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107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-741

======================================================================







 
     INCREASING THE WAIVER REQUIREMENT FOR CERTAIN LOCAL MATCHING 
 REQUIREMENTS FOR GRANTS PROVIDED TO AMERICAN SAMOA, GUAM, THE VIRGIN 
 ISLANDS, OR THE COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS, AND FOR 
                             OTHER PURPOSES

                                _______
                                

                October 11, 2002.--Ordered to be printed

                                _______
                                

  Mr. Hansen, from the Committee on Resources, submitted the following

                              R E P O R T

                        [To accompany H.R. 2826]

  The Committee on Resources, to whom was referred the bill 
(H.R. 2826) to increase the waiver requirement for certain 
local matching requirements for grants provided to American 
Samoa, Guam, the Virgin Islands, or the Commonwealth of the 
Northern Mariana Islands, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. WAIVER OF LOCAL MATCHING REQUIREMENTS.

  (a) Waiver of Certain Matching Requirements.--Section 501 of the Act 
entitled ``An Act to authorize certain appropriations for the 
territories of the United States, to amend certain Acts relating 
thereto, and for other purposes'', approved October 15, 1977 (48 U.S.C. 
1469a; 91 Stat. 1164) is amended--
          (1) in the last sentence of subsection (d), by striking ``by 
        law''; and
          (2) by adding at the end the following new subsection:
  ``(e) Notwithstanding any other provision of law, in the case of 
American Samoa, Guam, the Virgin Islands, and the Northern Mariana 
Islands, each department or agency of the United States shall waive any 
requirement for local matching funds (including in-kind contributions) 
that the insular area would otherwise be required to provide for any 
grant as follows:
          ``(1) For a grant requiring matching funds (including in-kind 
        contributions) of $500,000 or less, the entire matching 
        requirement shall be waived.
          ``(2) For a grant requiring matching funds (including in-kind 
        contributions) of more than $500,000, $500,000 of the matching 
        requirement shall be waived.''.
  (b) Conforming Amendment.--Section 601 of the Act entitled ``An Act 
to authorize appropriations for certain insular areas of the United 
States, and for other purposes'', approved March 12, 1980 (48 U.S.C. 
1469a note; 94 Stat. 90), is amended by striking ``, and adding the 
following sentence'' and all that follows through ``Islands.' ''.
  (c) Study.--Not later than 2 years after the date of the enactment of 
this Act, the Secretary of the Interior shall complete and submit to 
the Committee on Resources of the House of Representatives and the 
Committee on Energy and Natural Resources of the Senate the results of 
a study of the implementation of the amendments made by subsection (a).

                          Purpose of the Bill

    The purpose of H.R. 2826 is to increase the waiver for 
certain local matching requirements for grants provided to 
American Samoa, Guam, the Virgin Islands, and the Commonwealth 
of the Northern Mariana Islands, and for other purposes.

                  Background and Need for Legislation

    Federal law currently allows federal departments or 
agencies to waive the first $200,000 matching requirement for 
grants to the U.S. Territories of American Samoa, Guam, the 
Virgin Islands, and the Commonwealth of the Northern Mariana 
Islands (CNMI). The waiver of a matching requirement was first 
enacted in 1980 (Public Law 96-205) because accessing federal 
grants was difficult for territorial governments. At the time, 
the waiver was set at $100,000 and was extended only to 
American Samoa and the CNMI. Later amendments in 1983 and 1984 
to the underlying law increased the waived amount to $200,000 
(Public Law 98-213, Sec. 6) and added Guam and the Virgin 
Islands (Public Law 98-454, title VI, Sec. 601(b)).
    It has been nearly twenty years since Congress has 
revisited this law. While territorial economies have improved, 
each government continues to be challenged with rising 
unemployment, decreased government revenues, and limited new 
capital for diversification.
    H.R. 2826 will help broaden U.S. Territories' access to 
federal grants by increasing the amount federal agencies shall 
waive to $500,000. The bill also seeks to end the inconsistent 
manner in which 48 U.S.C. section 1469(a) is applied by 
clarifying that the matching waiver applies to all federal 
agencies and departments making grants to the U.S. Territories, 
not just the Department of the Interior.

                            Committee Action

    H.R. 2826 was introduced on August 2, 2001 by Delegate 
Robert A. Underwood (D-GU). The bill was referred to the 
Committee on Resources. On September 12, 2002, the Full 
Resources Committee met to consider the bill. An amendment in 
the nature of a substitute was offered by Delegate Underwood. 
The amendment clarified that the local matching waiver applies 
to the first $500,000 of any grant in excess of $500,000. For 
grants less than $500,000, the local matching requirement shall 
be waived in its entirety. The amendment also requires the 
Department of the Interior to provide a report to Congress on 
the effect of the updated waiver requirement. The amendment was 
adopted by unanimous consent. The bill, as amended, was then 
ordered favorably reported to the House of Representatives by 
unanimous consent.

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   Constitutional Authority Statement

    Article IV, section 3 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. The Committee on Resources 
believes that enactment of this bill will not have a 
significant effect on the federal budget.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    3. General Performance Goals and Objectives. This bill does 
not authorize funding and therefore, clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives does not 
apply.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has requested but not received a cost 
estimate for this bill from the Director of the Congressional 
Budget Office.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                        ACT OF OCTOBER 15, 1977


                          (Public Law 95-134)

 AN ACT To authorize certain appropriations for the territories of the 
 United States, to amend certain Acts relating thereto, and for other 
purposes.

           *       *       *       *       *       *       *


                                TITLE V

  Sec. 501. In order to minimize the burden caused by existing 
application and reporting procedures for certain grant-in-aid 
programs available to the Virgin Islands, Guam, American Samoa, 
the Trust Territory of the Pacific Islands, and the Government 
of the Northern Mariana Islands (hereafter referred to as 
``Insular Areas'') it is hereby declared to be the policy of 
the Congress, notwithstanding any provision of law to the 
contrary, that:
  (a) * * *

           *       *       *       *       *       *       *

  (d) Each department or agency making grant-in-aid shall, by 
regulations published in the Federal Register, provide the 
method by which any Insular Area may submit (i) a single 
application for a consolidated grant for any fiscal year 
period, but not more than one such application for a 
consolidated grant shall be required by any department or 
agency unless notice of such requirement is transmitted to the 
appropriate committees of the United States Congress together 
with a complete explanation of the necessity for requiring such 
additional applications and (ii) a single report to such 
department or agency with respect to each such consolidated 
grant: Provided, That nothing in this paragraph shall preclude 
such department or agency from providing adequate procedures 
for accounting, auditing, evaluating, and reviewing any 
programs or activities receiving benefits from any consolidated 
grant. The administering authority of any department or agency, 
in its discretion, may (i) waive any requirement for matching 
funds otherwise required [by law] to be provided by the Insular 
Area involved and (ii) waive the requirement that any Insular 
Area submit an application or report in writing with respect to 
any consolidated grant.
  (e) Notwithstanding any other provision of law, in the case 
of American Samoa, Guam, the Virgin Islands, and the Northern 
Mariana Islands, each department or agency of the United States 
shall waive any requirement for local matching funds (including 
in-kind contributions) that the insular area would otherwise be 
required to provide for any grant as follows:
          (1) For a grant requiring matching funds (including 
        in-kind contributions) of $500,000 or less, the entire 
        matching requirement shall be waived.
          (2) For a grant requiring matching funds (including 
        in-kind contributions) of more than $500,000, $500,000 
        of the matching requirement shall be waived.

           *       *       *       *       *       *       *


                         ACT OF MARCH 12, 1980

                          (Public Law 96-205)

  AN ACT To authorize appropriations for certain insular areas of the 
United States, and for other purposes.

           *       *       *       *       *       *       *


                        TITLE VI--MISCELLANEOUS

  Sec. 601. Title V of the Act of October 15, 1977, entitled 
``An Act to authorize certain appropriations for the 
territories of the United States, to amend certain Acts 
relating thereto, and for other purposes'' (91 Stat. 1159) 
shall be applied with respect to the Department of the Interior 
by substituting ``shall'' for ``may'' in the last sentence of 
subsection (d)[, and adding the following sentence at the end 
of subsection (d): ``Notwithstanding any other provision of 
law, in the case of American Samoa and the Nothern Mariana 
Islands any department or agency shall waive any requirement 
for local matching funds under $200,000 (including in-kind 
contributions) required by law to be provided by American Samoa 
or the Northern Mariana Islands.''].

           *       *       *       *       *       *       *