Palau Compact of Free Association Implementation Act

Palau Compact of Free Association Implementation Act - Authorizes the entry into force of the Compact of Free Association between the United States and Palau (the Compact), subject to specified determinations of approval by the Appellate Division of the Supreme Court of Palau or by referendum.

Directs the President to negotiate: (1) an agreement with the Government of Palau to establish an office of public auditor; (2) an agreement regarding responses to an audit by the Comptroller General of the United States or the Secretary of the Interior; (3) agreements for the establishment of an independent office of special prosecutor and for the provision of law enforcement assistance and U.S.-Palau law enforcement cooperation; (5) an agreement providing for the submission by the Palau Government of a national development plan; and (6) agreements for the provision of medical, capital improvement, and further referendum cost assistance.

Directs the Secretary to: (1) provide assistance for the development and promulgation of regulations regarding expenditures; and (2) negotiate an agreement guaranteeing purchase by the Federal Financing Bank of Palau Government obligations issued to refinance indebtedness related to the Palau electric power generating and distribution system.

Provides funds for construction of medical facilities in Palau and debt assistance to Palau, the Federated States of Micronesia, and the Marshall Islands for use of medical facilities prior to implementation of the territories' compacts.

Directs the Comptroller General to conduct annual audits of assistance provided to the Federated States of Micronesia and the Marshall Islands.

Extends Pell Grant, Supplemental Educational Opportunity Grant, and College Work-Study assistance to students who are or will be citizens of the Federated States of Micronesia, Palau, or the Marshall Islands.

Authorizes the Presidents of the United States and Palau to make agreements regarding compensation for and the transfer of land for defense uses.

Directs the United States to provide funds for capital improvements.

Directs the Secretary to: (1) establish field offices in Palau, the Federated States of Micronesia, and the Marshall Islands; and (2) provide sums as may be necessary for a further referendum or other costs of Compact implementation. Authorizes appropriations.

Provides for continuing availability of unobligated balances of funds provided to Palau.

Directs the Secretary to assist the President of Palau in implementing the requirements of the fiscal procedures and law enforcement assistance agreements and to report annually to the House Committee on Interior and Insular Affairs and the Senate Committee on Energy and Natural Resources.

Provides a 180-day transitional rule for granting of U.S. nonimmigrant status.

Amends the Act approving the Compact to provide that the authorizations for transition purposes shall decline over the first through third fiscal years after the Compact's effective date (under current law, FY 1987 through 1989).