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STATEMENT OF FRANCIS A. DONOVAN
DIRECTOR, OFFICE OF EAST ASIA AFFAIRS
BUREAU FOR ASIA AND THE NEAR EAST
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT
BEFORE THE HOUSE COMMITTEE ON FOREIGN AFFAIRS
SUBCOMMITTEE ON ASIA, THE PACIFIC AND THE GLOBAL ENVIRONMENT
July 25, 2007

Chairman Faleomavaega and Ranking Member Manzullo. Good afternoon and thank you for this opportunity to appear before you today to comment on important pending legislation that affects key disaster relief provisions for the Republic of the Marshall Islands (RMI) - and the Federated States of Micronesia (FMS) - in the Compact of Free Association Amendments Act of 2003.

Mr. Chairman, I am here this afternoon to draw the Subcommittee's attention to H.R. 2705, a bill that would enact the Compact of Free Association Amendments Act of 2007 and, in so doing, would make effective the shift of primary responsibility for provision of disaster assistance for the RMI and the FSM from the Department of Homeland Security's (DHS) Federal Emergency Management Agency (FEMA) to the U.S. Agency for International Development (USAID).

Both USAID and FEMA agree that this legislation - H.R. 2705 - is critical to the orderly, timely and seamless transfer of authority for disaster relief and reconstruction assistance from FEMA to USAID. It is our hope that the bill will be enacted during this session of the 110th Congress.

In highlighting the need for this legislation, I would also stress that the two agencies involved - FEMA and USAID - support the provisions it contains and we have been collaborating closely on developing a mechanism to ensure continued provision of comprehensive emergency disaster relief and reconstruction assistance to the RMI and FSM. Both agencies met recently to finalize the particulars of this mechanism, and I am pleased to report that once H.R. 2705 is enacted, we are positioned to implement the transfer, beginning on January 31, 2008, the effective date of the bill.

The Compact of Free Association Amendments Act of 2003 provided for a transition of disaster assistance from FEMA to USAID. Furthermore, it called for the countries and the United States to reach agreement about how best effectuate this transition. Agreements were reached between the RMI and FSM and the United States in June 2004 as amendments to Article X of the Federal Programs and Services Agreement were signed by each nation and the United States in June 2004. These agreements provide that FEMA and USAID will consult jointly on disaster assessments and declarations in the RMI and FSM. FEMA will provide funding to support reconstruction and response requirements and USAID will be responsible for administering disaster assistance and coordinating the U.S. response to declared disasters. U.S. legislation is needed to enact these agreements.

USAID and FEMA support enactment of legislation that will adopt these agreements. Nevertheless, both Agencies recognize that four technical matters need to be addressed legislatively in order to ensure a smooth handover of the responsibilities outlined in the Agreements. We are gratified that H.R. 2705 includes these four technical considerations: 1) designation of January 31, 2008 as the effective date of USAID's assumption of responsibility to allow for adequate preparation for transition (versus immediately upon enactment); 2) provision for shared FEMA-USAID funding authority to allow access to and efficient transfer of funds between the agencies; 3) explicit application of USAID's notwithstanding authority to the provision of disaster assistance to the RMI and FSM to ensure that critical funding of disaster assistance will not be delayed or impeded by contrary regulations; and, 4) reference to USAID throughout the documents rather than specific offices within the Agency.

These technical considerations ensure that operational and immediate financial requirements are spelled out so that the new implementation arrangements will be in place and, should a disaster occur, the needs of the citizens of the RMI and FSM will be met. We understand that the initiating legislation to amend the Compacts, S.283, is pending on the Senate calendar; however, since that bill does not contain the technical considerations requested by FEMA and USAID, it is our hope that H.R. 2705, as the companion bill, will prevail. In discussions with USAID and FEMA, the Senate Energy and Natural Resources Committee has also indicated their agreement with the four technical elements.

I would also note that while this legislation addresses the necessary requirements and resources for transfer of authority in the short term, as we move forward with the implementation, we will certainly learn more about specific needs associated with this activity, and we may need to return to the Congress if additional Congressional action is necessary are required. Since this joint responsibility is new territory for our two agencies, we can anticipate that some adjustments may need to be made as we proceed.

Mr. Chairman, we have faced many challenges in planning for the transfer of authority for disaster assistance from FEMA to USAID, but we have also made a great deal of progress. We are ready to move forward. Enacting H.R. 2705 will allow us to take all necessary steps in under six months, a time frame that will be in the best interests of the residents of both nations.

Thank you for allowing me to share with you our concerns about the need for this legislation. We at USAID appreciate your committee's interest in this important topic and that of the Natural Resources Committee's as well. I look forward to your questions.