Hearings and Business Meetings
March 1, 2006
SD-366 Energy Committee Hearing Room 09:30 AM
The Honorable Madeleine Bordallo
Delegate from Guam
Congresswoman Madeleine Z. Bordallo
Statement to Committee on Energy and Natural Resources
Hearing on “State of the Economies and Fiscal Affairs in the Territories of
March 1, 2006 at 9:30 a.m.
366 Dirksen Senate Office Building
Mr. Chairman, Ranking Member Bingaman, and Members of the committee:
Thank you for calling this hearing on the economic and financial state of the
Today I will address three specific issues for which I believe this Committee should exercise oversight. These issues touch upon the need to improve public utilities and infrastructure in the territories to better the business climate and quality of life on our islands. Workforce development and support for greater access to the federal marketplace for small businesses are also important priorities for which I seek this Committee’s support.
Tourism and the military presence on
A significant investment of federal dollars is planned to accommodate the Marines and to support additional naval and Air Force assets on the island. An exact dollar figure for the level of investment has not been announced. Recent estimates reported by various media outlets range on the conservative side from $3 to 4 billion over the next ten years. This level of investment promises to create many new jobs and the increased military activity will stimulate a sustained period of economic growth.
There is concern that
Increasing federal support for local job training and vocational education programs is one way to meet demand for labor.
Infrastructure improvements financed by military constructions funds will not address all of
Establishing a U.S. Territories Bond Bank that pools territorial resources and issues combined debt in the form of tax-exempt bonds is a possible solution to this challenge that I support. Proceeds from these bonds sales would be reissued in the form of loans aimed to finance reconstruction projects. Bond banks serve at least twelve States today. Like those banks, a U.S. Territory Bond Bank will use federal grant money to as collateral to guarantee the loans. Only by pooling our resources can the territories access the capital we need to improve the lives of their residents. I am committed to developing legislation that may be deemed necessary for the implementation of the territorial bond bank proposal.
One of the concerns our local government has is the tax status of off-island contractors who may be performing work on the military bases and whose corporate domicile is off-island. This is a complex issue that relates to our status as a mirror code jurisdiction. We have been exploring this issue and believe that a mechanism, whether initiated through administrative action or by legislation, is needed to inform the local tax jurisdictions of federal contract awards. I will be raising this issue with the House Armed Services Committee and I am prepared to offer an amendment to the National Defense Authorization Act so that each State and Territorial Tax Commissioner is notified of federal contracts awarded for work in their jurisdiction that may be subject to state, territorial, or local tax law. Compliance with this proposed requirement should be relatively simple as federal contact award data is already collected and logged into the Federal Procurement Data System (FPDS). Additionally, most federal agencies, including the Armed Services, customarily send courtesy notifications to Members of Congress of contracts awarded for work in their district. My proposal would simply require that the notification generated for this purpose also be reported to the appropriate State or Territorial Tax Commissioner. The State and Territorial Tax Commissioners would be responsible for enforcing the local tax law and by doing this we have created a mechanism by which federal contractors can be notified of their tax obligations.
Last year, Congress enacted legislation that I proposed along with Congressman Faleomavaega and Congresswoman Christensen that effectively designates our entire islands as Historically Underutilized Business Zones. The HUBZone program, administered by the U.S. Small Business Administration, is an important federal contracting tool that may be used to ensure that small businesses have competitive access to the federal marketplace. Prior to the enactment of this legislation last August,
In closing, I want to reiterate that the improvement of public infrastructure, workforce development, and support for greater access to the federal marketplace for small businesses are the three policy areas for which federal support is needed to further develop and diversify