Compact of Free Association Act of 1985

(House agreed to Senate amendment with amendment)

Compact of Free Association Act of 1985 - Title I: Approval of Compact; Interpretation of, and U.S. Policies Regarding Compact; Supplemental Provisions - Grants congressional approval of the Compact of Free Association between the United States, the Marshall Islands, and the Federated States of Micronesia.

Sets forth: (1) provisions for implementing such Compact (including provisions for congressional submission, presidential certification, mutual assistance in law enforcement and drug control and review of economic development plans); and (2) U.S. policies regarding such Compact.

Provides for the President to negotiate with the Government of the Marshall Islands an agreement to assure continued use of lands on Ejit by the people of Bikini. Requires the Government of the Marshall Islands to pay Kwajalein landowners for the use of land on Kwajalein Atoll for U.S. military purposes.

Sets forth provisions with respect to: (1) payments to the people of Bikini, Enewetak, Rongelap, and Utirik affected by U.S. nuclear weapons tests; (2) health care; (3) agricultural and food program; (4) establishment of the Enjebi Community Trust Fund; and (5) Rongelap and Bikini Island cleanup.

Sets forth provisions regarding: (1) the continuance of democracy and respect for international human rights by the Marshall Islands and the Federated States of Micronesia; (2) non-alienation of Compact state lands; and (3) nuclear waste disposal.

Requires the President to: (1) report to the Congress with respect to the impact of the Compact on the U.S. territories and Hawaii; and (2) seek the cooperation of the Marshall Islands and the Federated States of Micronesia in the development of international and regional fishery management policy (including jurisdiction over highly migratory species of fish found outside the territorial sea of the Compact states). Prohibits U.S. funds from being used by the Compact states to pay off foreign loans.

Sets forth provisions relating to: (1) Trust Territory authorizations; (2) foreign agent registration; (3) tort claims against Federal employees; (4) education assistance programs; (5) Compact state debts to Federal agencies; (6) technical assistance by the U.S. Forest Service, U.S. Coast Guard, U.S. Fish and Wildlife Service, and other U.S. agencies; (7) Department of Defense medical facilities; (8) United States land use payments; (9) disease control; and (10) user fees.

Provides for preferences to local contractors on construction projects, and for local hiring and training for such projects. Authorizes appropriations.

Establishes two U.S. development Funds to further close economic and commercial relations between the Federated States of Micronesia and the Marshall Islands. Authorizes appropriations.

Title II: Compact of Free Association - Sets forth the Compact of Free Association between the United States, the Marshall Islands, and the Federated States of Micronesia. (Declares that the people of the Marshall Islands and the Federated States of Micronesia are self-governing. States that the United States shall provide grant and program assistance to such territories. Declares that the United States has full authority and responsibility for the security and defense of such territories.)

Declares that the defense sites of the United States established in the Marshall Islands or the Federated States of Micronesia in accordance with the Compact and its related agreements are within the special maritime and territorial jurisdiction of the United States.

Title III: Pacific Policy Reports - Requires the Secretary of the Interior to: (1) submit to the Congress and the President a report on U.S. noncontiguous Pacific areas policy; and (2) convene a conference to obtain the views of the noncontiguous Pacific areas on matters required in such report.

Title IV: Clarification of Certain Trade and Tax Provisions of the Compact - Grants duty-free treatment to articles imported from the Federated States of Micronesia and the Marshall Islands. Excludes watches, clocks, buttons, textile and apparel, footwear, handbags luggage, flat goods, work gloves, and leather apparel from such treatment.

Declares that the exemption from U.S. income tax shall not apply to U.S. citizens who reside in the Marshall Islands and the Federated States of Micronesia. Sets forth provisions relating to tax incentives and exchange of tax information. Requires the Secretary of the Treasury to conduct a study on the effects of the Compact's tax provisions and to report such results to specified congressional committees.

Title V: Compact of Free Association with Palau - Expresses Congress' approval of the Compact of Free Association between the United States and Palau. Provides that such Compact shall take effect upon: (1) certification by the President to the Congress no later than March 31, 1986, that the United States will be able to carry out its defense responsibilities under the Compact; and (2) enactment by the Congress of the Compact.