms. Senate Report 94-876, at 4, 8 (1976);
House Report 94-1144, at 12 (1976. The United States currently has
"full powers of legislation" over the Northern Mariana Islands.
Trusteeship Agreemnt, Art. 3. The purpose of section 2778 is to
further various foreign policy objectives of the United States. See
22 U.S.C. � 2751. On termination of the trusteeship, the United
States will have ccmplete responsibility for and authority with
respect to matters relating to foreign affairs and defense affecting
the Northern Mariana Islands." Covenant SS 104, 1003. Since
Congress clearly has ,the power to enact legislation controlling arms
shipments to or fran the Northern Mariana Islands, and since Congress
in enacting section 2778 desired to exercise its power to the fullest
extent possible, section 2778 should be read as applying to arms
shipments to and fram the Northern Mariana Islands. See United
States v. Standard Oil Co., 404 U.S. 558 (1972). Accordingly, the
Northern Mariana Islands should be considered as part of the United
States for purposes of section 2778.

- 49 -

The Northern Mariana Islands is also part of the United States
for purposes of the Export Administration Act of 1979. See the
discussion under Export controls, below..
[3221 wildlife. A number of statutes, discussed below, qovern the
importation to and exportation from the United States of wildlife of
one sort or another. The Northern Mariana Islands is part of the
United States for purposes of each of these statutes. The Fish and
Wildlife Service of the Department of the Interior has consolidated
the regulations implementing these statutes. The consolidated
regulations provide, with certain exceptions, that "all wildlife
imforted into the United States must be cleared by a [United States
Fish and Wildlife] Service officer prior to release frcm detention by
Customs officers. 50 C.F.R. S 14.52(a) (1982). Wildlife may be
imported or exported only at designated Customs ports of entry. Id.
S 14.11. The nearest such port to the Northern Mariana Islands is
Honolulu, 3300 miles away, although Guam is a permissible port of
entry for wildlife (with some exceptions) originating in or destined
for Guam. Id. SS 14.12, 14.19(c).

--bald and golden eagles. Section 668 of title 16, U.S.C.,
prohi7bits any person wiEhin any place subject to the jurisdiction of
the United States fran importing or exporting bald eagles and golden
eagles. Gua-n is subject to the jurisdiction of the United States.
Accordingly, by operation of section 502(a)(2) of the Cbvenant, the
importat ion to or exportation frcm the Northern Mariana Islands of
bald eagles and golden eagles is prohibited by section 668.

_-migrato@y birds. Sections 703, 704, and 705 of title 16,
U.S.C., restrict the import and export of certain migratory birds,
their nests, and their eggs. Sections 705 and 708 indicate a
specific intent that these restrictions apply to the "several States
and Territories." See also 16 U.S.C. S 701.

These sections implement various international conventions for
the protection of migratory birds. See 16 U.S.C. �� 703, 712. Among
these agreements are conventions between the United States and Japan,
25 U.S.T. 3329, T.I.A.S. 7990 (1974), and between the United States
and the Union of Soviet Socialist Republics, 29 U.S.T. 4647, T.I.A.S.
9073 (1978). Id. Under the present trusteeship, the United States
has the authoiHty to apply in the Trust Territory the provisions of
particular international conventions. Trusteeship Agreement, .
Art. 14. The United States has determined that the conventions with
Japan and with the Union of Soviet Socialist Republic are applicable
to the Trust Territory. U.S. Department of State, Trust Territory of
the Pacific Islands: 1980 (33d Annual Report to the United Nations),
at 135, 137, 140. (No determinations have been made with respect to
similar conventions with Great Britain and Mexico antedating
execution of the Trusteeship Agreement. Id. at 144 n.1.) Further, by
its ovi terms the Convention between fh-e United States and Japan
applies specifically to the Trust Territory of the Pacific Islands.
See Convention for the Protection of Migratory Birds and Birds in

50 -

Danger of Extinction, and their Environment, Art. I (a) , 25 U.S.T.
3329, T.I.A.S. 7990 (1974). This applicability was mentioned by
Congress in its reports on the 1974 m-ie-ndments to section 703 of
title 16. House Report 93-936, at 3 (1974); Senate Report 93-851, at
[3231
2 (1974). These provisions should be construed consistently with the
conventions they implement. See Merxxninee Tribe v. United States,
391 U.S. 404, 413 (1968). Since the statutes impleffent, among other
agreements, the Convention with Japan, the statutes are applicable to
the Trust Territory of the Pacific Islands, including the Northern
Mariana Islands.

--marine mamnals. Sections 1371 et seq. of title 16, U.S.C.,
control the lm@ 5rtatlon into the United-SEates of' marine mcmmls in
order to protect the populations of those animals from depletion or
extinction. "United States" is defined to include, for purposes of
these provisions, the Northern Mariana Islands. 16 U.S.C.
S 1362(13). Thus, the Northern Mariana Islands is part of the United
States for purposes of the provisions controlling the importation of
marine manmals into the United States.

-endangered species. Section 1538 of title 16, U.S.C.,
prohibits importation into or exportation from the United States of
endangered fish, wildlife, and plants. "United States" is defined to
include all States and "States," in turn, are defined to include the
several States and Guam. 16 U.S.C. S 1532(17) and (21). F@y
operation of section 502(a)(2) of the Covenant, "State" also includes
the Northern Mariana Islands. Consequently, the Northern Mariana
Islands is part of the United States for purposes of the prohibitions
against importing endangered species into or exporting endangered
species from the United States.

The United States has, additionally, implemented the Convention
on International Trade -in Endangered Species of Wild Fauna and Flora,
27 U.S.T. 1087, T.I.A.S. 8249 (1975). Section 23.11 of title 50,
C.F.R. (1982), prohibits importation into, or exportation from, the
United States of enumerated endangered plant and wildlife species
without a license. "United States" is defined to include Guam and
the Trust Territory of the Pacific Islands. 50 C.F.R. S 23.3 (1982).
By operation of section 502(a) of the Covenant, importation to or
exportation frcm the Northern Mariana Islands of the designated
species without a license is prohibited by section 23.11.

-wildlife illegally caught or in improperly labelled packages.
Section 3372(a) of title 16, U.S.C., prohibits the import or export
of any fish, wildlife, or plant captured, killed, or transported in
violation of State, federal, or foreign laws. The section also
imposes criminal penalties for transporting in interstate or foreign
ccinmerce improperly labwelled packages containing fish or wildlife.
Id. subsection (b). "State" is specifically defined to include the
@Urthern Mariana Islands. Id. � 3371 (h) . "Import" is defined to
include imports into "any place subject to the jurisdiction of the
United States" whether or not the importation is an importation

- 51 -

"within the meaning of the customs laws of the United States." Id.
S 3371 (b) . The Northern Mariana Islands is sLbject tZ@_ the
jurisdiction of the United States. Trusteeship Agreement, Art. 3;
(3241 Covenant �5 101, 1003(c) . Accordingly, the movement of wildlife
illegally caught or in improperly labelled packages into or out of
the Northern Mariana Islands is prohibited.

--injurious wildlife. Section 42 of title 18, U.S.C., prohibits
impoi-tation into the United States or any of its territories or
possessions wild mammals, wild birds, fish (including mollusks and
crustacea), amphibians, or reptiles which the Secretary of the
Interior finds injurious to human beings, agriculture, horticulture,
forestry, wildlife, or the wildlife resources of the United States.
The statute specifically designates "fruit bats of the genus
Ptercpus" as one such injurious mamial. Fruit bats of the genus
Ptercpus are a highly-sought gourmet delicacy in the Northern Mariana
Islands.

Section 42's prohibition of importation into any of the
territories or possessions of the United States clearly bars
importation into Gum. The prohibition is thus applicable to the
several States and Guam and, under section 502(a)(2) of the Covenant,
to the Northern Mariana Islands as well. While the purpose of
section 42 would be served by barring only live animals (or eggs),
the only exception for dead animals is for natural-history specimens
for museums and scientific collections. Thus, even the impDrtation
of killed fruit bats is prohibited.

The Commission has agreed to recommend to Congress that section
42 be amended to rEmove the bar against importing fruit bats into the
Northern Mariana Islands.

-wild mawals and birds imported in violation of foreign law.
Section 1527 of title 19, U.S.C. prohibits impDrtation into the
United States of wild mammals or birds taken, killed, possessed, or
exported in violation of foreign law. "United States" is defined,
for purposes of the subtitle containing section 1527, to exclude
GuaTi' 19 U.S.C. S 1401 (h) . Section 1526 consequently does not
prohibit importation of wild mammals and birds into the -Northern
Mariana Islands.

General restrictions enforcing particular statutes.

All import and export restrictions enforce particular statutes,
if only the statutes containing those restrictions. For the statutes
listed in the preceding section, the congressional purpose underlying
the statute is achieved by applying restrictions to particular
classes of goods, whether defined broadly@-fbr example, consuirer
products--or narrowly--for example, switchblade knives. In the

statutes listed below the goods or other things subject to import and
export restrictions are defined not by any qualities of their own,
but only by the larger purpose of the statute pursuant to which the [3251
restrictions are imposed.

Protection of commerce--unfair competition. Section 72 of title
15, U.S.C., prohibits importation into the United States of articles
to be sold at less than market value or wholesale price with the
intent of injuring industry or competition in the United States.
Neither the language of this law nor its legislative history
indicates whether territories or possessions of the United States are
to be treated as parts of the United States. In the absence of any
such indication, the United States is presumed not to include those
areas and, consequently, not to include the Northern Mariana Islands.

Section 73 of title 15, U.S.C., triples the duty on articles
imported into the United States under an agreement (other than an
exclusive sales agency agreement) that prevents the importer or any
other person from using or dealing in the articles of any other
person. Neither the language of this law nor its legislative history
indicates whether territories or possessions of the United States are
to be treated as parts of the United States. Again, in the absence
of any such indication, the United States is presumed not to include
those areas and, consequently, not to inclLde the Northern Mariana
Islands.

Section 1337 of title 19, U.S.C., allows the United States
International Trade Commission to order excluded from entry into the,
United States goods found to be unfairly competing with goods made in
the United States or otherwise injuring competition in the United
States. Subsection (j) of section 1337 defines "United States" as
the custom territory of the United States. The Northern Mariana
Islands is not within the custons territory of the United States.
Covenant S 603(a). The United States International Trade Commission
consequently has no authority to prohibit imports into the Northern
Mariana Islands or to consider the effects of foreign imports on
industry, competition, and consumers within the Northern' Mariana
Islands when deciding wbether to bar entry of certain goods into the
United States.

--p ade goods. Section 1761 of title 18, U.S.C, imposes
.rison-m
criminal penalties for transporting prison-made goods into the United
States. "United States," for purposes of title 18, is defined to
include all places subject to the jurisdiction of the United States.
18 U.S.C. S 5. Guam is subject to the jurisdiction of the United
States. Accordingly, by operation of section 502(a)(2) of the
Covenant, section 1761 imposes criminal penalties for transporting
prison-rode goods into the Northern Mariana Islands.

- 53 -

Section 1307 of title 19, U.S.C., bars importation into the
United States of goods made by convict labor. "United States" is
defined for purposes of this prohibition to exclude Guam. 19 U.S.C.
[3261 S 1401 W . Consequently, the Covenant does not make the Northern
Mariana Islands part of the United States for purposes of section
1307, and importation into the Northern Mariana I slands of
convict-made goods is not barred by section 1307. But the criminal
penalties on prison-made goods imposed by section 1761 of title 18,
above, operate effectively to bar importation into the Northern
Mariana Islands of goods made by convict labor.

-antitrust. Section 11 of title 15, U.S.C., requires
forfeTit-ureof property imported into the United States in violation
of the prohibitions against combinations in restraint of trade in
imported goods. Section 11 also requires forfeiture of such property
"in the course of transportation from one State to another, or to or
from a Territory or the District of Columbia." "United States,"
"State," and "Territory" are not defined in section 11. The Supreme
Court has held that Congress intended other provisions of the
antitrust laws to apply wherever the power of Congress reaches.
United States v. Standard Oil Co., 404 U.S. 558 (1972) (American
Samoa); Puerto Ki@cov. Shell Co., 302'U.S. 253 (1937) (Puerto Rico).

The power of Congress to legislate for the Northern Mariana
Islands is already well established. Trusteeship AgreEment, Art. 3.
Further, Guam is also clearly within the reach of congressional
power, so that section 11 is also applicable to the Northern Mariana
Islands by operation of section 502(a)(2) of the Covenant.
Accordingly, property brought into the Northern Mariana Islands in
violation of the prohibitions against combinations in restraint of
trade in imported goods is subject to forfeiture.

--retaliatory restrictions. Section 75 of title 15, U.S.C.,
allows the President to prohibit particular imports into the United
States from nations prohibiting particular imports from the United
States.

Section 181 of title 19, U.S.C., allows the President to
prohibit importation into the United States of particular products of
countries unjustly discriminating against products of the United
States.

Neither the language of these statutes nor their legislative
history indicates whether territories or possessions of the United
States are to be treated as parts of the United States. In the
absence of any such indication, the United States is presuffied not to
include those areas and, consequently, not to include the Northern
Mariana Islands.

-trademarks. Section 1124 of title 15, U.S.C., forbids
importation inFo-the United States of goods bearing trademarks or

54 -

trade nanes copying trademarks or trade names protected in the United
States or otherwise misleading the public. "United States," for
purposes of this section, ',"includes and embraces all territory which
is under [United States] j,'Orisdiction and control." 15 U.S.C. (3271
� 1127. Importation of the offending goods into Guam is consequently
prohibited and so, by operation of section 502(a) (2) of the Covenant,
is importation of such goods into the Northern Mariana Islands.

Section 1526 of title 19, U.S.C., prohibits importation into the
United States of merchandise bearing an American trademark without
the consent of the trademark owner and authorizes seizure and
forfeiture of merchandise bearing a counterfeit trademark. "United
States" is defined, for purposes of the subtitle containing section
1526, to exclude Gum. 19 U.S.C. S 1401 (h) . The prohibitions of
section 1526 consequently do not apply to importation of trademarked
goods into the Northern Mariana Islands.

--false representations. Section 1125 of title 15, U.S.C,
forbi7ds @impDrtation into the United States of goods that are falsely
labelled or described. "United States," for purposes of this
section, "inclules and embraces all territory which is under [United
States] jurisdiction and control." 15 U.S.C. S 1127. Importation of
the offending goods into Guam is consequently prohibited and, by
operation of section 502(a) (2) of the Covenant, so is importation of
such goods into the Northern Mariana Islands.

Section 1304 of title 19, U.S.C., prohibits importation into the
United States of goods not properly labelled as to their country of
origin. "United States!' is defined for purposes of this prohibition
to exclude Guam. 19 U.S.C. S 1401(h). The Northern Mariana Islands
is thus hot part of the United States for purposes of section 1304,
so importation of improperly labelled goods into the Northern Mariana
Islands is not barred by this statute.

--fair packaging and labelling. Sections 1453 and 1454 of title
15, U.S.C., prohibit the distribution in commerce of packaged
consumer commodities not in conformity with fair packaging and
labelling regulations. Section 1456 provides for enforcement of
sections 1453 and 1454 against consumer commodities imported into the
United States, pursuant to section 381(a) and (b) of title 21, U.S.C.
Although the Fair Packaging and Labeling Act, of which these sections
are a part, does not define "United States," it does define
lvconwerce@' to include "commerce between any State, the District of
Columbia, the Common%ealth of Puerto Rico, or territory or possession
of the United States, and any place outside thereof." 15 U.S.C.
S 1459(e). The territories and possessions, such as Guam, are
grouped as part of the United States in this definition. By
operation of section 502(a)(2) of the Covenant, the Northern Mariana
Islands is also part of the United States for - ses of the Fair
PurpO,
Packaging and Labeling Act. Sections 381(a) and (b) of title 21,

- 55

U.S.C., to which reference is made in section 1456, also apply to
imports into the Northern M6 'riana Islands. See the discussion,
Fbods, drugs, cosmetics, and dentures- ad ul terated, misbranded, or
f- A i1qgly, packaged consumer
[3281 otherwise llegal Eroducts, above.
com@odities not in conFo-rffdty with fair packaging and labelling
regulations may not be imported into the Northern\r4ariana Islands.
N
Foreign pol ic@-- neutral i ty. Section 76 of title 15, U.S.C.,
allows the President, during a war in which the United States is not
involved, to prohibit particular imports into the United States from
nations prohibiting particular imports fram the Uni@ed States, and
imposes criminal penalties for violation of any such\ prohibitions.
The purpose of section 76 is to further foreign policy objectives of
the United States. On termination of the trusteeship, ,:the United
States "will have complete responsibility for and authority with
respect to matters relating to foreign affairs and defense affecting
the Northern Mariana Islands." Covenant SS 104, 1003. The Northern
Mariana Islands should be considered as part of the United Stat@-s for
purposes of section 76.

-international trade agreements-the Trade Expansion Act of
1962. Section 1821 of title 19, U.S.C., authorized the President tb,'
enter into international trade agreerrents between 1962 and 1967 and-
to change rates of customs duties in order to carry out those
agreements. Section 1862 allows the President to impose import
qu:)tas to protect national security, national defense industries, or
the economic welfare of other domestic industries. Section 1881,
with certain exceptions, requires that duties or other import
restrictions or duty-free treatmnt established to iniplemant
international trade agreements apply to products of all foreign
countries (the most-favored-nation principle). Section 1981
authorizes the President to increase duties or to impose other import
restrictions on particular articles to prevent or remedy serious
injury to domestic industries. Section 1982 authorizes the President
to negotiate orderly marketing agreements with foreign countries to
limit their export of particular items into the United States, in
order to prevent or remedy serious injury to dorrestic industries.
Neither the language of these statutes nor their legislative history
indicate whether territories or possessions of the United States are
to be treated as parts of the United States. In the absence of any
such indication, the United States is presumed not to include those
areas and, consequently, not to include the Northern Mariana Islands.

-international trade agreements-The Trade Act of 1974.
Section 2111 of title 19, U.S.C., authorized the Tr@esident to enter
into international trade agreements between 1975 and 1980 and to
change rates of customs duties in order to carry out those
agreements. Section 2112 authorized the President to enter into
international trade agreements to reduce or eliminate nontariff trade
barriers. Section 2132 authorizes the President to impose temporary

56 -

surcharges or quDtas on articles imported into the United States to
alleviate balance-of-payrrents problems. Section 2133 authorized the
President to enter into international trade agreements in 1981 and
1982 subject to greater limitations than under the authority granted [3291
by section 2111, above.

Section 2411 allows the President to enforce international trade
agreements by withdrawing concessions granted the other country party
to the agreement and by i7posirrg duties or other import restrictions
on the products and services of that country.

Sections 2431 to 2440 govern trade relations with countries with
nonmarket economies, in general, the Communist nations.

Section 2461 authorizes the President to provide duty-free
treatTrent for any eligible article imported from any "beneficiary
developing country" under the Generalized System of Preferences. The
Trust Territory o f the Pacific Islands is a "beneficiary developing
country" for purposes of section 2461. 19 U.S.C. S 2462(a)(3). The
United States has agreed to seek from foreign countries favorable
treatment for exports from the Northern Mariana Islands and to
encourage other countries to consider the Northern Mariana Islands a
developing territory. Covenant � 603(d) . The General Agreement on
Trade and Tariffs permits preferential tariff treatment of goods
exported from developing countries and territories, in order to
encourage exports from and, thus, the economic developmnt of those
countries and territories. Section 2461 authorizes preferential
treatnent for Northern Mariana Islands exports to the United States,
so long as the Northern Mariana Islands remains part of the Trust
Territory. Preferential treatment is also authorized, both before
and after termination of the trusteeship, by section 603(c) of the
Covenant.

"United States" is not defined in the various provisions
authorizing international agreeffents for the reduction or elimination
of duties and import restrictions. Duties and import restrictions
are generally imposed, however, at the point where an article enters
the customs territory of the United States. The Northern Mariana
Islands is not part of that customs territory. Covenant S 603(a) .
Imports into the Northern Mariana Islands are unlikely to have more
than marginal effects on national security, national defense
industries, or the econcmic welfare of other industries in the United
States. While imports into the Northern Mariana Islands might have
important effects on industries in the Northern Mariana Islands, the
Northern Mariana Islands has the authority to impose duties on
imports to protect its own industries. Covenant S 603(b).

International agreemnts affecting the Northern Mariana Islands
are negotiated and concluded by the United States. Trusteeship
Agreemant, Art. 8(4); Covenant SS 104, 1003(c). Duties and excise

57 -

taxes imposed by the goverment of the Northern Mariana Islands on
goods imported into the Northern Mariana Islands must be consistent
with the international obligations of the United States. Covenant
[3301 SS 603(b), 604(b). Should provisions in any international trade
agreenent or orderly marketing agreEment lawfully be applicable to
the Northern Mariana Islands, duties and excise taxes imposed by the
goverment of the Northern Mariana Islands could not conflict with
those provisions. Applicability would have to be determined by
reference to the terms and negotiating his@ory of each agreement.
rfhe legality of making an agreement applicable to imports into the
Northern Mariana Islands depends on (1) whether the statutes
authorize the President to impose duties or other restrictions on
imports into the Northern Mariana Islands, or (2) if there is no such
authority in these statutes, whether the President has such authority
under the United States Constitution or some other statute.

--international trade agreements--the Trade Agreements Act of
1979. Sections 2501 et seq. of title 19, U.S.C., the Trade
Agreements Act of 1919-, approve a number of trade agreements
negotiated in the Tbkyo Round of multilateral trade agreements and
provide for their implementation.

One such agreement is the Agreement on Technical Barriers to
Trade (relating to product standards). See 19 U.S.C. S 2503(c)(4).
Sections 2531 to 2573 of title 19, also part of the 1979 Act, deal
specifically with technical barriers to trade. States are
enccuraged, but not required, to refrain from imposing product
standards that unnecessarily obstruct the foreign coffumrce of the
United States. 19 U.S.C. S 2533. States are also eligible for
certain grants and contracts for " standards -related activities." Id.
S 2545. "State" and "United States" are defined, for purposes of
sections 2531 to 2573, to include "the Commonwealth of Puerto Rico,
Guam and any other Commonwealth, territory, or possession of
Le* United States. Id. � 2571(15) and (17). Since the legislation
w;as not enacted until-1979, section 502(a)(2) of the Covenant--making
applicable to the Northern Mariana Islands those laws applicable to
the several States and Guam on January 9, 1978-does not make this
legislation applicable to the Northern Mariana Islands. Whether the
term "State" includes the Northern Mariana Islands thus depends on
whether the Northern Mariana Islands is a Commonwealth, territory, or
possession of the United States. Although the Northern Mariana
Islands is already frequently called a Commonwealth, it technically
does not become one until termination of the trusteeship. Covenant
SS 101, 1003(c). On the other hand, there are no other commonwealths
of the United States, except for Puerto Rico, already mentioned
specifically in the definition.

--United Nations economic sanctions. Section 287c of title 22,
U.SX, authorizes the President ET -implement United Nations SecLxity
Council resolutions for economic sanctions against foreign countries

- 58

by regulating or prohibiting economic relations between that country
and the United States or any person subject to the jurisdiction of
the United States or involving property subject to the jurisdiction
of the United States. Persons and property in the Northern Mariana [3311
Islands are subject to the jurisdiction of the United States.
Trusteeship Agreement, Art. 3; Covenant ss 101, 1003(c).
Accordingly, the President's authority under sect-ion 287c includes
the authority to regulate or prohibit economic transactions involving
a foreign country and persons or property in the@ Northern Mariana
Islands.

-Cuban trade embargo. Section 2370 of title 22, U.S.C.,
authorizes the PresideiTti-to impose a total embargo on trade betvieen
the United States and Cuba. Such an embargo, imposed by President
Kennedy in 1962, is in ef fect. Proclamation No. 3447, 27 Federal
Register 1085 (February 3, 1962). The embargo prohibits the
importation into the United States of all goods of Cuban origin and
all exports froin the United States to Cuba. Id. 1111 2 and 3.

The purpose of section 2370 is to further foreign policy
objectives of the United States. Id. On termination of the
trusteeship, the United States "will h0_e complete responsibility for
and authority with respect to matters relating to foreign affairs and
defense affecting the Northern Mariana Islands." Covenant �� 104,
1003. The Northern Mariana Islands should be considered as part of
the United States for purposes of section 2370.

-trading with the enemy. Section 5 of the appendix to title
50, U.S.C., authorizes the President to regulate a wide variety of
foreign transactions in the interests of national security. The
authority conferred on the President extends to all persons,
property, and places sLbject to the jurisdiction of the United
States. The Northern Mariana Islands is subject to the jurisdiction
of the United States. Trusteeship Agreement, Art. 3; Covenant
SS 101, 1003(c). Accordingly, persons, property, and places in the
Northern Mariana Islands are subject to the President's regulatory
authority.

Foreign asset control regulations implementing section 5 are
found in Chapter V of title 31, C.F.R. (1982). In general, those
regulations govern trade with communist nations.

Section 11 of the appendix to title 50, U.S.C., authorized the
President to limit importation into the United States of particular
articles during the First World War. The provision is now obsolete.

Quarantine and inspection. Sections 264 to 272 of title 42,
U.S.C., authorize the Surgeon General of the United States to make
and enforce regulations to prevent the spread of communicable
diseases from foreign countries into any State or possession (or from

- 59 -

one State or possession to another). Included in the Surgeon
General's authority is the pouer to destroy imported animals or
articles, id. S 264(a), and to suspend imports from particular
foreign ccUn-tries, id. � 265. The Northern Mriana Islands is
[3321 defined as a "State'@-fbr purposes of the provisions in sections 264
to 272 authorizing the Surgeon General to control imports.
Accordingly, imports into the Northern Mariana Islands are subject to
this authority of the Surgeon General. -

Excess federal property. Section 512 of title 40, U.S.C.,
requires that foreign excess property of the United States
goverment, if sold, be sold an condition it not be imported into the
United States. "United States" is not defined by the statute, but
"foreign excess property" is defined, for purposes of section 512, to
exclude property in Guam or the Trust Territory of the Pacific
Islands. 40 U.S.C. � 472(f) . Under section 502 of the Covenant,
federal excess property in the Northern Mariana Islands also uOuld
not be "foreign excess property" for purposes of section 512.

In 1974 Congress amended the definition of "foreign excess
property" with the specific intention of putting Guam and the Trust
Territory of the Pacific Islands in the same status as other parts of
the United States for purposes of the Federal Property and
Administrative Services Act of 1949, of which section 512 is a part.
See Senate Report 93-1419 (1974), reprinted at 1974 U.S. Code Cong. &
Ad. News 7047, 7048. Accordingly, foreign excess property sold by
Ue-75-n-1-ted States may not be imported into the Northern Mariana
Islands. (Note, however, that "United States" is defined in
regulations implementing section 512 to include only the 50 States
and the District of Columbia. 41 C.F.R. S 101-43.001-24 (1981).)

Noise control. Sections 4908 and 4909 of title 42, U.S.C.,
prohibit impoFt-at-iron into the United States of products not in
compliance with applicable federal noise control regulations.
Although "United States" is not defined for purposes of sections 4908
and 4909, "State" is defined to include Guam and the Trust Territory
of the Pacific Islands. 42 U.S.C. S 4902(9). The inclusion of Guam
as a "State" is strong evidence of a congressional intent that Guam
be considered part of the United States for purposes of sections 4908
and 4909. By operation of section 502(a)(2) of the Covenant,
sections 4908 and 4909 also prohibit importation into the Northern
Mariana Islands of products not in compliance with applicable federal
noise control standa rds.

Import and export statistics. Sections 301 et seq. of title 13,
U.S.C., authorize the Secretary of Commerce to collect, compile, and
publish foreign trade statistics, in order to promote the domestic
and foreign commrce of the United States. An important means for
collection of these statistics is the Shipper's Export Declaration.
See 15 C.F.R. part 30 (1983). The Secretary has broad authority to
issue regulations to carry out the provisions of 'this chapter. 13
U.S.C. S� 4, 302, 307.

[3331

Section 301 authorizes the Secretary of the Treasury to collect
information "from all persons exporting from, or impc)rting into, the
United States and the noncontiguous areas over which the United
States exercises sovereignty, jurisdiction, or control." Collection
of such infon-nation from persons engaged in trade between the United
States and the noncontiguous areas, or between the noncontiguous
areas is also authorized. Guam is a noncontiguous area over which
the United States exercises sovereignty, jurisdiction, and control.
Collection of information is thus authorized with respect to goods
moving (1) between foreign countries and the United States, including
Gucm and other noncontiguous areas, (2) between the United States,
on the one hand, and Guam and the other noncontiguous areas, on the
other; and (3) between Guam and the other noncontiguous areas.

Section 502(a)(2) of the Covenant makes applicable to the
Northern Mariana Islands federal laws "which are applicable to Guam
and which are of general application to the several states." The
Secretary of Cbmwerce's authority under sections 301 et seq. applies
to importers and exporters in both Guan and the several States, as
well as to persons trading between Guam and the several States.
Accordingly, these sections are also applicable to the Northern
Mariana Islands.

The several States and Guam, however, are not subject to the
same treatment under these sections. The Secretary may collect
information on trade between Guam and foreign countries, between the
several States and foreign countries, between Guam and the several
States, and between Guan or the several States and the other
contiguous areas. The Secretary is not authorized, however, to
collect information on trade between two States of the United States.
Federal laws applicable to Guan and the several States are to be
applied to the Northern Mariana Islands as they are applied to the
several States, not as they are applied to Guan. Covenant S
502(a)(2). In what is surely an unintended result of application of
the Covenant formula, the Secretary is thus authorized to collect
information on trade between the Northern Mariana Islands and foreign
countries and on trade between the Northern Mariana Islands and Guam,

- 61 -

but not on trade between the Northern Mariana Islands and the several
States.*

[3341 The regulations now in effect under these provisions treat the
Trust Territory of the Pacific Islands (which, of course, still
includes the Northern Mariana Islands) as a foreign country. 15
C.F.R. S 30.1 (a)(1) (1983). Those regulations have been in effect
since prior to approval of the Covenant by the United States
Congress. To the extent those regulations purport to collect
information on trade between the Northern Mariana Islands and the
several States, they now exceed the authority granted the Secretary
by sections 301 et seq.

The regulations themselves have the status of law under section
502(a)(2) of the Covenant. In applying those regulations, the
Northern Mariana Islands must be treated as a State. (Note, however,
the broad authority of the Secretary to issue regulations
implementing these provisions allows the Secretary to change the
treatment of the Northern Mariana Islands in those regulations, so
long as changes do not purport to require information on the flow of
goods between the Northern Mariana Islands and the several States.)

Since the Northern Mariana Islands is treated as a State under
the regulations:

(1) exporters in the other States (or the District
of Columbia) are not required to file Shipper's Expc)rt
Declarations when sending goods to the Northern Mariana
Islands and exporters in the Northern Mariana Islands are
not required to file Declarations when sending goods to
those other States (15 C.F.R. �� 30.1, 30.2 (1983)).

*The authority of the Secretary under this chapter extends to
the movement of goods in and out of noncontiguous areas that are
under the jurisdiction and control, but not the sovereignty, of the
United States. 'The Trust Territory of the Pacific Islands is such an
area. Until approval of the Covenant by the United States Congress,
the Northern Mariana Islands was subject to this authority as part of
the Trust Territory of the Pacific Islands, and thus a noncontiguous
area rather than a State for purposes of the chapter. The Covenant,
however, makes clear that if a statute is applicable to Guan and the
several States, it is to be applied to the Northern Mariana Islands
as it is applied to the several States without regard for its prior
applicability to the Trust Territory of the Pacific Islands. Compare
Covenant � 502(a)(2) with id. � 502(a)(3).

62 -

(2) exporters in Guam and the Virgin Islands are not
required to file Shipper's Export Declarations when sending
goods to the Northern Mariana Islands (id. S 30.1 (a) (2) [3351
n.1);

(3) exporters in the Northern Mariana Islands are
required to f ile Shippers Export Declarations when sending
goods to foreign countries, including other parts of the
Trust Territory of the Pacif ic Islands (id.
30.1 (a) (1)(i));

(4) importers in the United States are not required
by these regulations to provide information on goods
received from the Northern Mariana Islands, although most
of the same information is required by Customs regulations
(id. 9 30.70 & n.9) ;

(5) importers in the Northern Mariana Islands must
provide information on goods entering the Northern Mariana
Islands frcm foreign countries (including the Trust
Territory of the Pacific Islands) and from Guam and other
noncontiguous areas on specified United States 0-istans
forms (id. S 30.70); and

(6) importers in the Northern Mariana Islands are
not required by these regulations to provide information on
goods entering the Northern Mariana Islands from the fifty
States, the District of Columbia, or Puerto Rico (id.).

LAWS AFFECTING EXPORTS ONLY

Export controls. Sections 2401 et seq. of the appendix to *title
50, U.S.C., authorize imposition of-controls on exports frcm the
United States to achieve a variety of national security and foreign
policy objectives. Industrial technology of significant military
value and materials in short supply, for example, may be restricted.
Similarly, export of goods to particular countries may be limited in
order to implement United States fbreign policy. Not explicitly
stated is whether these sections apply only to exports frcm the
custans territory of the United States or to exports fraR any area
under the sovereignty of the United States.

The legislation vas enacted in September 1979, after the
effective date of section 502 of the Covenant. Its applicability to
the Northern Mariana Islands, then, is determined by its own terms
rather than through operation of the Covenant. Neither the Northern
Mariana Islands nor the Trust Territory of the Pacific Islands is
mentioned by name in these sections. A number of provisions in the
legislation make specific reference to the territories and

63 -

possessions of the United States, leading to the conclusion that
Congress did intend exports from the territories and possessions to
be sLbject to controls imposed by the law. See 50 U.S.C. App.
[3361 S� 2404(c)(3), 2405(k), 2406(j), and 2407(c); see also id. � 2406(f).
Until termination of the trusteeship, however, the N6-rthern Mariana
Islands will not be under the sovereignty of the United States and,
consequently, will not be a territory or possession of the. United
States.

The language of the legislation, however, goes further than its
references to the territories and possessions of the United States.
Controls on exports for reasons of national security or foreign
policy may be imposed on any goods or technology or on any person
"subject to the jurisdiction of the United States." 50 U.S.C. App.
2404(a)(1), 2505(a)(1).

The bill contains the authority delegated to the
President . . to control exports subject to U.S.
jurisdiction or exported by any person sLbject to U.S.
jurisdiction

Senate Report 96-169 (1979), at 4, reprinted at 1979 U.S. Code Cong.
& Ad. News 1147, 1151.

Under the present trusteeship arrangement, citizens and
residents of the Northern Mariana Islands are subject to the
jurisdiction of the United States. Trusteeship Agreement, Art. 3.
And, on termination of the trusteeship, they will continue to be
under the jurisdiction of the United States. Covenant SS 101,
1003(c). Accordingly, exports from the Northern Mariana Islands are
subject to controls imposed under sections 2401 et seq.

The President's authority to impose export controls under
sections 2401 et seq. expired September 30, 1983, but -has been
temporarily extendEi-to mid-October 1983 to allow consideration of
its further extension. 41 Congressional Quarterly Weekly Report 2057
(October 1, 1983).

higricultural products--subsidies. Section 612c of title 7,
U.S.C., appropriates for each fisc5-l-year an amount equal to 30 per
cent of all customs duties collected by the United States during the
previous calendar year to a separate fund administered by the
Secretary of Agriculture. One of the permissible uses of this fund
is to "encourage the exportation of agricultural c0immodities and
products thereof by the paymnt of benefits in connection with the
exportation thereof or of indemities for losses incurred in
connection with such exportation . . . ." Section 610(f) of title 7
makes the chapter containing section 612c applicable to the United
States and all United States possessions "except the Virgin Islands,
American Sawa, the Canal Zone, and the island of Guam." Section
612c is thus not applicable to the Northern Mariana Islands under the

- 64

Covenant. The special fund established thereby is not available to
subsidize agricultural exports from the Northern Mariana Islands.
Under section 603(a) of the (bvenant, the Northern Mariana [3371
Islands is not within the custom territory of the United States.
Section 612c of title 7 does not earmark customs receipts, but does
tie the level of appropriations directly to the level of those
receipts. Nonapplicability of section 612c to the Northern Mariana
Islands is consistent with the exclusion of the Northern Mariana
.Islands from United States customs territory.

--reports. Section 612c-3 of title 7, U.S.C., requires
expD rs of wheat, cotton, and other agricultural ccmmodities
regularly to report to the Secretary of Agriculture specified
information with regard to their export sales. Section 610(f) of
title 7 makes the chapter containing section 612c-3 inapplicable to
Guam. Section 612c-3 consequently is not applicable to the Northern
Mariana Islands under the Covenant and persons exporting agricultural
ccnimodities from the Northern Mariana Islands are not subject to its
provisions.

--tobacco seeds and plants. Section 516 of title 7, U.S.C.0,
prohibits the export of tobacco seed or live tobacco plants frorn the
United States "or any Territory subject to the jurisdiction thereof"
except for experimental purposes under a federal permit. The purpose
of section 516 is to discourage the development of foreign
competition to the American tobacco industry. See 86 Cong. Rec.
4274-75 (1941). Neither the statute nor regulations issued
thereunder, 7 C.F.R. part 34 (1983), define "Territories subject to
the jurisdiction of the United States."

In its 1951 report to the United States Congress, the Commission
on the Application of Federal Laws, to Guam concluded that section 516
of title 7, in the substantially similar language in effect on
August 1, 1950, was then applicable to Guam. Report of the
Commission on the Application of Federal Laws to Guam, House Document
212, 82d Cong., 1st Sess. 15 (1951).

The Commission staff concluded:

The application of [the law to Guam] is particularly
unclear. Strictly. speaking, only Alaska and Hawaii are
covered, but the modifying phrase ("subject to the
jurisdiction" of the United States) should be given scme
meaning. However, since no tobacco is grown on Guam, the
question is totally academic.

House Gommittee on Interior and Insular Affairs, Resource Materials
Used in the Preparation of the Report of t Commission on
Application of Federal Laws to Guam 46 (Conimittee print 1952). The

- 65

question is likewise largely academic in the case of the Northern
Mariana Islands. If the geographic extent of the law remains
unclear, however, persons might attempt to evade enforcement of the
[3381 law by exporting tobacco plants from other parts of the United States
to the Northern Mariana Islands and then to foreign countries.

--apples and pears. Sections 581 et seq. of title 7, U.S.C.,
prohibit the export of apples or pears not meeting certain minimum
quality standards, in order to protect and enhance the reputation of
American-grown apples and pears in foreign markats. Section 587
authorizes the Secretary of Agriculture to cocperate with, among
others, any "Territory" or possession in enforcing these
prohibitions. "Floreign commerce" is defined by, section 589(3) to
mean "commerce between any State, or the District of Columbia, and
any place outside of the United States or its possessions." TAhether
commerce between a "Territory" and a foreign country is Within that
definition is not clear. Regulations enforcing sections 581 et seq.
also do not specify whether commerce between a "Territory" aii37a
foreign country is within the section 589(3) definition of foreign
commerce. See 7 C.F.R. part 33 (1983).

Apples and pears are not grown in the Northern Mariana Islands.
If apples and pears exported from the United States to the Northern
Mariana Islands must meet United States export standards, that is, if
the Northern Mariana Islands is not considered part of the United
States for purposes of this law, consumers in the Northern Mariana
Islands would be able to purchase export quality fruit frcm the
United States but would not have the option of purchasing
lower-quality fruit from the United States at lower prices.

-grapes and plums. Sections 591 et seq. of title 7, U.S.C.,
prohibit the export of grapes or plums not meeting certain minimum
quality standards, in order to protect and enhance the reputation of
American-grown grapes and plums in foreign markets. Section 597
authorizes the Secretary of Agriculture to cocperate with, among
others, any "Territory" or possession in enforcing these
prohibitions. "Floreign ccmmrcV' is defined by section 599(3) to
mean 11commerce between any State, or the District of Columbia, and
any place outside of the United States or its possessions." Unclear
is whether commerce between a "Territory" and a foreign country is
within that definition. Regulations enforcing sections 591 et seq.
also do not specify whether commerce between a "Territory" and a
foreign country is within the section 599(3) definition of foreign
commerce. See 7 C.F.R. part 35 (1983).

Grapes and plums are not grown in the Northern Mariana Islands
in commercially significant quantities. If grapes and plums exported
fram the United States to the Northern Mariana Islands must meet
United States export standards, that is, if the Northern Mariana
Islands is not considered part of the United States for purposes of

- 66 -

this law, consumers in the Northern Mariana Islands would be able to
purchase expc)rt quality fruit from the United States but, as with
apples and pears, would not have the option of purchasing 0391
lo%er-quality fruit from the United States at lower prices.

-timber. Sections 616 and 617 of title 16, U.S.C., limit
timber exports from national forests, public lands in Alaska, and
federal lands located west of the 100th meridian. The purpose of the
restrictions is to prevent foreign purchasers of federal timber from
bidding up prices to the detriment of American lumber mills. Senate
Report 1479, 90th Cong., 2d Sess., reprinted at 1968 U.S. Code Cong.
& Ad. News 3957, 3971 .

Since no lands in the Northern Mariana Islands fall within the
statutory categories, sections 616 and 617 do not affect possible
timber exports from lands in the Northern Mariana Islands. The
legislation does not indicate however, whether Guam or other
territories or pDssessions of the United States are considered as
inside or outside the United States for purposes of the export
limitations. In the absence of any indication, the United States is
presumed not to include those areas and, consequently, not to include
the Northern Mariana Islands. Accordingly, shipments of timber frcm
the described lands to the Northern Mariana Islands are subject to
export controls imposed pursuant to sections 616 and 617.

--dairy products. Section 693 of title 21, U.S.C., authorizes
the Secretary of Agriculture to establish rules and regulations for
the inspection -and labelling of dairy products intended for export.
Section 693 incorporates by reference the federal meat inspection
laws. Those laws include the Northern Mariana Islands as part of the
United States. See the discussion, Flood, drug, cosmetics, and
dentures--dairy products, above). nsequently., dairy products
intended for export from the Northern Mariana Islands to foreign
countries are subject to federal inspection and labelling
regulations.

Energy supplies. Section 6212 of title 42, U.S.C., allows the
President, in the interests of energy conservation, to restrict
exports of coal, petroleum products, natural gas, petroleum
feedstocks, or materials or equipffent used in their production or
transportation. "United States" is defined, for purposes of section
6212, to include the territories and possessions of the United
States. 42 U.S.C. S 6202(4) and (5). Gum is thus included and so,
by operation of section 502(a)(2) of the Covenant, is the Northern
Mariana Islands. The President's authority accordingly extends to
energy exports from the Northern Mariana Islands.

- 67

Armed vessels. Section 964 of title 18, u.S.C.r imposes
criminal penalties for exporting from the United States, during a war
[3401 in which the United States is neutral, a war vessel to a belligerent
nation. "United States" is defined, for purposes of title 18, to
include all places subject to the jurisdiction of the United States.
18 U.S.C. � 5. Section 464 of title 22, U.S.C., authorizes the
detention of any vessel "built for warlike purposes" carrying a cargo
of "arms and munitions of war" about to depart from any place subject
to the jurisdiction of the United States, if the vessel is intended
to be employed in hostilities against a nation with which the United
States is at peace. GuaTi is subject to the jurisdiction of the
United States. Accordingly, by operation of section 502(a)(2) of the
Covenant, section 964 of title 18 imposes criminal penalties for
exporting a war vessel from the Northern Mariana Islands to a
belligerent country during a war in which the United States is
neutral and section 464 of title 22 authorizes the detention of such
vessels about to depart frcm the Northern Mariana Islands.

Arms, liquors, and narcotics to the Pacific Islands. Section
969 of title 18, U.S.C., derived fran a 1909 statute, imposes
criminal penalties on anyone "subject to the authority of the United
States" who gives or sells arms, liquor, or narcotics to "any
aboriginal native of any of the Pacific Islands" in a specified area
unless the island is "in the possession or under the protection of
[a] civilized power." The object of the statute, which was strongly
supported by missionary societies, was to avoid sales "for the
purpose of so infuriating these tribes that they may kill the
civilized portion of the people that are on those islands." 35
Cong. Rec. 1202 (1902). The specified area includes all of
Micronesia (including the Northern Mariana Islands) , Melanesia, and
Polynesia (except Easter Island) . Persons in the Northern mariana
Islands are subject to the authority of the United States.
Trusteeship AgreEment, Art. 3; Covenant �� 10 1 , 1003 (c) . Presumably,
the authors of this legislation would concur that the Northern
Mariana Islands is now under the protection of a civilized power.
The statute could conceivably be applied, however, to persons in the
Northern Mariana Islands exporting, for example, liquor to other
island nations. This law should be repealed as obsolete, and the
Oamission has agreed to recommend to Congress that this be done.

Letters. Section 602 of title 39, U.S.C., prohibits vessels
leaviTi@ -te United States for foreign ports from carrying letters not
received fran a United States post office or not related to the cargo
of the vessel, except under specified circumstances. Statutory
restrictions on the private carriage of letters are intended to
implement the United States Government monopoly in the delivery of
letters. National Association of Letter Carriers v. Independent
Postal Sysfe-m-,Inc., 470 F. 2d 265, 270 (10th Cir. 1972). The Un
States Postal Service's responsibilities extend to delivery of mail
to and from the territories and possessions of the United States. 39

- 68 -

U.S.C. � 403(a) . It is a reasonable supposition that Congress also
intended the federal postal 'fronopoly to extend to the territories and
possessions. Guam is a territory or possession of the United States.
By operation of section 502(a)(2) of the Covenant, the federal postal [3411
monopoly also extends to the Northern Mariana Islands. Accordingly,
section 602 prohibits vessels leaving the Northern Mariana Islands
from engaging in the private carriage of letters to foreign ports.

TRADE ADJUSTMENT ASSISTANCE

Sections 2251 to 2395 of title 19, U.S.C., part of th@ Trade Act
of 1974, provide for relief of injury caused by import competition.
Section 2253 authorizes the President to impose or modify duties or
quotas, or to negotiate orderly marketing agreements, in order to
protect danestic industry fran serious economic injury fran foreign
competition. Section 2291 authorizes payment of trade readjustrent
allowances to certain workers who beccme unEmployed because of
foreign import competition. Sections 2343 and 2344 authorize
technical and financial assistance to firms seriously injured by
foreign import competition. Section 2373 authorizes assistance to
eligible ccmunities adversely affected by foreign import canpetition
with local products.

The geographic application of sections 2251 et seg. is not
defined in those provisions. Flor purposes of the sections
authorizing trade adjustment allowances to workers, "State" and
"United States" are defined to include only the several States, the
District of Columbia, and the Cowwnwealth of Puerto Rico. 19 U.S.C.
� 2319(8). These definitions are reiterated in regulations
implEmenting this program. See 29 C.F.R. � 91.3(a)(26) (1981).

Guam is thus not included in those definitions and, accordingly,
neither is the Northern Mariana Islands. Wbile payment of allowances
to workers is not conditioned on their residence within the United
States, the definition of "United States" indicates the allowance is
payable only to workers in the jurisdictions named in that
definition. (Both "State" and "United States" are used in these
statutes for purposes other than defining a worker's eligibility.
See, for example, section 2294 (disqualification for State
unemployrrent insurance disqualifies worker for trade adjustnent
allowances) and sections 2297 and 2298 (job search and relocation
allowances may only be used for job searches or relocation within the
United States). These examples indicate, however, that Congress did
not contemplate payffent of benefits to persons outside the United
States, as the tem is defined in section 2319(8).)

Regulations impleirenting the trade adjustment assistance
statutes as they apply to communities require those comunities to be
in a "trade impacted area." 13 C.F.R. S 315.98(a) (1983). "Trade
impacted areas",must be within the customs territory of the United

69 -

States. Id. � 315.2(b) (7). Neither Guam nor the Northern Mariana
Islands are within that customs territory. Revised Tariff Schedules,
General Headnote 2; Covenant S 603(a).
[3421 only for trade adjustment assistance to firnr. are both the
statutes and the regulations implementing the statutes silent as to
the geographic reach of the program. Since this program was enacted
as part of the sane statute that provides trade adjustment assistance
to workers and to communities, a reasonable assumption is that
Congress intended assistance to finus to be available only in those
areas where assistance to workers and communities is also available.
Accordingly, the trade adjustment assistance programs are not
available to workers, firms, or communities in the Northern Mariana
Islands.*

ENFORCEMENT OF THE IMPORT AND EXPORT LAM OF THE UNITED STATES IN THE
NORTHERN MARIANA ISLANDS

The United States Customs Service does not presently operate in
the Northern Mariana Islands, Guam, or American Samoa. 19 C.F.R.
� 7.8 n.5 and part 101 (1983). "The Customs administration of
AoLerican Sawa is under the jurisdiction of the [United States]
Department of the Interior (Office of Territories) . . . . The
Customs administration of Guam is under the Government of Guam." Id.

The custom laws of the Virgin Islands are administered by the
United States Secretary of the Treasury. 48 U.S.C. S 1406i. The
Virgin Islands is not within the customs territory of the United
States. Revised Tariff Schedules, General Headnote 2. The customs
laws of the Virgin Islands are enacted locally. 48 U.S.C. �� 1406i;
1574 (c), (f). The expenses of customs administration are paid from
customs receipts. Id. � 1406i. The remaining receipts are paid into
the treasury of the Virgin Islands. Id. � 1406h.

Although no law of the United States so states in specific
terms, enforcement of federal laws applicable to the movement of
goods and other things in and out of the Northern Mariana Islands on
a day-to-day basis is entrusted to the government of the Northern
Mariana Islands.

*The Northern Mariana Islands has the ability to protect its own
workers, firms, and communities from import competition by levying
its own import duties. Covenant � 603(c). The Northern Mariana
Islands can also allow foreign goods to enter without duty to
maintain low prices for consumers, and can enact its own legislation
to provide assistance to worlo-ars, firms, and communities adversely
affected by the competition of foreign goods.

- 70 -

The authorit@ of the government of the Northern Mariana Islands
to enforce federal law. In Ex parte Rogers, 104 F. Supp. 393 (D.
Guam 1952), the court held:
[3431
The Governor of Guam has the residual authority to
enforce the immigration laws of the United States in
default of performance by the Immigration and
Naturalization Service of the United States.

The residual authority is exercised, not as an agent of the
Immigration and Naturalization Service, but pursuant to section 6b of
the Organic Act of Guam, providing that the Governor of Guam "shall
faithfully execute the laws of the United States applicable to Guam."
(Section 1422 of title 48, U.S.C., in the present Organic Act,
provides that the Governor "shall be responsible for the faithful
execution of the laws of the United States applicable in
Guam.")

Nothing in the Covenant or in other federal statutes
specifically confers power on the Governor of the Northern Mariana
Islands, comparable to that given the Governor of Guam by the Organic
Act of Guam, to "faithfully execute the laws of the United States."
And, even in the case of Gum, local efforts to enforce federal 1W
have not always been successful. In Pacific Construction Co. v.
Branch, 428 F. Supp. 727 (D. Gum 1976), the right Ef -the Guam
Environrrental Protection Agency to enforce its own regulations
implementing the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended, 7 U.S.C. �� 136 et seq., was successfully challenged.
The court found that the Act d7d not grant to the States (including,
for purposes of the Act, Gum) the power to limit and inspect
pesticides imported from a foreign country. The court noted that the
Act delegated the power to control imports to the Secretary of the
Treasury. hbile. the Act authorizes cooperative arrangements between
the federal goverment an] a State for enforcement of the Act, the
federal government had entered into no such arrangement with the
Government of Guam. The court concluded, "If the Territory of Guam
desires to enforce the Federal Insecticide, Fungicide, and
Rodenticide Act, it must do so within the confines of that Act." 428
F. Supp. at 728. The court made no mention of the duty of the
Governor of Guam, under the Organic Act for Guam, to faithfully
execute federal laws applicable to Gum.*

*The authority of Goverment of Guam custcnis inspectors to
enforce federal laws has recently been questioned. See Custans can't
halt bogus items, Pacific Daily News (Guam, July 29, i982), at 26;
Gold taels allowed in states-sometimes, id. (April 11, 1982), at 1.

71 -

The decisions of the District (burt of Guam in the Rogers and
Pacific Construction Co. cases, if read to deny the government of
Guam power to enforce federal law in the absence of congressional
authorization, appear contrary to established judicial precedent,
[3441 although the issue is not entirely free from doubt. States of the
United States are encouraged to cocperate in enforcing federal
criminal laws. United States v. Chadwick, 415 F.2d 167, 171 (10th
Cir. 1969).* State courts commonly enfDrce federal law:

Nothing in the concept of our federal system prevents state
courts from enforcing rights created by federal law.
Concurrent jurisdiction has been a ccnmn phenomenon in our
judicial history, and exclusive federal court jurisdiction
over cases arising under federal law has been the exception
rather than the rule. . . . [Olur judgment [has] been
* * * to affirm the (state-court] jurisdiction, where it is
not excluded by express provision, or by incompatibility in
its exercise arising fran the nature of the particular
case.

Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 507-08 (1962). See
also Claflin v. Houseman, 93 U.S. 130, 137 (1876).**

In other cases upholding State power to enforce or implement
federal law, however, State enforcement or implementation has been
pursuant to specific congressional authorization. Thus, in American
Horse Protection Association v. Frizzell, 403 F. Supp. 1206, 1221-22
(D.Nev. 1975), the court held a formal agreement between the United
States and the State of Nevada did not constitute an illegal
delegation of federal management responsibilities to State officials.
The court relied, however, on specific authorization for such
agreements in the federal statute to be enforced under the agreement.
Similarly, in Oklahoma v. Federal Energy Regulatory Camission, 494
F.Supp. 636, 660 (W. D. Okla. 1980), affirmed, 661 F.2d 832 (10th
Cir. 1981 certiorari denied, 102 S. Ct. 2902-03 (1982), the court
held that . . the federal government may delegate implementation
of federal programs to states willing to comply," and, in the cases
discussed therein as precedent, stated the delegation of federal
power was specifically authorized in the acts of Congress
establishing the various programs.

Even though scme cases upholding State power to enforce federal
law rely on specific provision by Congress for State enforcement, no
cases have been found denying States the power to enforce federal law

*But offenses against the United States may not be prosecuted in
State courts. Tennessee v. Davis, 100 U.S. 257 (1880).

"Miere Congress expressly gives State courts specific powers to
enforce federal law, the State courts clearly may exercise those
powers unless prohibited frcrn doing so by State legislation.
Holmgren v. United States, 217 U.S. 509, 517 (1910).

72 -

in the absence of such a provision. Further, no policy is served by
denying States the power to enforce federal law. And, if States may
enforce federal law, so also may territories and possessions. See [3451
United States ex rel. Gereau v. Henderson, 529 F.2d 889, 894 (5th
Cir. 1976), following Duncan v. M@ji@gan, 278 F.2d 695, 696 (9th Cir.
1960), certiorari denied, 368 U.S. 919 (1961).

Accordingly, the goverment of the Northern Mariana Islands
should be considered to have the authority to enforce federal laws in
the Northern Mariana Islands. Specifically, the government of the
Northern Mariana Islands should be recognized to have the authority
to enforce federal laws governing the movement of goods and other
things in and out of the Northern Mariana Islands. Given the
uncertainty in the controlling case law, however, congressional
legislation confirming that authority way be desirable.

Paying for enforcement of federal law in the Northern Mariana
Islands. The United States does not reimburse the goverment of the
Northern Mariana Islands for expenses incurred by the Northern
Mariana Islands in enforcing federal laws at its borders. While the
Northern Mariana Islands may be the principal beneficiary of such
enforcement, the costs of enforcing federal border laws principally
benefitting Hawaii or Puerto Rico, are borne by the United States,
.not by the governments of Hawaii or Puerto Rico. See Custorns rules
disputed, Pacific Daily News (Gum, October 9, 1981), at 3.

CCVCLUSICIN

This survey is intended to acquaint readers with the present
applicability of federal impDrt-export legislation to the Northern
Mariana Islands. Here and there the desirability of clarifying the
applicability of certain of those laws has been noted. In general,
however, recommendat ions for changes in applicability are not made in
the survey. The survey should enable agencies, organizations, and
individuals concerned with one or more of the federal import-export
laws discussed to formulate their own recommendations. The
Gommission staff solicits such reccimmendai tons, as well as notice of
any errors or omissions in the survey.

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-6617

r3461

SOLICITATION OF VIEWS

ON THE APPLICATION OF

THE MMICAID PROGZAM

IN THE NORTHERN MARIANA ISLANDS

Introduction.
The staff of the Commission has been instructed to examine the [3471
application of the Medicaid program in the Northern Mariana Islands.
Since ue have only a limited acquaintance with the Medicaid program,
we solicit your suggestions and insights as to what legislative
changes, if any, ought to be made in the governing statute to make
the Medicaid program more effective or more efficient in the Northern
Mariana Islands.

The statute.

Subchapter XIX of chapter 7 of title 42, U.S. Code (�� 1396 et
seq.), contains title 19 of the Social Security Act, creating t-Fe-
Medicaid progran. The program

authorizes FL-deral grants to States for medical assistance to
lo@%-income persons who are age 65 or over, blind, disabled, or
members of families with dependent children. The program is
jointly financed by the Federal and State governments and
administered by States. Within broad Federal rules, each State
decides eligible groups, types and range of services, payment
levels for services, and administrative and operating
procedures. Payments for services are made directly by the
State to the individuals or entities that furnish the services.

42 C.F.R. � 430.0 (1982).

States participating in the @bdicaid program must submit a
medical assistance plan to the United States Department of Health and
Human Services for approval and, thereafter, in providing assistance
must comply with that plan. 42 U.S.C. �� 1396, 1396c. Eligible
individuals needing financial assistance apply to the State or local
agencies designated in the State plan. Medical services, in most
instances, may then be obtained from any institution, *doctor, or
other person qualified to perform the services. Id. S 1396a(a)(23).

Present applicability.

The definition of "State" for purposes of this subchapter was
amended in 1981 to include the Northern Mariana Islands, thereby
making the Me-dicaid program available to the Northern Mariana
Islands. Public Law 97-35, � 2162 (a) (1 95 Stat. 358, 42 U.S.C.

-2-

1301(a)(1). See also 42 C.F.R. S 430.1 (1982).*

[3481 Although generally treated as States for purposes of the
Medicaid program, the Northern Mariana Islands and other insular
areas of the United States are subject to two rules not applicable to
the States. First, total federal payments under the Medicaid program
in any fiscal year may not exeed an amount specified by statute. 42
U.S.C. S 1308(c). For the Northern Mariana Islands the "capP on
annual federal payments is $350,000. Id.**

Second, for the Northern Mariana Islands (and Puerto Rico, the
Virgin Islands, Guam, and American Sanoa), the Federal Government
pays fifty per cent of the costs of services provided under an
approved Medicaid plan. Id. S 1396d(b) . For all other eligible
jurisdictions, the federal contribution ranges from fifty percent to
eighty-three percent of the costs, the pDorer States receiving a
greater percentage of total costs from the Federal Government while
the more affluent States receive a lesser percentage.***

*Section 1396a(b) (4) of title 42, U.S.C., requires States
receiving Medicaid grants to impose no citizenship requirement on
eligibility for assistance that would exclude United States citizens.
In its January 1982 interim report to the United States Congress, the
Commission reccmrrended enactment of legislation to treat citizens of
the Northern Mariana Islands as citizens of the United States for
purposes of this requirEment. If enacted, this legislation would be
of benefit to citizens of the Northern Mariana Islands needing
Medicaid assistance while in other parts of the United States.

"Annual Medicaid expenditures in the Northern Mariana Islands
apparently have not yet been sufficiently large to bring the "cap"
into operation. This situation is likely to change when a new
hospital is ocmpleted, making qualified persons eligible for the
first tine to receive Medicaid assistance for inpatient medical
services in the Northern Mariana Islands. See the discussion, Health
care in the Northern Mariana Islands, below.

The upper limits for the other insular areas are: Puerto
Rico--$45,000,000; Virgin Islands--$1,500,000; Guam--$1,400,000; and
American Sama-$750,000. 42 U.S.C. � 1308(c). The limits are
roughly related to the population of each area.

***Congress may provide that persons in the territories receive
less assistance from federal ly-funded programs than similarly
situated persons in the States without violating constitutional
guarantees of equal protection. Harris v. Rosario, 446 U.S. 651
(1980).

-3-

The Northern Mariana Islands has an approved Medicaid plan and
is providng financial assistance to qualified individuals. Medicaid [3491
assistance in the Northern Mariana Islands is administred by the
Northern Mariana Islands Department of Public Health and
EnvironiTental Services. Northern Mariana Islands Public Law 1-8,
3(d).

Health Care in the Northern Mariana Islands.

In general, the health of the people of the Northern Mariana
Islands is quite good. An infant mortality rate 60% higher than that
in the United States, howver, is the principal contributor to an
crude death rate 20% greater than in the United States. See Robert
Mytinger Associates, Inc., New Directions for Health Services for the
Commonwealth of the Nor thein- -Mar-Ir-a-na Islands 3 (1980) (hereafter, the
`M-ytinger Study"

The principal hospital in the Northern Mariana Islands, Dr.
Torres Hospital on Saipan, has been characterized as "woefully
inadequate." 12@ Cong. Rec. 10090, 10092 (1979) (remarks of
Representative Phillip Burton) . The hospital cannot ffeet the
standards for Medicaid payments for inpatient medical services. See
U.S. Department of Health, Education & %blfare, Statement of
Deficiencies and Plan of Correction: Dr. Torres Hospital, Saipan,
Northern Marianas (February 9, 1979). In 1980, the Unit@3_States
Congress authorized construction of a new hospital on Saipan. Public
Law 96-205, S 202, 94 Stat. 84. Monies have. been appropriated
pursuant to that authorization, and construction of the new hospital
is now underway.

Health care is in large part provided by personnel employed by
the government of the Northern Mariana Islands. A private dental
clinic operated by the Seventh-Day Adventists, a private optometrist,
and a number of traditional healers (suruhana) also provide health
care. The principal goverment health care facilities are the 84-bed
Dr. Torres Hospital and four small dispensaries on Saipan, a 12-bed
sub-hospital on Rota, and a four-bed sub-hospital/dispensary on
Tinian. Id. at 35, 38, 40.

The geographic location of the [Northern Mariana Islands]
contributes to extraordinarily high costs of training, employing
and retaining health personnel. Its isolation contributes to
inordinate costs of importing medical technology and building
materials. The Emall population base and low volume of use of
highly specialized medical services makes it impossible to
provide the desired mix of high technology medical services on
site. This, in turn, generates increasing costs for care and
transport of patients to medical facilities abroad (in Guam,
Hawaii and the U.S. mainland).

-4-

Id. at 11

[3501 Throughout administration of the Trust Territory of the Pacif ic
Islands by the United States, medical care has been provided the
people of the Northern Mariana Islands by the goverment at fees that
reflect only a small portion of the actual costs of that care. The
goverment of the Northern Mariana Islands inherited this system of
health care financing. Although efforts are underway to bring fees
for medical services more into line with the costs of those services,
these efforts are hampered by the inability of many persons in the
less-develcped economy of the Northern Mariana Islands to pay a
larger share of the costs.

Issues.

Should the Northern Mariana Islands be exempted from the
Medicaid fr edom-of-choice requirement? In general, State plans for
Medicaid assistance must allow individuals eligible for that
assistance to choose any hospital, doctor, or other institution or
person qualified to provide the medical services needed. 42 U.S.C.
S 1396a(a) (23) . (Some exception and waivers fran this requirement
are permitted. See id. S 1396n.)

In 1975, Congress provided that the plans for Puerto Rico, the
Virgin Islands, and Guam need not permit individuals eligible for
Medicaid assistance freedan to select their own medical providers.
Public Law 94-48, S 2, 89 Stat. 247, 42 U.S.C. S 1396a(a)(23).
Congress noted that each of these jurisdictions "had in place before
Medicaid a well-developed pLblic health care system, used by most of
the popul at ion!' and concluded that exemption "from the
freedon-r-of-choice requiremnt would allow them to determine how to
utilize their own limited dollars in meeting the health needs of the
large eligible population." House Report 94-327, at 3 (1975). See
also 121 Cong. Rec. 20930-31 (1975).

The Northern Mariana Islands similarly has a public health care
system used by most of the population. At present, few alternatives
to that system are available so, even if the Medicaid recipient has a
legal right to choose any provider of health care, the public health
care system will in most cases be the provider.

If the Northern Mariana Islands is exempted from the
freedom-of-choice requirement, physicians and other providers of
health care may be discouraged from establishing practices in the
Northern Mariana Islands, since they may not be eligible to receive
Me-dicaid payments for services provided. On the other hand, if other
sources of medical assistance do become established in the Northern
Mariana Islands, and the freedom-of -choice requirement is in effect,
many persons would be likely to resort to those other sources. These

-5-

sources are apt to be more expensive than the government system. The
Northern Mariana Islands would nonetheless be required to fund the [3511
minimum services required by the Medicaid program. Since the
Northern Mariana Islands is subject to an annual "cap" of $350,000 on
federal assistance under the Medicaid program, application of the
freedom-of-choice requirement could divert funds from the treasury of
the Northern Mariana Islands from the government health care system
to private providers.

Should the Secretary of Health and Human Services be authorized
to waive or modify requirements of the Medicaid program otherwise
applicable to the Northern Mariana Islands? The medical care system
of Afferican Samoa is of about the same scphistication as that of the
Northern Mariana Islands. Mytinger Study 146. The Medicaid program
was extended to American Samoa in 1982. Public Law 97-248 S 136(a),
96 Stat. 324, 42 U.S.C. S 1301(a)(1). In extending the program to
American Samoa, Congress authorized the Secretary of Health and Human
Services to waive or modify any requirement of the Medicaid program
except the requirements that (1) Amarican Samoa provide matching
funds, (2) annual federal expenditures be subject to a statutory
"capP of $750,000, and (3) expenditures be for health services
covered by the program. 42 U.S.C. � 1396a(j). Note that the
Secretary is not required to grant all requests for waivers or
modifications of Medicaid requirements applicable to Aserican Samoa.
The only reason given for American Sawa's special treatment in the
legislative history of Public Law 97-248 is "the unique circumstances
in the health system in American Sawa." House Conference Report
97-760, at 441 (1982).

A bill, the Health Care Financing Amendnents of 1983, now
pending before Congress, would extend the treatment accorded American
Samoa to Puerto Rico, the Virgin Islands, Guam and the Northern
Mariana Islands. S. 643, 98th Cong., 1st Sess. � 227 (1983).

Should legislation be enacted to allow Medicaid payments for
inpatient care at Dr. Torres Hospital, even though that FE-spl`t-a-l
cannot meet Medicaid standards for inpatient care? As noted above,
Dr. Torres Hospital, the principal hospital in the Northern Mariana
Islands, cannot neet the standards for Medicaid payments for
inpatient hospital services. Inpatient hospital services may only be
furnished by hospitals meeting requirements for participation in
Medicare. 42 C.F.R. � 440.10(a)(3)(iii) (1982). Those requirements
are set forth in section 1395x(e) of title 42, U.S.C., and in
sections 405.1011 et seq. of title 42, C.F.R. (1982).

[The] conditions for participation are included to provide
assurance that participating institutions are safe, that they
have facilities and organization necessary for the provision of
adequate care, and that they exercise their responsibility to

-6-

discourage improper and unnecessary utilization of their
services and facilities. . . . To allow payffents to
[3521 institutions for services of lower quality than are now
generally acceptable might reduce the incentive for establishing
high-quality institutions or for maintaining high standards
where they now exist.

Senate Report 404, 89th Clong., 1st Sess. (1965), reprinted in 1965
U.S. Code Gong. & Ad. News 1943, 1969.

Thus, even though persons in *the Northern Mariana Islands may be
eligible for inpatient Medicaid assistance, they cannot receive that
assistance in the Northern Mariana Islands because no hospital is
qualified to provide inpatient care under the Medicaid program. The
persons needing inpatient services obtain those services at Dr.
Torres Hospital, but receive no Kadicaid assistance in paying for
those services.

At present, denial of Medicaid assistance for inpatient hospital
care to eligible persons in the Northern Mariana Islands does not
cause great hardship. The goverment pays most costs of hospital
care from its own general revenues, so fees charged to individuals
are low. Mytinger Study 4.

The new hospital under construction is expected to meet Medicaid
standards for inpatient care. Consequently, when that hospital is
opened, eligible persons will be able to receive inpatient care for
medical assistance in the Northern Mariana Islands.

Are there other requirements in the Medicaid program that should
be eliminated for the Northern Mariana Islands to make the program
more effective EFe-re? We are interested in learning whether
particular characteristics of the Northern Mariana Islands make
advisable legislative changes in the manner in which the Medicaid
program is made available there. Three characteristics occur to us
that might have adverse effects on the operation of the Medicaid
program in the Northern Mariana Islands: (1) its small population;
(2) the dual role of the goverment as administrator of the Medicaid
program and as principal provider of medical services; and (3) the
sUbsidy of health care by the goverment frcm its general revenues.

--small population. The Northern Mariana Islands has a small
popul7a_tlon -compared to that of the States and other jurisdictions
eligible to participate in the Medicaid program. As a consequence,
the nLmber of persons with the talent and education to ensure that
the Northern Mariana Islands meets all requirements for participation
in the Medicaid program is limited. Even mre than in other areas,
these persons should not be diverted from more productive enterprise
to compliance paperwDrk unless absolutely necessary to achieve the

-7-

purposes of the Medicaid program in the Northern Mariana Islands.

-dual role of goverment. The government of the Northern
Mariana Islands, as principal provider of health services, will be r3531
the principal recipient of Medicaid payments. At the same time, as
administrator of the Medicaid program, it will pay for these
services. In effect, the goverment will be paying itself. There
consequently may be opportunities to eliminate Medicaid requireflents
governing relationships between State Medicaid agencies and providers
of medical services that deal with each other at arm's length.

--goverment subsidy. Hospitals are normally paid by Medicaid
no more than their customary charge for inpatient services provided.
42 U.S.C. � 1396b(i) (3) .* XCen, as in the Northern Mariana Islands,
public institutions provide inpatient hospital services free of
charge or at nominal charge, those institutions may be paid no more
than the amount Department of Health and Human Services regulations
determine will provide fair compensation to the institution for the
services rendered. Id. Those regulations allow the institution to
receive payment "ai@-the sawe rate that would be used if the
provider's charges were equal to or greater than its costs." 42
C.F.R. S 447.271 (1982). Additional upper limits on Medicaid
payments are based on principles of reimbur sement established under
the Medicare program. Id. H 405.401 et seq., 447.272.

Conclusion.

Although the broad outline of the Medicaid program is relatively
simple, the governing statute is detailed and implemented by many
pages of regulations. We would greatly appreciate your corm-ents and
suggestions with respect to the issues we have discussed and your
assistance in identifying issues we have not recognized.

*Me-dicaid payments to hospitals must also be reasonable. 42
U.S.C. � 1396a(a)(13)(A). See also 42 C.F.R. S 447.250 (1982).

Draft Staff Recommendations
Not Acted on by th*e Commission

Northern Mariana Islands Commission on Federal Laws Washingft, D.C. 20240 (202) 343-5817

[3561

STAFF RECOMMENDATION

TITLE 19 OF THE UNITED STATES CODE,

CUSTOMS DUrIES

RECOMMENDATIONS

The only legislation recommended with respect to title 19 is a
group of technical amendments. Section 603 of the Covenant
contemplates that the Northern Mariana Islands will be treated as is
Guam for purposes of the federal customs laws. Each of the proposed
technical amendments makes clear that the Northern Mariana Islands is [3571
to be treated as is Guam for purposes of a particular provision.

Tariff Act of 1930--shipments from bonded warehouses.
Legislation should be enacted to make clear that goods may be
withdrawn from bonded warehouses within the customs territory of the
United States for shipment to the Northern Mariana Islands without
payment of duty on those goods. The Northern Mariana Islands is not
now included in the list of jurisdictions outside the customs
territon
.1 of the United States to which goods may be shipped from a
bonded warehouse without payment of duty.

Anti-Smuggling Act. Legislation should be enacted to make the
Anti-Snuggling Act inapplicable to the Northern Mariana Islands on
termination of the trusteeship. In the absence of legislation, the
Act will become applicable to the Northern Mariana Islands at that
time. The Act is intended only to prevent the smuggling of
merchandise into the customs territory of -the United States. Since
the Northern Mariana Islands is outside that custcms territory, the
..Act should be inapplicable to the Northern Mariana Islands, as it is
now inapplicable to Guam, Anerican Sa-ma, and other territories and
possessions of the United States that are outside the customs
territory.

Import relief. Legislation should be enacted to allow producers
in the Northern Mariana Islands to seek the imposition or
modification of United States duties or quotas to protect themselves
from serious economic .injury from foreign competition in markets
within the customs territory of the United States. Producers in Guam
and other -United States possessions outside the customs territory of
the United States now have that right.

INTRODUCTION

Customs are duties or taxes imposed by a nation on goods
imported to or exported from that nation. Marriott v. Brune, 50 'U. S.
632 (1850). The customs laws of the United States, generally found
in title 19 of the United States Code, include tariff rates and
classifications, import restrictions, and various other measures
related to international trade. The United States Customs Service, a
part of the Department of the Treasury, is responsible for
administration of the customs laws.

Until the great overseas territorial expansion of 1898, all
American territorial acquisitions had been regarded as within the
custcms territory of the United States. United States duties were
[3581 charged when foreign goods entered a territory, but not when goods
frcrn a territory entered other parts of the United States. DeLima v.
Bidwell, 182 U.S. 1, 187-94 (1901); Cross v. Harrisono, 57 U.S. 164
(1853). The 1898 acquisitions--Puerto Rico, the Philippine Islands,
Hawaii, and Guam--, unlike earlier territorial acquisitions, were not
located on the North American continent and differed markedly from
the earlier territories in history and culture. Their arrival into
the Ainerican political family sparked an animated debate as to the
status of the new possessions under the Constitution of the United
States. The debate culminated in a series of Supreme Court
decisions, collectively known as the "Insular Cases." The Insular
Cases are best known for establishing the dichotany between
"incorporated" territories, ultimately destined for statehood, in
which the Constitution is fully applicable, and the "unincorporated"
territories, where only "fundamental" constitutional rights are
protected. Several of the Insular Cases, however, treated the
customs status of the new American possessions, and it is that aspect
of those decisions that is of interest here.

Puerto Rico became part of the United States as a result of the
Spanish American War. In one of the Insular Cases, DeLima v.
Bidwell 182 U.S. 1 (1901), the Supreme Court held that, after the
1898 treaty of peace between Spain and the United States, Puerto Rico
was not a foreign country for purposes of the Dingley Tariff Act of
1897, 30 Stat. 151, which levied duties "upon all articles imported
fran foreign countries." In the Spanish American War, the United
States also took possession of the Philippine Islands and undertook
the civil administration of those islands. In another of the Insular
Cases, Fourteen Diamond Rings v._ United States, 183 U.S. 176, 177
(1901), the Supreme Court ' held that, after the treaty ending the war,
the Philippine Islands similarly were not a foreign country for
purposes of the Dingley Tariff Act.*

Article I, Section 8, Clause 1, of the United States
Constitution requires that "all Duties, Imposts and Excises shall be
uniform throughout the United States." In yet another of the Insular
cases, Downes v. Bidwell, 182 U.S. 244 (1901), the Supreme Court held
that this provision only requires uniformity throughout the States
admitted into the Union. Thus, if Congress so chooses, a territory

*But see Downing v. United States 116 Fed. 779 (S.D.N.Y. 1902),
affirmed, 122 Fed. 445 (2d Cir. 1903) (Cuba under United States
military occupation held to be a foreign country for purposes of the
Dingley Tariff Act; Cuban imports into the United States thus
subject to duty).

or possession can remain outside the customs territory of the United
States or, if within the customs territory, may be treated
differently from a State.*

Puerto Rico has remained within the customs territory of the (3591
United States. Act of April 12, 1900, c.191, SS 2-3.**

Hawaii, also acquired in 1898, was brought into the customs
territory of the United States in the first legislation establishing
a territorial goverment for those islands.*** Act of April 30,
1900, c.339, S 88, 31 Stat. 141, 159. See also id. � 93.

Congress decided, however, that the Philippine Islands would not
be brought into the customs territory of the United States. Act of
March 8, 1902, c.140, �� 2, 8. Instead, it would be treated as'a
foreign country for purposes of federal customs laws. Id. � 2. In
an effort to promote the economy of the Philippines, @Tall articles
the growth and product of the Philippine Archipelago caning into the
United States from the Philippine Archipelago" were to pay only 75
percent of the regular duties. Id.

*One other constitutional provision relating to customs duties
is worth noting: Article I, Section 10, Clause 2, of the United
States Constitution prohibits States from levying duties on imports
without the consent of Congress. Goods brought into the customs
territory of the United States from an unincorporated territory of
the United States are "imports" protected from State duties by that
provision. Hooven & Allison Co. v. Evatt, 324 U.S. 652, 668-79
(1945).

"For a brief period, in order to raise revenue for the
goverment of Puerto Rico until a local system of taxation could be
established, fifteen percent of the normal duty on foreign goods was
levied on goods entering the United States from Puerto Rico. The
proceeds of this duty were for the use of the goverment of Puerto
Rico. Id. �� 3-4.

***The Joint Resolution of Congress for the Annexation of the
Hawaiian Islands, 30 Stat. 750 (1898), had provided that:

Until legislation shall be enacted extending the
United States customs laws and regulations to the Hawaiian
Islands the existing customs relations of the Hawaiian
Islands with the United States and other- countries shall
remain unchanged.

See Crossman v. United States, 105 Fed. 608' (S.P.N.Y. 1900),
affirmed, 182 U.S. 221 (1901):.

Presumably because imports into the United States from Guam were
negligible, Congress did not enact legislation fixing the customs
(3601 status of that island until many years later.
In the Tariff Act of 1909, c.6, 36 Stat. 11, Congress modified
the customs status of the Philippine Islands. Section 5 of that Act,
36 Stat. at 83, allowed "all articles, the growth or product of or
manufactured in the Philippine Islands from materials the growth or
product of the Philippine Islands or of the United States, or of
both, or which do not contain foreign materials to the value of more
than twenty per centum of their total value" to be admitted into the
United States free of duty. Rice was not permitted duty-free entry,
and quantitative limits were placed on the duty@free admission of
sugar and tobacco. By the same section, "in consideration of the
exemptions aforesaid, all articles, the growth, product, or
manufacture of the United States" were accorded entry into the
Philippines free of Philippine duties.

Section IV.C. of the Tariff Act of 1913, c.16, 38 Stat. 114,
continued the duty-free treatmnt of Philippine goods in language
identical to that of the Tariff Act of 1909. The exception for rice
and the quotas on sugar and tobacco, however, were eliminated. The
1913 provisions were retained intact in the Tariff Acts of 1922 and
1930. Act of June 17, 1930, c.497, q 801, 46 Stat. 590; Act of
September 21, 1922, c.356, 5 301, 42 Stat. 858.

In 1917 Congress, in enacting its first legislation for the
government of the Virgin Islands, provided that "all articles, the
growth or product of or manufactured in (the Virgin Islands] from
materials the growth or product of, such islands or of the United
States, or of both, or which do not contain foreign materials to the
value of more than 20 per centum of their total value" should be
admitted into the United States free of duty. Act of March 3, 1917,
c.171, � 3, 39 Stat. 1132. The language, intentionally, is virtually
identical to that in the Tariff Acts of 1909 and 1913, providing
duty-free treatment for Philippine goods. See 54 Cong. Rec. 3649
(1917).

In 1950, Congress enacted the first organic legislation for
Gum. Section 27 of the Organic Act of Guam, 64 Stat. 392, provided
that "ralrticles which are the growth, production, or manufacture of
Guam coming into any State, Territory, or insular possession of the
United States from Guam shall be entered at the several ports of
entry free of duty."

In 1954, Congress enacted the Revised Organic Act for the Virgin
Islands. Act of July 22, 1954, c.558, 68 Stat. 497. Section 28 (d)
of the Revised Organic Act continued the duty-free exemption for
Virgin Islands goods, but raised the permissible foreign content of
such goods from 20 percent to 50 percent of total value.

within six weeks of enacting section 28(d) of the Revised
Organic Act of the Virgin Islands, Congress enacted the Customs
Simplification Act of 1954. Act of September 1, 1954, c.1213, 68
Stat. 1139. One of the purposes of that act, was to "eliminate (3611
certain inconsistencies in the present law relating to the
application of duties to products of our insular possessions" and to
provide "equal treatment of all insular possessions, except Puerto
Rico." House Report 2453, 83d Cong., 2d Sess. 1, 5 (1954). Section
401 of the Customs Simplification Act added a new section 301 to the
Tariff Act of 1930,** which extended the treatrent given six weeks
earlier to the Virgin Islands to all insular possessions, except
Puerto Rico. Goods from the insular possessions, so long as their
foreign content did not exceed 50 percent of total value, were
entitled to admission into the customs territory of the United States
without payment of duty. Section 301 of the Tariff Act of 1930 is
the statubDry antecedent to General Headnote 3(a), discussed in more
detail under chapter 4 in the chapter-by-chapter analysis of title
19, below.

Sections 603, 604, and 605 of the Covenant treat expressly the
applicability of federal customs laws to the Northern *Mariana
Islands:

-Section 603. (a) The Northern Mariana Islands will
not be included within the customs territory of the United
States.

(b) The Government of the Northern Mariana Islands
may, in a manner consistent with the international
obligations of the United States, levy duties on goods
imported into its territory from any area outside the
custams territory of the United States and impose duties on
exports from its territory.***

*By this time, the Philippines had became independent. Hawaii,
an "incorporated Territory" but not yet a State, was not considered
an insular possession.

**See the discussion of chapter 4 in the chapter-by-chapter
analysis of title 19, below.

***Congress may delegate to the Northern Mariana Islands the
power to impose tariff duties on imports into the Northern Mariana
Islands. See Miranda v. Puerto Rico, 101 F.2d 26 (1st Cir. 1938);
Pan Amrican �T-andard Brands, 177 F. Supp. 769, 773 (Customs Ct.
1959). In approving section 603(b) of the Covenant, Congress has
delegated that power to the Northern Mariana Islands. (Footnote
added by the Commission.)

(c) Imports fran the Northern Mariana Islands into
the custcms territory of the United States will be subject
to the sane treatment as imports from Gum into the custams
[3621 territory of the United States.

(d) The Goverment of the United States will seek to
obtain. fran foreign countries favorable treatment for
exports from the Northern Mariana Islands and will
encourage other countries to consider the Northern Mariana
Islands a developing territory.

Section 604. (a) The Government of the United
States may levy excise taxes on goods manufactured, sold or
used or services rendered in the Northern Mariana Islands
in the same manner and to the same extent as such taxes are
applicable within Guam.

Section 605. Nothing in this Article will be deemed
to authorize the Government of the Northern Mariana Islands
to impose any customs duties on the property of the United
States or on the personal property of military or civilian
personnel of the United States Government or their
dependents entering or leaving the Northern Mariana Islands
pursuant to their contract of employment or orders
assigning them to or fram the Northern Mariana Islands or
to impose any taxes on the property, activities or
instrumentalities of the United States which one of the
several States could not impose . . . .

The Marianas Political Status Ccmmission, in its
Sect ion-by-Sect ion Analysis of the Covenant,* concluded that:

*The Analysis is reprinted in Hearings on the Covenant to
Establish the Ccrmmnwealth of the Northern Mariana islands befor;@
the Subcommittee on Territorial and Insular Affairs of the House
Committee on Interior and Insular Affairs, 94th Cong., lst Sess. 626
(1975) and in Hearings on the Northern Mariana Islands before the
Senate Committee on Interior and Insular Affairst 94th Cong.,, lst
Sess. 356 (1975).

It is to the advantage of the Northern Marianas to be
outside the custams territory [of the United States), for
it permits the Northern Marianas to have a. duty-free port. [3631
This will mean lower consumer prices in the Northern
Marianas and will also encourage the tourist business. It
means that goods will enter the Marianas subject to duties
imposed by the local goverrment rather than subject to the
duties which are imposed by the federal government. This
is an important element of local self-goverrment and
assures that the duties can be tailored to local
conditions.

Another camientator notes that,

* * * In addition, [the Marianas] are free to levy
duties on exports or imports fran non-U.S. sources
independent of the United States schedule of duties. Thus,
duties may be custom tailored to met local needs and need
not impose too great a burden on Marianas residents who
must, of necessity, rely to a considerable extent on
imports.

Liebman, Incane Tax Incentives for Investment in the Northern Mariana
Islands, 2 University of Hawaii Law Review 389, 396 (1981).
Collection costs, however, "likely would exceed revenues fran the
duties at the current level of imports." Id. at 396 n.43.*

As provided in section 603(c) of the Covenant, goods exported
fran the Northern Mariana Islands into the custans territory of the
United States are subject to the sane treatment as goods exported
fran Guam into the customs territory of the United States. Goods
fram Guam and, thus, from the Northern Mariana Islands enter that
custans territory duty-free, provided that a sufficient part of the
value of such goods is derived fran Guam or the Northern Mariana
Islands rather than fran scme foreign country. In other words, an
importer may not escape United States duties by shipping foreign
goods through Guam or the Northern Mariana Islands on their way into
the United States. See the discussion of chapter 4 in the
chapter-by-chapter analysis, below.

*The Northern Mariana Islands may be precluded fran levying
duties on goods that may enter the custcms territory of the United
States fran foreign countries duty@free. Should the Northern Mariana
Islands attempt to levy a duty on such goods, the importer could
merely first enter the goods into the United States and then ship
them to the Northern Mariana Islands. Section 603(b) of the Covenant
prevents the Northern Mariana Islands fran levying duties on goods
imported fran the United States. See generally Miranda v. Puerto
Rico, 101 F.2d 26, 28 (lst Cir. 1938).

Other territories. Puerto Rico is within the customs territory
of the United States. Revised Tariff Schedules of the United States,
General Headnote 2.* Guam and Anerican Samoa are not within that
customs territory and administer their own customs laws. Id. ; 19
[3641 C.F.R. S 7.8 n.5 (1983).** The Virgin Islands is also outild-e the
customs territory of the united States, but its customs laws are
administered by the United States Customs Service. Id. ; 48 U. S. C.
5 1406i. See also id. 5S 1574(f), 1642, 1642a, 1644, 1 45.

Border searches. In Barusch v. Calvo, 685 F.2d 1199 (1982), the
United States Court of Appeals for the Ninth Circuit addressed the
extent to which the Fourth Amendment to the Constitution of the
United States prohibits searches of persons arriving in Gum from
other parts of the United States. The Ninth Circuit refused to
prohibit customs searches of persons arriving in Gum from the
Northern Mariana Islands, but only on the ground that the Northern
Mariana Islands is still part of the trusteeship and not yet part of
the United States. The clear implication of the opinion is that, on
termination of the trusteeship, the Fourth Amendment--as interpreted
by the Supreme Court in Torres v. Puerto Rico ', 442 U.S. 465
(1979)--will bar customs searches of persons caning to Guam from the
Northern Mariana Islands. By the same reasoning, the Northern
Mariana Islands would also be unable to examine the baggage of
persons arriving in the Northern Mariana islands from Guam or other
parts of the United States.

Section 603(b) of the Covenant allows the Northern Mariana
Islands to levy duties on goods imported into the Northern Mariana
Islands from any area outside the customs territory of the United
States. Gum is outside the customs territory of the United States.
Revised Tariff Schedules, General Headnote 2. Thus, under section
603(b), the Northern Mariana Islands may levy duties on goods
imported from Guam. But under the Barusch reasoning, the Northern
Mariana Islands could not examine the baggage of incoming passengers
or, for. that matter, air or ocean freight shipments, to determine
whether its customs laws were being violated.

A question is also raised as to the baggage of a person caning
from foreign countries who spends some time on Guam before proceeding

*See also 48 U.S.C. �� 738-740; Leibowitz, The Ccmmonwealth of
Puerto Rico: Trying to Gain Dignity and Maintain Culture 11 Georgia
Journal of International & Comparative Law 211, 266-72 (1981).

"The Governor of American Samoa my request the United States
Department of the Treasury to "administer and enforce the collection
of all customs duties derived from American Samoa, without cost to
the government of American Samoa." 48 U.S.C. S 1669.

- 9 -

to the Northern Mariana Islands. Guam is able to levy duties on
articles in that person's baggage and may inspect that person's
baggage. That is of no particular concern to the Northern Mariana
Islands. But the Northern Mariana Islands may not inspect that (3651
person's baggage to enforce its customs laws. (Guam, of course, will
be in the same situation if the traveller visits the Northern Mariana
Islands before going to Guam.)

Customs searches do -not only enforce tariff laws. Customs
searches also enforce laws against various sorts of contraband,
tainted foods, hazardous materials, misbranded articles, and so
forth. Th the extent the Northern Mariana Islands has its own laws
restricting the entry of articles into its customs territory, its
ability to enforce those laws will be debilitated by the Barusch
decision.

The situation in Barusch is significantly different from that in
Torres since Puerto Rico--unlike Guam (and the Northern Mariana
Islands)--is within the customs territory of the United States. The
customs territory of the United States, however, is defined by
statute and distinctions based on federal statute cannot modify the
prohibition of a constitutional amendment. But the Fourth Amendment
prohibits unreasonable searches and seizures. A search to enforce
separate customs laws sanctioned by Congress is reasonable and,
therefore, not within the prohibition of the Fourth Amendment.
Accordingly, to the extent the Rarusch decision implies that persons
arriving in the Northern Mariana Islands after termination of the
trusteeship from Guam or other parts of the United States cannot be
subjected to customs searches, that decision is in error. (Likewise,
any implication that persons arriving in the customs territory of the
United States from the Northern Mariana Islands or Guam cannot be
subjected to border searches by the United States Customs Service is
wrong as well as contrary to current practice.) See generally United
States v. Chabot 531 F. Supp. 1063 (D.V.I. 1982), sustaining the
constitutionality of a customs search of a person travelling from
Puerto Rico (within the customs territory of the United States) to
the United States Virgin Islands (outside that customs territory).

CHAPrER-BY-CHAPrER ANALYSIS.

Note. The provisions of chapter 2 of title 19 have been
repealed or otherwise amitted from the current edition of the United
States Code.

Chapter 1. Collection Districts, Ports, and Officers.

The statutes.

Chapter 1 contains a variety of provisions related to
administration and enforcement of the customs laws of the United

10 -

States. The President is authorized to rearrange customs districts
and to determine the locations of ports of entry into the customs
territory of the United States. The Secretary of the Treasury is
authorized to oversee the collection of customs duties and to
[3661 establish rules and regulations as necessary for the administration
of the customs laws. Other provisions in chapter 1 govern fees for
customs services, provide for compensation of customs officers and
employees, define certain criminal offenses by those officers and
employees, and prohibit a vessel captain from obstructing federal
officers boarding the vessel to enforce the customs or navigation
laws of the United States.

Present applicability.

The provisions of chapter I are directed almst exclusively to
the collection of duties on qoods entering the customs territory of
the United States. ne Northern Mariana Islands is not part of that
customs territory. Covenant S 603(a). Accordingly, chapter 1 is in
large part inapplicable to the Northern Mariana Islands.

One provision in chapter 1 could conceivably apply to the
Northern Mariana Islands. Section 70 of title 19 prohibits the
captain ("master") of a vessel from obstructing federal officers
boarding the vessel to enforce the customs or navigation laws of the
United States. Because the Northern Mariana Islands is outside the
customs territory of the United States, a federal officer would be
unlikely to board a vessel in waters adjacent to the Northern Mariana
Islands to enforce the customs laws of the United States. Some
federal navigation laws, however, are applicable to the Northern
Mariana Islands. See, for example, 33 U.S.C. SS 1221 et seq.,.
1222(3). A federal officer could board a vessel in waters adjacent
to the Northern Mariana Islands to enforce a navigation law
applicable to the Northern Mariana Islands. If the captain of the
vessel were to obstruct that federal officer, the captain would be
subject to a fine under section 70.

Chapter 1A. Foreign_Trade Zones.

The statutes.

Chapter 1A authorizes establishment of foreign trade zones. In
a foreign trade zone, business firms may import and assemble products
free of tariffs that would otherwise be imposed. import duties are
levied when the goods leave the trade zone. If items are reexported,
no duties are paid. A foreign trade zone is, in effect, an area of
American soil legally defined as outside the customs territory of the
United States.

Present applicability

Since the Northern Mariana Islands is already outside the
custcms territory of the United States, no gain fran establishing a
foreign trade zone under chapter 1A is possible:* A firm already can (3671
import and assemble products in the Northern Mariana Islands free of
United States tariffs. The firm can reexport those goods to any
place other than the United States without paying United States
tariffs. And, because of General Headnote 3(a), the firm, if the
local value added is sufficiently high, may be able to enter the
goods into the United States without paying United States tariffs.
Goods entering the United States frcm a foreign trade zone always pay
the full United States tariff.

Chapter 3. The Tariff and Related Provisions.

The statutes.

most provisions in chapter 3 have been repealed or anitted.
Current laws relating to tariffs are, for the most part, found in
chapter 4, below, which contains the Tariff Act of 1930.

Scme provisions in chapter 3 are still effective. Section 128
of title 19 imposes a ten percent additional duty on goods imported
into the United States in foreign vessels, unless those vessels are
exempted fran the duty by treaty. Section 159.42 of title 19 of the
Code of Federal Regulations (1983) provides that this duty shall be
imposed only on specific instructions of the Commissioner of Customs.

Section 130 subjects to forfeiture goods imported into the
United States in vessels other than vessels of the United States or
of the country where the goods were produced. The vessels are also
subject to forfeiture. Section 131 exempts vessels and goods of any
foreign nation that does not similarly restrict vessels of the United
States.

Section 181 allows the President to prohibit importation into
the United States of particular products of countries unjustly
discriminating against products of the United States.

other miscellaneous provisions in chapter 3 specify the form of
payment for custans duties, 19 U.S.C. �� 197-198; provide that the

- 12

value of imports upon which duty is levied shall be the true market
value in the exporting country on the date of shipment, id. S 240;
provide for overtime canpensation for custcms officers and employees,
id. SS 261, 267; govern the payment of duty on goods purchased abroad
7o be used on vessels, d. SS 282; specify the duties of vessel
[3681 L
captains when touching foreign ports on voyages between two United
States ports or when departing or arriving at a United States port
lacking a customhouse, id. �� 286-294; specify measures to prevent
danestic liquors fran 6;lng sold as imported, id. SS 468-469; and
authorize searches and seizures to enforce thJ-custams laws, id.
S 482.

Present applicability.

Neither the language of any of these statutes nor their
legislative histories indicate whether territories and possessions of
the United States are to be treated as parts of the United States.
In the absence of any such indication, the United states is presumed
not to include those areas and, consequently, not to include the
Northern Mariana Islands. All of the still effective statutes in
chapter 3 are concerned with enforcing the obligation to pay duties
on mrchandise imported into the United States. The inapplicability
of the chapter to the Northern Mariana Islands is' thus consistent
with the status of the Northern Mariana Islands as an area outside
the customs territory of the United States. See Covenant S 603(a).

Two exemptions in chapter 3 are available only to citizens of
the United States. Citizens of the Northern Mariana Islands will not
become citizens of the United States until termination of the
trusteeship. Covenant SS 301, 1003(c). Section 128 exempts fran a
discriminating ad valorem duty goods imported in non-United States
vessels if the vessel is owned by United States citizens and, before
leaving an American port, beccmes registered as a vessel of the
United States. In general, goods may be imported only in vessels of
the United States or of their country of origin. 19 U.S.C. S 130.
Section 131 exempts fron this requirEment vessels owned by United
States citizens that before leaving an American port beccme
registered as vessels of the United States.*

*In its 1982 interim report to Congress, this Ccmmission
recamnended that citizens of the Northern Mariana Islands be treated
as citizens of the United States for purposes of a number of
statutes. The Camission, however, made no recommendation in that
report with respect to sections 128 or 131.

13 -

Chapter 4. Tariff Act of 1930.

The statutes.
[3691
Chapter 4, the Tariff Act of 1930, is the principal legislation
under which duties are assessed and collected on merchandise entering
the United States. The Revised Tariff Schedules of the United States
were formerly published.as part of this chapter, at section 1202 of
title 19. (Because of their bulk, and the frequent amendments to the
Schedules, the Schedules are now published as a separate document
available fram the Superintendent of Documents.)

General Headnote 1 to the Revised Tariff Schedules provides that
"all articles imported into the custans territory of the United
States from outside 'thereof are subject to duty or exempt therefrom
as provided" in the General Headnotes and the Revised Tariff
Schedules.

Chapter 4 also establishes the United States International Trade
Cammission and assigns it a variety of functions. The Commission is
charged with additional -duties under other federal laws, including
chapter 12 of title 19. The Commission has broad powers to
investigate the international trade of the United States and to
advise the President and Congress with respect to particular issues.
See generally U.S. Government Manual 618-622 (1982).

The Revised Tariff Schedules and the remainder of chapter 4
contain a number of provisions of particular interest to the Northern
Mariana Islands. Those provisions are summarized in the course of
describing their present applicability, below.

Present applicability

The Revised Tariff Schedules of the United States. The Northern
Mariana Islands, as noted above, is outside the customs territory of
the United States. Covenant S 603(a). See also General Headnote 2
of the Revised Tariff Schedules. Accordingly, articles imported into
the Northern Mariana Islands are not subject to duty (or exempted
therefran) as provided in the General Headnotes and the Revised
Tariff Schedules.

Articles exported to the customs territory of the United States
fran the Northern Mariana Islands are, however, subject to duties and
exemptions as provided in the Revised Tariff Schedules. Section
603(c) of the Covenant provides that such articles will receive the
sane treatment as articles exported to the customs territory of the
United States from Guam, wMch is also outside the customs territory

- 14 -

of the United States.* General Headnote 3(a) to the Revised Tariff
Schedules governs the treatment of articles exported to the customs
territory of the United States from Guam and other insular
possessions. See also 48 U.S.C. S 1421e. In general, such articles
[3701 may be imported into the custcms territory of the United States
duty-free if 70 percent or less of the value of the product (whether
manufactured, produced, or grown) is derived from foreign materials.
Public Law 98-67, S 214(a)(1)(A) (1983). See Senate Report 94-433,
The Covenant to Establish a Commonwealth of the Northern Mariana
Islands 81 (1975). If more than 70 percent of the value of the
product is derived from foreign materials, the product is subject to
the usual duties. For certain textile, apparel, canned tuna,
petroleum, and watch products, only 50 percent or less of the value
of the product may be derived from foreign materials. Public Law
98-67, S 214(a)(1)(B). (The costs of transporting the water i als to

*Neither the Revised Tariff Schedules nor any specific provision
of the Covenant govern duties on articles moving between the Northern
Mariana Islands and Guam, both of which are outside the customs
territory of the United States. The Marianas Political Status
Commission, in its Sect ion--by-Sect ion Analysis of the Covenant, noted
that "there will be no guarantee that Guam's goods will enter (the]
Northern Marianas duty@free or that Northern Marianas goods will
enter Guam duty-free." That Commission then recorded its expectation
"that appropriate arrangements can be developed with Guam to assure
the economic developuent of both areas in an appropriate manner."

Carriers of merchandise into Gum must deliver a cargo manifest
to the government of Gum before they can unload. 15 C.F.R. S 30.81
(1984).

- 15 -

the Northern Mariana Islands are included in the foreign component of
the product's value. 19 C.F.R. S 7.8(d) (1983).)*

[3711
*In supplementary information accompanying certain "Customs
Regulations Amncbvents Relating to Textiles and Textile Products," 50
Fed. Reg. 8710 (March 5, 1985), the United States Customs Service
asserts that, under General Headnote 3(a), "to achieve the
preferential tariff treatment, merchandise must both be the growth or
product of the insular possession and satisfy a specified percentage
of its value derived from that insular possession" (Emphasis added).
Id. at 8712. The Customs Service thus envisions the possibility that
an article could derive more than the specified minimum percentage of
its value from the insular possession without being -considered a
product of that insular possession.

The Customs Service cites in support of its two-fold test a
literal reading of General Headnote 3(a):

[A] 11 . . . articles the growth or product of any
[insular] possession, or manufactured or produced in any
such possession from materials the growth, product, or
manufacture of any such possession or of the customs
territory of the United States, or of both, which. do not
contain foreign materials to the value of wre than 70
percent of their total value [subject to various
qualifications] . . . are exempt from duty.

See 50 Fed. Reg. at 8712.

The percentage of local value in an article furnishes a
bright-line test to determine whether that article is local. In the
statutory antecedents of General Headnote 3(a), it was clear that any
article that did not exceed the specified percentage was entitled to
duty-free admission into the customs territory of the United States.
Thus:

[A] 11 art ic le s, the growth or product of or
manufactured in the Philippine Islands from materials the
growth or product of the Philippine Islands or of the
United States, or of both, or which do not contain foreign
material to the value of more than 20 per centum of their
total value,', upon which no drawback of customs duties has
been allowed therein, coming into the United States from
the Philippine Islands shall hereafter be admitted free of
duty. . . .

Tariff Act of 1930, c. 497, S 301, 46 Stat. 590 (emphasis added).
And

- 16 -

(footnote continues:)
[A] 11 art ic les, the growth or product of, or
manufactured in, [the Virgin Islands], from materials grown
[3721 or produced in such islands or in the United States, or
both, or which do not contain foreign materials to the
value (5?-more than 50 per centum of their total value, upon
which no drawback of customs duties has been allowed
therein, caning into the United States from such islands
shall be admitted free of duty. . . .

Revised Organic Act of the Virgin Islands, c.558, S 28(d), 68 Stat.
497 (1954) (Emphasis added).

The emphasized "or" in the statutory antecedents of General
Headnote 3(a) was dropped when the customs treatment of products of
the insular possessions (except Puerto Rico) was consolidated in the
Customs Simplification Act of 1954. Act of September 1, 1954,
c.1213, 68 Stat. 1139. Fran the anission of the critical "or" in the
1954 legislation, one can argue that Congress intended to require
that an article, to receive duty-free treatment, must be both the
growth or product of the insular possession and satisfy the required
percentage of value derived fran the insular possession. That was
not, however, the intent of Congress. In both the Senate and House
reports on the legislation that became the Customs Simplification Act
of 1954, the proposed legislation is set forth in the form in which
it was enacted, that is, without the critical "or." Senate Report
2326, 83d Cong., 2d Sess. 10 (1954); House Report 2453, 83d Cong., 2d
Sess. 12 (1954). Yet each of those reports describes the new
legislation in identical terms:

The new section would provide that all articles
imported from an insular possession of the United States,
except Puerto Rico, shall be dutiable at the same rate as
are importations from foreign countries, except those which
(1) are of native growth or product or (2) are manufactured
in such possession and contain 5U--percent or less of
foreign materials or (3) are articles previously imported
into the United States with full payment of dutes and taxes
and have been shipped from the United States directly to
the possession without remission, refund, or drawback of
such duties or taxes. Except in the case of Puerto Rico,
this proposal would result in equal treatment for all the
insular possessions of the United States.

Senate Report 2326, above, at 6; House Report 2453, above, at 5
(emphasis added). Thus, Congress clearly intended that an article
manufactured in an insular possession and containing no more than 50
percent foreign materials would be entitled to enter the customs
territory of the United States without payment of duty. Congress did
not intend that the article be subject to an additional test, that
the article also be the growth or product of the possession.

- 17 -

Section 703(b) of the Covenant turns over to the Northern
Mariana Islands goverment the proceeds of "all custcms duties
derived from the Northern Mariana islands" as WL-11 as "the proceeds
of all taxes collected under the internal revenue laws of the United f3731
states on articles produced in the Northern Mariana Islands and
transported to the United States, its territories or possessions."
Under section 602 of the Covenant, the Northern Mariana Islands
government may in turn rebate taxes collected under the United States
internal revenue laws. Because section 703(b) treats "custans
duties" and "taxes collected under the internal revenue laws" as
distinct categories, the rebate authority under section 602 does not
authorize the Northern Mariana Islands government to rebate custcms
duties received from the United States under section 703(b).

Tuna. Canned tuna not packed in oil imported into the custans
territory of the United States is charged a 6 percent ad valorem
duty, so long as the total quantity of a canned tuna imported in a
year does not exceed 20 percent of the total amount of canned tuna
packed within the United States during the preceding year. When that
quantity is exceeded, the ad valorem duty jumps to 12.5 percent.

Section 102 of Public Law 97-446, 9 6 Stat. 2329 (1983), makes
clear that tuna shipments from "insular possessions of the United
States" are not counted in determining the extent to which the tariff
quota has been filled. House Conference Report 97-989, at 37 (1982).
While Guam. is an insular possession of the United States, the
Northern Mariana Islands cannot be considered as such prior to
termination of the trusteeship. Even though Public Law 97-446 was
enacted after January 9, 1978, its purpose was to make clear that the
law in ef fect prior to that date included Guam, among other insular
possessions, as a part of the United States and not as a foreign
country for purposes of determining the extent to which the tariff
quota has been filled. Id. Accordingly, by operation of section
502(a)(2) of the Covenant, shiprwnts of canned tuna not packed in oil
fran the Northern Mariana Islands to the United States are not
counted in determining the extent to which the tariff quota has been
filled.

*In Puerto Rico v. Blumenthal, 642 F.2d 622 (1980), certiorari
denied, 451 U.S. 983 (1981), a7F-Virgin Islands v. Blumenthal, 642
F.2d 641 (1980), certiorari denied, 451 U.S. 983 (1981), the United
States Court of Appeals for the District of Columbia Circuit narrowly
construed similar provisions in the organic acts for Puerto Rico and
the Virgin Islands to exclude excise taxes collected on gasoline
produced in those jurisdictions and shipped into the United States.

Tuna is potentially a significant export fran the Northern
Mariana Islands to the United States. Exports of tuna to the United
States fran the Northern Mariana Islands, however, are governed by
General Headnote 3(a), discussed under The Revised Tariff Schedules
[3741 of the United States, above, and are little affected by the tariff
quota.

Watches. The United States provides favorable tariff treatment
for watches manufactured in the insular possessions of the United
States, subject to an adjustable annual quota that is allocated mong
the Virgin Islands, Guam, and Azerican Samoa. Public Law 97-446,
S 110, 96 Stat. 2329 (1983). See Senate Report 97-564, at 12-14
(1982). Section 603(c) of the Covenant provides that "RImports from
the Northern Mariana Islands into the custcms territory of the United
States will be subject to the same treatment as imports fram Gum
into the custcrns territory of the United States." Thus, the Northern
Mariana Islands would appear to be entitled to a portion of the
annual quota equal to that of Gum. Public Law 97-446, enacted after
approval of the Covenant, makes no provision, however, for allocation
of a portion of the quota to the Northern Mariana Islands.
Accordingly, watches manufactured in the Northern Mariana Islands are
not entitled to the favorable tariff treatment afforded by Public Law
97-446.

Imports bV returning residents of the United States. ItEM
813.31 of the Revised Tariff Schedules allows returning resia nts of
the United States to import duty-free goods valued at not more than
$400 or, if arriving fran the Virgin Islands, Guam, or American
Samoa, not more than $800 (of which no more than $400 shall be the
value of goods acquired elsewhere than in those insular possessions).
Section 603(c) of the Covenant provides that imports from the
Northern Mariana Islands into the custcms territory of the United
States will receive the sane treatment as imports frcm Guam.
Accordingly, returning residents of the United States arriving from
the Northern Mariana Islands may import duty-free goods valued at not
more than $800 (of which no more than $400 shall be the value of
goods acquired elsewhere than in the Virgin Islands, Guam, Anerican
Samoa, or the Northern Mariana Islands). Goods acquired in the
Northern Mariana Islands are also treated as goods acquired in Guam
for returning residents of the United States arriving fram the Virgin
Islands, Gum, and American Samoa, that is, as goods fran insular
possessions and not as goods frcm a foreign country subject to a
duty-free maximum value of $400.

White phosphorous matches. Schedule 7,, Part 9A, Headnorte 1, of
the Revised Tariff Schedules prohibits importation into the United
States of white phosphorus matches. Other imported matches are
controlled to ensure that white phosphorus matches are not imported.
See 19 C.F.R. S 12.34 (1983). Imports into Guam and the Northern
Mariana Islands are not subject to the Revised Tariff Schedules. See

- 19 -

the discussion, The Revised Tariff Schedules of the United States,
above. Accordingly, the importation of white phosphorus matches into
the Northern Mariana Islands is not prchibited by Schedule 7, Part
9A, Headnote 1, of the Revised Tariff Schedules, and other match
imports are not subject to the controls implementing that [3751
prohibition.

Improperly labelled goods Section 1304 of title 19 prohibits
importation into the United States of goods not properly labelled as
to their country of origin. "United States" is defined for purposes
of this prohibition to exclude Guam. 19 U.S.C. S 1401(h). The
Northern Mariana Islands is thus not part of the United States for
purposes of section 1304, so importation of improperly labelled goods
into the Northern Mariana Islands is not barred by this statute.

Immoral items. Section 1305 of title 19 bars importation into
the United States of items classified as immoral. "United States" is
defined for purposes of this prohibition to exclude Guam. 19 U.S.C.
9 1401(h). Accordingly, the prohibition of section 1305 against
importation of immoral itEms into the United States does not bar
similar importations into the Northern Mariana Islands.

Livestock. Section 1306 of title 19 prohibits importation into
the United States of livestock frcm countries where rinderpest or
foot-and-mouth disease exist. "united States" is defined, for
purposes of this prohibition, to exclude Guam. 19 U.S.C. � 1401(h).
Accordirqly, importation of livestock from countries where rinderpest
or foot-and-mouth disease exist into the Northern Mariana Islands is
not barred by this statute.

Goods made by convicts. Section 1307 of title 19 bars
importation into the United States of goods made by convict labor.
"United States" is defined for purposes of this prohibition to
exclude Guam. 19 U.S.C. � 1401(h). Consequently, the Covenant does
not make the Northern Mariana Islands part of the United States for
purposes of section 1307, and importation into the Northern Mariana
Islands of convict-made goods is not barred by section 1307. But
criminal penalties on prison@-made goods imposed by section 1761 of
title 18, United States Code, operate effectively to bar importation
into the Northern Mariana Islands of goods made by convict labor.

Drawbacks. When goods exported fran the United States are
manufactured with goods imported into the United States on which
custans duties have been paid, the exporter is entitled to a refund
of 99 percent of the duties paid. 19 U.S.C. � 1313; 19 C.F.R. part
22 (1983).* "United States" is defined, for purposes of the drawback

*Drawback of custans duties paid is also allowed in certain
other situations. Id.

- 20 -

provisions, to exclude Guam. 19 U.S.C. 5 1401(h). Thus, a firm that
brings goods to the Northern Mariana Islands that have been
manufactured in the United States fram foreign ccmponents is entitled
to a drawback of 99 percent of the United States duties paid when
those foreign ccmponents were brought into the United States.
[3761
Emergency supplies. Section 1318 of title 19 allows the
President to authorize importation of food, clothing, and medical
supplies free of duty for use in emergency relief work. Section 1318
does not specify the places into which such importation free of duty
may be permitted. "United States" is defined, however, for purposes
of part I and subtitle II of chapter 4 of title 19, which includes
section 1318, to exclude Guam. 19 U.S.C. S 1401(h). The reasonable
conclusion is that the President's authority would extend only to
lifting duties imposed by the United States on goods entering the
customs territory of the United States and would not reach duties
imposed by the Northern Mariana Islands pursuant to section 603(b) of
the Covenant.

Gifts. Section 1321 of title 19 authorizes the Secretary of the
Treasury to allow persons in the United States to receive duty-free
gifts valued at not more than $100 sent from persons in the Virgin
Islands, Guam, and American Samoa. For gifts fran other areas
outside the customs territory of the United States, the maximum value
of such gifts is $50. Regulations implementing the Secretary's
authority are found in sections 10.152 and 10.153 of title 19, C.F.R.
(1983).

Imports from the Northern Mariana Islands to the customs
territory of the United States are to receive the same treatment as
imports fran Guam. Covenant 5 603(c). Accordingly, persons in the
customs territory of the United States may receive gifts valued at
not more than $100 sent from persons in the Northern Mariana Islands.

Equalizing foreign and dcmestic production costs. Section 1336
of title 19 authorizes the United States International Trade
Commission to investigate differences in production costs between
domestic goods and canpeting foreign goods and, if warranted, to
recammend to the President changes in customs duties to reduce those
differences. "Dcimestic" goods are those produced in the United
States. 19 U.S.C. � 1336(h)(i). "United States" is defined to
include "the several States and Territories and the District of
Columbia. Id. � 1336(h)(2). "Foreign country" is defined to exclude
"the United-states. and its possessions." Id. � 1336(h)(3). The use
of "Territory" in one definition and '7@ssession" in the other
indicates that "Territory" is not to be used in its broad sense,
encompassing all possessions of the United States. "Territory"
should be construed in its narrow sense to include only the
incorporated territories of the United States, that is, territories
intended eventually to becane States of the union. When section 1336

21 -

was enacted in 1930, the only incorporated territories were Alaska
and Hawaii, both of which were then within the customs territory of
the United States. (There are now no incorporated territories of the
United States.)
Accordingly, "domestic" goods, for purposes of section 1336, do [3771
not include goods produced in Guam or the Northern Mariana Islands,
neither of which is incorporated and both of which are outside the
customs territory of the United States.

'Ihe relief available under section 1336, the raising of duties
on foreign goods, does not protect producers outside the customs
territory of the United States. That fact further buttresses the
conclusion that goods produced in the Northern Mariana islands are
not "domestic" goods for purposes of section 1336. Accordingly, the
United States International Trade Commission is not authorized to
investigate differences in production costs between goods produced in
the Northern Mariana Islands and foreign goods.*

Goods produced in the Northern Mariana Islands are not, however,
"foreign" goods for purposes of section 1336. Goods produced in "the
United States and its possessions" are not produced in a foreign
country. 19 U.S.C. S 1336(h)(3). Gum is a possession of the United
States. By operation of section 502(a)(2) of the Covenant, goods
produced in the Northern Mariana Islands are not produced in a
foreign country. Consequently, the United States International Trade
Camnission is not authorized to investigate cost differentials
between goods produced in the United States and those produced in the
Northern Mariana Islands. Again, the relief available under section
1336 is an increase of the duty on products entering the customs
territory of the United States. Under General Headnote 3(a) of the
Revised Tariff Schedules, goods produced in the Northern Mariana
Islands enter the customs territory of the United States without
payment of duty. Accordingly, goods produced in the Northern Mariana
Islands are properly treated, for purposes of section 1336, as not
produced in a foreign country.

Goods competing unfairly with American goods. Section 1337 of
title 19 allows the United States International Trade Commission to
exclude from entry into the United States goods found to be unfairly
competing with goods made in the United States or otherwise injuring
competition in the United states. Subsection (j) of section 1337
defines "United States" as the customs territory of the United
States. The Northern Mariana Islands is not- within the customs

*See also 35 Op. Att'y Gen. 495 (1928) (Puerto Rico not part of
United States under predecessor statute).

- 22

territory of the United States. Covenant � 603(a). The United
States International Trade Commission consequently has no authority
to prohibit imports into the Northern Mariana Islands or to consider
the effects of foreign imports on industry, ccmpetition, and
(3781 consumers within the Northern Mariana Islands when deciding whether
to bar entry of certain goods into the United States. The Camission
may, however, prevent goods fran the Northern Mariana Islands fran
entering the United States if those goods canpete unfairly with goods
made in the United States or otherwise injure ccmpetition in the
United States.

Discrimination against American goods. Section 1338 of title 19
allows the President to impose additional duties on imports on
finding that the exporting country unfairly discriminates against
products of the United States. "United States" is defined, for
purposes of section 1338, to include only the custcms territory of
the United States. 19 U.S.C. � 1337 (j). Since the Northern Mariana
Islands is outside that customs territory,, the President may not
impose additional duties because a foreign nation unfairly
discriminates against products of the Northern Mariana Islands.
"Foreign country" is defined to exclude the "United States and its
possessions" for purposes of section 1338. Id. � 1338 (i). Since
Guam is a possession, the Northern Mariana Ii-l-ands--by operation of
sections 502(a)(2) and 603(c) of the Covenant--is not a foreign
country for purposes of section 1338. Accordingly, additional duties
may not be imposed under section 1338 on goods imported into the
United States fram the Northern Mariana Islands.

Trademarked goods. Section 1526 of title 19 prohibits
importation into the United States of merchandise bearing an American
trademark without the consent of the trademark owner and authorizes
seizure and forfeiture of merchandise bearing a counterfeit
trademark. "United States" is defined, for purposes of the subtitle
containing section 1526, to exclude Guam. 19 U.S.C. 1� 1401(h). The
pirchibitions of section 1526 consequently do not apply to importation
of trademarked qoods into the Northern Mariana Islands.

Wild mammals and birds imported in violation of foreiqn law,
Section 1527 of title 19 prohibits importation into the United States
of wild mammals or birds taken, killed, possessed, or exported in
violation of foreign law. "United States" is defined, for purposes
of the subtitle containing section 1527, to exclude Guarn. 19 U.S.C.
S 1401 (h). Section 1526 consequently does not prohibit importation
of wild mammals and birds into the Northern Mariana Islands.

Citizenship requirements. Citizens of the Northern Mariana
Islands will not beccme citizens of the United States until
termination of the trusteeship. Covenant 5S 301, 1003(c). Several
requirements of United States citizenship are imposed in chapter 4.

- 23 -

Sect ion 1330(a) requires members of the United States
International Trade Commission to be citizens of the United States.
No recommendations were made with regard to this citizenship
requirement in the Commission's January 1982 interim report to the
United States Congress. [3791

Section 1498(a)(8) allows the Secretary of the Treasury to
prescribe regulations for entry into the United States of personal
effects of United States citizens who have died in a foreign country.
In its January 1982 interim report, the Commission recommended that
citizens of the Northern Mariana Islands be treated as citizens of
the United States for purposes of section 1498(a)(8). In 1983
Congress enacted Public Law 98-213, 97 Stat. 1459. Sections 19 to 23
of that statute allow the President by proclamation to declare that
citizenship requirements in particular federal laws are not
applicable to citizens of the Northern Mariana Islands. In 1984 the
President removed for citizens of the Northern Mariana Islands many
citizenship restrictions. Presidential Proclamation 5207, 49 Fed.
Reg. 24365. The restriction in section 1498(a)(8), however, was not
removed.

Section 1526(a) makes unlawful importation of merchandise of
foreign manufacture bearing a trademark owned by a United States
citizen and registered in the Patent and Trademark Office unless the
written consent of the trademark owner is produced at time of entry.
In the January 1982 interim report, the Commission also recommended
treatment of citizens of the Northern Mariana Islands as citizens of
the United States for purposes of section 1526(a). In 1984, pursuant
to sections 19 to 23 of Public Law 98-213, the President allowed
trademarks owned by citizens of the Northern Mariana Islands the
protection of section 1526(a). Presidential Proclamation 5207,
4(j), 49 Fed. Reg. 24356.

Section 1641(a) requires customhouse brokers* to be United
States citizens. No recommendations were made with regard to this

*Customhouse brokers are private individuals or firms licensed
by the United States Customs Service.. Only customhouse brokers are
authorized by law "to act as agents for importers in the transaction
of their customs business. . . . Customhouse brokers will prepare
and file the necessary customs entries, arrange for the payment of
the duties found due, take steps to effect the release of the goods
in Customs custody, and otherwise represent their principals in
customs matters." U.S. Customs Service, Importing into the United
States 13 (1981).

citizenship requirement in the Commission's January 1982 interim
report to the United States Congress.*

(3801 Discussion.

Shipments from bonded warehouses. Sect ions 1551 et M. of
title 19 allow imported merchandir-s-eon which United St@a-tes duties
have not been paid to be transported and stored under bond. Before
the merchandise can be taken from the bonded carrier or the bonded
warehouse, the duties owed must be paid. If, however, the goods are
to be transported to a foreign country or "to the Virgin Islands,
American Samoa, Wake Island, Midway Islands, Kingman Reef, Johnston
Island, or the . island of. Guam," they may be released from bond
without payment of duty. 19 U.S.C. �� 1557(a), 1562. Al 1 of the
listed areas are outside the customs territory of the United States.
The Northern Mariana Islands is also outside the customs territory of
the United States. No provision however, allows shipment of bonded
goods to the Northern Mariana Islands without payment of duty. Nor
does the Covenant authorize duty-free shipment of bonded goods to the
Northern Mariana Islands.

Even though duty must be paid when bonded goods are shipped to
the Northern Mariana Islands, the exporter is entitled to a drawback
(refund) of 99 percent of the duty paid because the goods are being
shipped outside the customs territory of the United States. 19
U.S.C. �� 1313(j). No good reason requires persons exporting bonded
goods to the Northern Mariana Islands to apply for a drawback or to
pay even one percent of federal duties. The Northern Mariana Islands
should be added to the list of jurisdictions outside the customs
territory of the United States to which bonded goods may be shipped
without payment of duty. Legislation is proposed herein to add the
Northern Mariana Islands to that list.

Chapter 5._ Smuggling.

The statutes.

Chapter 5, the Anti-Smuggling Act, authorizes various measures
to prevent or deter the entry of merchandise into the United States

*In addition, section 1586(c) penalizes masters of ships from
foreign ports who transfer prohibited merchandise to vessels of the
United States or to vessels owned by United States citizens or
domiciliaries. Subsection (e) of section 1586 penalizes United
States citizens who, at any place in the world, assist in the entry
or transshipment of prohibited foreign goods. The Commission made no
recommendations with respect to section 1586 in its 1982 interim
report.

without payment of customs duties. The President is authorized to
establish special customs enforcement areas on the high seas in order
to allow smuggling vessels to be seized while hovering just outside
the "customs waters" of the United States. 1 [3811
Vessels of under five hundred tons may not bring liquor into the
United States without a federal license. vessels of under thirty
tons my not bring any foreign merchandise into the United States
without a federal license. Any vessel violating these requirements
or othervise bringing merchandise into the United States without
payment of customs duties is subject to forfeiture.

Chapter 5 also makes criminal participation by United States
citizens (or the waster or crew of certain vessels of the United
States) in loading liquor on a vessel outside the,. United States for
unlawful importation into the United States.

Present applicability

"United States" is defined for purposes of chapter 5 to include
"all Territories and possessions of the United States, except the
Virgin Islands, the Canal Zone, American Samoa, Wake Island, Midway
Islands, Kingman Reef, Johnston Island, and the island of Guam." 19
U.S.C. � 1709(a). Since "United States" does not include Guam,
section 502 of the Covenant does not expand the definition of "United
States" to include the Northern Mariana Islands. Accordingly,
chapter 5 does not apply to the smuggling of merchandise into the
Northern Mariana Islands. The nonapplicability of chapter 5 to the
Northern Mariana Islands is consistent with the exclusion of the
Northern Mariana Islands from the customs territory of the United
States. Covenant S 603(a).

On termination of the trusteeship, the Northern Mariana Islands
will become a "Territory or possession of the United States" and,
thus, will become part of the United States for purposes of chapter 5
(since it is not among the enumerated excluded Territories and
possessions).

Discussion.

The Northern Mariana Islands will remain outside the customs
territory of the United States on termination of the trusteeship.
Since chapter 5 is intended to prevent and deter the snuggling of
merchandise into the customs territory of the United States, its
purpose is not served by making it apply to the Northern Mariana
Islands. The Northern Mariana Islands should be treated as are
American Samoa and nearby Gum, both of which are also outside the
customs territory of the United States. Legislation is proposed
herein to ensure that the Northern Mariana Islands is not treated as
part of the United States for purposes of chapter 5 on termination of
the trusteeship.

- 26

Chapter 6. Trade Fair Program.

The statutes.
[38 21 Chapter 6 allows articles to be brought into the United States
for use at a federally-approved trade fair free of duty or internal
revenue taxes and without canplying with certain labelling
requirezents of the internal revenue laws and the Federal Alcohol
Administration Act.

Present applicability,

"United states" is not defined for purposes of chapter 6.
Duties, however, are collected only on goods imported into the
customs territory of the United States. The Northern Mariana Islands
is not part of that customs territory. Covenant S 603(a). Nor i s
the Northern Mariana Islands part of the United States for purposes
of the Federal Alcohol Administration Act. 27 U.S.C. 5 211(a)(1).
Same internal revenue laws are, however, applicable to the Northern
Mariana Islands.

Discussion.

Trade fairs are a possible means of promoting tourism, the
principal industry of the Northern Mariana Islands. Because some
internal revenue laws are applicable to the Northern Mariana Islands,
there might be some slight benefit to the Northern Mariana Islands
were trade fairs in the Northern Mariana Islands eligible under
chapter 6 for federal approval and the exemptions conferred thereby.
No recam-kendation is here made, however, to confirm the eligibility
of trade fairs in the Northern Mariana Islands for favorable
treatment under this chapter. The principal benefit of chapter 6,
freedom from United States duties, is already available to trade
fairs in the Northern Mariana Islands by operation of section 603(a)
of the Covenant.

Chapter 7. Trade Expansion Program.

The statutes.

Chapter 7 authorized the President to enter into international
trade agreemnts between 1962 and 1967 and to change rates of customs
duties in order to carry out those agreements. The chapter also
allows the President to impose import quotas to protect national
security, national defense industries, or the economic welfare of
other domestic industries. With certain exceptions, duties or other
import restrictions or duty-free treatnent established to implement
international trade agreements apply to products of all foreign
countries (the most-favored-nation principle). The President is
authorized, on the recamnendation of the United States International

27 -

Trade Camission, to increase duties or to impose other import
restrictions on particular articles to prevent or remedy serious
injury to damestic industries. The President is also authorized,
again on the recamendation of the United States International Trade (3831
Ccmmission, to negotiate orderly marketing agreements with foreign
countries to limit their export of particular items into the United
States, in order to prevent or remedy serious injury to damestic
industries.

Present applicability

Neither the language of chapter 7 nor its legislative history
indicates whether territories or possessions of the United States are
to be treated as part of the united States. In the absence of any
such indication, the United States is presumed not to include those
areas and, consequently, not to include the Northern Mariana Islands.
Accordingly, import quotas established pursuant to the Act may be
applied to goods ccming into the United States fran the Northern
Mariana Islands. Whether a particular quota applies to goods from
the Northern Mariana Islands depends on the language of the
presidential proclamation establishing that quota.

Presidential authority under chapter 7 is sufficiently broad to
overccue the presumption that the United States does not include the
Northern Mariana Islands. A presidential proclamation restricting
particular imports into the Northern Mariana Islands pursuant to the
chapter, if challenged, would almost certainly be upheld for two
reasons. First, the President has wide latitude in determining what
action to take under the chapter and the action selected is supported
by a general presumption of validity. Federal Energy Administration
v. Algonquin SNG, Inc., 426 U*S. 548, 561-71 (1976); Pancoastal
Petroleum, Ltd. v. Udall, 348 F.2d 805, 807 (D.C. Cir. 1965).
Second, import quotas established pursuant to this chapter are
closely related to the conduct of foreign affairs and the national
defense, both areas in which the United States exercises camplete
authority for the Northern Mariana, Islands. Trusteeship Agreement,
Arts. 3, 5, 8(4), 10, 11(2); Covenant 104, 1003(c).

Presidential proclamations issued pursuant to chapter 7 have
included territories and possessions of the United States as part of
the United States. See, for example, Presidential Proclamation 4907,
3 C.F.R., Canp. 1982, at 21 (1983), as amended by Presidential
Proclamation 5141, 3 C.F.R., Camp. 1983, at 143 (1984). These
proclamations, issued pursuant to section 232 of the Trade Expansion
Act of 1962, bar importation of Libyan crude oil into the United
States, its territories or possessions." Presidential Proclamation
5141, S 3(a). (Although Guan is a territory or possession of the
United States, the proclamations were issued after January 9, 1978,
the effective date of section 502(a)(2) of the Covenant, and are thus
not made applicable to the Northern Mariana Islands by operation of
that section. Accordingly, the presidential proclamations do not bar

the importation of Libyan crude oil into the Northern Mariana
Islands.)

Chapter 8. Autcmotive Products.
[3841
The statutes.

Chapter 8 amends the Tariff Schedules of the United States to
allow the duty-free import into the United States fram Canada of
motor vehicle equipment for use in the manufacture of motor vehicles
in the United States.

Present applicability.

Duties under the Tariff Schedules are imposed only on entry into
the custcms territory of the United States. General Headnote 1,
Revised Tariff Schedules. The Northern Mariana Islands is not within
that custans territory. Covenant � 603(a). Accordingly, chapter 8
does not affect the importation of motor vehicle equipment into the
Northern Mariana Islands frcm Canada.

Chapter 9. Visual and Auditory Materials of Educationall-
Scientific, and Cultural Character.

The statutes.

Chapter 9 authorizes the President to implement the
international Agreement for Facilitating the International
Circulation of Visual and Auditory Materials of an Educational,
Scientific, and Cultural Character, 17 U.S.T. 1578, T.I.A.S. 6116
(1949). The Agreement exempts qualified films, filmstrips,
microfilms, sound recordings, glass slides, models, maps, charts, and
posters frcm. customs duties, quotas, and import licensing
requirements when the materials move fran one nation that is party to
the Agreement to another. The material must be certified by the
goverm-Lent of the country in which it originates as "of an
educational, scientific, or cultural character."

The United States Information Agency (USIA) has been designated
by the President as the agency charged with implementing the
Agreement for the United States. Executive Order 11311, 3 C.F.R.,
Camp. 1966-1970, at 593 (1971). The USIA certifies materials
originating in the United States as qualified for exemption under the
Agreement. The USIA also reviews certificates of foreign governments
attesting to the qualification of materials originating within their
jurisdiction. See generally 22 C.F.R. part 502 (1984); 19 C.F.R.
S 10.121 (1983).

Present applicability

In its ratification of the Agreement, the United States declared

that the Agreement would be observed "by the United States of America
and by the citizens of the United States of America and all other
persons subject to the jurisdiction thereof." 17 T.I.A.S. 1602, 1603
(1966). Persons in the Northern Mariana Islands are subject to the f3851
jurisdiction of the United States. Trusteeship Agreement, Art. 3;
Covenant �� 101, 1003(c). Accordingly, qualified materials
originating in the Northern Mariana Islands may enter the territory
of other nations that are party to the Agreemnt, and qualified
materials originating in those other nations *must be accorded similar
treat:ment on entering the Northern Mariana islands. In neither case
may customs duties, quotas, or import licenses be required.

Even though the Northern Mariana Islands is outside the customs
territory of the United States, the Northern Mariana Islands may not
levy duties, impose quotas, or require licenses of materials
qualified for exemption under the Agreement. (The power of the
Northern Mariana Islands, under section 603(b) of the Covenant, to
levy duties on foreign goods is specifically qualified by the
requirement that any such duties be levied "in a manner consistent
with the international obligations of the United States." The
Agreement, of course, is such an international obligation.)

Chapter 10. Customs Service.

The statutes.

Chapter 10 establishes the United States Customs Service, within
the Department of the Treasury.

The Customs Service enforces customs and
related laws . . . . Some of the responsibilities wbich
Customs is specifically charged with are assessing and
collecting customs duties, excise taxes, fees, and
penalties due on imported merchandise; interdicting and
seizing contraband, including narcotics and illegal drugs;
processing persons, carriers, cargo, and mail into and out
of the United States; administering certain navigation
laws; detecting and apprehending persons engaged in
fraudulent practices designed to circumvent customs and
related laws; copyright, patent, and trademark provisions;
quotas; and marking requirements for imported merchandise.

U.S. Goverment Manual 429 (1982).

Present applicability.

The United States Customs Service does not presently operate in
the Northern Mariana Islands, Guam, or American Sama. 19 C. F. R.
9 7.8 n.5 & part 101 (1983). Each of those areas is outside the
customs territory of the United States. Covenant 5 603(a); Revised
Tariff Schedules, General Headnote 2.

"The Customs administration of American Samoa is under the
jurisdiction of the [United States] Department of the Interior
(Office of Territories) . . . . The Customs administration of Guam is
[3861 under the Government of Guam." 19 C.F.R. S 7.8 n.5 (1983).

The customs laws of the Virgin Islands are administered by the
United States Secretary of the Treasury. 48 U.S.C. S 1406i. The
Virgin Islands is not within the customs territory of the United
States. Revised Tariff Schedules, General Headnote 2. The customs
laws of the Virgin Islands are enacted locally. 48 U.S.C. SS 1406i;
1574(c), (f). The expenses of customs administration are paid from
customs receipts. Id. � 1406i. The remaining receipts are paid into
the treasury of the irgin Islands. Id. S 1406h.

Should a law administered or enforced by the United States
Customs Service be applicable to the Northern Mariana Islands,
nothing in chapter 10 (or elsewhere in the United States Code) bars
the Customs Service from undertaking activities within the Northern
Mariana Islands to administer or enforce that law. The Customs
Service may undertake activities outside the customs territory of the
United States. See 19 U.S.C. SS 6, 2076, 2079.

Discussion.

The principal function of the United States Customs Service,
enforcing the customs laws of the United States, does not require the
Customs Service to be present in the Northern Mariana Islands, since
the Northern Mariana Islands is outside the customs territory of the
United States. Some laws enforced by the Customs Service at the
borders of the customs territory of the United States are also
applicable to the Northern Mariana Islands. For example, the Customs
Service assists in the enforcement of federal laws controlling the
importation of narcotics and dangerous drugs. 19 C.F.R.
� 161.2(a)(2) (1983). Sections 951 to 970 of title 21 of the United
States Code strictly control the importation of narcotics and
dangerous drugs into both the United States and the customs territory
of the United States and their exportation from the United States.
"united States" is defined, for purposes of these sections, to
include all areas under the jurisdiction of the United States,
including the Trust Territory of the Pacific Islands. 21 U.S.C.
�� 802(24), (26); 951. By operation of section 502 of the Covenant,
"United States" also includes the Northern Mariana Islands.
Consequently, importation of narcotics and dangerous drugs into the
Northern Mariana Islands is subject to sections 951 to 970 as is
exportation from the Northern Mariana Islands (including exportation
into the customs territory of the United States).

Although no law of the United States so states in specific
terms, enforcement of federal laws like the laws on narcotics and
dangerous drugs applicable to the movement of goods and other things

31 -

in and out of the Northern Mariana Islands on a day-to-day basis is
entrusted to the government of the Northern Mariana Islands. In its
recanmendation, Enforcement of federal laws in the Northern Mariana
Islands, the Cammission urges enactment of legislation to confirm the
authority of the government of the Northern Mariana Islands to [3871
enforce federal laws in the Northern Mariana Islands.

Chapter 11. @ @ rtation of Pre-Columbian Monumental or
Architectural Sculpture or Murals.

The statues.

Chapter 11 prohibits importation into the United States of
certain pre-Columbian sculpture and murals form latin America and the
Caribbean islands.

Present applicability

"United States" is defined, for purposes of chapter 11, to
include only the several States, the District of Columbia, and Puerto
Rico. 19 U.S.C. S 2095(2). Accordingly, neither Guam nor the
Northern Mariana Islands is part of the United States for purposes of
the chapter. The importation of pre-Columbian sculpture and murals
into the Northern Mariana Islands, consequently, is not prohibited by
this chapter.

Discussion.

Although chapter 11 does not apply to importation of
pre-Columbian sculpture or murals into the Northern Mariana Islands,
that importation may be subject to restrictions imposed pursuant to
chapter 14 of title 19, discussed below.

Chapter 12. Trade Act of 1974.

The statutes.

International trade agreements. Section 2111 of title 19
authorized the President to enter into international trade agreements
between 1975 and 1980 and to change rates of customs duties in order
to carry out those agreements. Section 2112 authorized the President
to enter into international trade agreements to reduce or eliminate
nontariff trade barriers. Section 2132 authorizes the President to
impose temporary surcharges or quotas on articles imported into the
United States to alleviate balance-of-payments problems. Section
2133 authorized the President to enter into international trade
agreements in 1981 and 1982 subject to greater limitations than under
the authority granted by section 2111, above.

32 -

Section 2411 allows the President to enforce international trade
agreements by withdrawing concessions granted countries not complying
with an agreement and by imposing duties or other import restrictions
DR81 on the products and services of those countries.

Sections 2431 to 2440 govern trade relations with countries with
nonmarket economies, in general, the Camunist nations.

Section 2461 authorizes the President to provide duty@free
treatment for any eligible article imported from any "beneficiary
developing country" under the Generalized System of Preferences.

Trade adjustment assistance. Sections 2251 to 2395 of title 19,
part of the Trade Act of 1974, provide for relief of injury caused by
import competition. Section 2253 authorizes the President to impose
or modify duties or quotas, or to negotiate orderly marketing
agreements, in order to protect domestic industry from serious
economic injury from foreign competition. Section 2291 authorizes
payment of trade readjustment allowances to certain workers who
become unemployed because of foreign import competition. Sections
2343 and 2344 authorize technical and financial assistance to firms
seriously injured by foreign import competition. Section 2373
authorizes assistance to eligible communities adversely affected by
foreign import competition with local products.

Present applicability.

International trade agreements. The Trust Territory of the
Pacific Islands is a "beneficiary developing country" for purposes of
section 2461. 19 U.S.C. S 2462(a)(3). The United States has agreed
to seek from foreign countries favorable treatment for exports from
the Northern Mariana Islands and to encourage other countries to
consider the Northern Mariana Islands a developing territory.
Covenant 5 603(d). `1he General Agreement on Tariffs and Trade
permits preferential tariff treatment of goods exported from
developing countries and territories, in order to encourage exports
from and, thus, the economic development of those countries and
territories. Section 2461 authorizes preferential treatment for
Northern Mariana Islands exports to the United States, so long as the
Northern Mariana Islands remains part of the Trust Territory.
Preferential treatment is also authorized, both before and after
termination of the trusteeship, by section 603(c) of the Covenant.

In addition, articles imported into the customs territory of the
United States from an insular possesison of the United States are
generally entitled to duty treatment no less favorable than that
afforded similar articles imported into the United States from a
beneficiary developing country. General Headnote 3(a)(iii), Revised
Tariff Schedules of the United States. Guam is an insular
possession. Imports from the Northern Mariana Islands into the

United States are given the same treatment as imports frcm. Gum into
the United States. Covenant 603(c). Accordingly, articles
imported into the United States fran the Northern Mariana Islands are
entitled to duty treatment no less favorable than the treatment
afforded similar articles imported into the United States fran (3891
beneficiary developing countries pursuant to this chapter.

"United States" is not def ined in the various provisions
authorizing international agreements for the reduction or elimination
of duties and import restrictions. Duties and import restrictions
are generally imposed, however, at the point where an article enters ,
the custans territory of the United States. The Northern Mariana
Islands is not part of that customs territory. Covenant � 603(a).
Imports into the Northern Mariana Islands are unlikely to have more
than marginal ef fects on national security, national defense
industries, or the econanic welfare of other industries in the United
States. (TAbile imports into the Northern Mariana Islands might
damage industries in the Northern Mariana Islands, the Northern
Mariana Islands has the authority to impose duties on imports to
protect its own industries. Covenant � 603(b).)

International agreemnts affecting the Northern Mariana Islands
are negotiated and concluded by the United States. Trusteeship
Agreemnt, Art. 8(4); Covenant �� 104, 1003(c). Duties and excise
taxes imposed by the goverrment of the Northern Mariana Islands on
goods imported into the Northern Mariana Islands must be consistent
with the international obligations of the United States. Covenant
�9 603(b), 604(b). Should provisions in any international trade
agreement or orderly marketing agreement lawfully be applicable to
the Northern Mariana Islands, duties and excise taxes imposed by the
government of the Northern Mariana Islands could not conflict with
those provisions. Applicability must be determined by reference to
the terms and negotiating history of each agreement. The legality of
making an agreement applicable to imports into the Northern Mariana
Islands depends on (1) whether the statutes authorize the President
to impose duties or other restrictions on imports into the Northern
Mariana Islands, or (2) if there is no such authority in these
statutes, whether the President has such authority under the United
States Constitution or same other statute.

Paragraphs .(4) and (6) of section 2462 restrict favorable trade
treatnent otherwise available to a developing country if the country
has expropriated property,of United States citizens or if the country
fails to enforce arbitral awards in favor of United States citizens.
In its 1982 interim report to Congress, the Ccmmission recammended
enactment of legislation to treat citizens of the Northern Mariana
Islands as citizens of the United States for purposes of section
2462. In 1983 Congress enacted Public Law 98-213, 97 Stat. 1459.
Sections 19 to 23 of that statute allow the President by proclamation
to declare that citizenship requirements in particular federal laws

- 34

are not applicable to citizens of the Northern Mariana Islands. In
1984 the President removed for citizens of the Northern Mariana
Islands many citizenship restrictions. Presidential Proclamation
5207, 49 Fed. Reg. 24365. The restriction in section 2462, however,
[3901 was not removed.

Trade adjustment assistance. As part of the Caribbean Basin
Economic Recovery Act (CBERA) of 1983, Congress made clear that
producers in the insular possessions of the United States could seek
the imposition or modification of duties or quotas to protect
themselves from serious economic injury from foreign competition.
Public Law 98-67, S 214(f), 19 U.S.C. 9 2251 note; House Report
98-266, at 23 (1983). The United States International Trade
Commission is required by that legislation, in assessing whether
increased imports have caused injury to domestic industry, to
consider the effects of the increased imports on industries in the
insular possessions as well. Id.

The Northern Mariana Islands is not an insular possession of the
United States at this time, so producers in the Northern Mariana
Islands are not directly protected by the CBERA provisions from
serious injury due to import competition. Further, the CBERA was
enacted after January 9, 1978, the effective date of section
502(a)(2) of the Covenant. Since its provisions did not protect
producers on Guam as of that date, section 502(a)(2) does not operate
to entitle producers in the Northern Mariana Islands to seek relief
fran the competition of foreign imports. See also House Report
98-266, at 22 (1983). Neither will producers in the Northern Mariana
Islands become eligible for import relief on termination of. the
trusteeship. Covenant � 105.

For purposes of the sections authorizing trade adjustment
allowances to workers, "State" and "United States" are defined to
include only the several States, the District of Columbia, and the
Commonwealth of Puerto Rico. 19 U.S.C. � 2319(8). These definitions
are reiterated in regulations implementing this program. See 29
C.F.R. S 91.3(a)(26) (1984). Guam i s thus not included in those
definitions and, accordingly, neither is the Northern Mariana
Islands. While payment of allowances to workers is not conditioned
on their residence within the United States, the definition of
"United States" indicates the allowance is payable only to workers in
the jurisdictions named in that definition. (Both "State" and
"united States" are used in these statutes for purposes other than
defining a worker's eligibility. See, for example, section 2294
(disqualification for State unemployment insurance disqualifies
worker for trade adjustment allowances) and sections 2297 and 2298
(job search and relocation allowances may only be used for job
searches or relocation within the United States). These examples
i@dicate, however, that Congress did not contemplate payment of
benefits to persons outside the United States, as the term is defined
in section 2319(8).)

- 35 -

Regulations implementing the trade adjustment * assistance
statutes as they apply to communities require those communities to be
in a "trade impacted area." 13 C.F.R. S 315.98(a) (1984). "Trade
impacted areas" must be within the customs territory of the United
States. Id. � 315.2(b)(7). Neither Guam nor the Northern Mariana [3911
Islands aiFe-within that customs territory. Revised Tariff Schedules,
General Headnote 2; Covenant S 603(a).

Only for trade adjustment assistance to firms are both the
statutes and the regulations implementing the statutes silent as to
the geographic reach of the program. Since this program was enacted
as part of the same statute that provides trade adjustment assistance
to workers and to camnunities, a reasonable assumption is that
Congress intended assistance to firms to be available only in those
areas where assistance to workers and communities is also available.
Ac cord i ng ly, the trade adjustnent assistance, programs are not
available to workers, firms, or camunities in the Northern Mariana
Islands.

Discussion.

The Northern Mariana Islands has the ability to protect its own
workers, firms, and communities from import competition within the
Northern Mariana Islands by levying its own import duties. Covenant
� 603(c). The Northern Mariana Islands can also allow foreign goods
to enter without duty to maintain low prices for consumers, and can
enact its own legislation to provide assistance to workers, firms,
and communities adversely affected by the competition of foreign
goods.

The Northern Mariana Islands does not, however, have the ability
similarly to protect the markets of its producers in the United
States from foreign competition. Producers in the Northern Mariana
Islands now export few goods into the customs territory of the United
States. Nonetheless, those producers--like producers in Guam and
other United States possessions outside the customs territory of the
United States--should be able to seek the imposition or modification
of duties or quotas to protect themselves from serious economic
injury from foreign competition in United States markets.
Legislation is proposed herein to afford them that ability.

Chapter 13. Trade Agreements Act of 1979.

The statutes.

Chapter 13, the Trade Agreements Act of 1979, approves a number
of trade agreemnts negotiated in the Tokyo Round of multilateral
trade agreements and provides for their implementation.

- 36 -

One such agreement is the Agreement on Technical Barriers to
Trade (relating to product standards). See 19 U.S.C. � 2503(c)(4).
Sections 2531 to 2573 of title 19, also part of the 1979 Act, deal
3921 specif ically with technical barriers to trade. States are
encouraged, but not required, to refrain frcm imposing product
standards that unnecessarily obstruct the foreign ccmmerce of the
United States. 19 U.S.C. S 2533. States are also eligible for
certain grants and contracts for "standards-related activities." Id.
� 2545.

Present applicability.

"State" and "United States" are defined, for purposes of
sections 2531 to 2573, to include "the Cam-onwealth of Puerto
Rico, . . . Guam and any other Ccmmonwealth, territory, or possession
of the United States." Id. � 2571(15), (17). Since the legislation
was not enacted until 197-9, section 502(a)(2) of the Covenant-making
applicable to the Northern Mariana Islands those laws applicable to
the several States and Guam on January 9, 1978--does not make this
legislation applicable to the Northern Mariana Islands. Whether the
term "State" includes the Northern Mariana Islands thus depends on
whether the Northern Mariana Islands is a Ccmmonwealth, territory, or
possession of the United States. Although the Northern Mariana
Islands is already frequently called a Ccmmonwealth, it technically
does not become one until termination of the trusteeship. Covenant
�� 101, 1003(c). Accordingly, the Northern Mariana Islands until
termination of the trusteeship is not a "State" for purposes of the
provisions of chapter 13 related to product standards.

Section 2571(9)(B) defines "private persons" as United States
citizens or nationals, for purposes of authorizing measures to
discourage private persons frcm imposing product standards designed
to inhibit importation of foreign goods. The Cammission did not
recamnend, in its January 1982 interim report to Congress, that
citizens of the Northern Mariana Islands be treated as citizens of
the United States for purposes of this provision.

Chapter 14. Convention on Cultural Property.

The statutes.

Chapter 14 implements the international Convention on Cultural
Property. The President, upon request of another nation party to the
Convention, may restrict the importation of archeological or
ethnological material taken fran that other nation in violation of
its -laws.

'Present applicability.

Import restrictions imposed by the President under chapter 14

apply to the United States, def ined to include "any territory or area
the foreign relations for which the United States is responsible."
19 U.S.C. � 2601(10). The United States is responsible for the
foreign relations of the Northern Mariana Islands. Trusteeship [3931
Agreement, Arts. 2-5, 10-11, 14; Covenant �� 104, 1003(c).
Accordingly, the President may prohibit the importation of
archeological or ethnological material into the Northern Mariana
Islands under, chapter 14. Section 2613 of title 19 provides that the
prohibitions against importation of illegal ly@possessed cultural
property will be enforced in the 'custcms territory of the United
States and in the Virgin Islands by United States custcms officers
and in other areas subject to United States jurisdiction by persons
designated by the President.

Chapter 15. Caribbean-Basin Econcmic Recovery.

The statutes.

In order to pranote econcmic development in the Caribbean basin,
chapter 15 authorizes certain products of eligible nations in that
region to enter the United States free of duty.

Present applicability

"United States" is not defined for purposes of chapter 15, but
the clear intent of the chapter is to allow duty-free entry of
eligible products into the customs territory of the United States.
See 19 U.S.C. �� 2702(a)(1)(B), (C); 2703(a)(1).(A.). Accordingly, the
chapter does not affect duties levied on products entering the
Northern Mariana Islands. And, since the Northern Mariana Islands is
not located within the Caribbean *basin, products exported fran the
Northern Mariana Islands to the United States are not directly
affected by this chapter.*

The Caribbean Basin Econcmic Recovery Act amended General
Headnote 3(a) to provide generally that articles imported into the
custams territory of the United States frcm an insular possession of
the United States receive duty treatment no less favorable than the
treatment afforded similar articles imported frcm the Caribbean
nations favored by that Act. General Headnote 3(a)(iv), Revised
Tariff Schedules of the United States. Guam is an insular
possession. Imports frcm the Northern Mariana Islands into the
United States are given the sane treatment as imports frcin Guam into
the United States. Covenant � 603(c). Accordingly, articles
imported into the United States frcm the Northern Mariana Islands are
entitled to duty treatment no less favorable than the treatment
afforded similar articles imported into the United States from the

*See also the discussion under chapter 12, above, of the import
relief provisions of the Caribbean Basin Econamic Recovery Act.

Caribbean nations benef itting from the Caribbean Basin Economic
Recovery Act.

r3941 PROPOSED LEGISLATIVE LANGUAGE

The following language, if enacted by the United States
Congress, would implement the proposals contained herein:

An Act to amend the applicability of certain provisions of
the federal customs laws to the Northern Mariana
Islands.

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

Sec. 1. Tariff Act of 1930-shipments from bonded
warehouses. (a) Subsection (a) of section 557 of the
Tariff Act of June 17, 1930, c.497, 46 Stat. 590, as
amended (19 U.S.C. 15 1557(a)), is further amended by
inserting the phrase "the Northern Mariana Islands," after
the phrase "Johnston Island," each time it occurs.

(b) Section 562 of the Tariff Act of June 17, 1930,
c.497, 46 Stat. 590, as amended (19 U.S.C. @ 1562), is
further amended by inserting the phrase "the Northern
Mariana Islands," after the phrase "Johnston Island,".

Sec. 2. Anti-Smuggling Act. Subsection (a) of
section 401 of t@e Act of August 5, 1935, c.438, 49 Stat.
517 (19 U.S.C. � 1709(a)), is amended by inserting "the
Northern Mariana Islands," immediately - after "Johnston
Island,".

Sec. 3. Import relief. Section 214(f) of Public Law
98-670, 97 Stat. 369 (1983) (19 U.S.C. S 2251 note), is
amended by deleting the final period and adding thereto the
following: "and in the Northern Mariana Islands.".

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

[3951

STAFF RECOMMENEATION

IMPORT QUOTAS

Recammendation.

Legislation should be enacted to allow products of the Northern
Mariana Islands to enter the custams territory of the United States
without regard for quotas or other quantitative limitations so long
as fifty percent of the value of those products is attributable to
(3961 the Northern Mariana Islands. For purposes of this legislation,
value added by foreign laborers residing in the Northern Mariana
Islands is not considered as value attributable to the Northern
Mariana Islands.

The statutes

"An import quota is a quantity control on imported merchandise
for a certain period of time." U.S. Custcxns Service, Importing into
the United States 70 (1981). Once the quota has been filled, no
additional imports of that merchandise are permitted. Id. (If the
quota is a "tariff-rate" quota rather than an "absc;-lute" quota,
additional merchandise may be imported, but only a higher rate of
duty. Id.)

Import quotas are imposed pursuant to authority granted by a
number of different federal laws. Generally, import quotas are
imposed by presidential proclamation, often after a prerequisite
recamriendation by the United States International Trade Ccmmission.

Quantitative limitations on imports are imposed for a variety of
reasons. The President, on the reccmmendation of the United States
International Trade Ccmmission, may impose import quotas on
particular goods to protect dcmestic industry fran serious econanic
injury frcm foreign canpetition. 19 U.S.C. �� 1981, 2253. if
imported goods endanger the national security, national defense
industries, or the econcmic welfare of other damestic industries, the
President may restrict the importation of those goods. Id. S 1862.

Similarly, the President on the recamnendation of the
International Trade Ccmmission (or, in an emergency, of the Secretary
of Agriculture) may restrict the importation of any agricultural
ccmmodity or product if imports of that cammdity or product
materially interfere with federal price-support, soil conservation,
or acreage allotment programs. 7 U.S.C. S 624.

A second major purpose for which the President is given
authority to impose import restrictions is the implementation of-
internat ional agreements. The President may impose import
restrictions when necessary to implement or enforce international
trade agreements. 19 U. S. C. �� 2135, 2411. The President, on the
recammendation of the United States International Trade Ccmmission,'
may also neciotiate and implement orderly marketing acireements with
foreign countries to limit their export of particular items into the
United States, in order to prevent or remedy serious injury to
dcxnestic producers. Id. � 2253(a)(4).

The President is also authorized to impose import quotas to
implermnt international agreements governing the importation into the
United States of agricultural commodities, textiles, and agricultural
and textile products. 7 U. S. C. q 18 5 4. In addition to that general [3971
authority, the President has specific statutory authority to impose
import restrictions to implement particular international commodity
agreements. Id. �S 1642 (International Wheat Agrer=ment); 3602
(International Sugar Agreement); 19 U.S.C. � 1356k (International
Coffee Agreement).

A third major purpose of import quotas is to stabilize the
international monetary system. The President may impose temporary
import quotas on goods entering the United States in order to reduce
United States balance-of-payments deficits, to prevent depreciation
of the dollar, or to cooperate with other nations in correcting an
international balance:-of-payrnents disequilibrium. Id. � 2132.

The procedure for bringing goods subject to import quotas into
the customs territory of the United States is set forth in part 132
of title 19 of the Code of Federal Regulations (1983).

Present applicability.

The applicability of an import quota to goods entering the
custom territory of the United States from the Northern Mariana
Islands* depends upon the terms of the statute authorizing that
particular quota. In general, however, neither the statutes nor
their legislative histories indicate whether territories or
possessions of the United States are to be treated as parts of the
United States. In the absence of any such indication, the United
States is presumed not to include those areas and, consequently, not
to include the Northern Mariana Islands. Accrdingly, import quotas
generally may be applied to goods coming into the United States from
the Northern Mariana Islands. Whether a particular quota applies to
goods from the Northern Mariana Islands depends. on the language of
the presidential proclamation or other document establishing that
quota. many such proclamations amend the Revised Tariff Schedules of
the United States, which apply only to the customs territory of the
United States. As a consequence, those proclamations (to the extent
they are not directed exclusively to goods from particular designated
countries) subject goods from the Northern Mariana Islands to the
import quotas established. See, for example, Pres ident ial
Proclamations 5104, 3 C.F.R., Canp. 1983, at 99 (1984) (sugars);
5074, id. at 68 (steels); 5071, id. at 64 (sugars); 5050, id. at 41
(motorcycles); 4998, 3 C.F.R., Canp. 1982, at 107 (1983) (brooms);
4941, id. at 55 (sugars); 4901, id. at 12 (clothespins).

*The Northern Mariana Islands is not within the customs
territory of the United States. Covenant � 603(a).

Discussion.

Goods manufactured, grown, or produced in the Northern Mariana
Islands should be allowed entry into the customs territory of the
39 81 United States without regard for quotas or other quantitative
restrictions imposed by the United States on the entry of foreign
goods.

The United States, in section 701 of the Covenant, has agreed to
assist in the economic development of the Northern Mariana Islands.
One means by which the United States assists in that economic
developiment is by affording goods from the Northern Mariana Islands
duty-free status on entering the- customs territory of the United
States. Covenant � 603(c); General Headnote 3(a), Revised Tar if f
Schedules of the United States.

Business firms face certain difficulties in becoming established
in the Northern Mariana Islands. The Northern Mariana Islands has a
small population and an underdeveloped infrastructure, and is distant
from suppliers and markets. A firm, overcoming these obstacles, may
make the necessary investment in plant and equipment, in securing a
labor force, and in othervise establishing a business in the Northern
Mariana Islands intending to sell in the United States goods
manufactured, qrown, or produced in the Northern Mariana Islands.
The firm most likely will have made its investment relying on the
implicit assurance that its goods will be able to enter the customs
territory of the United States without payment of duty. The
imposition of quotas or other quantitive restrictions that limit the
ability of the firm to bring its goods into the United States market
is an abrupt frustration of the firm's expectations.

It takes few such abrupt frustrations before investors decide
that attempting to establish a business in the Northern Mariana
Islands that will bring goods to consumers in the United States is
simply not worth the risk. The purpose of General Headnote 3(a), in
providing favorable treatment for Northern Mariana Islands goods,
will have been defeated. A possible avenue toward the economic
development of the Northern Mariana Islands will have been closed.

To date, only one industry, garmnt manufacturing, has been
established in the Northern Mariana Islands with the objective of
exporting goods into the customs territory of the United States.
See, for example, Knitter to Sell Sweaters to Sears, Pacific Daily
News (Guam), Focus supplement, July 27, 1984, at 3; New Garment
Factories Opens Soon [sic), Marianas Variety, June 16, 1984, at 16;
Garment Factory Begins Production id., January 27, 1984, at 11;
Fourth Application for Saipan G@rmjn_t Factory, id., December 23,
1983, at 5; Saipan Gets 2nd Garment Fact=, id., December 16, 1983,
at 1; Garment Factory Opens on Saipan, Pacific Daily News,

October 15, 1983, at 7. In August 1984, less than a year af ter the
first of these factories began production, the United States Custams
Service issued regulations that curtailed the ability of the Northern
Mariana Islands garnent manufacturers to import garTwnts into the
custcms territory of the United States. 49 Fed. Reg. 31248. See [3991
Garment Firms Lay Off 305 Marianas Variety, February 15, 1985, at 1;
Textilers Say Industry 'Dying' ', Pacific Daily News, Focus supplement,
February 15, 1985, at 1; Garment Rules Exemption Sought, Marianas
Variety, November 16, 1984, at 1; Tenorio Asking for Negotiations,
Pacific Daily News, Focus supplement, November 16, 1984, at 5; Saipan
Garment Makers Brace for Shutdown Pacific Daily News, November 12,
1984, at 1; CNMI, Guam Seek to Cut Textile Rules, id., October 7,
1984, at 3; Islands' Reps Oppose Textile Regulations, id.,
September 28, 1984, at 4; Textile Industry Reprieve Unlikely, Ld.p
September 24, 1984, at 1; Guam, CNMI Officials Drafting Textile
Industry Position Paper, Pacific Daily News, September 13, 1984, at
5.

In the international arena, the United States acts for the
Northern Mariana Islands. Trusteeship Agreement, Arts. 3, 5, 8(4),
10, 11(2); Covenant �� 104, 1003(c). To regulate the international
trade of a particular cammodity or product, the United States, in
negotiating a bilateral or multilateral international agreement,
could conceivably find it necessary to agree to limit imports of that
cam-odity or product into the Northern Mariana Islands. But under no
circumstances could the requirements of such an international
agreement justify the imposition of import quotas on trade between
the Northern Mariana Islands,and the United States.

The United States balance of payments is the difference between
all payments made by the United States to all other nations in the
world and the payments made to the United States by all other
nations. See Black's Law Dictionary 130 (5th ed. 1979). The
Northern Mariana Islands is within the area in which the United
States dollar is made legal tender by federal law. 31 U.S.C. S 5103;
12 U.S.C. S 41 & historical note following id. S 38; Covenant
� 502(a)(1). Further, the Northern Mariana Islands is under the
jurisdiction of the United States and, on termination of the

*Similarly, a watch-assembly industry in Guam scme years ago was
reportedly destroyed by the institution of quotas on the importation
of watches into the United States fran Guam. Joe Murphy, Pipe
Dreams, Pacific Daily News, May 7, 1984, at 19; On Free Trade Issue,
id., March 9, 1984, at 40. See also Virgo Corp. v. Paiewonski, 384
F-.2d 569, 581-82 (3d Cir. 1967), certiorari denied sub. nan. Master
Time Co. v. Dejongh, 390 U.S. 1041 (1968); Tuna Tariff Clarified,
News Bulletin (Goverment of American Samoa), October 19, 1981, at 1.

trusteeship, will be under the sovereignty of the United States.
Trusteeship Agreemnt, Art.3; Covenant, S� 101, 1003(c). The
Northern Mariana Islands, accordingly, is part of the United States
for balance-of-paymnts purposes. Including the Northern Mariana
r400] Islands as part of the United States when import quotas are imposed
for balance-of-payments reasons or to prevent depreciation of the
dollar may be useful. But imposing import quotas on goods entering
the United States from the Northern Mariana Islands neither improves
the balanoe-of-payments position of the United States nor affects the
value of the dollar.

Establishing import quotas on goods entering the customs
territory of the United States from the Northern Mariana Islands may
protect industries within that customs territory from competition
and, thus, from possible economic loss. The United States, however,
should not act to protect industry within the customs territory of
the United States from competition from the Northern Mariana Islands,
any more than it should protect industry in Kansas from canpetition
from Oregon.* This is particularly so when the United States is
obligated to assist in the econanic develcpmnt of the Northern
Mariana Islands. Covenant � 701.

The United States has a legitimate interest in ensuring that
foreign exporters do not use the Northern Mariana Islands as a
"passthrough" point, transshipping their goods through the Northern
Mariana Islands in order to avoid applicable United States
quantitative restrictions. For that reason, the legislation here
proposed requires that, in order to be free of quantitative
restrictions, at least fifty percent of the value of each article
entitled to enter the customs territory of the United States be
attributable to the Northern Mariana Islands. If foreign materials
constitute more than fifty percent of the value of the article, the
article will remain subject to any applicable quantitative
restrictions on entering the customs territory of the United States.

The legislative language proposed below is modelled on that of
General Headnote 3(a) to the Revised Tariff Schedules of the United
States. 11he principal difference is that, while General Headnote
3(a) allows articles to enter the customs territory of the United
States free of duty so long as the value of foreign materials in the

*If the United States does protect industry within its customs
territory by imposing import quotas on goods from the Northern
Mariana Islands, can the Northern Mariana Islands impose its own
import quotas on goods from the United States? The Covenant does not
prohibit the Northern Mariana Islands from imposing its own import
quotas.

- 6 -

article does not exceed 70 percent of the article's total value,* the
proposed legislative language allows entry into the customs territory
free of import quotas only if the value of foreign components does
not exceed 50 percent of the article's total value. Under the
proposed legislation, an article could thus qualify for duty-free f,4011
entry into the customs territory of the United States under General
Headnote 3(a), but still be subject to an applicable quota. For
example, if sixty percent of the value of an article subject to a
quota were attributable to foreign sources, the article might enter
the customs territory of the United States from the Northern Mariana
Islands free of duty, but only if the quota on that article had not
been exhausted.

To the extent a business firm in the Northern Mariana Islands
employs aliens rather than citizens of the Northern Mariana Islands,
the firm's contribution to the economic development of the Northern
Mariana Islands is diminished. Similarly, the i nterest of the United
States in promoting the economic development of the Northern Mariana
Islands is not well served to the extent the labor force employed
because of the freedom from quantitative restrictions is composed of
aliens rather than citizens of the Northern Mariana Islands. A
foreign firm, for example, should not be able to avoid applicable
quotas by bringing -its entire foreign labor force to a rented
building in the Northern Mariana Islands. Pursuant to section 503(a)
of the Covenant, the Northern Mariana Islands is not generally
subject to the immigration laws of the United States. The ability of
a business firm in the Northern Mariana Islands to employ alien labor
is controlled by the laws of the Northern Mariana Islands, not by the
laws of the United States. To minimize the incentive for business
firms in the Northern Mariana Islands to import foreign labor, the
proposed legislation provides that foreign labor be treated as are
foreign materials in determining the percentage of the value of an
article that is attributable to the Northern Mariana Islands. Only
the labor of persons who are citizens of the Northern Mariana Islands
or citizens or nationals of the United States will not be counted as
"foreign" in determining the percentage of an article's value
attributable to foreign sources.

At this time, the only goods imported in significant quantities
into the customs territory of the United States from the Northern
Mariana Islands are garments, as discussed above. Exports, other
than garments, from the Northern Mariana Islands to any place in the
world are generally insignificant. The recommendation, here made is

*For certain textile, apparel, canned tuna, petroleum, and watch
products, no more than 50 percent of the value of the product may be
derived from foreign materials.

- 7 -

not intended to resolve the current controversy over the importation
of ganneents frcm the Northern Mariana Islands into the custcms
territory of the United States. Rather, the recamnendation is
intended to supply firm and fair rules on which entrepreneurs can
[4021 rely in determining whether to establish a business in the Northern
Mariana Islands that would export goods into the custans territory of
the United States.

Proposed legislative language.

The following language, if enacted by the United States
Congress, would implement this recamnendation:

An Act to allow products of the Northern Mariana Islands to
enter the customs territory of the United States free
of quantitative restrictions.

Be it enacted by the Senate and House of
Representatives of the United States of America in Congress
assembled, that articles imported fram the Northern Mariana
Islands into the customs territory of the United States
shall not be subject to any quota or quantitative
restriction, so long as such articles are the growth or
product of the Northern Mariana Islands, or manufactured or
produced in the Northern Mariana Islands fran materials
that are the growth, product, or manufacture of the
Northern Mariana Islands or of the custams territory of the
United States, or of both, or which do not contain foreign
materials to the value of more than fifty percent of their
total value.

(b) In determining whether an article produced or
manufactured in the Northern Mariana Islands contains
foreign materials to the value of more than fifty percent-

(1) that portion of the article's value
attributable to the labor of persons residing in
the Northern Mariana Islands who are not
citizens of the Northern Mariana islands or
citizens or nationals of the United States shall
be regarded as foreign;

(2) constituent parts of the article
previously imported into the custans territory
of the United States with payment of all
applicable duties and taxes imposed upon or by
reason of importation which were shipped fram
the United States, without remission, refund, or
drawback of such duties or taxes, directly to
the Northern Mariana Islands, shall be regarded
as materials produced or manufactured in the
Northern Mariana Islands;

- 8 -

(3) No material shall be considered
foreign which, at the time such article is
entered into the custams territory of' the United [4031
States, may be imported into that custcms
territory frcm a foreign country, other than
Cuba or the Philippine Republic, and entered
free of duty.

(c) For purposes of this section, "citizens of the
Northern Mariana Islands" are those persons defined as
United States citizens or United States nationals in
section 8 of the Schedule on Ttansitional Matters of the
Constitution of the Northern Mariana Islands, as approved
by Presidential Proclamation 4534 of October 24, 1977.

Northern Mariana Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-5617

[4041

SEOOND REVISED STAFF RE03MMENIATION

VESSEL DOCUMENTATION

AND

VESSEL CREWING LAWS

SECOND REVISED STAFF REoa*1ENEATICQq

VESSEL DOCUMENTATION [4051

AND

VESSEL CREWING LAWS

O(JTLINE

Reccmirendation.

The statutes.

Vessel documentation laws.
Vessel crewing lws..

Present applicability.

Discussion.

Vessel documentation as an act of sovereignty.
Coastwise laws and prohibitions against foreign vessels landing
fish.
Use of foreign hulls for fisheries.
Citizenship requirements for owiership of documented vessels.
Citizenship requirements for operation of documented vessels.
-citizens of the Northern Mariana Islands.
--aliens.

Proposed legislative language.

Recommendation.

Legislation should be enacted (1) to allow permanent use of
fbreign-hull fishing vessels by citizens of the Northern Mariana
[4061 Islands and citizens or nationals of the United States domiciled in
the Northern Mariana Islands; (2) to affirm that citizens of the
Northern Mariana Islands, prior to termination of the trusteeship,
are to be treated as citizens of the United States for purposes of
federal laws governing the docLmientation and operation of vessels;
(3) to allow the Northern Mariana Islands to issue restricted
licenses and restricted certificates of registry, without regard for
otherwise applicable citizenship requirements, for use on
locally-owned documented vessels operating only in waters adjacent to
the Northern Mariana Islands; (4) to exempt locally-owned documented
vessels operating only in waters adjacent to the Northern Mariana
Islands from federal statutes imposing citizenship requirements on
officers and crew; and (5) to make minor anendments in the vessel
documentation laws so those laws are consistent with the exeiTption of
the Northern Mariana Islands from the coastwise lads of the United
States under section 503(b) of the Covenant.

The statutes.

Vessel docLinentation laws. A vessel at sea is regarded for many
purposes as part of the natio to which it belongs. Persons on board
the vessel are protected by and subject to the laws of that nation.
St. Clair v. United States, 154 U.S. 134, 152 (1894).

Ships have a national character as recognized by the
law of nations, because they regularly carry the flag of
the nation to which they belong. This conception is
fraught with important consequences, in times of both peace
and war. Mus, commercial nations generally have, for the
advancenent of their own individual prosperity, conferred
great privileges on the ships belonging to their own
citizens, and, in consideration thereof, have imposed on
their owners certain special duties and obligations. on
the outbreak of war, the national character of a vessel
determines the liability of itself and cargo to capture and
condemnation by the war vessels and privateers of the
respective belligerents. ordinarily, national character is
dependent on compliance with the conditions imposed by the
lad of the country whose flag the vessel claims.

70 Am. Jur. 2d, Shipping � 4 (1973).

The registration of ships and the need to tly the
flag of the country where the ship is registered are
considered essential for the maintenance of order on the
open sea, since it is easy to enforce the rule that a
vessel not sailing under the maritime flag of a State

- 2 -

enjcys no protection whatsoever. It is now a
well-established doctrine of international law that
11freedan of navigation on the open sea is freedan for such [4071
vessels only as sail under the flag of a State."

9 Whiteman, Digest of International Law S 1, at 21, quoting fran a
1960 statement prepared by the Government of India. See also United
States v. Barrio, 556 F. Supp. 395, 400 (D.P.R. 1982).

It would be disastrous financially for the owners and
operators of [a ship] to have it be regarded as without
nationality since . . . any state could assert jurisdiction
over the vessel while it was on the high seas and the
vessel would not have the benefit of any commercial treaty
fran which rights to enter foreign ports normally stem.

U.S. Dep't of State, "Answers to Questions of Senate Foreign
Relations Ccmmittee Concerning the Law of the Sea Conventions, 11
printed in Hearings on Conventions on the Law of the Sea before the
Senate Camd-ttee on Foreign Relations, 86th Cong., 2d Sess. 82, 86
(1960).

Article 5 of the Convention of the High Seas, 13 U.S.T. 2312,
T.I.A.S. 5200 (1958), a multilateral treaty to which the United
States is a party, requires each signatory "State" to

fix the conditions for the grant of its nationality to
ships, for the registration of ships in its territory, and
for the right to fly its flag.

The purpose of the vessel docurrentation laws of the United States is
to declare the requirements a vessel must meet in order to identify
itself as a vessel of the United States. Douglas v. Seacoast
Products, Inc., 431 U.S. 265, 272-73 (1977) ; Th@- -Mohawk, 70 U.S. (3
Wall.) 566, 571 (1865).

The Vessel Documentation Act** was enacted in 1980 to revise and
simplify a large number of complex and often archaic federal vessel

*That is, nation.

**'Ihe Vessel Documentation Act, Public Law 96-594, 94 Stat.
3453, is codified to various locations in title 46, U.S.C. In 1983
parts of title 46, including the vessel documentation laws, were
again revised and enacted into positive law. PLt)lic Law 98-89, 97
Stat. 500. Citations in this discussion are to the Vessel
Docurrentation Act as codified into the United States Code by the 1983
revision.

documentation laws. Vessel docmentation is the administrative
procedure that identifies a ship or boat as a vessel of a particular
[4081 nation. ribe document issued a vessel is analogous to a certificate
of registration for an autcmbile. See generally Hcuse Report
96-428, at 2, 4 (1979) .

The Vessel Documentation Act makes certain vessels eligible for
documentation as vessels of the United States. See 46 U.S.C.
� 12102.* Vessels way not engage in specified activities unless they
a re documen ted . See id. �� 12105-12108, governing foreign trade,
certain insular trade-, coastwise trade, Great LaRes trade, and
fisheries. If a vessel eligible for documentation engages "in a
trade for %bich certificates of documentation are issued under the
vessel documentation laws" without documentation, it is liable to
civil monetary penalties. Id. S 319. Since the activities for which
certificates of docunentJ_Ton are issued include virtually all
cam-ercial activities, it is in the interest of a vessel owner to
document his or her vessel.

A ship documented as a vessel of the United States is also
eligible for certain protections and privileges afforded by other
federal statutes. For example, a vessel may be seized by a foreign
nation for violating its territorial vaters. If the United States
does not recognize the claim of the foreign nation to the waters in
which the vessel is seized, the United States will take steps to
protect and secure the release of the vessel and its crew and will
reimburse the o%ner of the vessel for f ines or other charges paid to
secure the release of the vessel and its crew. 9hese measures wi-11
only be undertaken, however, on behalf of vessels of the United
States. 22 U.S.C. �� 1971 et seq.

only f ishing vessels that are vessels of the United States are
eligible to receive monetary campensation for damage to or loss or
destruction of the vessel or its gear in the f ishery conservation
zone of the United States. 22 U.S.C. � 1980(b)".

Vessels of the United States are given preference in hauling
cargo for the United States Government, including foreign-aid
shipiments and exports financed by federal instrumentalities, such as
the Export-L-nport Bark. 46 U.S.C. �� 1241, 1241-1.

*Vessels of less than five net tons are not documented, but are
numbered. Numbering is generally carried out under State law in
conformity with standards prescribed by the Coast Ward. Vessels so
numbered are vessels of the United States. See 46 U.S.C.
2101(46), 12102, 12301 et seq.

Vessel crewing laws. In general, any master, mate, or engineer
of a vessel of the United States must be licensed. 46 U.S.C.
S 8304(c) . Me license attests that its holder rwets the minimum r.4091
requirements of professional capacity. Id. � 8304(e) . Only citizens
of the United States may be issued licenses by the United States.
1d. � 7102.

A separate statute limits to United States citizens those who
may serve "as master, chief engineer,', or officer in charge. of a deck
vatch or engineering watch on a documented vessel." Id.
,� 8103(a). Yet another statute requires officers on vessels of the
United States to be citizens of the United States. 10 U.S.C. � 6019.

Licenses for ship radio operators are issued only to those who
have radiotelegraphers licenses fran the FL-deral Communications
Commission (FCC). 46 U.S.C. � 7103(a). To obtain the FCC license,
it is necessary to be "legally eligible for employment in the United
States." 47 U.S.C. S 303 (1)(1). Individuals legally eligible for
employnent in the United Sfates are citizens and nationals of the
United States and aliens allowed to enter and %ork in the United
States under the federal :kmigration laws.

Vessels of the United States (other than fishing vessels,
whaling vessels, or yachts) cannot leave ports of the United States
unless at least 75 percent of the crew are citizens of the United
States. 46 U.S.C. � 8103(b). If the vessel is a passenger vessel
built or operated with a federal sLbsidy, at least 90 percent of the
crew must be citizens of the United States and the renainder (except
for stewards) must be aliens lawfully admitted to permanent residence
in the United States. Id. S 8103(d). Flor vessels, other than
passenger vessels, built-or operated with federal subsidies, the
entire crew must be canposed of citizens of the United States. Id.
� 8103(c).

Present applicability.

When the Vessel Documentation Pct became law in 1980, the
Northern Mariana Islands vas not included as part of the United
States for purposes of the Act. House, Report 96-428 (1979),
reprinted at 1980 U.S. Code (bng. & Ad News 7162, 7168. Men the
vessel docuffentation laws, along with other parts of title 46 of the
United States Gode, %ere revised, consolidated, and enacted into
positive law in 1983, a new section on definitions was added. The
definitions are applicable not only to the vessel documentation
provisions but to other parts of title 46 included in the revision.
In the new revision, both "State" and "United States@' are defined to
include the Northern Mariana Islands. PLblic Lav 98-89, 97 Stat.
500; 46 U.S.C. S 2101(36), (44). Me addition of this definition

- 5

makes the vessel documentation laws applicable to the Northern
Mariana Islands. House RepDrt 98-338, at 129-30 (1983).*

r.4101 The vessel crewing laws are applicable to vessels of the United
States wherever they may be.

Discussion.

Vessel documentation as an act of sovereignty. Vessel
docwrEn--tation is a national respDnsibility, an act of sovereignty.
When the trusteeship ends, sovereignty over the Northern Mariana
Islands will becorne vested in the United States. Covenant �� 101,
1003(c). At that time, the Northern Mariana Islands will not be
capable under international law of conferring nationality upDn
vessels. 22 opinions of the Attorney General 578 (1899) (holding
that Ha,@aiils vessel registration law was abrogated %hen the United
States aoguired sovereignty over Hawaii).

`Ihe United States is obligated under international lcW to
"effectively exercise its jurisdiction and control in administrative,
technical and social rratters over ships flying its flags. 11
Convention on the High Seas, Art. 5, 13 U.S.T. 2312, T.I.A.S. 5200
(1958); United States v. Arra, 630 F.2d 836, 845 n.13 (1st Cir.
1980). Jurisdiction and control must be exercised, awng other
purposes, to ensure ccnpliance by American vessels with international
treaties to which the United States is a party. Awng these treaties
are the International Cbnvention for the Safety of Life at Sea, 16
U.S.T. 185, T.I.A.S. 5780 (1960);** the Convention concerning the
Certification of Able Seanen, 5 U.S.T. 605, T.I.A.S. 2949 (1946);***
the Convention concerning the Minimum Requirement of Professional
Capacity for Masters and aEficers on Board Merchant Ships, 54 Stat.
1683, T.S. 950 (1936);t and the Convention concerning Liability of

*The legisla'tive history of this provision does not specify the
rationale for applying the vessel doculTentation laws to the Northern
Mariana Islands.

**rlhis treaty is applicable to Guan and the Trust "Territories"
of the Pacific Islands. By cperation of section 502(a)(2) of the
Covenant, the Northern Mariana Islands is also part of the United
States for purposes of this treaty.

***This treaty is specifically applicable to Guam. By operation
of section 502(a)(2) of the Covenant, the Northern Mariana Islands is
also part of the United States for purposes of this treaty.

tThis treaty extends to all areas over which the United States
has jurisdiction and, thus, to the Northern Mariana Islands.
Trusteeship Agreement, Art. 3; Covenant �� 101, 1003(c).

the Shipowner in case of Sickness, Injury or Death of Seamen, 54
Stat. 1693, T.S. 951 (1936).*
The legislation here prcposed does not alter the general (4111
applicability of the Vessel DocLurentation Act to the Northern Mariana
Islands. Vessels and vessel owners, with a few exceptions discussed
below, will remain sLbject to the Act, just as are vessels and vessel
owners in, say, Hawaii.

Coastwise laws and prohibitions against foredgn vessels landing
fish. The prcposed legislation specifically provides that it does
not amand section 503(b) of the Covenant. That section makes
inapplicable to the Northern Mariana Islands the coastwise laws of
the United States and any prohibition in the laws of the United
States against foreign vessels landing fish or unfinished fish
products in the United States.

In addition, the prcposed legislation makes two minor amendments
in the vessel documantation laws to make them consistent with the
general exemption of the Northern Mariana Islands, under section
503(b) of the Covenant, from the coastwise laws of the United States.
Registry, one form of documentation, allows a foreign-Wilt vessel
that is United States ouned to be used in trade bet%een the United
States and foreign ports and between the United States and certain
parts of the United States not sLbject to the coastw-ise laws. 46
U.S.C. � 12105(a), (b). 'Ihe prcposed legislation adds th 'e Northern
Mariana Islands to the list of areas not subject to the coastwise
laws.

The vessel documentation laws allow a foreign-built vessel that
is procured outside the United States by United States owiers and
that is proceeding to the United States under temporary documentation
to engage en route in trade with certain parts of the United States
not subject to the coastwise laws. 46 U.S.C. � 12112. The prcposed
legislation again adds the Northern Mariana Islands to the list of
areas not subject to the coastwise laws.

Use of foreign hulls for fisheries. r1he legislation here
proposed confirm the right of residents of the Northern Mariana
Islands to operate foreign-built fishing vessels in waters adjacent
to the Northern Mariana Islands.

The Fishery Conservation and Management Act (FCMA), 16 U.S.C.
1801 et seq., prohibits fishing within the waters of any United
States jurisdiction or within the fishery conservation zone by any
vessel other than a vessel of the United States, unless that vessel

*1his treaty also extends to all areas over which the United
States has jurisdiction and, thus, to the Northern Mariana Islands.

- 7 -

has been issLed a foreign fishing permit under the FCMA.* Id.
� 1857(2). (And foreign fishing permits are given only for that
portion of the cptimum yield of a fishery not e)pected to be
[412] harvested by vessels of the United States. See id. S 1821(d) (2).) A
"vessel of the United States", for purposes of tHe- FCKA, is "a vessel
documented under the. laws of the United States or registered under
the laws of any State." Id. � 1802(27). Regulations under the FCMA
further define such a vessel as one "docunented or nuThered by the
Coast Guard under United States law" or, if under five net tons,
"registered under the laws of any State." 50 C.F.R. � 611.2(gg)
(1983).

Until June 1, 1982, section 11 of title 46, U.S.C., limited
"registry" of vessels to those vessels built within the United States
with certain exceptions, most notably an exception for seagoing
vessels engaged in trade with foreign countries or with Guam and
certain other United States pDssessions in the Pacific 0--ean. on
June 1, 1982, section 11 vas replaced by what is now section 12102 of
title 46. Section 12102 -i&-Lkes "any vessel" of at least five net tons
eligible for docuiTentation sLbject to certain ownership
restrictions," regardless of where it was built. r1hus, the FCMA
requireffent that only vessels of the United States be permitted to
fish in the fishety conservation mne (without a foreign fishing
permit) can now be mt by a foreign-built vessel if its owners zeet
the qualifications of section 12102.

But, while the FCMA requiren-ents, can be satisfied by a
foreign-built vessel, a similar prohibition in the vessel
docuimntation laws cannot. Section 12105(d) of title 46, U.S.C.,
prohibits foreign-built vessels fran fishing within the fisheries
conservation zone. See also 46 U.S.C. �� 2101(11), 12106, 12108.
The only difference, then, is that formerly a foreign-built vessel
could only be docuffented in specific circunstances and for specific
purposes, none of which included fishing. Now the foreign-Wilt
vessel may be documnted but still may not fish.

On February 21, 1980, exercising his powers under section
1004(a) of the Covenant,*** the President suspended until termination
of the trusteeship "any provision of the vessel documentation laws of

*'Ihe Commission has agreed to recmmnd that the FCMA be wade
inapplicable to the Northern Mariana Islands.

**11hose ownership restrictions in general require the owners to
be citizens of the United States. See the discussion, citizenship
requirements, below.

***Section 1004(a) permits the President to suspend until
termination of the trusteeship federal laws inconsistent with the
Trusteeship Agreenent.

the United States" preventing citizens of the Northern Mariana
Islands or the Government of the Northern Mariana Islands from using (4131
their "foreign-built, United States registered fishing vessels" in
the territorial sea and fisheries conservation 2Dne adjacent to the
Northern Mariana Islands. Presidential Proclamation 4726, 45 Fled.
Reg. 12369 (1980). Me suspension vas directed prinariiy at section
11 of title 46, U.S.C., %bich vas repealed by the Vessel
Documentation Act of 1980. Sections 12105(d) and 12108, barring
fishing by foreign-built vessels, x%ere enacted by the Vessel
Documntation Act. That Act is a vessel documentation law, so those
sections are suspended by the proclamation.

Because the question of ubether foreign-built vessels way fish
adjacent to the Northern Mariana Islands has given rise to several
lawsuits and the forenentioned presidential proclaration, the
proposed legislation specifically allows foreign-built vessels to
fish in those waters.

In suspending the application of these provisions of the vessel
documentation lcaws, the proclamation declared:

Because of the considerable distance of the Northern
Mariana Islands from Auerican shipyards and resultant high
transportation costs associated with the purchase of
Aimerican-built ships for use in the Northern Marianas
fisheries, this result is inconsistent with the
undertakings assumed by the United States in the
Trusteeship Agreenent to provide for the economic
advancEment and self-sufficiency of the inhabitants and to
encourage the development of the fisheries of the Northern
Mariana Islands.

The United States has similarly committed itself to promote the
economic advancement of the Northern Mariana Islands in the
post-trusteeship period. See Covenant � 701. `Ihe rationale for
suspension of the fJoreign-hull prohibition will be just as cogent
when the suspension ends on termination of the trusteeship. The use
of foreign-built vessels for fishing by citizens of the Northern
Mariana Islands, the Government of the Northern Mariana Islands, or
by citizens or nationals of the United States domiciled in the

Northern Mariana Islands* should be permitted in the territorial sea
and any fisheries conservation zone adjacent to the Northern Mariana
Islands, both before and after temination of the trusteeship.
[414]
Partnerships, corporations, and other firms controlled by
persons who are citizens of the Northern Mariana Islands or citizens
or nationals of the United States and who are domici-led in the
Northern Mariana Islands are also pennitted the privilege of using
docurwnted foreign-built vessels in fisheries adjacent to the
Northern Mariana Islands under the prcposed legislation.

Citizenship requirements for ownership of docunented vessels.
Section 12102 of title 46, U.S.C., allows only vessels owned
bycitizens of the United States to be documented. Citizens of the
Northern Mariana.Islands are not now citizens of the United States."
On full implementation of the Covenant, at the temination of the
trusteeship, most citizens of the Northern Mariana Islands will
beccale citizens of the United States. Covenant �� 301, 1003(c).
Sane, however, way choose to become United States nationals rather
than United States citizens. Id. � 302. Under current law, vessels
owned by nationals of the United States are not eligible for
documentation as vessels of the United States. 46 U.S.C. � 12102.

*Presidential Proclamation 4726 allows only foreign-built hulls
owned by citizens of the Northern Mariana Islands and the Governnent
of the Northern Mariana'Islands to fish in the territorial sea and
fisheries conservation zone adjacent to the Northern Mariana Islands.
On temination of the trusteeship, citizens of the Northern Mariana
Islands will become citizens or nationals of the United States.
Covenant Art. III; � 1003(c) . %be prcposed legislation extends the
privilege of fishing in these %aters to foreign-built vessels owned
by other United States citizens and nationals dcmiciled in the
Northern Mariana Islands as well, on the ground that no valid reason
supports discrimination among United States citizens and nationals
domiciled in the Northern MarianaIslands.

**An opinion of the Chief Counsel of the United States (bast
Guard, dated June 27, 1978, concludes that "for the purposes of
vessel documentation and licensing, the citizens of the [Northern
Mariana Islands] may be treated as if citizens of the United States."
That cpinion was directed, however, primarily at the vessel
documentation requirements then contained in section 11 of title 46,
U.S.C. 9hose requirements have now been repealed and replaced by the
requirements of section 12102. The legislation here proposed is not
intended to cast dcubt on the validity of the Chief Counsel's
opinion. Rather it affirms the conclusions reached by the Chief
Counsel, removes any doubts that may persist, and ensures that those
conclusions remain applicable to the subsequently"enacted
legislation.

r1he proposed legislation allows vessels owned by citizens of the
Northern Mariana Islands to be docunented as vessels of the United
States during the period betdeen enactment of the legislation and (4151
termination of the trusteeship.* r1he proposed legislation also
allows vessels. owned by nationals *of the United States domiciled in
the Northern Mariana Islands to be documented as vessels of the
United States after temination of the trusteeship. Thus, under the
proposed legislation, all persons who are now citimns of the
Northern Mariana Islands will be able to document vessels owned by
thEm as vessels of the United States, both before and after
temination of the trusteeship. (Ihose who after termination of the
trusteeship choose United States nationality rather than citizenship
must, however, be daniciled in the Northern Mariana Islands in order
to avail thenrelves of this right.)

A "citizen of the Northern Mariana Islands" for purposes of the
proposed legislation is defined therein as a person who qualifies as
a United States citizen or a United States national under section 8
of the Schedule on Transitional Matters of the Constitution of the
Northern Mariana Islands. `Ihe (bnstitution of the Northern Mariana
Islands was deened approved by Presidential Proclamation 4534 of
October 24, 1977, and cc-m into effect on January 9, 1978.

Citizenship requirEments for operation of docunented
vesself@s--cJtizens of the NortheFF@Mariana Islands. The proposed
legislation provides that citizens of the Northern Mariana Islands
shall be deEmed citizens of the United States for purposes of all

*`Ihe paragraphs of - the proposed legislation allowing
documentation of vessels owned by citizens of the Northern Mariana
Islands by their own terms expire on termination of the trusteeship,
and all rights and privileges extended pursuant to those paragraphs
merge with those aaguired with United States citizenship at that
time. Citizens of the Northern Mariana Islands who choose to becom
nationals rather than citizens of the United States at that time will
consequently have no further rights under these paragraphs, but
another provision in the proposed legislation will allow them to
continue to docuffent their vessels as vessels of the United States.

- 11 -

citizenship requirements related to operation of vessels documented
under the laws of the United States.*

[4161 Citizenship requirements for operation of docunented
vessels--aliens. The Northern Mariana Islands lacks the skilled
vessel officers and crew generally available in United States ports.
Few citizens of the Northern Mariana Islands are qualified for this
work and few United States citizens who are qualified in maritime
occupations reside in the Northern Mariana Islands. Further, the
Northern Mariana Islands is so small and so distant from parts of the
United States where qualified vessel officers and crew are available
that it is unlikely to be able to attract at a reasonable cost United
States citizens to serve on vessels operating out of the Northern
Mariana Islands.

Mile Anerican officers and crew are likely to be difficult to
recruit for service on vessels in the Northern Mariana Islands, alien
officers and crew frcm other nations in the western Pacific are more
apt to be available. The legislation here proposed would allow
aliens to serve as officers and crew on documented vessels operating
out of the Northern Mariana Islands, but only in waters generally
adjacent to the Northern Mariana Islands. The prcposed legislation
is carefully restricted to prevent the exemption granted from being
used to undermine the vessel crewing laws elsewhere. A ship owner
will not find it advantageous, under the legislation here proposed,
to operate a vessel out of the Northern Mariana Islands in order to
be able to hire alien officers and crew. The proposed exenption is
available only to a documented vessel owned and controlled by persons
who are citizens of the United States or the Northern Mariana Islands
and who are don-Liciled in the Northern Mariana Islands. Further, the
exemption is available only for voyages between ports in the Northern
Mariana Islands or between the Northern Mariana Islands and Guam.

*As with the citizenship requirements for ownership of
documented vessels, above, citizens of the Northern Mariana Islands
way already be treated as United States citizens by virtue of the
June 27, 1978, cpinion of the Chief Counsel of the United States
Coast Guard. Again, the intention of the proposed legislation is to
affirm the conclusions reached in that cpinion and to remove any
lingering doubts.

In its January 1982 interim report to Clongress, at pages 11,
26-27, the Ccnunission recommended legislation to treat citizens of
the Northern Mariana Islands as citizens of the United States for
purposes of statutes imposing citizenship requirements on officers
and crew of vessels of the United States. Sections 19 and 20 of
Public Law 98-213, 97 Stat. 1459 (1983), authorize the President by
proclamation to effect that result.

- 12 -

(The exemption is also available for a voyage f rcm the Northern
Mariana Islands to a port outside the Northern Mariana Islands if the
voyage is made for the exclusive purpose of repairing, renovating, or [4171
refurbishing the vessel or if the stop at the foreign port is made
for the exclusive purpose of preventing the loss at sea of the vessel
or persons or cargo on board.)

The prcposed legislation also allows the goverrment of the
Northern Mariana Islands to issue restricted licenses and restricted
certificates of registry for individuals on documented vessels. 9he
restricted docuffents would be good only on vessels owned by persons
who are citizens or nationals of the United States or the Northern
Mariana Islands and who are domiciled in the Northern Mariana
Islands. And, again, 'the documents would be valid only for voyages
within the Northern Mariana Islands or between the Northern Mariana
Islands and Guam (or elsewhere if only for ship repair, renovation,
or refurbishing or for prevention of loss at sea).

The restricted licenses and restricted certificates of registry,
unlike the licenses and certificates of registry issued by the United
States Wast Ward, could be issued to persons who are not citizens
of the United States. In other respects, the governmant of the
Northern Mariana Islands would be expected to adhere to the licensing
standards enforced by the Coast Guard.* (Uie international
obligations of the United States to ensure the con-petency of persons
operating vessels of the United States would thus continue to be
fulfilled.)

As an alternative to the provision here prcposed, the restricted
licenses and restricted certificates of registry could be issued by
the United States (bast Ward. Me legislation here proposed places
that function in the government of the Northern Mariana Islands in
order to minimize the need to appear at or communicate with the Coast
Guard's nearest regional examination center, in Honolulu.

After termination of the trusteeship, citizens of the Northern
Mariana Islands who choose to become nationals rather than citi2ens
of the United States would also be eligible, under the legislation
here proposed, to serve as officers and crew on docuuented vessels
operating cut of the Northern Mariana Islands in waters generally
adjacent to the Northern Mariana Islands. Another possibility, not
included in the legislation here proposed, is amendffent of the laws
governing the operation of vessels to allow nationals as %ell as
citizens of the United States to obtain licenses and certificates of
registry and to serve as officers and crew on vessels of the United
States wherever those vessels may operate. In addition to those

*r1hese standards may be found in part 10 of title 46, C.F.R.
(1983).

relatively few citizens of the Northern Mariana Islands who are
expected to choose to become nationals on termination of the
[4181 trusteeship, the principal beneficiaries of such legislation would be
American S&wans who are nationals rather than citizens of the United
States. See 8 U.S.C. �� 1101(a)(29), 1408.

Proposed legislative language.

The following language, if enacted by the United States
Congress, would implement this recommendation:

An Act to alter the application of the vessel documentation
laws and the vessel crewing laws in the Northern
Mariana Islands; and for other purposes.

Be it enacted by the Senate and House of
Re-presentatives of the United States of America in Congress
assembled, that a foreign-built vessel documented under the
laws of the United States and owned by a citizen or
national of the United States who is domiciled in the
Northern Mariana Islands, or by a qualified firm, shall be
entitled to engage in fishing within the territorial sea
and any fishery conservation zone or exclusive economic
zone adjacent to the Northern Mariana Islands, without
acquiring a permit under section 204 of the Magnuson
Fishery and Wnservation Act, as amended (16 U.S.C.
� 1824), notwithstanding the prohibitions of subsection 2
of section 307 of that Act, as amended (16 U.S.C.
S 1857(2)), or of sections 12105, 12106, or 12108 of title
46, United States Code.

Se c. 2. (a) (1) Citizens of the Northern Mariana
Islands shall be deemed citizens of the United States of
America for purposes of the vessel documentation lads of
the United States, for the purposes of all citizenship
requirements related to operation of vessels documented
under those laws, and for purposes of this Act.

(2) Upon the establishuent of the Commonwealth of
the Northern Mariana Islands pursuant to section 1002 of
the Covenant, the rights and privileges extended under this
section shall rrerge without interruption into those to
which the recipient is entitled by virtue of his or her
acquisition of United States citizenship, Lnless the
recipient exercises his or her privilege under section 302
of the Covenant to become a national but not a citizen of
the United States.

- 14

(b) Notwithstanding the requirements of section
12102 of title 46, United States Code, upon the [4191
establishuent of the Gbmwnwealth of the Northern Mariana
Islands pursuant to section 1002 of the Covenant, a vessel
of at least f ive net tons not registered under the laws of
a foreign country is eligible for docunentation as a vessel
of the United States if it is owned by a national of the
United States domiciled in the Northern Mariana Islands or
by a qualified firm.

Sec. 3. Subsection (b) of section 12105 of title 46,
United States Code, is amended by inserting after "Guam,"
the phrase "the Northern Mariana Islands,".

Sec. 4. Subsection (b) of section 12112 of title 46,
United States GDde, is amnded by inserting after "Guam,"
the phrase "the Northern Mariana Islands,".

Sec. 5. The government of the Northern Mariana
Islands may issue restricted licenses and restricted
certificates of registry for individuals on documented
vessels. 1he restricted licenses -and restricted
certificates of registry shall be valid only for service on
board qualified vessels while such vessels are engaged in
Northern Mariana Islands voyages. Restricted licenses and
restricted certificates of registry may be issued to
persons who are not citizens of the United States or
citizens of the Northern Mariana Islands, notwithstanding
the provisions of sections 7102 and 7103 of title 46,
United States Code. Applicants for restricted licenses or
restricted certificates of registry shall otherwise be
required by the government of the Northern Mariana Islands
to meet all qualifications established by the United States
Coast Guard for the issuance of licenses or certificates of
registry, as the case may be.

Sec. 6. The citizenship requirements of section 8103
of title 46, United States Code, and section 6019 of title
10, United States Gode, shall not apply to qualified
vessels engaged in Northern Mariana Islands voyages.

Sec. 7. Nothing in this Act shall be deemed to amend
section 503 of the Covenant.

Sec. 8. Fbr purposes of this Act-

(a) "Citizens of the Northern Mariana Islands"
are those persons defined as United States
citizens or United States nationals in section 8

- 15

of the Schedule on Transitional Matters of the
r.4201 Constitution of the Northern Mariana Islands, as
approved by Presidential Proclamation 4534 of
October 24, 1977;

(b) "GDvenant" means the (bvenant to
Establish a Ccawnwalth of the Northern Mriana.
Islands in Political Union with the United
States of Anerica (approved by PLblic Law
94-241, 90 Stat. 263, 48 U.S.C. 1681 note
(1976));

(1) an association, trust,
joint ventLxe, or other entity
capable of holding title to a vessel
under the laws of the United States
or of the Northern Mariana Islands,
all the members of which are citizens
or nationals of the United States
daniciled in the Northern Mariana
Islands;

(2) a partnership whose
general partners are citimns or
nationals of the United States
domiciled in the Northern Mariana
Islands and the controlling interest
in which is owned by citimns or
nationals of the United States
domiciled in the Northern Mariana
Islands;

(3) a corpDration created
under the laws of the United Statest
or the Northern Mariana Islands if--

(A) the controlling
interest is owned by
citimns or nationals of
the United States
domiciled in the Northern
Mariana Islands;

(B) its president
or other chief executive
officer and the chairman
of its board of directors

16 -

are citizens or nationals
of the United States [4211
dcaticiled in the Mrthern
Mariana Islands; and

(C) no more of its
directors than a knority
of the nuTber necessary to
constitute a quorun are
other than citizens or
nationals of the United
States daniciled in the
Northern Mariana Islands;
or

(4) the goverment of the
Northern Mariana Islands;

(d) a "qualified vessel" is a vessel of
at least five net tons that is not registered
under the laws of a fbreign country that is
owned by-

(1) an individual who is a
citimn or national of the United
States who is dcmiciled in the
Northern Mariana Islands; or

(2) a qualified firm;

and

(e) a "Northern Mariana Islands voyage"
is--

(1) a vcyage between one port
in the Northern Mariana Islands and
the sane port or another port within
the Northern Mariana Islands;

(2) a voyage between a port in
the Northern Mariana Islands and
Guam;

(3) a voyage between a port in
the Northern Mariana Islands and a
port outside the Northern Mariana
Islands, but only uben the voyage is
made for the exclusive purpose of

- 17 -

repairing, renovating, or
refurbishing the vessel or uhen the
[4221 stcp at the foreign port is made f or
the exclusive purpose of preventing
the loss at sea of the vessel or
persons or cargo on board.

* U.S. GOVERNMENT PRINTING OFFICE: 480-429-1985

Photography: Front cover and all
photos on back cover except tank
and beach scene (at lower left)
courtesy of Carole Mathison,
photographer for Commonwealth
C o u n c i 1for Arts and C u 1 t u r e ,
Northern Mari a na Islands
Department of Community and
Cultural Af f airs. Photos of tank
and beach -scene courtesy of Nancy
Mactleekin.

tp,

IV,

gi,
Wlow

10,

3 6668 00002 2873