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Fiscal Year 2016 Budget, RPPL No. 9-46 2015

PALAU

RPPL No. 9-46

NINTH OLBIIL ERA KELULAU

RPPL No. 9-46

Eleventh Regular Session, July 2015 (Passed as House Bill No. 9-191-11,HD6,SD3,PD1)

AN ACT

To enact a budget law for Fiscal Year 2016 through the authorization of the sum of $84,909,200 and appropriation of the sum of $84,459,200 from the National Treasury for the annual general operations, special revenue, and debt service budget of the Republic of Palau for the fiscal year ending September 30, 2016, and for related purposes.

THE PEOPLE OF PALAU REPRESENTED IN THE OLBIIL ERA KELULAU DO ENACT AS FOLLOWS:

Section 1. Short Title.
This Act shall be known and may be cited as "The Fiscal Year 2016 Budget Act."

Section 2. Executive Branch Operations. The sum of $40,574,200 is authorized for appropriation and is hereby appropriated for expenditure and obligation for Fiscal Year 2016 for the purpose of covering the operational and contingent expenses of the Executive Branch. The total amount authorized to be appropriated shall be made up of the following available revenues: The amount of $22,427,200 shall come from local revenues; the amount of $13,147,000 shall come from anticipated USDOI-OIA fiscal year 2016 grant assistance provided to Palau; and the amount of $5,000,000 shall come from the Compact Section 211(f) Trust Fund Investment Account. The total amount authorized for appropriation and that is hereby appropriated in this section shall be allocated according to the following schedule, respectively:

Section 3. Judicial Branch. The sum of $2,796,000 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 for the purpose of covering the operational and contingent expenses of the Judicial Branch. The entire amount of the funds authorized and appropriated in this section shall come from local revenues.

Section 4. Legislative Branch. The sum of $5,221,500 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 for the purpose of covering the operational and contingent expenses of the Legislative Branch. The entire amount of funds authorized and appropriated in this section shall come from local revenues. The total authorization and appropriation shall be allocated according to the following schedule:

Section 5. Boards, Commissions, and Authorities. The sum of $1,054,000 is authorized for appropriation and is hereby appropriated for expenditure and obligation for Fiscal Year 2016 for the purpose of funding the operational and contingent expenses of Boards, Commissions and Authorities. The entire amount of funds authorized and appropriated in this section shall come from local revenues. The total authorization and the total appropriation shall be allocated according to the following schedule, respectively:

Section 6. State Block Grants. The sum of $6,503,600 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 for the purpose of state governments' operational and capital improvement projects expenses. The entire amount of funds authorized and appropriated in this section shall come from local revenues. The amount authorized for appropriation shall be available for expenditure for operations and CIP projects in accordance with 40 PNC Chapter 22. The total authorization and total appropriation shall be allocated according to the following schedule, respectively:

Section 7. Independent Agencies. The sum of $2,622,000 is authorized for appropriation and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 as operating grants or subsidies for independent agencies of the National Government. The entire amount of the funds authorized and appropriated in this section shall come from local revenues. The total authorization and appropriation shall be allocated according to the following schedule, respectively:

Section 8. Other Agencies and Activities. The sum of $1,808,000 is authorized for appropriation and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 as grants or subsidies for recurring programs and activities except as provided by law. The entire amount of funds authorized and appropriated in this section shall come from local revenues. The total authorization and appropriation shall be allocated according to the following schedule, respectively:

Section 9. Education Assistance. The sum of $5,372,515 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 to subsidize the educational institutions and scholarship program set forth below. The total amount authorized to be appropriated and that is hereby appropriated in this section shall come from local revenue. The total authorization and appropriation shall be allocated according to the following schedule, respectively:

Section 10. Hospital Trust Fund. The amount of $3,296,000, or the actual amount collected, is hereby authorized to be appropriated and is hereby appropriated for Fiscal Year 2016 for purposes of the Hospital Trust Fund. The amount authorized to be appropriated and that is hereby appropriated shall come from the revenues derived from clinical and public health medical and dental services fees and charges during the fiscal year, so long as the actual expenditures or obligations does not exceed actual revenue receipts. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 11. PAN Fund. The sum of $2,000,000, or fifty percent (50%) of the actual amount collected from the environmental protection fee ("Green Fee") established pursuant to 24 PNC § 3413, whichever is less, is hereby authorized to be appropriated and is hereby appropriated for Fiscal Year 2016 for the purposes of the Protected Areas Network Fund. $385,500 or the actual amount of Green Fee revenue allocated under 24 PNC § 3413(b)(1) in excess of $2,000,000 is hereby authorized and appropriated to be transferred in equal shares to all states with established PAN sites. The states may use these funds to meet the minimum wage requirement under 13 PNC § 1025 to the extent consistent with 24 PNC § 3413. The amount authorized to be appropriated in this section shall come from local revenues derived from the collection of the Green Fee during the fiscal year. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 12. Road Maintenance Fund. The amount of $751,000 is hereby authorized to be appropriated and is hereby appropriated for Fiscal Year 2016 for purposes of the Road Maintenance Fund to be used for the routine and periodic maintenance of the Compact Road and other national road infrastructure network. The entire amount of the funds authorized and appropriated in this section shall come from local revenues derived from the Road Use Tax (40PNC § 1404). Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 13. All Other General Fund Revolving Accounts. The amount of $876,000, or the actual amount collected, is hereby authorized to be appropriated and is hereby appropriated for Fiscal Year 2016 for all other special revolving accounts under the General Fund established pursuant to law. The amount authorized to be appropriated and that is hereby appropriated shall come from fees, fines and other charges derived from various activities and programs during the fiscal year, so long as the actual expenditures or obligations does not exceed actual revenue receipts. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 14. General Fund Reserve. The amount of $1,000,000 is hereby authorized to be appropriated and is hereby appropriated for Fiscal Year 2016 for the purposes of the General Fund Reserve pursuant to 40 PNC § 330.

Section 15. Debt Service. The sum of $2,757,000 is authorized for appropriation and is hereby appropriated for Fiscal Year 2016 for the purpose of payment of periodic interest and principal payments pursuant to the promissory notes under the $20 million International Commercial Bank of China ("ICBC") (Taiwan) loan agreement for the purpose of completion of Phase II of the national capitol construction project in Melekeok State; the $8,000,000 million Mega International loan agreement for the purpose of undertaking various improvements to the Palau International Airport; and the Asian Development Bank ("ADB") Water Sector Improvement Program ("WSIP") loan for various infrastructure and institutional capacity improvement initiatives. The amount of $1,975,000 authorized to be appropriated and that is hereby appropriated in this section shall come from local revenues; and the amount of $782,000 shall come from the 50 percent allocation of the Green Fee for water and sewer improvements. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

The total authorization and appropriation amount shall be allocated to the following schedule:

Section 16. Compact Review Office. The sum of $200,000 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 for the purpose of undertaking the Compact of Free Association review and its associated activities. The entire amount authorized to be appropriated and that is hereby appropriated in this section shall come from local revenues. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year. The services purchased with funds authorized and appropriated for the purposes of the Compact Review and lobbying services in Washington D.C. in connection with the passage of the Compact II shall be exempt from the competitive procurement requirements of Chapter 6 of Title 40 of the Palau National Code because the services related to the Compact Review Office are particularly specialized to secure the ratification of the Compact II in the United States Congress.

Section 17. Health Care Fund Contribution. The sum of $515,185 is authorized for appropriation and is hereby appropriated for expenditure in Fiscal Year 2016 for the purpose of paying subscription costs for citizens who are age sixty (60) years old and older and not working, or are disabled and not working pursuant to 41 PNC §952(a). The entire amount authorized to be appropriated and appropriated in this section shall come from local revenues.

Section 18. Subsidy to PPUC for Water & Sewer Operations. The sum of $1,603,500 is authorized for appropriation and is hereby appropriated for expenditure in Fiscal Year 2016 to subsidize the water and sewer improvement operations of the Palau Public Utilities Corporation (PPUC), provided that the amount of $603,500, or so much thereof as may be necessary, shall be utilized by the PPUC to costs associated with migrating their SCADA system to a new bandwidth (radio frequency) and to establish and fund a permanent subsidy program for electrical power consumption for fixed or low income household customers. The Subsidy Program shall subsidize electrical power usage for only the life-line rate (0-150,000KwH) for eligible households. Eligibility criteria shall be based on the poverty threshold as defined in the Analysis of the 2006 Household Income and Expenditure Survey Report and as updated. The PPUC and the Ministry of Finance shall work together to develop rules and regulations to implement this subsidy program effective October 1, 2015. The PPUC shall provide an annual report of the subsidy program to the President and the Olbiil Era Kelulau including but not limited to the number of eligible household customers, program and administrative cost. The entire amount authorized to be appropriated and appropriated in this section shall come from the 50 percent allocation of "Green Fee" collections for power, water and sewer improvements. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 19. Supplemental SSA Benefit Payments. The sum of $1,831,200 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 for the purpose of providing an additional fifty dollars ($50) in Social Security benefit payments to individuals receiving Social Security benefits pursuant to Title 41, Subchapter VI of the Palau National Code. The continuation of this supplemental social security benefit payment is subject to appropriation of funds from the National Government. The entire amount authorized to be appropriated and that is hereby appropriated in this section shall come from local revenues. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 20. 12th Festival of Pacific Arts. The sum of $450,000 is hereby authorized for Fiscal Year 2016 for the purpose of funding Palau's participation in the 12th Festival of Pacific Arts to be held in Guam, USA. Of such sum, $100,000 is hereby appropriated for such purpose. The entire amount authorized to be appropriated in this section shall come from local revenues.

Section 21. National Government Base Salary Increase. The sum of $1,441,000 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 for the purpose of funding a salary increase of $25 biweekly for every civil service government employee pursuant to RPPL No. 9-39. The entire amount authorized to be appropriated and that is appropriated in this section shall come from local revenues.

Section 22. Civil Service Pension Plan Accrued Interest Charles. The sum of $500,000 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 for the purpose of paying the accrued interest payable for the employer contribution amounts not paid on or before the date prescribed for such payment by the National Government of Palau for the Civil Service Pension Plan for prior fiscal years. The entire amount authorized to be appropriated and that is appropriated in this section shall come from local revenues from the remittance tax established pursuant to 40 PNC § 1408.

Section 23. New Correctional Facility Construction. The sum of $500,000 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 to provide additional funding for the construction of the Republic's new correctional facility including environmental assessments, road access, site clearance, basic infrastructure connections and facilities. The entire amount authorized to be appropriated and appropriated in this section shall come from local revenues. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at fiscal year end.

Section 24. Angaur State Boat. The sum of $250,000 is hereby authorized to be appropriated and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 to provide additional funding toward the repairs or replacement of the Angaur State Boat, Regina IV. For the safety of passengers and proper maintenance of the vessel, the master/captain and engineer of the Angaur State Boat shall be appropriately licensed for a vessel of the Angaur State Boat's engine power and size. The Angaur State Boat must be maintained and operated in compliance with all applicable rules and regulations of the Republic of Palau. The entire amount authorized to be appropriated and appropriated in this section shall come from local revenues. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at fiscal year end.

Section 25. Ngaraard State Government. The sum of $125,000 is authorized for appropriation and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 to the Ngaraard State Government. In anticipation of residence relocations from low-lying areas due to the effects of climate change and to accommodate existing households, the appropriated sum shall be allocated for Phase I construction projects for water and power line extensions from Ngkeklau to Ngerdebsiu. Ngaraard State Government shall have the discretion to choose which Phase I construction project will receive priority. The entire amount of the funds authorized and appropriated in this section shall come from local revenues. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 26. Ngatpang State Government. The sum of $35,000 is authorized and appropriated to the Ngatpang State Government as requested for the cost of shipping heavy equipment from the Republic of China (Taiwan) to Palau. The entire amount of the funds authorized and appropriated in this section shall come from local revenues.

Section 27. Ngiwal State Government. The sum of $141,000 is authorized for appropriation and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 to the Capital Improvement Project Office to begin Phase I to provide power and water lines to the Ngiwal Housing Area (Ngarmechau) and to upgrade the existing road from East Ngiwal to the Compact Road connecting the Ngiwal Housing Area (Ngarmechau) to the Compact Road. Of these funds, the sum of $10,000 is allocated for power lines, $6,000 is allocated for water lines, and $125,000 is allocated for the road construction. The entire amount of the funds authorized and appropriated in this section shall come from local revenues. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 28. Ngarchelong State Government. The sum of $75,000 is authorized for appropriation and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 to the Ngarchelong State Government to construct and improve the access road to Todai. The entire amount of the funds authorized and appropriated in this section shall come from local revenues. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 29. Ngchesar State Government. The sum of $75,000 is authorized for appropriation and is hereby appropriated for expenditure or obligation for Fiscal Year 2016 to Ngchesar State as a matching fund for other grants including the stimulus and other rural grants to build: (1) Bai ra Ngara Oldiang, (2) Bai ra Ngerkesou, (3) a bridge at Shimizu area connecting Benjamin Emesiochel's property over the river to Matthew Elbelau's property, and (4) a bridge accommodating vehicle traffic at Ngerwikl. The appropriated funds may be applied to design costs, estimates, and all other related costs for construction. The entire amount of the funds authorized and appropriated in this section shall come from local revenues. Any unexpended or unobligated balance of the appropriation of this section shall not lapse at the end of the fiscal year.

Section 30. Kavangel State. The sum of $15,000 is authorized and appropriated to the
Kayangel State Government as requested to subsidize the cost of fuel. The entire amount of the funds authorized and appropriated in this section shall come from local revenues.

Section 31. Peleliu State. The sum of $35,000 is authorized and appropriated to the Peleliu State Government as requested to fund the construction of a buoy or marker at Sebeseb. The entire amount of the funds authorized and appropriated in this section shall come from local revenues.

Section 32. Outside Grants and Development Assistance. All external funds received from development partners and donors, including, but not limited to, the U.S. Federal Program Grants, Japan Grant Aid, Republic of China (Taiwan) grants, other countries, organizations, or individual donors, are hereby authorized to be appropriated and are appropriated for Fiscal Year 2016 in the amounts received for those specific programs or projects for which they are granted, donated, or otherwise contributed. U.S. Federal Program Grants cost recoveries associated with such program grants may be retained for use by the President for such purposes as are needed to implement such programs or projects for which they were granted. The Minister of Finance shall report monthly to the Olbiil Era Kelulau (OEK) the receipt of any outside grant or development assistance in the preceding month. In addition to all other reporting requirements established by law or regulation, the Minister of Finance shall submit quarterly reports to the President and the OEK setting forth expenditures and obligations of all funds received from outside sources and expended or obligated pursuant to this section.

Section 33. Reprogramming. The President shall have the authority to reprogram funds in Sections 2, 5, and 7 in the Fiscal Year 2016 Budget Act in accordance with 40 PNC § 351.

Section 34. Special Provisions for the Judiciary. The Judiciary is appropriated an additional $5,000. This appropriation is earmarked for administrative costs incurred providing the Olbiil Era Kelulau with a budget request for Fiscal Year 2017 that would accommodate the hiring of new judges sufficient to separate the Trial and Appellate Divisions of the Supreme Court of Palau per the Fourteenth Amendment of the Constitution of the Republic of Palau.

Section 35. Amendment. 24 PNC § 3413 (b) (3) pertaining to the Environmental Protection Fee ("Green Fee") is hereby amended to read as follows: "(3) fifty percent (50%) of the funds generated from collection of the Green Fee shall only be authorized and appropriated for improving the power, water and sewer systems of the Republic or to pay back the loan from the Asian Development Bank that is designed to reform the water and sewer sector (ADB Project No. 44031) or the proposed loan from the Asian Development Bank to fund infrastructure improvements (ADB Project No. 42439) or as source of funding for State Block Grants or as budget reserve funds pursuant to 40 PNC § 330."

Section 36. Severabilitv. If any provision of this Act is found to be invalid or unconstitutional by a court of competent jurisdiction, then the offending part or portions may be severed from the rest of the bill and the remaining parts or portions shall continue in full force and effect.

Section 37. Effective date. This Act shall take effect upon its approval by the President of the Republic of Palau, or upon its becoming law without such approval.

___________________

PASSED: September 15, 2015

Approved this 21^st day of September, 2015

___________________

H.E. Tommy E. Remengesau, Jr.
President of the Republic of Palau