Energy Committee Recommends Passage of Compact Amendment Act

The U.S. Senate Committee on Energy and Natural Resources issued a report last month recommending a bill amending the Compact of Free Association Amendments Act of 2003 to be passed. The bill, S. 283, was introduced by Committee Chairman Jeff Bingaman [D-NM] on January 12, 2007, co-sponsored by Ranking Committee Member Pete Domenici [R-NM]. Bingaman said it was unfortunate that, last year, the Senate passage of an identical bill, was delayed leaving insufficient time for enactment.

The bill's purpose is to approve subsidiary agreements and make conforming, clarifying, and technical amendments relating to disaster assistance and continued eligibility for certain education programs.

Eligibility for the programs and services of the Legal Services Corporation for RMI and FSM citizens who legally reside in the United States is reinstated under this bill.

Another section, applying to the Republic of the Marshall Islands (RMI) and the Federated States of Micronesia (FSM), include restoration of videotaping rights for television program rebroadcast which was in effect during Trust Territory days.

The new bill also clarifies the tax-free status of the trust funds established for the two nations under their respective Compacts.

During the bill's introduction, Bingaman referred to the "small and remote," areas including the the U.S.-affiliated insular areas and the freely associated communities with which the U.S. has special historical and political relationships.

"Maintaining and strengthening these relationships is a particular concern of the Committee on Energy and Natural Resources because of its jurisdiction over matters relating to the territories and freely associated states," he said.

The Energy and Natural Resources Full Committee met January 31 to consider the bill. The favorable report was entered on February 15 with S. 283 placed on the Senate Legislative Calendar under General Orders, Calendar No. 42.

- by Aenet Rowa, Yokwe Online, March 6, 2007

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COMPACTS OF FREE ASSOCIATION AMENDMENTS ACT OF 2007
SENATE REPORT
1st Session 110-17, February 15, 2007

Mr. BINGAMAN, from the Committee on Energy and Natural Resources, submitted the following REPORT: [To accompany S. 283]

The Committee on Energy and Natural Resources, to which was referred the bill (S. 283) to amend the Compact of Free Association Amendments Act of 2003, and for other purposes, having considered the same, reports favorably thereon without amendment and recommends that the bill do pass.

PURPOSE OF THE MEASURE

The purpose of S. 283 is to approve subsidiary agreements to the Compact of Free Association, as amended, between the Government of the United States of America and the Government of the Federated States of Micronesia, and to the Compact of Free Association, as amended, between the Government of the United States of America and the Government of the Republic of the Marshall Islands, and to make other conforming, clarifying, and technical amendments to the Compact of Free Association Amendments Act of 2003 (CFAAA), (Public Law 108-188).

SUMMARY OF MAJOR PROVISIONS

S. 283 consists of nine sections. Section 1 provides a short title. Sections 2 and 3 approves agreements negotiated between the United States and the Federated States of Micronesia (FSM), and between the United States and the Republic of the Marshall Islands (RMI) regarding disaster assistance and makes conforming amendments to the CFAAA. Section 4 clarifies the eligibility of students from the FSM and RMI for certain education programs, and the eligibility of the Government, institutions, and people of the Republic of Palau for certain programs, under the CFAAA. Section 5 clarifies that citizens of the FSM and RMI who legally reside in the United States are eligible for the programs and services of Legal Services Corporation. Section 6 makes numerous grammatical and technical edits to the CFAAA. Section 7 restores the authorization for FSM, Palau and the RMI to transmit videotaped programming. Section 8 allows Palau to deposit a payment, otherwise due the United States in connection with a Compact road project, into a trust fund for road maintenance. Section 9 clarifies the tax-free status of the trust funds established for the FSM and RMI under their respective Compacts.

BACKGROUND AND NEED

In 1947, the United States became Administrator of the United Nation's Trust Territory of the Pacific Islands, composed of the Marshall, Caroline, Palau and Mariana (except Guam) islands. All of these islands were captured from Japan in World War II and include those that now comprise the FSM and the RMI. U.S. obligations under the Trusteeship included promoting self-government or independence of the inhabitants. In the case of the FSM and RMI, negotiations on political status culminated with the signing of the Compact of Free Association, which was approved by Congress, under Public Law 99-239, in 1986. The new relationship of free association allowed for termination of the U.N. Trusteeship, international recognition of the FSM and RMI as sovereign nations, but also for the continuation of the special political, economic, and security relationship between the United States and these new nations.

In 2003, Congress enacted the CFAAA, which separated the Compact into two separate agreements, and approved amendments to extend and restructure the financial and program assistance provisions. One area that remained unresolved in the new law, however, was how disaster assistance would be handled. The Federal Emergency Management Agency (FEMA) objected to continuing to provide disaster assistance under the Compacts because, in its experience, the FSM and RMI governments lacked the capacity to properly meet their administrative and support responsibilities. Simply terminating FEMA's role was unacceptable to Congress because there would likely be disasters in the future, and a program would be needed to fund and coordinate disaster assistance to meet the needs of the population and to reconstruct essential infrastructure.

Accordingly, section 105(f)(1)(A) of the CFAAA directed the Secretary of State, in consultation with FEMA, to negotiate specific disaster assistance agreements with the FSM and RMI and report to Congress on the outcome of those negotiations, including recommendations on any changes to law.

On August 19, 2004, the State Department transmitted to Congress new agreements and the legislative language needed to bring them into effect. Generally, the agreements provide that FEMA and the Office of Foreign Disaster Assistance (OFDA) will jointly consult on any disaster damage assessments and on disaster declaration recommendations. FEMA will provide the funding to meet FEMA reconstruction and response requirements and other necessary expenses, and OFDA will be responsible for administering disaster assistance and coordinating the U.S. response to declared disasters.

Prior to introduction of the legislative language as transmitted to the Congress, the sponsors agreed to use the bill as a vehicle to make other conforming, clarifying, and technical amendments to the CFAAA.

LEGISLATIVE HISTORY

S. 283 was introduced by Senator Bingaman (for himself and Senator Domenici) on January 12, 2007.

During the 109th Congress, the Committee considered similar legislation, S. 1830, introduced by Senator Domenici (for himself and Senators Bingaman and Akaka), at the request of the Administration. The Committee on Energy and Natural Resources held a hearing on S. 1830 on October 25, 2005 (S. Hrg. 109-291), and ordered the bill favorably reported, with amendments, on March 15, 2006. S. Rept. 109-237. The Senate passed the bill by unanimous consent, with amendments, on September 29, 2006. No further action occurred prior to the sine die adjournment of the 109th Congress.

At its business meeting on January 31, 2007, the Committee ordered S. 283 to be favorably reported.

COMMITTEE RECOMMENDATION

The Committee on Energy and Natural Resources, in open business session on January 31, 2007, by a voice vote of a quorum present, recommends that the Senate pass S. 283.

SECTION-BY-SECTION ANALYSIS

Section 1 provides that this Act may be cited as the `Compacts of Free Association Amendments Act of 2007'.

Section 2 amends section 101 of the Compact of Free Association Amendments Act of 2003 (CFAAA) (Public Law 108-188) to approve the two disaster assistance agreements negotiated pursuant to section 105(f)(1)(A) of that Act and transmitted to the Congress on August 19, 2004.

Section 3 deletes the interim disaster assistance provisions and negotiating instructions set forth in section 105(f)(1)(A) of the CFAAA, which will be rendered moot upon approval of the new agreements. The Administration more recently sent additional language contained in clause (ii) to clarify that funding to implement these agreements will be `transferred' from FEMA to OFDA.

Section 4 makes three clarifying amendments to section 105(f)(1)(B) of the CFAAA regarding the availability of certain U.S. education programs. The first two paragraphs clarify that students from the FSM and the RMI who are attending colleges in the United States or its territories--and also in Palau, which had been inadvertently omitted--shall continue to be eligible to receive benefits through the end of their current course of studies, up to four years, for programs that are otherwise terminated by the CFAAA.

The third paragraph clarifies that the `government, institutions, and people' of Palau shall continue to be eligible, until the end of fiscal year 2009, for those education programs for which they were eligible in fiscal year 2003. The existing language had generally stated that the `Republic of Palau' would remain eligible, instead of specifying that the `students, institutions, and government of Palau' would remain eligible.

Section 5 clarifies that section 105(f)(1)(C) of the CFAAA is intended to continue eligibility for the programs and services of the Legal Services Corporation for FSM and RMI migrants who legally reside in the United States. Legal Services Corporation eligibility was extended by the first Compact Act in 1986 (Public Law 99-239), but in 1996, without any further action by Congress, the Legal Services Corporation, by rule, terminated the eligibility of FSM and RMI migrants. Section 104(e) of the original Compact Act, and of the CFAAA, states that it is `not the intent of Congress to cause any adverse consequences for an affected area,' which are defined as Hawaii, Guam, the CNMI, and American Samoa. The Legal Services Corporation is one of those programs which had assisted local communities, in both the `affected areas' and in the mainland United States, in responding to the impacts and needs of FSM and RMI citizens who were residing in U.S. communities. This section would restore eligibility as it existed from 1986 to 1996.

Section 6 makes technical corrections to the CFAAA.

Section 7 authorizes the FSM, Palau, and the RMI to transmit videotaped programming. In remote and isolated communities of the United States, such as isolated communities in Alaska, Hawaii, and the Territories, Congress has provided an exception from the copyright laws to allow for the videotaping of television programming for rebroadcast in outlying areas. Section 7 would restore this exception for videotaping and rebroadcast of television programming for the freely associated states, which enjoyed the privilege during the Trust Territory period.

Section 8 allows the Government of Palau to deposit the payment, otherwise payable to the United States under section 111 of Public Law 101-219, into a trust fund if the earnings of the trust fund are expended solely for maintenance of the road system constructed pursuant to section 212 of the Palau Compact, and if this trust fund is established and operated pursuant to an agreement entered into between the United States and Palau.

Section 9 would clarify the tax-free status of the trust funds established for the FSM and RMI under their respective Compacts. Because these trust funds are to be incorporated in the District of Columbia and it is not a State, the intended tax-free status could otherwise be questioned.

COST AND BUDGETARY CONSIDERATIONS

The following estimate of the cost of this measure has been provided by the Congressional Budget Office:

S. 283--Compacts of Free Association Amendments Act of 2007

S. 283 would amend the Compact of Free Association Amendments Act of 2003. The bill would make several amendments to the compact and would cancel a $3 million payment Palau owes to the federal government if Palau deposits $3 million into a trust fund controlled by the Republic of Palau. The earnings from the trust fund would be used for maintenance of the road system in Palau. Based on information from the Department of the Interior, CBO estimates that this provision would result in a loss of offsetting receipts (a credit against direct spending) of $3 million in fiscal year 2007. Enacting the legislation would not affect revenues.

S. 283 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.

The CBO staff contact for this estimate is Matthew Pickford. The estimate was approved by Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

REGULATORY IMPACT EVALUATION

In compliance with paragraph 11(b) of rule XXVI of the Standing Rules of the Senate, the Committee makes the following evaluation of the regulatory impact which would be incurred in carrying out S. 283. The bill is not a regulatory measure in the sense of imposing Government-established standards or significant economic responsibilities on private individuals and businesses.

No personal information would be collected in administering the program. Therefore, there would be no impact on personal privacy.

Little, if any, additional paperwork would result from the enactment of S. 283, as ordered reported.

EXECUTIVE COMMUNICATIONS

Because S. 283 is similar to legislation considered by the Senate in the 109th Congress, the Committee did not request Executive Agency views on S. 283.


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Following is a copy of the August 19, 2004, letter from the U.S. Department of State to the Chairman of the Committee transmitting the text of legislation that was included as section 2 of S. 283, as introduced. Copies of the two agreements to be approved by this language are retained in the Committee files.
United States Department of State,

Washington, DC, August 19, 2004.

Hon. JEFF BINGAMAN,
Committee on Energy and Natural Resources,
U.S. Senate.

DEAR SENATOR BINGAMAN: In accordance with section 105(f)(1)(A)(iii) of the Compact of Free Association Amendments Act of 2003 (P.L. 108-188), the Department of State has completed negotiations and signed subsidiary agreements to the amended Compacts of Free Association with the Republic of the Marshall Islands (RMI) and the Federated States of Micronesia (FSM) with regard to future United States provision of disaster assistance.

Specifically, we have reached agreement with the RMI and FSM on amendments to the Federal Programs and Services Agreements necessary to address the continued extension of disaster assistance and response services by the U.S. Agency for International Development (USAID), Office of Foreign Disaster Assistance (OFDA), and continued support from the Department of Homeland Security's Federal Emergency Management Agency (FEMA). Accordingly, I am pleased to transmit to the Congress for consideration and enactment under section 105(f)(1)(A)(iii) of P.L. 108-188, the enclosed draft legislation to grant the consent of Congress to:

(1) the Agreement to Amend Article X of the Federal Programs and Services Agreement Between the Government of the United States and the Government of the Republic of the Marshall Islands Concluded Pursuant to Article III of Title One, Article II of Title Two, (including Section 222), and Section 231 of the Compact of Free Association, as Amended; and

(2) the Agreement to Amend Article X of the Federal Programs and Services Agreement Between the Government of the United States and the Government of the Federated States of Micronesia Concluded Pursuant to Article III of Title One, Article II of Title Two, (including Section 222), and Section 231 of the Compact of Free Association, as Amended.

The text of the signed Agreements is also enclosed,

The Department of State appreciates Congress' expeditious passage of the Compact of Free Association Amendments Act of 2003. The amended Compacts have entered into force with both nations, and the Department is working with the Department of the Interior, other executive branch agencies, and the respective governments to ensure their successful implementation.

The Office of Management and Budget advises that there is no objection to the submission of this legislation from the standpoint of the Administration's program.

Sincerely,

Paul V. Kelly,

Assistant Secretary, Legislative Affairs.

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Bill Changes to Existing Law (Compact of Free Association 2003)