{
  "id": "RL33029",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL33029",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 307304,
      "date": "2005-08-12",
      "retrieved": "2016-04-07T19:35:27.018029",
      "title": "Loss-of-Use Damages From U.S. Nuclear Testing in the Marshall Islands: Technical Analysis of the Nuclear Claims Tribunal's Methodology and Alternative Estimates",
      "summary": "Key oversight committees in the 109th Congress have held joint hearings on the Republic of the\nMarshall Islands (RMI)  Changed Circumstances Petition,  which requests $522 million in\nadditional\ncompensation for loss-of-use of Enewetak and Bikini atolls due to U.S. nuclear testing. The $522\nmillion appears to be significantly overstated because the methodology -- sample rent data,\nassumptions, and statistical procedures (i.e., the sampling technique and the use of the exponential\nregression model) -- overestimates the per-acre rental rate for land on Enewetak and Bikini, the key\nvariable in the loss-of-use calculation. \n \n Rents on Enewetak and Bikini are overestimated because an exponential regression model was\napplied to rents established not in a competitive, free market for agricultural land on Enewetak and\nBikini, but rather to government-established, and predominantly commercial, rents on the more\nurbanized and densely populated, Majuro and Kwajalein atolls. Most land in the RMI is leased at\n\u201cthe official government rate\u201d established by the RMI cabinet. This rate, which was\nset by the RMI\nat $2,500/acre on January 1, 1979 and increased to $3,000/acre on October 1, 1989, serves as the\nbenchmark for all lease transactions. The RMI government is not only the tenant in over 40% of the\nleases -- a major source of the demand for RMI land -- but RMI government officials were also\neffectively the landlords during the estimation period when rents were government-controlled.\nApplying this methodology to unrepresentative sample rent data leads to projected rent/acre of\n$112,995/acre for the year 2027, which is equivalent to land asset value of nearly $1,774,024/acre.\nThe Nuclear Claims Tribunal\u2019s (NCT) methodology also assumes that vaporized islands\nwere not\nvaporized, undervalues the rentals on alternative atoll habitation, and assumes that 100% of the\nrental proceeds would have been saved.\n \n The NCT\u2019s estimated average rent/acre -- e.g., $4,105/acre in 1996 -- also appears\noverstated\nwhen compared to average agricultural rents in the United States for similar periods: $17.50/acre in\nMontana, $115/acre in Oregon, $210/acre in California, $88/acre in New Mexico (1995 figures), and\n$66.50/acre for the United States generally (1998 figures). Using an alternative economic\nmethodology, and applying it to RMI\u2019s national income and product accounts data, the\nCongressional Research Service (CRS) has developed alternative estimates of agricultural land rents\nfor Enewetak and Bikini for the period 1982-1990, which are more consistent with the underlying\nreal rental value of the two atolls (and the RMI economy), as well as with agricultural rents observed\nin the United States and in regions in the Pacific. CRS estimated rent/acre at $115/acre for the\nyear1982 rising to $258/acre for 1990, as compared with the NCT\u2019s estimates of $1,902 for\n1982\nrising to $2,939 for 1990. Based on these rental rates, CRS estimates  gross  loss-of-use rentals\nfor\n1982-1990 (before adjustments and interest) of $6.4 million, about 10% of the $64 million estimated\nby the NCT. According to the NCT, the amount of loss-of-use compensation already paid by the\nUnited States over this period is $36 million. \n This report will not be updated.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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          "url": "http://www.crs.gov/Reports/pdf/RL33029",
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      "topics": []
    }
  ],
  "topics": [
    "Economic Policy",
    "Energy Policy",
    "Foreign Affairs"
  ]
}