S. 343
A bill to amend Title I of PL 99-658 regarding the Compact of Free Association between the Government of the United States of America and the Government of Palau, to approve the results of the 15-year review of the Compact, including the Agreement Between the Government of the United States of America and the Government of the Republic of Palau Following the Compact of Free Association Section 432 Review, and to appropriate funds for the purposes of the amended PL 99-658 for fiscal years ending on or before September 30, 2024, to carry out the agreements resulting from that review.
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Committee on Energy and Natural Resources. Hearings held. Hearings printed: S.Hrg. 112-121.
June 16, 2011
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Introduced in Senate
February 14, 2011
Sponsor introductory remarks on measure. (CR S690-691, S695)
February 14, 2011
Read twice and referred to the Committee on Energy and Natural Resources. (text of measure as introduced: CR S691-695)
February 14, 2011
Committee on Energy and Natural Resources. Hearings held. Hearings printed: S.Hrg. 112-121.
June 16, 2011
Floor Debate
9 membersWhat members said about S. 343 on the floor




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Floor Debate
9 membersWhat members said about S. 343 on the floor
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Bill Text
Latest available legislative text
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 343 Introduced in Senate (IS)]
112th CONGRESS
1st Session
S. 343
To amend Title I of Public Law 99-658 regarding the Compact of Free
Association between the Government of the United States of America and
the Government of Palau, to approve the results of the 15-year review
of the Compact, including the Agreement Between the Government of the
United States of America and the Government of the Republic of Palau
Following the Compact of Free Association Section 432 Review, and to
appropriate funds for the purposes of the amended Public Law 99-658 for
fiscal years ending on or before September 30, 2024, to carry out the
agreements resulting from that review.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 14, 2011
Mr. Bingaman (for himself and Ms. Murkowski) introduced the following
bill; which was read twice and referred to the Committee on
Energy and Natural ResourcesYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY
_______________________________________________________________________
A BILL
To amend Title I of Public Law 99-658 regarding the Compact of Free
Association between the Government of the United States of America and
the Government of Palau, to approve the results of the 15-year review
of the Compact, including the Agreement Between the Government of the
United States of America and the Government of the Republic of Palau
Following the Compact of Free Association Section 432 Review, and to
appropriate funds for the purposes of the amended Public Law 99-658 for
fiscal years ending on or before September 30, 2024, to carry out the
agreements resulting from that review.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. IMPLEMENTATION OF AGREEMENT BETWEEN THE UNITED STATES AND
THE REPUBLIC OF PALAU.
Title I of Public Law 99-658 is hereby amended by inserting a new
section 105 as follows:
``SEC. 105. RESULTS OF COMPACT REVIEW.
``(a) The Agreement between the Government of the United States of
America and the Government of the Republic of Palau Following the
Compact of Free Association Section 432 Review set forth in subsection
(b) of this section, is hereby approved.
``(b)
AGREEMENT BETWEEN THE
GOVERNMENT OF THE
UNITED STATES OF AMERICA
AND THE
GOVERNMENT OF THE REPUBLIC OF PALAU
FOLLOWING THE COMPACT OF FREE ASSOCIATION
SECTION 432 REVIEW
``In recognition of the ties that were developed between the United
States of America and Palau during World War Two, and the subsequent
half century of United States administration of Palau and the
continuing close relationship between the Governments of the United
States and Palau under the Compact of Free Association (`Compact'),
following the fifteenth anniversary review of the relationship
conducted pursuant to Section 432 of the Compact (which provides: `Upon
the fifteenth and thirtieth and fortieth anniversaries of the effective
date of this Compact, the Government of the United States and the
Government of Palau shall formally review the terms of this Compact and
its related agreements and shall consider the overall nature and
development of their relationship. In these formal reviews, the
governments shall consider the operating requirements of the Government
of Palau and its progress in meeting the development objectives set
forth in the plan referred to in Section 231(a). The governments commit
themselves to take specific measures in relation to the findings of
conclusions resulting from the review. Any alteration to the terms of
this Compact or its related agreements shall be made by mutual
agreement, the terms of this Compact and its related agreements shall
remain in force until otherwise amended or terminated pursuant to Title
Four of this Compact'), and in light of the desire of the United States
of America and the Republic of Palau to deepen their relationship, now,
therefore, the Government of the United States of America and the
Government of the Republic of Palau agree as follows:
``1. Compact Section 211(f) Fund
``The Government of the United States of America (the `Government of
the United States') shall contribute $30.25 million to the Fund
referred to in Section 211(f) of the Compact in accordance with the
following schedule: $3 million annually for ten years beginning with
Fiscal Year 2013 through Fiscal Year 2022, and $250,000 in Fiscal Year
2023.
``2. Infrastructure Maintenance Fund
``(a) The Government of the United States shall provide a grant of $2
million annually from the beginning of Fiscal Year 2011 through Fiscal
Year 2024 to create a trust fund (the `Infrastructure Maintenance
Fund') to be used for the routine and periodic maintenance of major
capital improvement projects financed by funds provided by the United
States. The Government of the Republic of Palau (the `Government of
Palau') will match the contributions made by the United States by
making contributions of $150,000 to the Infrastructure Maintenance Fund
on a quarterly basis from the beginning of Fiscal Year 2011 through
Fiscal Year 2024. Implementation of this subsection shall be carried
out in accordance with the provisions of Appendix A to this Agreement.
``(b) The $3 million owed to the Government of the United States under
paragraph 3(d) of Article V of the Agreement Concerning Special
Programs Related to the Entry Into Force of the Compact of Free
Association Between the Government of the United States and the
Government of the Republic of Palau (the Guam Accords) done at Guam,
May 26, 1989, plus accumulated interest, shall be paid into the
Infrastructure Maintenance Fund. The $3 million shall remain in the
Infrastructure Maintenance Fund and not be expended for any purpose.
All past and future income generated by the $3 million shall be used
exclusively for the routine maintenance of the Compact Road provided by
the United States under Section 212 of the Compact.
``3. Fiscal Consolidation Fund
``The Government of the United States shall provide the Government of
Palau $5 million in Fiscal Year 2011 and $5 million in Fiscal Year 2012
for deposit in an interest bearing account to be used to reduce
government payment arrears of Palau. Implementation of this section
shall be carried out in accordance with the provisions of Appendix B to
this Agreement.
``4. Direct Economic Assistance
``(a) In addition to the $13.25 million in economic assistance provided
to the Government of Palau by the Government of the United States in
Fiscal Year 2010, and unless otherwise specified in this Agreement or
in an Appendix to this Agreement, the Government of the United States
shall provide the Government of Palau $107.5 million in economic
assistance as follows: $13 million in Fiscal Year 2011; $12.75 million
in Fiscal Year 2012; $12.5 million in Fiscal Year 2013; $12 million in
Fiscal Year 2014; $11.5 million in Fiscal Year 2015; $10 million in
Fiscal Year 2016; $8.5 million in Fiscal Year 2017; $7.25 million in
Fiscal Year 2018; $6 million in Fiscal Year 2019; $5 million in Fiscal
Year 2020; $4 million in Fiscal Year 2021; $3 million in Fiscal Year
2022; and $2 million in Fiscal Year 2023. The funds provided in any
fiscal year under this subsection shall be provided in four (4)
quarterly payments (30 percent in the first quarter, 30 percent in the
second quarter, 20 percent in the third quarter, and 20 percent in the
fourth quarter) unless otherwise specified in this Agreement or in an
Appendix to this Agreement.
``(b) Notwithstanding the provisions of Compact section 211(f) and the
Agreement Between the Government of the United States and the
Government of Palau Regarding Economic Assistance Concluded Pursuant to
Section 211(f) of the Compact of Free Association, with respect to
Fiscal Years 2011 through Fiscal Year 2023 and except as otherwise
agreed by the Government of the United States and the Government of
Palau, the Government of Palau agrees not to exceed the following
distributions from the Section 211(f) Fund: $5 million annually
beginning in Fiscal Year 2011 through Fiscal Year 2013; $5.25 million
in Fiscal Year 2014; $5.5 million in Fiscal Year 2015; $6.75 million in
Fiscal Year 2016; $8 million in Fiscal Year 2017; $9 million in Fiscal
Year 2018; $10 million in Fiscal Year 2019; $10.5 million in Fiscal
Year 2020; $11 million in Fiscal Year 2021; $12 million in Fiscal Year
2022; and $13 million in Fiscal Year 2023.
``(c) No portion of the funds provided to the Government of Palau under
this section, including the funds distributed from the Section 211(f)
Fund, shall be used, directly or indirectly, to fund state block
grants, or the activities of the Office of the President of Palau, of
the Olbiil Era Kelulau (the Palau National Congress), or of the Palau
Judiciary. Annually, $15 million of the funds provided to the
Government of Palau under this section, including the funds distributed
from the Section 211(f) Fund, shall be used exclusively for purposes
related to education, health, and the administration of justice and
public safety, recognizing that these funds are subject to the
provisions of subsection 4(h) herein.
``(d) In order to increase the long-term economic stability of Palau
and to maximize the benefits of the economic assistance provided by the
Government of the United States, the Government of Palau shall
undertake economic, legislative, financial, and management reforms, and
shall give due consideration to reforms such as those described in the
International Monetary Fund's (IMF) Country Report No. 08/162, Republic
of Palau: Selected Issues and Statistical Appendix, (May 2008), and the
Asian Development Bank's (ADB) Strategy and Program Assessment, Palau:
Policies for Sustainable Growth, A Private Sector Assessment (July
2007) and any other similar subsequent and future reports and
recommendations issued by the IMF, the ADB, and other credible
institutions, organizations or professional firms. To the extent that
anticipated fiscal and economic reforms require substantial financial
resources to design, implement, or mitigate negative impacts, the
Government of Palau may propose and the two governments may agree to
the use of additional funds from the Section 211(f) Fund, provided that
the two governments agree in writing that the additional withdrawals
from the Section 211(f) Fund will not impair the ability of the fund to
provide $15 million annually from Fiscal Year 2024 through Fiscal Year
2044, and that the proposed reforms are a necessary and prudent use of
the funds. Government to government communications shall be through
diplomatic channels.
``(e) The Government of the United States and the Government of Palau
shall establish, effective on the day this Agreement enters into force,
an Advisory Group on Economic Reform (the `Advisory Group'). The
purpose of the Advisory Group is to contribute to the long-term
economic sustainability of Palau by recommending economic, financial,
and management reforms. The Advisory Group shall be composed of five
(5) members, two (2) of whom shall be designated by the President of
Palau and two (2) of whom shall be designated by the Government of the
United States, the fifth of whom shall be chosen by the Government of
the United States from a list of not fewer than three (3) persons not
residents of Palau submitted by the President of Palau. In the event
the Government of the United States rejects the persons enumerated in
the list submitted by the President of Palau, then the fifth member
shall be chosen by the President of Palau from a list of not fewer than
three (3) persons submitted by the Government of the United States. In
making their designations, the President and the Government of the
United States shall give consideration to the mix of expertise that
would be most beneficial to the work of the Advisory Group. The
Advisory Group will be chaired by a member chosen by the members from
among their number. Its meetings will be held once a year in Palau and
once a year in Hawaii, unless otherwise agreed by the members. Each
government shall provide the necessary support for its designated
representatives on the Advisory Group. Support for the fifth member
shall be borne by the government that recommended the member. Unless
otherwise agreed by the two governments the Advisory Group shall
terminate at the end of Fiscal Year 2023.
``(f) The Advisory Group shall recommend economic, financial and
management reforms and the schedule on which the reforms should be
implemented. The Advisory Group shall report annually not less than
thirty (30) days prior to the annual bilateral economic consultations
to be held on or about June 1 every year on the Government of Palau's
progress in implementing reforms recommended by the Advisory Group or
other reforms taken by the Government of Palau. The two governments are
committed to these annual economic consultations being meaningful,
substantive, and comprehensive.
``(g) The Government of Palau's progress in achieving reforms shall be
reviewed at the annual bilateral economic consultations. Examples of
significant progress in a fiscal year would be, but are not limited to:
meaningful improvements in fiscal management, including the elimination
and prevention of operating deficits; a meaningful reduction in the
national operating budget from the previous fiscal year; a meaningful
reduction in the number of government employees from the level the
previous fiscal year; a meaningful reduction in the annual amount of
the national operating budget dedicated to government salaries from the
previous fiscal year; demonstrable reduction of government
subsidization of utilities, and meaningful tax reform.
``(h) If the Government of the United States determines after the
annual bilateral economic consultations that the Government of Palau
has not made significant progress in implementing meaningful reforms,
then, after direct consultation with the President of Palau, the
Government of the United States may, after ninety (90) days notice to
the Government of Palau, delay payment of economic assistance under
this section. The Government of the United States shall determine the
amount of the economic assistance to be delayed. Any assistance delayed
shall be held and released when the Government of the United States
determines that Palau has made sufficient progress on the reforms.
``5. Infrastructure Projects
``The Government of the United States shall provide grants totaling $40
million to the Government of Palau as follows: $8 million annually in
Fiscal Years 2011 through Fiscal Year 2013; $6 million in Fiscal Year
2014; and $5 million annually in Fiscal Years 2015 and 2016; towards
one or more mutually agreed infrastructure projects in accordance with
the provisions of Appendix C to this Agreement.
``6. Reporting and Auditing
``Palau shall resolve all deficiencies in the Annual Single Audit such
that by 2018 no deficiency or recommendation dates from before Fiscal
Year 2016. By the first day of the fourth quarter of each fiscal year
or as soon as practicable thereafter, in the annual report it submits
under Section 231(b) of the Compact, the Government of Palau shall
report on the status and use of all funds provided under this
Agreement. The status and use of all funds provided under this
Agreement shall also be discussed in the annual bilateral economic
consultations. The financial information relating to this funding shall
conform to the standards of the Government Accounting Standards Board.
All funds provided under this Agreement shall be subject to a financial
and compliance audit and other requirements in accordance with the
provisions of Appendix D to this Agreement.
``7. Federal Programs and Services
``The Government of the United States shall make available to Palau
through Fiscal Year 2024, in accordance with and to the extent provided
through amendments to the Federal Programs and Services Agreement
Concluded Pursuant to Article II of Title Two and Section 232 of the
Compact of Free Association, signed at Palau on January 10, 1986, the
services and related programs covered in that agreement as amended
herein. The amendments to that agreement constitute Appendix E to this
Agreement.
``8. Telecommunication Services
``The Agreement Regarding the Provision of Telecommunication Services
by the Government of the United States to Palau Concluded Pursuant to
Section 131 of the Compact of Free Association, signed at Koror,
Republic of Palau, January 10, 1986 and the Agreement Regarding the
Operation of Telecommunication Services of the Government of the United
States in Palau Concluded Pursuant to Section 132 of the Compact of
Free Association, signed at Koror, Republic of Palau, January 10, 1986
are amended and these amended agreements constitute Appendix F to this
Agreement.
``9. Passport Requirement
``Section 141 of Article IV of Title One of the Compact shall be
construed and applied as if it read as follows:
`Section 141
`(a) Any person in the following categories may be admitted
to, lawfully engage in occupations, and establish residence as
a nonimmigrant in the United States and its territories and
possessions without regard to paragraphs (5) or (7)(B)(i)(II)
of section 212(a) of the Immigration and Nationality Act, 8
U.S.C. Sec. 1182(a)(5) or (a)(7)(B)(i)(II), provided that the
passport presented to satisfy section 212(a)(7)(B)(i)(I) of
such Act is a valid unexpired machine-readable passport that
satisfies the internationally accepted standard for machine
readability:
`(1) a person who, on September 30, 1994, was a
citizen of the Trust Territory of the Pacific Islands,
as defined in Title 53 of the Trust Territory Code in
force on January 1, 1979, and has become and remains a
citizen of Palau;
`(2) a person who acquires the citizenship of
Palau, at birth, on or after the effective date of the
Constitution of Palau; or
`(3) a naturalized citizen of Palau, who has been
an actual resident of Palau for not less than five
years after attaining such naturalization and who holds
a certificate of actual residence.
`Such persons shall be considered to have the permission of the
Secretary of Homeland Security of the United States to accept
employment in the United States.
`(b) The right of such persons to establish habitual
residence in a territory or possession of the United States
may, however, be subjected to non-discriminatory limitations
provided for:
`(1) in statutes or regulations of the United
States; or
`(2) in those statutes or regulations of the
territory or possession concerned which are authorized
by the laws of the United States.
`(c) Section 141(a) does not confer on a citizen of Palau
the right to establish the residence necessary for
naturalization under the Immigration and Nationality Act, or to
petition for benefits for alien relatives under that Act.
Section 141(a), however, shall not prevent a citizen of Palau
from otherwise acquiring such rights or lawful permanent
resident alien status in the United States.'.
``10. Effective Date, Amendment, and Duration
``(a) This Agreement, including its Appendices, shall enter into force
on the date of the last note of an exchange of diplomatic notes by
which the Government of the United States and the Government of Palau
inform each other that all internal procedures necessary for its entry
into force have been fulfilled.
``(b) This Agreement may be amended at any time by the mutual written
consent of the Government of the United States and the Government of
Palau.
``(c) This Agreement shall remain in full force and effect until
terminated by mutual written consent, or until termination of the
Compact, whichever occurs first.
``IN WITNESS WHEREOF, the undersigned, duly authorized by their
respective Governments, have signed this Agreement.
``DONE AT Honolulu, Hawaii, USA, in duplicate, this 3rd day of
September 2010, in the English language.
``FOR THE GOVERNMENT FOR THE GOVERNMENT
OF THE UNITED STATES OF OF THE REPUBLIC OF PALAU:
AMERICA: .......................................................
.......................................................
.......................................................
Frankie A. Reed Johnson Toribiong
[Title] [Title]
``APPENDIX A--INFRASTRUCTURE MAINTENANCE FUND
``1. Subject to the terms of this Appendix, the Government of the
United States shall provide the grants specified in section 2(a) of the
Agreement between the United States of America and the Government of
the Republic of Palau following the Compact of Free Association Section
432 Review (the `Agreement') to which this document is an appendix.
``2. If, in a given Fiscal Year, the Government of Palau does not
make the contributions agreed to in section 2(a) of the Agreement,
economic assistance funds to be provided to Palau in the following
fiscal year under section 4 of the Agreement will be redirected to the
Infrastructure Maintenance Fund to make up the contributions owed by
the Government of Palau.
``3. Grant funds from the Government of the United States and
Government of Palau contributions to the Infrastructure Maintenance
Fund shall be deposited in an account established by the Government of
Palau. Fiscal control and accounting procedures shall be sufficient to
permit the preparation of required reports and to permit the tracing of
funds to a level of expenditure adequate to establish that such funds
have been used in compliance with this Appendix.
``4. Palau shall report, at the annual bilateral economic
consultations, the sources of its contributions to the Infrastructure
Maintenance Fund.
``5. The Infrastructure Maintenance Fund, and any interest accruing
thereon, is to be used by the Government of Palau for the maintenance
of United States financed capital improvement projects such as the road
system (Compact Road) provided by the United States under Section 212
of the Compact and the capital improvements provided by the United
States to the Airai International Airport. The Government of Palau may
request in writing the use of the Infrastructure Maintenance Fund for
maintenance of U.S. financed capital improvement projects other than
these two, such as the U.S.-financed capital improvements reflected in
the Palau national hospital and schools. The Government of the United
States shall give due consideration to any such request and shall
endeavor to make a determination within sixty (60) days of receipt of
the request. Although the primary purpose of the Infrastructure
Maintenance Fund is to provide for routine and periodic maintenance, it
may be used, when mutually agreed upon in writing, to mitigate damage
and make emergency repairs to capital improvement projects funded by
the United States.
``6. The Government of Palau shall identify to the Government of
the United States the Government of Palau official and office
responsible for maintenance of the infrastructure with Fund monies. The
official shall be responsible for activities necessary to plan and
implement annual programs of maintenance of the Compact Road and the
International Airport at Airai, and all other public infrastructure.
The official shall be responsible for keeping each facility as nearly
as possible in its original condition as constructed. The official
shall develop an annual maintenance plan and related budget for
reactive, preventive, repetitive, non-recurrent, and emergency-
generated maintenance of the infrastructure specified in paragraph 5
and for all other public infrastructure. The plan will include
descriptions and schedules of planned activities and shall identify the
related costs. The plan for the infrastructure specified in paragraph 5
shall be submitted to the Government of the United States for its
approval no less than sixty (60) days prior to the beginning of each
fiscal year.
``7. The Government of the United States will base its approval or
disapproval of the plan for the infrastructure specified in paragraph 5
on its consideration of the effectiveness of the plan within the bounds
of annual resources. Approval by the Government of the United States
will be in the form of an annual grant which incorporates the approved
maintenance plan and budget. Acceptance of the grant by the Government
of the Republic of Palau will obligate the Government of Palau to the
implementation of the annual maintenance plan and budget for the
infrastructure specified in paragraph 5.
``8. The grant, annual maintenance plan, and budget for the
infrastructure specified in paragraph 5 may be amended by written
mutual agreement.
``9. Use of the Fund monies shall be subject to 43 Code of Federal
Regulations 12 and all other applicable laws and regulations governing
the use of grant funds provided by the Government of the United States.
These funds may not be used for any purpose other than that for which
they are offered.
``10. Any grant funds remaining unexpended at the end of a fiscal
year shall remain in the Infrastructure Maintenance Fund and may be
included in subsequent annual maintenance plans and budgets.
``11. Reporting Requirements:
``(a) A Standard Form SF 425 (or successor form) and a
narrative project status report shall be submitted quarterly.
``(b) Reports are due within thirty (30) days of the end of
each quarter. Final reports are due ninety (90) days after the
expiration or termination of the award.
``(c) All required plans and reports must be submitted to
the U.S. Department of the Interior Office of Insular Affairs
grant manager for the grant.
``APPENDIX B--FISCAL CONSOLIDATION FUND
``1. Subject to the terms of this Appendix, the Government of the
United States shall provide the Government of Palau the amounts
specified in section 3 of the Agreement of the United States of America
and the Government of the Republic of Palau following the Compact of
Free Association Section 432 Review (the `Agreement') to which this
document is an appendix. Until disbursed, these funds will be deposited
in an interest bearing account and the interest generated shall also be
used to reduce Palau's government payment arrears in accordance with
the provisions of this Appendix.
``2. The purpose of these funds is to allow the Government of Palau
to discharge the level of debts accumulated prior to September 30,
2009. None of the principal or interest accrued on these funds may be
disbursed to discharge a debt until the governments agree upon a
specific list of debts to be paid with each annual contribution. The
funds may not be used to pay off debt owed to another government, to
pay an international organization, or to pay off debts which are the
subject of current or pending litigation. Unless agreed to in writing
by the Government of the United States, the funds may not be used to
pay any entity owned or controlled by any member of the government,
elected or appointed; to pay any entity owned or controlled by any
member of the immediate family of any member of the government; to pay
any entity from which a member of the government derives income; or to
pay any creditor if the creditor owes money to the Government of Palau
unless arrangements are made immediately to offset amounts owed to the
Government of Palau from the funds made available to the creditor.
Debts owed to U.S. creditors must receive priority. All debts to be
paid with these funds must be properly documented as legitimate debts
of the Republic of Palau using generally accepted accounting
principles. The total amount of the debt to be paid shall not exceed
the general fund deficit established by the Single Audit Report as of
September 30, 2009.
``3. The Government of Palau shall report quarterly to the
Government of the United States on the use of these funds until they
are expended and, until expended, the status and use of these funds
shall be a regular agenda item for annual bilateral economic
consultations to be held around June 1 of every year. If eligible debts
do not amount to $10 million, upon the request of the Government of
Palau, the funds remaining after payment of the eligible debts shall be
added to the amounts provided for infrastructure projects in section 5
of the Agreement.
``APPENDIX C--INFRASTRUCTURE PROJECTS
``1. Subject to the terms of this Appendix, the Government of the
United States shall provide grants towards one or more mutually agreed
infrastructure projects as specified in section 5 of the Agreement of
the United States of America and the Government of the Republic of
Palau following the Compact of Free Association Section 432 Review (the
`Agreement') to which this document is an appendix. These
infrastructure grants shall be subject to 43 Code of Federal
Regulations 12 and all other applicable laws and regulations governing
the use of grant funds provided by the Government of the United States.
Grant funds may not be used for any purpose other than that for which
they are offered.
``2. Payment of grant funds shall be made as reimbursement of
actual or accrued expenditures, using a format provided by the
Government of the United States or as mutually agreed.
``3. Prior to requesting reimbursement or payment, the Government
of Palau shall, as applicable, provide the following documentation to
the Government of the United States:
``(a) Evidence of title, leasehold agreement, or other
legal authority for use of the land upon which the capital
improvement project(s) is (are) to be constructed.
``(b) A detailed project budget for each infrastructure
project. The budget shall include a breakdown of costs (in-
house and contract) for planning, engineering and design, real
estate, supervision and administration, construction, and
construction management and inspection. The Government of Palau
and the Government of the United States shall mutually agree to
the format of this submission.
``(c) A scope of work that describes the work to be
performed and the schedule from planning through completion of
construction. A certified professional engineer or architect
shall sign both the scope of work and budget for each
construction project.
``4. Prior to disbursing funds requested to reimburse for actual
project construction, the Government of the United States may review
construction plans and specifications, any revised detailed cost
estimate, and a detailed construction schedule.
``5. All grant monies shall remain available until expended, unless
otherwise provided in this Appendix.
``6. Failure to comply with objectives, terms and conditions, or
reporting requirements may result in the suspension of grant payments
until the deficiency is corrected.
``7. Reporting Requirements:
``(a) A Standard Form SF 425 (or successor form) and a
narrative project status report shall be submitted quarterly.
``(b) Reports are due within thirty (30) days of the end of
each quarter. Final reports are due ninety (90) days after the
expiration or termination of the award.
``(c) All required documents and reports must be submitted
to the U.S. Department of the Interior Office of Insular
Affairs grant manager for the grant.
``APPENDIX D--AUDIT STANDARDS AND RESPONSIBILITIES
``1. The Government of Palau shall perform a financial and
compliance audit, within the meaning of the Single Audit Act, as
amended (31 U.S.C. 7501 et seq.), of the uses of the funding provided
pursuant to the Agreement Between the Government of the United States
of America and the Government of the Republic of Palau following the
Compact of Free Association Section 432 Review (the `Agreement') for
each fiscal year during which the Agreement is in effect. The results
of these Audits shall be available not later than the beginning of the
fourth fiscal quarter following the end of the fiscal year under
review, as required by the Single Audit Act. The costs of these audits
are to be borne by the Government of Palau, and may be a recognized
expense to funds provided under section 4 of the Agreement. If the
Government of the Republic of Palau does not endeavor to perform a
Single Audit in any given fiscal year, economic assistance funds to be
provided to Palau in the following fiscal year under section 4 of the
Agreement shall be redirected to pay for the required Single Audit.
``2. In conducting the audits required under this Appendix, the
auditors shall take into account relevant laws and regulations of the
United States and Palau, including U.S. laws and regulations on the
conduct of audits, and Palauan laws and regulations which relate in a
material, substantial or direct way to financial statements and
operations of the Government of Palau.
``3. The authority of the Government of the United States set forth
this Appendix shall continue for at least three (3) years after the
last Grant or element of assistance by the Government of the United
States under this Agreement has been provided and expended.
``4. Audit officials or agents of the Government of the United
States may perform audits on the use of all funding provided pursuant
to this Agreement, including grants and other assistance provided to
the Government of Palau. The Government of the United States is
responsible for all costs attendant to the discharge of this authority.
``5. Audit officials from the Government of the United States are
the officials and employees of the Government of the United States who
are responsible for the discharge of its audit responsibilities,
including those of the Comptroller General of the United States and any
Inspector General of an agency of the Government of the United States
with programs operating in or otherwise serving the Republic of Palau.
While present in the Republic of Palau for the purposes of this
Appendix, audit officials from the Government of the United States
shall be immune from civil and criminal process relating to words
spoken or written and all acts performed by them in their official
capacity and falling within their functions, except insofar as such
immunity may be expressly waived by the Government of the United
States. The Comptroller General and his duly authorized
representatives, and other audit officials from the Government of the
United States, shall not be liable to arrest or detention pending
trial, except in the case of a grave crime and pursuant to a decision
by a competent judicial authority, and such persons shall enjoy
immunity from seizure of personal property, immigration restrictions,
and laws relating to alien registration, fingerprinting, and the
registration of foreign agents. Such persons shall enjoy the same
taxation exemptions as are set forth in Article 34 of the Vienna
Convention on Diplomatic Relations. The privileges, exemptions and
immunities accorded under this paragraph are not for the personal
benefit of the individuals concerned but are to safeguard the
independent exercise of their official functions. Without prejudice to
those privileges, exemptions and immunities, it is the duty of all such
persons to respect the laws and regulations of the Government of the
Republic of Palau.
``6. Audit officials from the Government of the United States shall
provide the Government of Palau with advance notice of the specific
dates and nature of their visits prior to entering the Republic of
Palau and shall show verifiable identification to officials of the
Government of Palau when seeking access to records. In the performance
of their responsibilities under this Agreement, audit officials from
the Government of the United States shall have due regard for the laws
of the Republic of Palau and the duties and responsibilities of the
officials of the Government of Palau. Officials of the Government of
Palau shall cooperate fully to the extent practicable with the United
States audit officials to enable the full discharge of their
responsibilities.
``7. The Comptroller General of the United States, and officials of
the United States Government Accountability Office acting on his or her
behalf, shall have coextensive authority with the executive branch of
the Government of the United States as provided by this Appendix. The
audit officials from the executive branch of the Government of the
United States shall avoid duplication between their audit programs and
those of the United States Government Accountability Office. The
Government of Palau shall cooperate fully to the extent practicable
with the Comptroller General of the United States in the conduct of
such Audits as the Comptroller General of the United States determines
necessary in accordance with this Appendix to enable the full discharge
of his responsibilities.
``8. The Government of Palau shall provide audit officials from the
Government of the United States with access, without cost and during
normal working hours, to all records, documents, working papers,
automated data, and files which are relevant to the uses of funding
received pursuant to the Agreement by the Government of Palau. To the
extent that such information is contained in confidential official
documents, the Government of Palau shall undertake to extract
information that is not of a confidential nature and make it available
to the audit officials from the Government of the United States in the
same manner as other relevant information or to provide such
information from other sources.
``9. In order to reduce the level of interference in the daily
operation of the activities of the Government of Palau, audit officials
from the Government of the United States shall, to the extent
practicable, inform the Government of Palau of their need for
information, including the type of information and its relation to
their annual audit schedule. To the extent practicable, the Government
of Palau shall make available the information requested by audit
officials from the Government of the United States relevant to Audits
and available in a manner consistent with generally accepted accounting
procedures that allows for the distinction of the Grants, assistance,
and payments provided by the Government of the United States from any
other funds of the Government of Palau. Such information shall be used
and returned as quickly as accurate audit testing and surveying allow.
``10. The Government of Palau shall maintain records, documents,
working papers, automated data, files, and other information regarding
each such Grant or other assistance for at least three (3) years after
such Grant or assistance was provided.
``11. Audit organizations and officials from the Government of the
United States, including the Comptroller General of the United States
and his duly authorized representatives, shall provide the Government
of Palau with at least thirty (30) days to review and comment on draft
audit reports prior to the release of the reports. The comments of the
Government of Palau shall be included, in full, in the final audit
reports. Should a draft audit report be revised based on the comments
of the Government of Palau, the Government of Palau shall have an
additional period to review and comment on the report prior to its
release.
``(c) The amendments to the Compact subsidiary agreements
referenced in sections 7 and 8 of the Agreement set forth in section
105(b) above are hereby consented to (except for the extension of
Article X of the Federal Programs and Services Agreement Concluded
Pursuant to Article II of Title Two and Section 232 of the Compact of
Free Association).
``(d) There are authorized and appropriated to the Department of
the Interior, out of any funds in the Treasury not otherwise
appropriated, to remain available until expended, such sums as are
necessary to carry out the purposes of sections 1, 2(a), 3, 4(a), and 5
of the Agreement set forth in section 105(b) above.
``(e) If this section 105 and the Agreement set forth in section
105(b) above become effective during fiscal year 2011, and if between
September 30, 2010, and the date the Agreement set forth in section
105(b) becomes effective, the Government of Palau withdraws more than
$5,000,000 from the trust fund established under section 211(f) of the
U.S.-Palau Compact, amounts payable under sections 1, 2(a), 3, and 4(a)
of the Agreement set forth in section 105(b) above, shall be withheld
from the Government of Palau until Palau has reimbursed the trust fund
for the amount, above $5,000,000, withdrawn.
``(f) There are authorized to be appropriated to the Departments,
agencies, and instrumentalities named in paragraphs 1, 3, and 4 of
section 221(a) of the U.S.-Palau Compact, and their successor
Departments, agencies, and instrumentalities, such sums as are
necessary to carry out the purposes of those paragraphs, to remain
available until expended.
``(g) There are authorized to be appropriated to the Department of
the Interior $1.5 million annually for 14 years--Fiscal Year 2011
through Fiscal Year 2024--to subsidize United States Postal Service
(USPS) postal services provided to Palau, the Republic of the Marshall
Islands, and the Federated States of Micronesia, to remain available
until expended.
``(h) Section 105(f)(1)(B)(ix) of the Compact of Free Association
Amendments Act of 2003 (48 U.S.C. 1921d(f)(1)(B)(ix)) shall be applied
by substituting `2024' for `2009'.''
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