TO APPROVE THE AGREEMENT PROVIDING TERMS

FOR A CONTINUATION OF THE FREE

ASSOCIATION BETWEEN THE UNITED STATES AND
PALAU, AND FOR OTHER PURPOSES

MARKUP
BEFORE THE

SUBCOMMITTEE ON ASIA AND THE PACIFIC

OF THE

COMMITTEE ON FOREIGN AFFAIRS

HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
ON

H.R. 6040
JULY 18, 2012

Serial No. 112154

Printed for the use of the Committee on Foreign Affairs

(
Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or
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WASHINGTON

75160PDF

2012

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COMMITTEE ON FOREIGN AFFAIRS

ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey
HOWARD L. BERMAN, California
DAN BURTON, Indiana
GARY L. ACKERMAN, New York
ELTON GALLEGLY, California
ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California
Samoa
DONALD A. MANZULLO, Illinois
BRAD SHERMAN, California
EDWARD R. ROYCE, California
ELIOT L. ENGEL, New York
STEVE CHABOT, Ohio
GREGORY W. MEEKS, New York
RON PAUL, Texas
RUSS CARNAHAN, Missouri
MIKE PENCE, Indiana
ALBIO SIRES, New Jersey
JOE WILSON, South Carolina
GERALD E. CONNOLLY, Virginia
CONNIE MACK, Florida
THEODORE E. DEUTCH, Florida
JEFF FORTENBERRY, Nebraska
DENNIS CARDOZA, California
MICHAEL T. MCCAUL, Texas
BEN CHANDLER, Kentucky
TED POE, Texas
BRIAN HIGGINS, New York
GUS M. BILIRAKIS, Florida
ALLYSON SCHWARTZ, Pennsylvania
JEAN SCHMIDT, Ohio
CHRISTOPHER S. MURPHY, Connecticut
BILL JOHNSON, Ohio
FREDERICA WILSON, Florida
DAVID RIVERA, Florida
KAREN BASS, California
MIKE KELLY, Pennsylvania
WILLIAM KEATING, Massachusetts
TIM GRIFFIN, Arkansas
DAVID CICILLINE, Rhode Island
TOM MARINO, Pennsylvania
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
ROBERT TURNER, New York
YLEEM D.S. POBLETE, Staff Director
RICHARD J. KESSLER, Democratic Staff Director

SUBCOMMITTEE

ON

ASIA

AND THE

PACIFIC

DONALD A. MANZULLO, Illinois, Chairman

RON PAUL, Texas
ENI F.H. FALEOMAVAEGA, American
BILL JOHNSON, Ohio
Samoa
DAN BURTON, Indiana
FREDERICA WILSON, Florida
EDWARD R. ROYCE, California
GARY L. ACKERMAN, New York
STEVE CHABOT, Ohio
BRAD SHERMAN, California
MIKE KELLY, Pennsylvania
DENNIS CARDOZA, California
JEFF DUNCAN, South Carolina
BEN CHANDLER, Kentucky

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CONTENTS
Page

MARKUP OF
H.R. 6040, To approve the Agreement providing terms for a continuation
of the free association between the United States and Palau, and for other
purposes ................................................................................................................
Amendment in the nature of a substitute to H.R. 6040 offered by the
Honorable Donald A. Manzullo, a Representative in Congress from the
State of Illinois, and chairman, Subcommittee on Asia and the Pacific ......

2
13

APPENDIX
Markup notice ..........................................................................................................
Markup minutes ......................................................................................................
The Honorable Eni F.H. Faleomavaega, a Representative in Congress from
American Samoa: Prepared statement ...............................................................

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TO APPROVE THE AGREEMENT PROVIDING

TERMS FOR A CONTINUATION OF THE
FREE ASSOCIATION BETWEEN THE UNITED
STATES AND PALAU, AND FOR OTHER PURPOSES
WEDNESDAY, JULY 18, 2012

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON ASIA AND THE PACIFIC,
COMMITTEE ON FOREIGN AFFAIRS,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 p.m., in room
2172, Rayburn House Office Building, Hon. Donald A. Manzullo
(chairman of the subcommittee) presiding.
Mr. MANZULLO. The subcommittee will come to order. Pursuant
to notice, and for purposes of a markup, I call up H.R. 6040, the
Continued Free Association with Palau Act of 2012.
The clerk will designate the bill.
Ms. SANTANA. H.R. 6040, to approve the agreement providing
terms for continuation of the free association between the United
States and Palau, and for other purposes. Be it enacted
Mr. MANZULLO. Without objection, the measure is considered
read and open for amendment.
[H.R. 6040 follows:]

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12
Mr. MANZULLO. I have a bipartisan amendment in the nature of
a substitute that makes a few changes to the underlying legislation. The amendment, which was sent to the members offices yesterday, was carefully considered and improves the underlying legislation by fully offsetting the costs.
The clerk will report the amendment.
Ms. SANTANA. Amendment in the nature of a substitute to H.R.
6040 offered by Mr. Manzullo of Illinois. Strike all after the enacting clause
Mr. MANZULLO. Without objection, the amendment in the nature
of a substitute is considered read.
[The amendment in the nature of a substitute offered by Mr.
Manzullo follows:]

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Mr. MANZULLO. The amendment in the nature of a substitute replaces section 3 of the underlying legislation with a mandatory
spending offset that fully covers the $183 million cost of the bill.
This provision titled Denial and Revocation of Passports amends
the Passport Act of 1926 to provide the Secretary of State the authority to deny or revoke the passports of anyone who owes $50,000
or more in Federal back taxes and is seriously delinquent in payment.
There is legal precedence for the State Department to withhold
the issuance of passports for a number of reasons, including parents owing more than $2,500 in back childcare payments. The Supreme Court specifically held that that law is constitutional. The
offset in the amendment is modeled after this highly successful
program and has several built-in safety nets to ensure that only
those who are seriously delinquent are affected.
The Government Accountability Office released a report last year
that studied the feasibility of using passport issuance as a tool for
collecting billions of dollars in unpaid taxes. According to GAO,
over 1 percent of total passport issuances in Fiscal Year 2008 were
to people who owed over $5.8 billion in unpaid Federal taxes. The
Joint Committee on Taxation estimates that the U.S. Government
stands to generate over $400 million over 10 years if even a small
fraction of the back taxes were collected as a result of this provision. In fact, a similar provision passed the Senate as part of the
Senates transportation bill, S. 1813, with a bipartisan margin of
74 to 22.
I urge my colleagues to support the amendment in the nature of
a substitute and the underlying legislation. The compact renewal
with the Republic of Palau preserves an important relationship
that is vital to our national security. Palau is a strong supporter
of Israel at the U.N., votes consistently to condemn Communist
Cuba, and even supports Taiwan over China. Citizens from Palau
serve in the U.S. Armed Forces and have paid the ultimate sacrifice in defense of this Nation. With Chinas rapid rise in the
South China Sea, is it is critical that we secure Americas vital interests in the Western Pacific.
I now recognize the ranking member, Mr. Faleomavaega.
Mr. FALEOMAVAEGA. Mr. Chairman, thank you for calling this
markup, as it is very important. And I want to ask unanimous consent that the full text of my statement be made part of the record.

23
Mr. MANZULLO. Without objection, the complete statement will
be made a part of the record.
Mr. FALEOMAVAEGA. Thank you.
And I kind of wanted to gloss over it a little bit. I want to say
how deeply I appreciate not only your leadership, but your commitment and being helpful to this piece of legislation, which is very
important not only to the people of Palau, but certainly to the interests of our own Government.
I can give you all the historical overview of this issue and the
problems in terms of our investment in the Pacificespecially the
Micronesia entitiesimmediately following World War II.
I do want to say, Mr. Chairman, that the U.S. interests relating
to Palau are being preserved because of your leadership, Mr. Chairman, finding alternative offsets and those that are in the bill now.
The offset is in the substitute that I joined you in developing.
The law that will come from this legislation and the preservation
of U.S. strategic and economic interests for the next dozen years
will be a major issue to the legacy you have given to our Nation,
and especially to the good people and the leaders of Palau.
And with that, Mr. Chairman, I fully support the substitute that
you have introduced, and I ask my colleagues to support and endorse this.
Mr. MANZULLO. Thank you.
Are there any other members who wish to strike the last word
and speak briefly on the measure?
Hearing no further amendments, the question is on agreeing to
the bipartisan amendment in the nature of a substitute.
All those in favor, signify by saying aye.
All those opposed, no.
In the opinion of the Chair, the ayes have it, and the amendment
in the nature of a substitute is agreed to.
The question now occurs on adopting the legislation as amended.
All those in favor, signify by saying aye.
All those opposed, no.
In the opinion of the Chair, the ayes have it, and the amended
legislation is agreed to.
Without objection, H.R. 6040, as amended, is reported favorably
to the full Committee on Foreign Affairs, and the staff is authorized to make any technical and conforming changes.
That concludes our business. Without objection, the subcommittee stands adjourned.
[Whereupon, at 2:07 p.m., the subcommittee was adjourned.]

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APPENDIX

MATERIAL SUBMITTED

FOR THE

HEARING RECORD

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