[Senate Hearing 116-245]
[From the U.S. Government Publishing Office]
S. Hrg. 116-245
THE STATE OF THE U.S. TERRITORIES
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HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 26, 2019
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
35-556 WASHINGTON : 2020
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming JOE MANCHIN III, West Virginia
JAMES E. RISCH, Idaho RON WYDEN, Oregon
MIKE LEE, Utah MARIA CANTWELL, Washington
STEVE DAINES, Montana BERNARD SANDERS, Vermont
BILL CASSIDY, Louisiana DEBBIE STABENOW, Michigan
CORY GARDNER, Colorado MARTIN HEINRICH, New Mexico
CINDY HYDE-SMITH, Mississippi MAZIE K. HIRONO, Hawaii
MARTHA McSALLY, Arizona ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee CATHERINE CORTEZ MASTO, Nevada
JOHN HOEVEN, North Dakota
Brian Hughes, Staff Director
Kellie Donnelly, Chief Counsel
Isaac Edwards, Special Counsel
Sarah Venuto, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
Rebecca Bonner, Democratic Professional Staff Member
C O N T E N T S
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OPENING STATEMENTS
Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska.... 1
Manchin III, Hon. Joe, Ranking Member and a U.S. Senator from
West Virginia.................................................. 2
WITNESSES
Rossello, Hon. Ricardo, Governor, Puerto Rico.................... 12
Guerrero, Hon. Lourdes A. Leon, Governor, Guam................... 24
Bryan, Jr., Hon. Albert, Governor, U.S. Virgin Islands........... 30
Torres, Hon. Ralph DLG., Governor, Commonwealth of the Northern
Mariana Islands................................................ 41
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Bryan, Jr., Hon. Albert:
Opening Statement............................................ 30
Written Testimony............................................ 33
Responses to Questions for the Record........................ 79
Guerrero, Hon. Lourdes A. Leon:
Opening Statement............................................ 24
Written Testimony............................................ 26
Responses to Questions for the Record........................ 76
Halegua, Aaron, et al.:
Letter for the Record........................................ 108
Manchin III, Hon. Joe:
Opening Statement............................................ 2
Moliga, Hon. Lolo Matalasi:
Statement for the Record..................................... 5
Murkowski, Hon. Lisa:
Opening Statement............................................ 1
Puerto Rico Hospital Association:
Letter for the Record........................................ 145
Puerto Rico Manufacturers Association:
Letter for the Record........................................ 150
Rossello, Hon. Ricardo:
Opening Statement............................................ 12
Written Testimony............................................ 14
Questions for the Record..................................... 72
Torres, Hon. Ralph DLG.:
Opening Statement............................................ 41
Written Testimony............................................ 43
Responses to Questions for the Record........................ 91
THE STATE OF THE U.S. TERRITORIES
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TUESDAY, FEBRUARY 26, 2019
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:00 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Lisa
Murkowski, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
The Chairman. Good morning, everyone. The Committee will
come to order.
I would like to begin by welcoming our Governors for being
with us this morning. I know that certainly for some of you
this is quite a trek, actually for all of you, and so it is
greatly, greatly appreciated. I mean, it is hard enough to get
time on one Governor's schedule for a meeting, let alone
getting four of you together here. So I am especially grateful
and appreciative that you are here.
Unfortunately, Governor Moliga from American Samoa was
unable to make it to Washington, DC, today, so he is not with
us in person, but we do have his written testimony which will
be made part of the record.
The purpose this morning is to hear about your priorities
for your respective territories for the coming year and how our
Committee can be helpful in achieving them.
I had the privilege just last year of visiting four of the
territories as Chairman of this Committee, including a trip
last February to Guam, to Tinian, to Saipan--very, very
impactful certainly for me and my first visit out there. I had
the opportunity to be in Puerto Rico and the U.S. Virgin
Islands shortly after the devastating hurricanes the year
prior.
I think it is fair to say that Congress does not always
acknowledge the contributions that the territories make to our
nation. But from high participation rates in our Armed Forces,
the distinct culture of the islands and their geographical
importance, the territories are clearly, clearly, an integral
part of the United States.
I would note that each of the territories has had at least
one major disaster declared by the President in the past two
years. Of course, we are all very familiar with the impacts of
Hurricanes Irma and Maria on Puerto Rico and the U.S. Virgin
Islands. We have had much discussion here in this Committee
about that, but we are also aware of Cyclone Gita, Typhoon
Mangkhut, and most recently Super Typhoon Yutu, which directly
struck the Northern Marianas Island of Tinian with sustained
winds of 178 miles per hour and gusts over 200 miles per hour.
I heard back from many friends and Alaskans or acquaintances
who described the damage that Tinian had sustained and in
Saipan as well.
NOAA says that the Super Typhoon Yutu was the second
strongest storm to ever hit any part of the United States, so I
would anticipate that we are probably going to be hearing a
little bit today about the role of the Federal Government in
responding to these disasters, including what has worked and
what can be improved.
Of course, disaster relief is not the only area of concern.
From workforce issues to healthcare and tax treatment, I think
we have plenty to talk about this morning. And a new issue
arose a few weeks ago when a three-judge panel of the First
Circuit Court of Appeals determined that the manner in which
the members of the Financial Oversight and Management Board,
established by PROMESA, was appointed is unconstitutional. And
while narrow in its ruling that the Board members are principal
officers of the United States and subject to the Senate's
advice and consent, the panel's finding on Congressional
authority under the Territorial Clause could have broader
consequences down the road if left to stand. We are still
reviewing this here on the Committee and could possibly take
that up in the future.
But again, plenty, plenty to discuss this morning.
I thank you all for being here and for your leadership in
your respective areas.
With that, I turn to my colleague and the Ranking Member,
Senator Manchin.
STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
Senator Manchin. I want to thank you, Chairman Murkowski,
for convening this important hearing on the state of U.S.
territories, and we welcome all of you here, again. It is great
to see the territory Governors here today, and I want to thank
all of you for traveling great distances from your homes to be
here. I understand that Governor Moliga of the American Samoa
could not be here because of health issues, and we wish him a
full and speedy recovery. As a former Governor myself, I am
well aware of the many demands on your time. So thank you,
again, for making yourselves available.
As many of my colleagues know, the Committee has a long-
standing jurisdiction of territory and insular affairs, and I
look forward to a productive relationship with each one of you
in my role as the Ranking Member.
We are here today to discuss the opportunities and
challenges facing the territories including how to best support
each of you in advancing the well-being of those living and
working in territories. I have often said that, and I know that
you get people coming to you all the time asking for your
assistance or asking for your help. And I have always said
government should be your partner. I am not your provider, I am
your partner. That is a two-way street, and I think that is
what we are looking for.
Unfortunately, there are many challenges still facing the
territories today. First and foremost, numerous devastating
natural disasters--which the Chairman has gone over--in the
Caribbean and the Pacific, at least in the last few years,
leaving not a single territory unharmed. I think every one of
you all have been touched. Hurricane Irma struck Puerto Rico
and U.S. Virgin Islands in September 2017. Then two weeks
later, Hurricane Maria delivered an even stronger blow to you
all. In addition, a slew of record-breaking typhoons and
cyclones have hit the Pacific territories impacting
infrastructure, agriculture and local economies.
Recovery is still going on. I applaud the excellent work to
restore power, water and communication capacities in the wake
of these disasters; however, I would be remiss if I did not
acknowledge how much work remains in order to fulfill the
promise of a full recovery. Further, we must also ensure that
we are rebuilding in a way, and I repeat that, rebuilding in a
way that will help our territories face the challenges
associated with extreme weather and climate change. This
includes the need to advance a robust coordinated strategy for
the future of the electric grid in Puerto Rico. We are now over
a year out from the hurricanes, and I am frustrated at the lack
of meaningful progress toward the grid's recovery. So I look
forward to today's discussion about where that recovery stands.
Again, as I have said in my position previously, I know all
too well the challenges that you all are facing in leading your
territories through these difficult recoveries. It is critical
that investments made now are feasible and that there is the
capacity on the ground to maintain the infrastructure
investment going forward. Please be assured that we stand with
you, ready to assist as you seek to restore capacity and bring
economic vitality and opportunity to your communities.
Additionally, serious immigration and workforce challenges
still face the Northern Mariana Islands and Guam. Given the
labor violations in the 1990s and early 2000s and again in the
last few years, it is critical that any immigration plan
promotes growth without sacrificing labor standards, workplace
safeties and the well-being of the workforce. This Committee
has spent much time and effort on these issues but much more
work needs to be done.
I look forward to discussing how we can work with both of
you to shore up the economic opportunities while advancing the
transition from a foreign to a domestic workforce. I repeat
that, a transition from foreign to domestic workforce, and
ensuring that none of this is done at the expense of our labor
standards which we hold near and dear to our workforce.
Underlying many of the challenges we will discuss here
today are questions of economic development and fiscal
stability; however, we all know that finding the right balance
is critical for the long-term survival and prosperity of our
communities. Therefore, I am interested in hearing about your
plans to promote sustainable economic growth in your
communities.
Additionally, I know that one of the unique challenges
territories face relates to health care. As you know,
territorial Medicaid funding is capped and the federal match is
fixed at a lower level than for most of our states. With the
Affordable Care Act funding expiring at the end of this year, I
am concerned about your citizens' ability to access essential
health care services. So I am interested in discussing what
options exist to resolve that upcoming challenge.
So again, I want to thank you all, and I look forward to
this discussion today.
The Chairman. Thank you, Senator Manchin.
I would note that today is just about the beginning of
March.
Senator Manchin. There is a lot going on.
The Chairman. We call it March madness around here. If you
had a long line in front of you to enter the building, it is
just indicative of what we have in front of us. So the fact
that we do not have full attendance at this morning's hearing
is not indicative of a lack of interest in the territories.
Please, please, hear me on that. It is just that there are
many, many competing hearings that are also beginning at ten
o'clock. So we are going to have members cycling in and out and
I apologize for the up and down, but I thank my colleagues that
are here.
We will begin this morning with hearing from each of you.
As I mentioned, we have the testimony that has been submitted
by the Governor from American Samoa.
[Governor Moliga's written testimony follows.]
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The Chairman. We will begin with the Honorable Ricardo
Rossello, who is the Governor from Puerto Rico. He will be
followed by the Honorable Lourdes A. Leon Guerrero, who is the
Governor for Guam. The Honorable Albert Bryan is the Governor
for the U.S. Virgin Islands, and the Honorable Ralph Deleon
Guerrero Torres is the Governor for the Commonwealth of the
Northern Mariana Islands (CNMI).
I would ask you all to try to limit your comments to about
five minutes. Your full statements will be included as part of
the record, but we will have an opportunity for a good exchange
once you have concluded your remarks.
We will begin with you, Governor Rossello, and just proceed
down the line. Welcome to each of you.
Governor Rossello.
STATEMENT OF HON. RICARDO ROSSELLO, GOVERNOR, PUERTO RICO
Mr. Rossello. Thank you.
Good morning Chairwoman Murkowski and Ranking Member
Manchin and all of the members of the Committee. Thank you for
the opportunity to discuss the state of the U.S. territories
and of Puerto Rico.
While Puerto Rico is confronting a number of very serious
challenges, I believe we are at the cusp of a transformational
moment for our island. It depends on pulling the right levers,
both on the local fronts and on the federal front. The actions
we take today will either help open the doors to equality,
progress and success for Puerto Rico or continue to yield
social and economic stagnation that will further exacerbate
existing trends of mass outmigration and possibly lead to
further degradation of our island.
My written testimony discusses Puerto Rico's ongoing fiscal
and debt restructuring, the process of economic and disaster
recovery and reconstruction and the need for equality under
federal laws and programs. While these are necessary components
for Puerto Rico's success, none will be sufficient unless
Congress ends the current unequal and undemocratic territory
status placed on Puerto Rico and places a definitive path
toward statehood. It is the root cause of the problems that we
will be discussing here today.
Prior to my administration, this was the last take of
Puerto Rico, large government expenditures without
accountability, an unsustainable debt burden, the imposition of
an undemocratic fiscal oversight board, decades of economic
decay and unmaintained infrastructure systems. We aim to change
that.
We worked intensively to establish a fiscal and structural
plan that both achieved fiscal responsibility and a path
forward to growth and to a better society. We enacted labor
reform, established a gold standard framework for public-
private partnerships, cut political appointments by 20 percent,
reduced 21 percent of our agencies with a head count reduction
of 10 percent in our government, got a fiscal plan certified by
the board and we had the single, largest one-year reduction in
state budgets, 17 percent, in at least the last 35 years of the
United States. So we are doing our part to be responsible.
Our plans moved along but not one, but two, devastating
storms hit our island causing catastrophic humanitarian damages
to over three million U.S. citizens. At that point, we had to
work on three parallel work streams. One, the immediate
emergency response; two, the recovery; and three, the
rebuilding of Puerto Rico. Critical actions in the beginning
lacked the necessary sense of urgency, such as the restoration
of energy. This, need I remind you, took over a year. No other
jurisdiction in the United States would have found that to be
acceptable. Other actions have been unfortunately slow, and
there are lingering problems that threaten the pace of our
recovery.
By their own report, FEMA's response to our island was
inferior to that of other states, and that inferior response
continues. For example, Puerto Rico has had approximately 65
large, permanent work projects approved in the last 17 months
that followed the hurricanes. In stark contrast, in the same
timeframe, over 13,000 projects were approved for Louisiana and
Mississippi in the wake of Hurricane Katrina. For the first
time, people stateside were able to clearly see the unequal
treatment of U.S. citizens on our island.
Facing many challenges, Puerto Rico was fortunate to have
strong partners, and I would like to thank a few, Congress and
HUD, for their response.
Despite all the challenges, we continue with renewed
resolve to transform our island. We move forward. Our energy
transformation build that allowed a new grid with private
stakeholder collaboration. We enacted education reform. We
created a new healthcare model to increase access and to
increase choice. We've renegotiated the debt of two major
credits saving the people of Puerto Rico over $17.5 billion in
the long run. We've created a Recovery Office with
unprecedented transparency and accountability streams. Our
commitment is firm and unwavering. We are doing our part, and
we expect the Federal Government to do theirs.
We need our resources to move fast. A slow recovery hinders
the prospects of U.S. citizens in Puerto Rico. We need fair and
sustainable treatment on Medicaid. Our citizens have been
receiving a third or a fourth of what the Federal Government
provides to states in similarly situated conditions. We need
NAP relief for over one million U.S. citizens who are at risk
of seeing reduced nutritional assisted benefits at the end of
March. We need tax treatment that supports economic growth and
a path forward. And we certainly need a final solution to the
perennial unequal treatment of U.S. citizens in our island.
Indeed, statehood is the best path forward into economic growth
and prosperity. If Puerto Rico can be transformed into a place
of thriving prosperity, it can serve as a beacon of hope for
all Americans and a sign to the world that the best for America
and for Puerto Rico is yet to come.
Thank you.
[The prepared statement of Mr. Rossello follows:]
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The Chairman. Governor, thank you very much.
Governor Guerrero, welcome.
STATEMENT OF HON. LOURDES A. LEON GUERRERO, GOVERNOR, GUAM
Ms. Guerrero. Good morning and Hafa Adai to the members of
this Committee, and thank you for the opportunity to present
testimony today.
I am Lou Leon Guerrero, the Governor of Guam, first female
Governor elected in Guam and have been on the job for 51 days
and still love my job.
I would like to ask your assistance in resolving five top
priorities of my administration.
Number one and foremost is the H-2B issue. The Department
of Homeland Security's recent administrative action that
removes the eligibility of the Philippines for the H-2B program
affects us greatly. While USCIS has discretion to approve
petitions that serve the national interest, including those
that qualify under section 1045 for the Fiscal Year 2019 NDAA,
it is clear that the ban on foreign skilled labor from the
Philippines is having a very detrimental impact in Guam. It has
caused delays in home construction, business expansion has been
delayed and I am sure our military buildup will also slow down.
Our island's economic stability is national security. Inside
and outside the fence doesn't work on an island 30 miles long
and 8 miles wide. All projects must be considered as associated
with military realignment. I ask for your legislative or
administrative actions that Guam, along with our sister
territory of the Northern Mariana Island, be exempted from
prohibitions in accessing foreign labor from the Philippines.
Two, Compacts of Free Association (COFA). While we welcome
our neighbors from the Outer Micronesian Islands as part of the
Compact of Free Association, our local social services and
infrastructure has been overly taxed to their influx while
promises from Congress to cover the cost go unfulfilled. The
Compact Impact cost from Fiscal Year 1987 to 2018 has been more
than about $1.4 billion and our assistant grants is only $229
million.
Next is our Income Tax, Earned Income Tax Credit (EITC).
The Government of Guam receives over 55,000 tax returns
annually and refunds about $120 million, with over $50 million
for Earned Income Tax reimbursement. EITC is our second-largest
unfunded mandate, second only to the costs associated with
providing services to citizens of the Freely Associated States
(FAS). While the states are reimbursed by the Federal
Government, Guam is required to pay EITC reimbursements, and we
are not reimbursed by the Federal Government. I ask that
Congress fund this mandate and ensure that Compact
reimbursement funds account for EITC payments to FAS citizens.
Medicaid. The Guam Medicaid Program operates differently
than it does in the states. Because Guam's Medicaid operates
essentially as a block grant with an annual ceiling, we would
often exhaust our federal funds allocations. We want to be
treated fairly, as with the states, and we want to be evaluated
and calculated on the per capita income basis.
The Guam World War II Loyalty Recognition Act. This
Committee's work has been tremendous, and I thank you for your
work. The Guam World War Loyalty Recognition Act authorizes
Section 30 funds to be set aside for war claims compensation;
however, the Department of Treasury is now claiming that they
are unable to issue final award payments based on their
interpretation that the Act does not contain appropriations
language. With this inaction, the Federal Government is not
just withholding payments of war claims, they are withholding
parity and closure for Guam's remaining survivors. I am hopeful
that members of this Committee can express their support to the
Trump Administration to resolve this issue administratively,
and I pledge that my administration is willing to work with
Congress and the Trump Administration to be able to provide
immediate payment of adjudicated claims stemming from the
Island's occupation. We must bring closure and honor to the
survivors of wartime. We rely on your leadership and advocacy
in addressing these issues for our Island.
We ask for your assistance in helping us reach a better
quality of life for our people.
Thank you and Si Yu'os Ma'ase.
[The prepared statement of Ms. Guerrero follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you very much.
Governor Bryan, welcome.
STATEMENT OF HON. ALBERT BRYAN, JR., GOVERNOR,
U.S. VIRGIN ISLANDS
Mr. Bryan. Good morning, Chairwoman Murkowski, Ranking
Member Manchin, and members of the Committee. Thank you for the
opportunity to appear today to discuss the state of the United
States Virgin Islands and our Territory's priorities for 2019.
The people of the U.S. Virgin Islands are grateful to you
and your colleagues in Congress for your support in helping us
recover from the unprecedented damage caused by the
catastrophic hurricanes on September 2017. With help from our
federal partners, we are on the path to recovery, but long-term
recovery will take several years. Your continued support and
assistance is critically needed for us to rebuild our territory
to be stronger and more resilient in the face of constant
economic pressures and the increasing occurrence of natural
disasters.
Even before the hurricanes, the Virgin Islands and other
territories faced unique challenges not encountered on the U.S.
mainland. Many of these challenges are the result of factors
beyond the control of the Federal Government, such as
geographic isolation and lack of natural resources. But some
challenges we face are exacerbated by federal policies, which
are within the power of the Congress to change. In my comments
here today, I will focus on those issues for which we most
urgently need and request your assistance.
Healthcare. The area where Congressional action is most
critical is healthcare. Even before the hurricanes, our
healthcare system was under great stress. Under Medicaid the
average arbitrarily high local match requirement has imposed
severe and unsustainable financial demands on our territory. We
are grateful for the temporary disaster-related waiver of the
local match and additional allotments that Congress provided in
the Bipartisan Budget Act of 2018. This funding has been a
lifesaver for the territory's poor. However, unless Congress
acts before September 30th, 2019, two events will cause
potentially catastrophic damage to our Medicaid program.
First, the temporary disaster relief is scheduled to end on
September 30th. Our severe disaster-related revenue losses are
projected to extend well beyond that date. As a result, we
simply cannot afford to pay the local match starting October
1st. We therefore urge the Congress to extend the disaster-
related Medicaid relief by one year to allow our Medicaid
program to operate through Fiscal Year 2020 and allow our
hospitals to recover.
In addition, we and all other territories face the so-
called Fiscal Cliff on September 30th when our Affordable Care
Act allotments expire. Unless Congress takes action to
eliminate the Fiscal Cliff, up to 30 percent of our entire
populations could lose access to Medicaid. We urge Congress to
act to prevent this potential calamity, well before September
30th.
Disaster funding, our second critical need that relates to
local match requirements for federal disaster funding. The
Virgin Islands does not have the resources available to come up
with the local match in order to access disaster funds.
Anticipating this lack of resources in the territories, the
Insular Areas Act provides all federal agencies the discretion
to waive local match requirements for insular areas, including
the Virgin Islands, but with a few exceptions FEMA has proved
reluctant to do so despite overwhelming evidence of the
territory's financial plight.
For example, FEMA has prematurely ended the 100 percent
federal funding for public assistance categories A and B. These
projects, even though they were delayed as a result of federal,
not territorial, delays in implementation, we have
administratively appealed FEMA's decision and are hopeful that
these issues can be resolved in a cooperative manner. If not,
we may ask for your assistance.
Similarly, FEMA has been reluctant to agree to waive the
local match for the territory for FEMA public assistance
categories C through G which include the permanent repair or
reconstruction of key facilities. The policy reasons for
invoking the Insular Areas Act Waiver are at least as
compelling for these projects.
Therefore, we respectfully request that Congress direct
FEMA to exercise its discretion under the Insular Areas Act and
waive the local share for public assistance grants awarded to
the USVI. Alternatively, Congress could enact legislation to
specifically waive the local match.
Finally, we believe that there are several simple
administrative steps that would not cost anything and yet would
significantly expedite our recovery, including enabling FEMA to
advance funding for our major recovery projects to relieve the
strain in our already depleted cash flows, reducing
bureaucratic obstacles in FEMA's project approval process and
encouraging FEMA to approve our application to administer our
own permanent housing construction program reducing project
cost and administrative burdens these things would accomplish.
Each of these steps is described in greater detail in my
written testimony. We would be deeply grateful for
Congressional assistance in achieving these relatively simple
and no cost measures.
High visit infrastructures. The third major area in which
we seek Congressional assistance is transportation
infrastructure. The Territorial Highway Program in recent years
has been unfairly singled out for funding cuts. While the
states and DC have received significant funding increases, we
urge Congress to correct this inequity in the next
infrastructure bill by increasing funding levels for the
Territorial Highway Program.
Finally, we seek Congressional assistance in crafting
federal tax policies that fairly reflect the unique status and
circumstances of the U.S. territories. Federal tax policy plays
a crucial role in creating the investment climate to create
jobs, generate sustainable economic growth and improve the
territory's long-term fiscal health. The current Federal Tax
Code is in key respects unfair to the territories in ways that
impair economic development and financial self-sufficiency.
For example, under the Internal Revenue Code, the Virgin
Islands is considered a foreign jurisdiction even though Virgin
Islanders are U.S. citizens and Virgin Island's businesses are
U.S. businesses. U.S. territories should always be treated more
favorably than foreign jurisdictions under federal tax law. But
as a result of unduly harsh provisions in the JOBS Act of 2004,
the territories are in some ways treated worse than foreign
jurisdictions. In particular, the income sourcing rules imposed
by the JOBS Act have inhibited our ability to attract new
employers and grow our economy. I urge your support for modest
corrective changes to the JOBS Act to remedy these inequities.
Further, the Tax Cuts and JOBS Act of 2017 inadvertently
disadvantage U.S. investments in the Virgin Islands with
respect to new taxes imposed by that Act. We request the
Committee's support for a technical amendment to provide parity
for such investment in our territory.
Thank you for considering this testimony and for your
support of your fellow Americans in the U.S. Virgin Islands. I
look forward to answering any questions you may have.
[The prepared statement of Mr. Bryan follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Governor Bryan.
Now we will turn to Governor Torres, welcome.
STATEMENT OF HON. RALPH DLG. TORRES, GOVERNOR, COMMONWEALTH OF
THE NORTHERN MARIANA ISLANDS
Mr. Torres. Good morning and Hafa Adai. On behalf of the
people of the Commonwealth of the Northern Mariana Islands, I
want to thank Chairman Murkowski and Ranking Member Manchin and
all the members today.
Many of the issues facing the territories today are unique
to us. We all fight against issues of geography, limited land
mass, labor access, natural resources scarcity, distance from
the United States, and import reliance are key among these
issues. But I believe most important among these issues is our
continual struggle to gain the Federal Government's
understanding of the complexity of achieving substantial
progress for the people living in the territories.
I thank Chairman Murkowski for your outstanding effort on
behalf of the U.S. Senate for organizing and encouraging
participation in Congressional Delegation visits to the CNMI.
Many of the challenges we face are difficult to comprehend if
one does not travel the 8,000 miles across the Pacific Ocean to
experience it for themselves. Efforts such as these are
critical when federal laws have such over-sized effects on the
fragile state for the U.S. territories.
One of the most urgent priorities is the rebuilding of safe
and resilient homes that were destroyed by Super Typhoon Yutu
last October. According to damage assessments performed by the
American Red Cross, 5,910 homes were destroyed or suffered
major damage after October 25th last year. Nearly four out of
every ten homes on the islands were impacted by this disaster
at a time where available housing stocks were already at
capacity.
Already the cost of policies limiting access to
construction labor has increased the cost to the Federal
Government for disaster recovery.
After Typhoon Yutu, FEMA and the Department of Defense
recognized the challenges of performing their work for the
American citizens living in the CNMI by seeking out new and
innovative solutions that conforms to our unique circumstances.
If it weren't for the 200 men and women of the Seabees and the
Red Horses, 184 homes in Tinian would still be without roofs
over their heads because there are simply no available
construction workers from the Island of Tinian.
The CNMI, along with Guam, more than ever needs the Federal
Government to recognize that there is a choice between the
progress of the thousands of U.S. citizens in the territories
and all the encompassing application of national laws and
regulations, and in many instances, it is clear that these two
choices are mutually exclusive.
It is a priority to reduce instances of poverty and
increase wages and opportunities for my people, but the
resources the CNMI has and its ability to grow the economy to
meet the needs of the population are slim. These challenges are
not unique to the CNMI around the world, but are unique within
the United States. Still, it is essential that we leverage
available resources to build a stronger community. However,
Federal Government actions such as the restriction of labor
access, threats to the already essential tourism markets and
the growing competitiveness to the global economy are severely
limiting our potential to succeed.
I make mention of these challenges to highlight an
essential point, the United States needs to recognize the
unique challenges of its territories and work toward a new
approach when dealing with its territory issues. I am proud to
say that we have made great progress in the CNMI over the
course of the last couple of years. Either enhanced public
services, launched our first ever public transportation system
and increased social service benefits to our people. Our
streets are safer and our people have more opportunities to
thrive.
Excuse me.
We have made progress on our issues discussed in this
Committee. Over the course of my administration we have
undertaken efforts to ease concerns over money laundering as
the Commonwealth Casino Commission and the newly established
House and Senate Committee on Gaming move forward on stronger
legislation to protect our people from the harms associated
with the gaming industry. My administration has also worked
closely with FinCEN to ensure our regulations are created with
the primary goal of ensuring compliance with federal anti-money
laundering and bank secrecy laws.
Thank you for the opportunity to provide you this
testimony. I sincerely appreciate the efforts being made to
increase communication with the U.S. territories, and I'm
committed to continuing these efforts to discuss in the months
and years ahead.
Thank you. Si Yu'os Ma'ase.
[The prepared statement of Mr. Torres follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you.
I would also like to note that Congresswoman Radewagen has
joined the Committee today. We appreciate your leadership as
well coming from American Samoa.
Let me begin my questions, just kind of focused on the
aftermath of the disaster that we have seen and particularly
out in Guam, in the Northern Marianas, the issue of how you
rebuild when you simply lack the workers. And this is, as you
say, Governor Torres, it is tough to rebuild your housing stock
when you don't have the workers there. Governor Leon Guerrero,
you note that with the military construction and the buildup
there, there really is nothing outside the fence in the sense
that the island is one where everything is related to the
military construction.
Governor Torres, you mentioned the impact from the ban on
those coming from the Philippines. The question that I have is
whether or not you are looking to other sources of labor that
you could tap into for any of these construction projects,
whether Taiwan, Korea, Indonesia, any other Pacific locations
for an option?
And then also to you, Governor Leon Guerrero, about where
we are with the H-2B visas there on Guam for non-military
construction? I know that those numbers have effectively shrunk
to zero. Can you both speak a little bit to where you can turn
for additional assistance when it comes to labor?
Go ahead.
Mr. Torres. Thank you for the question.
Like I said, there's 5,900 homes destroyed. FEMA is giving
us hundreds of initial dollars to rebuild our economy, I mean,
rebuild those homes, but there's simply no construction
workers. They're trying to hire construction workers out here
in the United States to bring them down to Saipan because of
our restriction of labor. That's costing, again, the Federal
Government hundreds of millions of dollars.
I mean, if it wasn't----
The Chairman. Were they able to bring in sufficient numbers
of workers from stateside here?
Mr. Torres. No, ma'am.
They're having a hard time getting the materials, let alone
workforce. Up to this date there's absolutely no construction
company that has agreed or found by FEMA to come down to
rebuild our homes. On top of that, there's--with the hospitals
and all the other government infrastructure that was damaged--
there's no construction, again, to build them.
So again, there's two things here. Economic growth and
then, more importantly, is building homes for our folks. And if
it wasn't for the military coming in, we had over 1,500 men and
women came down to Saipan from Hawaii, Japan and Guam to help,
not just the debris, but building roofs of our fellow citizens.
If it weren't for them, we have over 500 families that would
still be without a roof. Up to today we still have more than
3,000 homes that need to be----
The Chairman. So it is not only homes, but it is also your
public buildings as well that lack the ability to be repaired.
Governor Leon Guerrero, can you speak just a little bit to
the situation with the H-2Bs then?
Ms. Guerrero. Yes, thank you, Senator Murkowski.
The H-2B visa, we have really been approved, our petitions
have been approved in the past, no problem. And then in 2015
the Homeland Security just decided to deny all petitions which
impacted our workforce from 3,000 to almost zero. I do know, as
you are aware also, that there has been a provision that was
put in by Congress to allow 4,000 workers for military
projects, but even that doesn't help our civilian projects. And
that's why I made the statement that all projects in Guam is
really aligned to the military. The roads, the military travel
in the same road's infrastructure, in terms of social
infrastructure, like restaurants, hotels and so forth--those
are also related to military buildup because you increase the
population and the supply for those workers are not there.
It has impacted greatly our economy. Homes now are delayed
in construction. Costs of homes have gone up. We used to
construct at $110 per square foot. Now it's $160 per square
foot. That's a 45 percent increase. So it's impacting us
economically.
It has even put a big strain with the recent
Administration's declaration that the Philippines is no longer
an eligible country for H2 workers. So we have also looked at
other places, but the Philippines is a very prime resource.
Their culture is the same as ours. The language, we can speak
English. It's quite difficult to construct when all the
instructions and the designs are in English and you only speak
Chinese or you only speak Japanese or you only speak Korean. So
there's a big concern and a challenge in that also.
We have looked at the Island's sovereign nations of
Micronesia. We have looked at Republic of Palau, Pohnpei, but
they are also at a challenge in needing their workforce. So I
cannot over emphasize, overstate, the concern and the impact
that this is costing, causing, our Micronesian areas both with
the CNMI and ourselves. We are short of skilled labors.
And to Senator Manchin's concern about foreign to domestic
workforce, we are working very feverishly with our Guam
Community College to start training people in high school. We
are working very closely with the Guam Trades Academy that's
bringing in students to learn the trade of construction.
But our immediate, that's not the immediate solution right
now. We can see that in the long run, but right now our
immediate solution we seek is please exempt us from this ban of
the Philippine workforce and help us try to make our economy
more stable and expanded by providing the workforce that we
need to build our islands.
The Chairman. Thank you.
It is certainly something that I came to appreciate very
directly when I was over there. The effort that is made to
attract those workers coming over from the continental United
States and maybe in Hawaii and Alaska, we can appreciate it a
little bit better. But the reality is when the economy here is
strong, nobody wants to be 4,000 miles away from their
families. It is very, very expensive to get out there and get
back. The workforce conditions and issues are very, very
challenging.
Senator Manchin.
Senator Manchin. Thank you, Madam Chairman, and thank all
of you.
I have had the pleasure of visiting, I think, three of the
islands. I have been to Guam and, of course, Puerto Rico and
the Virgin Islands. I have not been to the Marianas, and I
assure you I will be there.
First of all, Governor Rossello, part of the conversation
regarding the future of the grid infrastructure which I am
concerned about in Puerto Rico. There have been plans put
forward to do a public-private type of, to get private
investment, to get private oversight or overseers invested with
Puerto Rico. You all own the system now, correct?
Mr. Rossello. That's correct.
Senator Manchin. Okay.
We have invested about $2 billion, I am understanding, so
far, about $2 billion in emergency work for Puerto Rico on the
grid? I know there's billions more that is needed.
The indications point to Puerto Rico absolutely not being
in a position to take care of the infrastructure it already
has. A little loan to billions of dollars is going to be
needed. So my question would be, what mechanisms have you put
in place to ensure that Puerto Rico is in a position to
maintain these infrastructure improvements as weather continues
to hit?
And I have been in the islands. I have been in the Virgin
Islands probably as much or more than the other, but it is such
a fragile system. It is, kind of, with no disrespect, hodge-
podged to a certain extent. And if we are going to put a major
grid system with billions of dollars, how do we approach that
and get that done correctly? How do we bury when we should be
burying? How do we basically maintain against these severe
weather conditiions that we are going to continue to have if
all of us don't get our head out of the sand and start working
in a more----
Mr. Rossello. Well, thank you for the question, Senator.
I would like to address that by stating that we recognize
that in the past our energy authority has been lackluster.
Senator Manchin. Right.
Mr. Rossello. And as I came into the administration, part
of my commitment was to change that. We needed to change the
structure, we needed to change the culture and we needed to
establish investment.
We were stating the obvious that the infrastructure was
old, that it was mostly energy generated by expensive and
damaging fossil fuels and that it was unmaintained. Of course,
a few months into our administration a hurricane came and
demonstrated to everybody that this was really the case.
And we can do one or two things, Senator, and this is my
petition. We cannot either rebuild the old energy grid that we
had which is exactly what they did in the Virgin Islands for
the past five hurricanes. It's not a very good solution. It's
not a very good use of taxpayer money because you're going to
have to reinvest again in rebuilding it because weather
patterns are changing. Or we can think forward and see what we
have to do now in order to rebuild the energy grid of the
future, not just for Puerto Rico, but for it to be a model for
all of the jurisdictions.
And here's what we're doing. Immediately in the aftermath
of the storm I said I had to work on three work streams. Number
one, the emergency response, saving people's lives; number two,
getting back to normalcy and recovery; but number three, how do
we rebuild Puerto Rico better and more effective?
At that point I decided to push forward a transformation
bill that would allow private stakeholders to come to Puerto
Rico to be part of that solution. We also established a
regulatory framework that is being considered right now that
it's completely independent and it is very empowered so that
the markets can have, you know, support with that. So there are
certain levers that we had under our control in order to
transform.
We also have a gold standard public-private partnership law
that allows for unsolicited proposals. And we've been getting
several of these proposals. That is under our control.
We went forward to get an IRP so that we could see the
resources as planned toward the future and based on that
resources plan, we can achieve our objectives. And we've worked
with the markets to see market sounding and the good news is
when we went to the market to see what the transmission and
distribution would capture, we expected the best we would get
response from maybe two stakeholders. We got response from five
stakeholders. So there is interest in rebuilding in Puerto Rico
now.
We are doing, on our end, all of those changes and
operational efficiency changes within the current power
authority. But really, we need the support of the Federal
Government.
We have----
Senator Manchin. Let me ask this question.
Do you all have, do you have a partnership with any of the
utilities in the United States?
Mr. Rossello. In terms of the----?
Senator Manchin. The partnership coming in and being a
partner, bringing their expertise to the island to work with
you to rebuild this?
Mr. Rossello. Oh yes. In the rebuild we've partnered with
Florida Power and Light.
Senator Manchin. Okay.
Mr. Rossello. And we partner with Long Island Power
Authority, but that's just to put it back up. That was the $2
billion that they just focused on.
Senator Manchin. Right.
Mr. Rossello. Right now, we're looking toward making that
new energy grid because, Senator, if we leave it as is and
another storm comes by----
Senator Manchin. Yes.
Mr. Rossello. It's going down again and we're reinvesting.
Here's what we want and let me define the energy grid that
we want for the future. We want one that's customer centric.
That is based on renewables and that can reduce the carbon
footprint significantly. I've made a pledge to reduce the
carbon footprint by 50 percent in the next seven years. We've
made a pledge to go to renewables to 40 percent in the next
four years and 100 percent by 2050. So, we're establishing that
path forward and there are critical levers----
Senator Manchin. I understand your renewables were the
first to come down with the storms?
Mr. Rossello. I'm sorry?
Senator Manchin. I understand that renewables were the
first, whether it be your wind and solar, the first to come
down.
Mr. Rossello. Wind got severely affected but solar actually
had significant resilience.
Senator Manchin. Come back quicker, yes, I understand that.
Mr. Rossello. And so, we feel----
Senator Manchin. Sir, my time is----
Mr. Rossello. Okay.
Senator Manchin. This is really interesting. We are going
to get into this more but I have to, if you don't mind
indulging me----
The Chairman. Go ahead.
Senator Manchin. ----if I can ask Governor Torres. The
foreign labor force, okay, you are still at 15 percent
unemployment, your unemployment has not changed?
Mr. Torres. We actually dropped down to ten percent in
2017.
Senator Manchin. Okay.
Mr. Torres. We have more U.S. workers today than we ever
had.
Senator Manchin. Yes, I know that.
The immigration policy that you have, you want relief on
that right now and I think we gave you relief last year?
Mr. Torres. Well, Senator, yes, what we did is increase the
number of CW contract workers but eliminate construction
workers under the CW so that our private companies will go to
H-2B for construction workers.
Senator Manchin. From an education standpoint, what are you
able to do as far as to train the local population? Are any of
them in skilled training? Are any of them in these types of
skills that are needed, whether it be carpentry, plumbing and
electrical?
Mr. Torres. Thank you very much for that question.
I just recently signed a bill that during the Northern
Marianas Trade Institute which is an institution that we have
into my own government executive branch to make sure that that
program works forward with our public school system. And we're
creating a program to start young students at the age of seven,
seventh grade, sorry, seventh grade, move forward to high
school and moving on to occupations that we need, whether it be
carpentry, plumbing, construction workers and so forth.
We have our business alliance in the back that are here
showing support that their company also is a stakeholder on
making sure our labor force for the U.S. citizens are
available.
Senator Manchin. I am over my time, but I want all of you
to think, because I will come back for a second round here, are
you building to new typhoon/hurricane standards? Are you all
basically to those standards? So if you could think about that,
and we will get back to it because I am over my time.
Thank you, Madam Chairman.
The Chairman. Thank you, Senator.
Senator Cortez Masto.
Senator Cortez Masto. Thank you. Thank you all for being
here.
Let me follow up on this conversation, and maybe I can
start with Governor Rossello.
I know in your testimony you highlighted the need for
additional disaster supplemental funding for Puerto Rico, and
my understanding is the House passed a bill to do just that but
the Senate has yet to act.
Let me ask you this, as part of the discussion on what the
future grid looks like and what your future construction looks
like, it is my understanding that before the need for any
disaster package to come forward, it is important that we waive
the prior condition limitation. Is that correct? And that is
what you are talking about is if we put that prior limit
condition, if we don't waive that, then we are building up to
what we have done before. We know the weather patterns are
going to be the same or worse, and that is why we need to be
able to build for the future. Is that right?
Mr. Rossello. That's correct. That's correct.
And if I may add, Senator, the other day we had a panel
with some of the FEMA experts and they gave us an interesting
piece of data that I think we should all reflect upon. FEMA
spent $80 billion in the past year and a half which is more
than what they had spent in the last over 38 years. So if you
imagine that will either sustain or increase with the changing
weather patterns, then there needs to be some significant
changes to the statutes to the Stafford Act and so forth. There
needs to be changes both on regards with flexibility, number
one. And number two, with the actual financing. I've heard, you
know, some of the concerns of my fellow governors. The money is
just not flowing through. They're putting bureaucratic
obstacles.
As Governor, I inaugurated a project last year that was
started in 1998 from a previous hurricane. If we are to
understand that weather patterns are changing and that we need
to rebuild stronger and more resilient, we also need to see how
we can get that money into the rebuilding sector quicker so
that we can build resiliently. Otherwise, we're going to be
impacted by storm after storm and we're never going to get up
to date.
Senator Cortez Masto. Yes and I agree. I think it needs to
be waived. It just makes sense as we look to appropriate money
for disaster recovery. We should be smart about that as well in
how that money is being utilized in your infrastructure needs
for all of the territories.
Let me also say this. I absolutely agree with somehow
exempting or opening up for H-2B visa programs. I get it.
Short-term you are going to build up your workforce, but you
don't have it right now. So there has to be a way to bring the
skilled workforce in that is willing to help. And so I
completely understand, and I think we should be addressing that
issue on behalf of the territories.
Let me ask all the governors. Can you discuss a long-term
impact of the hurricanes, the typhoons and other natural
disasters on your healthcare system and delivery of healthcare?
I am curious, what are you seeing and how do your governments
anticipate covering any additional expenditures because of
these natural disasters? Governor Torres, let me start with
you.
Mr. Torres. I'll just briefly state that working with HHS
has been a great partner with the CNMI. They've brought in
Rubicon which is a program that they brought doctors and nurses
to the Island. And they brought these nurses and doctors
actually to the villages where they went house to house, some
of the nurses, they give shots.
Because we only have one hospital it's critical that the
additional help comes from our partners, otherwise our people
in the CNMI, especially Saipan and Tinian, will not get the
health care they need because the facility is damaged and let
alone, lack of nurses and doctors.
Senator Cortez Masto. Okay, thank you.
Governor Bryan?
Mr. Bryan. Yes, Senator.
So, three things. One hospital on each island and that has
been a serious problem. We've essentially had universal
healthcare in the Virgin Islands forever because we have to
take care of everybody that comes to that hospital whether
they're covered by insurance, Medicaid or anything else. So the
storms have damaged each of those hospitals to the point where
the one in St. Croix has to be totally rebuilt. Up to now we
still haven't gotten the temporary hospital done so we can
start the deconstruction. And we're two years from sticking a
shovel in the ground due to federal regulations. In St. Thomas
we're doing a complete rehabilitation of that hospital. St.
John, the same thing. And we're still dealing with 1980s basing
for CMS.
So not only are we, have we started in a bad fiscal
situation, the storms have created a situation where now our
hospitals do not have their revenue streams that preexisted and
still have to service the indigent who suffer from kidney
dialysis needs that is not a revenue generator, emergency rooms
that are overwhelmed because we don't have beds to put people
in and we have, and FEMA doesn't cover the existing debt that
they started out when those hurricanes blew on that night.
So, we have the debt, legacy debt, to take care of, the
existing debt of keeping our physicians engaged because it's
hard for us to get specialists out to the islands and to stay.
For some while, they didn't even have customers. So, we have a
lot of issues around the healthcare system. That's why we're
desperately asking for the extension of these Medicaid
concessions.
Senator Cortez Masto. Thank you.
I am over my time, so I am going to ask Governors Guerrero
and Rossello--I will submit these questions for the record and
if you would just provide a response, that would be great.
Thank you.
The Chairman. Thank you, Senator Cortez Masto.
I had an opportunity shortly after the devastating
earthquakes to be there at St. Thomas and to see how the
hospital had been completely blown through from one side back
out to the other. It was extraordinary to know that the one on
St. Croix was not habitable at all. When you don't have the
ability to be able to provide for the care--and I guess it was
after that that they sent everybody over to Puerto Rico and
then Puerto Rico got hit. So it was just one continuing
disaster after another.
Senator Hirono.
Senator Hirono. Thank you, Madam Chair, and welcome to all
of you. Thank you very much, and welcome to Congresswoman
Radewagen. It is good to see you with us.
Governor Rossello, you mention in your testimony the
importance of the nutrition assistance program and, unless
Congress takes action, this program will end in March. And the
Administration has called plans to provide additional ongoing
disaster food aid to Puerto Rico excessive and unnecessary. Can
you respond to this characterization, and if Congress fails to
act by the March deadline, what will be the impact on low
income Puerto Ricans and the local economy?
Mr. Rossello. Sure.
We completely reject the notion that it's unnecessary and
excessive. And as a scientist, I'd like to rebut those notions
with data.
Eighty-five percent of our folks are food insecure. Puerto
Rico is under the NAP program as opposed to the SNAP program
with the rest of the states. That means we're entitled to a
significantly lower amount of funding and what was given after
the storm, the $1.27 billion, was in order to get us kind of up
to par to that moment.
What we're asking right now is an extension of that because
we still, obviously, haven't fully recovered and there are
hundreds of thousands of U.S. citizens in Puerto Rico that will
be severely affected if they don't have this.
So, on the short-term, Senator, we've asked for $600
million for this NAP relief, but really, we need to be talking
about long-term sustainability here. We want to be considered,
to be included into the SNAP program, as everybody else so that
we can have the appropriate resources and can move forward
again. Our island, you know, exports most of the food that it
eats. It's food insecure in many ways.
And this, a final note, the characterization of unnecessary
and excessive clearly denotes a lack of understanding of the
inequalities of Puerto Rico. This is why I state and I bring
every time that we have this discussion, the overarching root
cause of the problem.
Puerto Rico, being a colonial territory, has severe
limitations in empowerment, in decision-making. We've seen them
in the past, whether it's healthcare and we've seen them now in
the recovery phase where we get shortchanged or delayed in the
process.
So, I would encourage everybody to ask yourselves if in the
United States we are content with having two types of
citizenships or if our value system is based upon one that
there is one and equal U.S. citizen where all of the people get
the appropriate and just resources?
Senator Hirono. Well, Hawaii having been a territory
herself, I can understand your commitment.
I have some questions related to the impact of COFA
citizens in your area. So this is a question for Governor
Guerrero because we know that COFA citizens can travel anywhere
they want and while most reside in Guam and Hawaii, CNMI as
well as states like Arkansas, Oregon and Washington also have
high populations of COFA citizens.
Now one of the issues involves their eligibility for
Medicaid under the Medicaid program and back in 1996, when the
so-called welfare reform was enacted, the COFA citizens'
eligibility for a number of programs, social welfare programs,
including Medicaid, where in my view having done the research
was inadvertently eliminated.
Since then the territories and states like Hawaii had a
significant increase, well, they've had to bear the expense of
the care for COFA migrants. And in 2014 alone, the State of
Hawaii is estimated to have spent over $163 million to pay for
social services, healthcare and other services for COFA
citizens residing in Hawaii with 40 percent of that going to
healthcare. I know that you face similar concerns in Guam,
having visited Guam.
Could you comment on the challenges that you face in
dealing with the fiscal costs of COFA citizens coming to Guam
and would you support legislation that restores Medicaid
eligibility for COFA migrants? I would ask this of Governor
Torres also, and anyone else who wants to comment.
Ms. Guerrero. Yes, thank you, Senator Hirono, for that.
In healthcare we have one public hospital and we are
mandated by statute to treat everybody. Thirty percent of the
patients that come through our public hospital are non-paying
patients. You know that in any business you'd go bankrupt if
you didn't get those payments.
So we are faced with a very severe financial challenge with
that, and a large portion of them are COFA citizens and it also
impacts our educational system. It impacts our public safety,
our Department of Corrections. I just took a tour to the prison
there, and I would say 80 percent of the women that are in
prison are COFA residents. And so it does impact us
financially, because we have to bear the burden of that cost
through our general fund, our local funds.
So, I do support, you asked if I support, although I don't
know in details what that would be, but I do support them being
eligible into Medicaid but I also will support it if Medicaid
is calculated the same way we are calculated throughout the
United States which is a per capita income basis and if we also
are given an extension of our ACA expanded Medicare. So we
estimate about over a $1.5 billion short impact since the COFA.
I spoke to Governor Ige during the conference and he's
going to work with me to try and get standardized calculations,
because that was the issue with GAO when we sent in our report
for expenses that there wasn't a standard calculation of the
COFA impacts. So we are going to work together and get that
standardized.
Senator Hirono. We are going to need to greatly increase
the amount of money that we provide for the compact impact.
Could I just ask Governor Torres to also respond because
you do have some COFA citizens in the CNMI as far as I know.
Mr. Torres. Yes, I would like to go ahead and say we have a
good relationship but we do need assistance also for the
Medicaid part. For the COFA, I'll be turning in my answer to
that because it's a long process for me to----
Senator Hirono. So you, too, would support restoring
Medicaid eligibility for COFA citizens?
Mr. Torres. Yes, yes, Senator.
Senator Hirono. Something that I have been working on for
what seems like a long time. We will get it done eventually.
Mr. Torres. For sure.
Senator Hirono. Thank you very much.
Mr. Torres. Thank you.
The Chairman. Thank you, Senator Hirono.
Just continuing on that. If Congress were to extend the
ability to use each territory's Affordable Care Act Medicaid
allotments beyond FY'19 by making the funds available until
they are expended, how much is left out there in your
particular territories in the Block grant and basically how
long does it last? How helpful is this?
Ms. Guerrero. For our island we have the extended, sorry,
expanded ACA and we have about $61 million that's not been
expended yet. Our challenge there is finding the 45 percent
match because, as you know, we are 55/45 which is a real big
burden on our general fund. And then we have another $24
million from a different supplemental that we can access but we
cannot access it until we exhaust the $61 million.
The Chairman. Are the other territories kind of similarly
situated that it's the match issue that--go ahead, Governor
Bryan.
Mr. Bryan. Yes, it is. The match hampers us and also the
cap, because the cap is at $17.1 million for us. So that's the
max we can get in a year. So it would last us another four to
five years with the current situation. But if we were to lift
the cap and give us the 80/20, we would go through it a lot
faster.
The Chairman. Governor Torres?
Mr. Torres. Senator, I would like to report that we've
actually exhausted all our resources there but an extension and
lowering the matching will definitely alleviate us from using
our local funds.
Mr. Rossello. We have about $250 million that would be
utilized but just to put it into context, sustained levels of
funding would be about $1.6 billion. And of course, without
that, without that $4.8 billion that was appropriated we would
be at $300 million which is a, you know, severalfold decrease
from what we previously had. So one of the considerations is
seeing if we can extend the usage of that fund beyond September
2019 that would at least give us a little bit more runway.
The Chairman. Governor Bryan, you mentioned in your
comments the reliance on the FEMA Community Disaster loans to
basically help you maintain basic government functions which I
think we recognize is not a tenable position going forward. How
long do you expect USVI to be in this financial position? You
are just now beginning your term here, but what is the vision
going forward there for the Virgin Islands?
Mr. Bryan. For us, I would like to say, I'm happy to report
that, you know, we're looking at a bright financial future
because of the help of the Federal Government. But it's like
they've erected, you know, this gigantic, beautiful vault of
money and then put a glass, 12-inch-thick glass in front of it
and created all types of obstacles in order for us to get that
money from the Federal Government to the kitchen table of our
residents.
One of the things that I've been commenting on is while
there is a disaster response from FEMA that is rapid, the
actual disaster recovery process, there is no emergency process
that is activated or implemented by the Federal Government to
make those funds becoming available urgent.
I'll give you an example, while Puerto Rico is building
their grid, we rebuilt ours. If we had to go through the
federal procedures that really the money that we're going
through HUD and the other funds we're using now to rebuild our
grid, we still wouldn't have had a pole struck yet.
We're getting a message from a lot of people from HUD and
people from FEMA and other places that this is going to be a
five-year and ten-year process and referencing Katrina and
Sandy. We simply don't have that luxury of time. June starts
the hurricane season again. We still don't have our hospitals
up. Our schools are still in temporary units. You know, we've
finally been seeing some road repairs and our stop lights are
going back up. Our hotels won't be open up until 2020, so we
won't be getting any real tourism economy until the following
year.
The Chairman. Let me ask because you are all nodding your
heads--we understand that this is the lag here.
What are perhaps some more island specific suggestions that
you might have given what you are dealing with in your
respective territories that could help us better ensure that it
is not just a focus on the disaster the day of and the week
after, but really, kind of, that longer-term, how you recover?
Mr. Bryan. Well, one thing, Senator, I would like the
Senate and the Congress and the President, but mostly the
Senate and Congress are considering governors. Each of you have
disasters that happen to your states from time to time. If it's
taking us small islands this long to give relief to our
residents, imagine how long it would take you with millions of
people, as Puerto Rico's experience, to get relief to theirs.
These are the basic labs where you can test quick response
to recovery and allow FEMA to do some new things in HUD that
will make our recovery go faster. We can identify the stop
gaps, the best practices so when it happens on a major scene,
like a California fire or Houston flood, you can implement them
and make FEMA work even faster and better for you.
The Chairman. Governor Rossello?
Mr. Rossello. Yes, I would say several things.
Number one, there are things that we can do on the local
level that we can start giving the example. For example, in our
pledge for Puerto Rico, we've put a commitment to spend 100
percent of our CapEx money into resiliency so that everything
that we build has to be at a certain standard.
Number two, I think, I mean, this might be island specific
and we've learned a lot after the storm, but I think it impacts
everybody. If we are to understand that at any juncture, you
know, a catastrophic devastation might occur anywhere in the
states, then it is important for us to either start building
resiliently now or recover resiliently toward the future
because in the aftermath, Madam Chairwoman, here's what's going
to happen if those funds don't come. We're going to be waiting
for resources to come for several years. Perhaps another storm,
another earthquake will come and you will just go back after
spending billions of dollars in, sort of, getting things back
up, you're going to have to start from ground zero again. Our
petition to you is let's fix the initial condition problems for
the territories and for, you know, for recovery in general.
I'll tell you one that's important for the territories
since I didn't have the opportunity to answer the Senator's
question. It is finding a permanent fix to the Medicaid
problem. If it is an initial condition and our response and our
resources were weakened because we didn't have those resources
moving forward. So I think there needs to be a clear path and
commitment toward finding a sustainable and permanent solution
because otherwise all of us territories are going to be coming
over here every other year to try to get a little bit more
money that's just not sustainable toward the future.
And secondly, just in terms of recovery, climate change and
weather patterns that are changing, it's a reality. It's not a
theory. I'm living in it in Puerto Rico. It is the third
jurisdiction in the world that has been mostly affected. There
is a little island off the East Coast of Puerto Rico that was
called Palominito. It was there three years ago. It's not there
anymore. There are coastlines that are eroding. We did--you saw
our hurricanes hitting our island, but we have faced major
droughts as well. And all of these things compound. And if we
don't get the resources in, you know, in a fairly effective
manner, then we won't be able to rebuild resiliency until the
next challenge comes along.
So there's two paths over here. One, there's the
Congressional path. But secondly, there is an administrative
path. And in the case of Puerto Rico, my colleagues can speak
for themselves on this matter, but we have been imposed
additional obstacles to get resources from FEMA.
I'll give you one example. Every state, every state,
disperses the funding from FEMA. They're empowered to do so. In
Puerto Rico's case, administratively, FEMA controls the purse.
And what has been the outcome of that is that we have several
orders of magnitude less projects than even in Katrina. So if
we are to recognize that there is a new landscape, if we are to
recognize that for this landscape we need to execute quickly
and we need to build smarter and better, changes need to be
made both on the administrative front and on the legislative
front.
The Chairman. Thank you.
Let me turn to Senator Manchin.
Senator Manchin. First of all, I think about the time when
you take office, when you get sworn in and the first thing you
do when you get elected before swearing in is figure what have
I got my hands on now and how do I get a handle on this?
Basically, it's getting your financial house in order.
The first thing I wanted to do was find out the finances of
my state. I went to Wall Street immediately, and I went to all
my standards. I went to Standard and Poor's, Fitch's, and
Moody's. I went to, immediately, to find out from the people
who do the credit, give us the credit ratings, because with
credit ratings it affects your cost of doing business, what you
can access capital for your territories and your states. And
they told me in unbridled truth, you know, what my challenges
and problems were.
Forty-five states have a balanced budget amendment. We have
to. Every Thursday at two o'clock, like clockwork, my entire
budget team came to my office and we went through the finances
of our state, adjustments I had to make on a week-by-week basis
to stay in the balanced budget. So at the end of the year I
would not run a deficit.
Now I had to make some pretty tough choices. During the
2007-2008 crash, we were meeting twice a day trying to get our
hands around not getting upside down. The first thing, I had
pension debts. Every state has pension problems. Every
territory has pension problems. And the sooner you come to
grips with them, the better you are going to be because, if
not, they expand.
I know, my dear friends on the Virgin Islands, you have
some challenges there, very challenging. You have the $2
billion public debt and even higher pensions. I guess I would
like to hear a little bit. Do you have a team specifically set
up to try to get your finances under control and, basically,
see a pathway forward?
There are three pots of money I always looked at. So if
your budget, I don't know what your budgets are, I will use a
budget of $4 billion. Let's just use $4 billion. If that is
your general revenue which is basically the budgets you have
your legislature vote on, there are three pots of money you
get. You get basically general fund, you get special revenue,
and then you get federal. I have always said this, that
basically you take all three, mostly your budget is based on
general revenue. So if a state tells me that they are running
on a $3 billion budget, that is about an $8 or $9 billion cash
flow it takes to run that because they----
And then I have to make sure, are you collecting the taxes
you are supposed to collect? Are you going after the revenue
that has been lost? Have you looked at the fines and fees that
have not been collected? Have you shut down the
irresponsibilities of how the government has been working so
inefficiently? Every state goes through that. We are held a
little bit tighter on that, because the feds come at us a
little differently.
So my thing would be not so much but working with you all
trying to see if we can find a pathway, give you the support
and the strength that it is going to take to make those
changes. They are tough. And you will get a lot of pushback on
that, a lot of pushback.
So, Governor Bryan, if you want, I mean, I have been a
little bit more involved, you know, with my close relationships
with so many of your friends down there, but if you want to
give me a little bit of where you think you have been able to
look at that and have a direction that you think might be
favorable. I know you are all facing it.
Mr. Bryan. Well, we are facing a lot of fiscal crisis, but
the good news is, is that the storm and the Federal Government
has created a lot of economic activity.
Senator Manchin. I mean, on pension reforms, are you
looking truly at--reforms?
Mr. Bryan. Oh, absolutely.
I ran on pension reform, reforming our government
employees' retirement system. We met with the actuaries up to
last week on several ways.
So we have two things that we're trying to do. We're trying
to tier down on the amount of benefits that we give to
employees, especially those who are active and trying to
preserve as much as possible, the benefits of those who
retired, changing the system so those coming into the system
have less of a government liability and we can put more money
toward supporting the pension system on a whole.
And then thirdly, identifying new revenue sources whether
that's the attraction of new distilleries on the expansion of
our tax incentive programs or other forms of financing revenue
streams, as well as us finding some way in order for us to get
money into the pension system. As you know, the Virgin Islands
cannot really go back to the market and the rates that we are
getting offered, while our odds are doing really well on the
secondary market and are trading at par or over, it is just
very difficult for us to go back and pay the type, the kinds of
prices.
So what we have been doing is building back our
dependability, our confidence in the system from the market
while we have our financial advisors working on that,
tightening our belts and making sure that this newfound revenue
with the opening of the refinery and several other projects
coming on board, that we direct those monies.
Senator Manchin. Back on St. Croix?
Mr. Bryan. Say again?
Senator Manchin. St. Croix, the refinery back on St. Croix,
is the refinery opening back up?
Mr. Bryan. Yes, sir. We have about 800 people working right
now on redoing the refinery. They're trying to be open for next
year, 2020.
Senator Manchin. The property beside the refinery which was
the, supposedly, the identification for where you were going to
put a power plant.
Mr. Bryan. Right.
Senator Manchin. Is that--nothing has materialized there,
right?
Mr. Bryan. In the last six years we've reinvested about $50
million in the old power plant site, so I don't think that
we'll be doing that within the next five to ten years.
Senator Manchin. Does anybody else have a comment?
Mr. Rossello. Yup, I would love to tackle that.
Puerto Rico's situation, I think, is well known, but I will
reiterate what it was when we came into the administration.
We had very little visibility over budget expenditures in
Puerto Rico. We had a mountain of mounting debt and a mounting
pensions liability component. We had a fiscal oversight board
imposed in Puerto Rico and there was low revenue streams coming
in. That is why some folks, even as I approached office, were
calling it the toughest job in politics because you had all of
these other streams working.
So, what did we do immediately? And I concur, you have to
get the fiscal house in order. Tough decisions to be made. We
reduced budget one year to the other, 17 percent. That is the
single largest reduction in budget from one year.
Senator Manchin. Do you all have a balanced budget
amendment? By your constitution do you have to balance the
budget?
Mr. Rossello. Well, it hasn't been balanced in the past.
Senator Manchin. I know that. I know that. But has that
part of the law just been ignored or has it ever been in your
constitution?
Mr. Rossello. Yes, it's been completely ignored.
Mr. Bryan. We have a balanced budget law.
Senator Manchin. You do have it.
Mr. Bryan. Yeah.
Senator Manchin. Governor Guerrero?
Ms. Guerrero. Yes, I ran for fiscal responsibility also.
Senator Manchin. Do you all have a balanced budget?
Ms. Guerrero. Yes.
Senator Manchin. All of you do, okay. It has just
basically, it has been ignored.
Mr. Rossello. Yeah, well there's and there's certain things
I would love to talk about what we saw.
There was lack of visibility. There were streams created
where even the government itself was not seeing where the
expenditures were going. There was mounting debt that was, in
theory, used for permanent work but was really being channeled
for, you know, operational work in government. That is why
there have to be some changes.
Look, we made those tough decisions as well. We reduced 21
agencies in our government. We enacted labor reforms in Puerto
Rico. We went through permits reform as well. We opened
ourselves to new markets. And so, there are a lot of things
that we are doing but my petition over here, sir, would be
that, as you stated, this is a partnership. And I think that
the Federal Government needs to do their part as well.
I already, and I reiterate the recovery part. How can you
have such a glaring difference, even when comparing it to
Katrina that folks know wasn't the best recovery effort? You
have 13,000 permanent project worksheets moving along by this
time, and in Puerto Rico you only have 65.
That is orders of magnitude. There is a glaring problem
there that needs to be addressed. How can we talk about fixing
healthcare and fixing the budget if a lot of our budget goes
into healthcare because we want to give access to all of our
folks, but we get a third or a fourth, for every one of the
citizens that we have? Those things need to change.
Senator Manchin. Governor Guerrero, we will go with
Governor Guerrero first.
Ms. Guerrero. Yes, thank you.
I ran on a fiscal policy and fiscal responsibility and all
the things that you have said here, collecting taxes, creating
some new revenues, credit ratings.
I was just in San Francisco and New York talking to our
Standard and Poor's and Moody's, just to introduce myself, who
I am, what kind of leadership we're going to be providing, how
we can protect your investment and then, and how we can invest
more because we do have, I believe, a good reputation in the
capital market. And I want to keep that good reputation in the
capital market for future capital improvement projects.
I ran on the fact that the previous government had $200
million of uncollected taxes. And the first thing I did after
the flag was raised and I was sworn in, was to go down to the
Department of Revenue and Taxation and go over their
collections process. I hired a very capable person to run that
department. We have partnered with the U.S. Attorney, not the
U.S., the Attorney General to enforce those businesses that are
delinquent. We're going to crack down on businesses that are
doing business in Guam that do not have a license and having
the privilege of doing business. So all those kinds of things
we are doing.
I monitor our cash flow every morning. And I get, I sleep
better at night when I see, especially on payday week, that we
have a positive cash flow.
So, believe me, I'm tracking that. I put together a very
strong fiscal team and they know what my expectations are of
them. So I am very much focused on that because I truly
believe, Senator Manchin, that we need to be fiscally
independent.
Senator Manchin. Don't follow the lead of the Federal
Government here.
[Laughter.]
Because there is no one talking about fiscal
responsibility.
Ms. Guerrero. I want to be partners with the Federal
Government because also we provide benefits to the Federal
Government as a territory, geographically positioned, to be the
first line of national security defense. And that's our
leverage and that's our strength.
Senator Murkowski asked though, well what can we do to help
us? First, I think, whenever federal policies are going to be
passed that really affect the people, the stakeholders, I would
like to have the courtesy of making an input to that.
Additionally, I think it would go a long way if we had voting
delegates in Congress so that they can have a strong voice in
our representation from a federal level. So if you can do those
things, I'd truly appreciate it.
Senator Manchin. It would be a miracle committee too.
Mr. Bryan. Senator, could I add one more thing?
I think one of the greatest things you could do for the
territories is to make Puerto Rico a state because between the
three of us----
[Applause.]
----between the three of us we only represent 300,000
people and we're getting treated the same as Puerto Rico, who
has three million people. So if you want to do something big,
make them a state.
Senator Manchin. Governor Torres?
Mr. Torres. Well, I want to talk a little bit about our
government debt. Our government, since we got in, we pay the
retirement fund settlement. That's $400 million. We're up to
date on that. We definitely need to pass a balanced budget.
That's within our law. We pay government employees' back pay
that hasn't been raised in the last 15 years. Paid land
compensation.
We actually, same as the Governor of Guam, just hired a new
Director for Tax and Revenue. And we passed a law a couple of
years ago that any supplemental budget that comes in, we save
five percent of that toward the emergency declaration that for
a rainy day. So we do have a fund that actually my chief of
staff authored and passed into law. So we do have an emergency
fund.
But what I would like to ask, Senator, Chair, is give us
the flexibility, give us the flexibility with the territories
whether it's workforce or funds for FEMA or something, just
give us that flexibility because each one of us and you can
hear we have the same issue of Medicaid, same issue with
recovery, same issue with hospital, tourism, airfare. I don't
think there's any issue that's not similar to all of us. But if
you give us that flexibility, I guarantee you that we would
take care of our state or our islands accordingly because at
the end of the day, when we sleep at night, it's our people
that we're making sure that their safety and the health is
being provided.
So, thank you.
And Senator Manchin, please come down to Saipan since
you're--okay. And please, you know, because Saipan and Tinian
just had the worst typhoon in the land since 1935.
Senator Manchin. I am also on the Armed Services Committee.
I have been on intel, so I know the geopolitical exchanges that
are going on in the world. So we are very much concerned.
Mr. Torres. We just approve on divert for Tinian. We
actually have our Mayor of Tinian here, who is, we're fully
supporting of our military arms.
The Chairman. Thank you, Senator Manchin.
I just have, just a couple more, quick questions, but this
has been very helpful and I think particularly--go ahead.
Senator Manchin. If I may just say one thing. I have to go
to an Armed Services meeting right now, but our staff, there
are some follow-up questions.
If you all have any time at all, both of our staffs, we
have great staffs and they work very well together. We'd love
to get into a few questions with you in how we can have a
better rapport. If you would----
The Chairman. Absolutely.
Senator Manchin. ----meet with them, they will be right
here.
Mr. Bryan. Thank you, Senator.
The Chairman. Thank you, Senator Manchin.
Then just, kind of quickly for me to be able to wrap up.
Senator Cassidy, before he left, had a question that he was
hoping to ask you, Governor Rossello, on as you modernize and
rebuild and move toward a more resilient Puerto Rico, one of
the objectives for transforming the energy system there is to
modernize the generation fleet and increase the development of
renewable energy and natural gas-fired facilities, including
increased use of LNG. You indicated that your goal is to be 100
percent renewable by 2050. What steps are you taking to help
facilitate the conversion to greater use of LNG?
Mr. Rossello. Right. So we've already started with several
projects on the pipeline.
So we see this in several work streams. Number one we have
the IRP work stream so that we could put the resources that we
need long-term. But number two, we also have the transmission
and distribution work stream. Our commitment is that by the end
of December 2019, we will have a concession model already in
place in Puerto Rico. And through that track, there are several
projects.
But I want to showcase one of them that's very particular.
We have an RFP that we're almost ready to move forward on for
the conversion of the San Juan 6 and 7 power plants into LNG
from expensive fossil fuels. So our expectation is by
summertime we will have that conversion. That will save
anywhere from .8 to .9 cents a kilowatt-hour to the U.S.
citizens in Puerto Rico. It will make it cleaner, and it will
make it more sustainable.
We're also seeing with the IRP now different areas where we
can make other conversions such as in the Palo Seco plant, in
Mayaguez and down southeast which was severely affected,
establishing a new plant that can give that energy LNG
conversion.
So those projects are on their way. And in parallel to
that, we have an RFP out for a peaker unit substitution but
this one would be renewables. This one would be solar and
battery component for peaker unit substitution as well as the
renegotiation of outstanding PPOAs that amount to about 300-330
megawatts a kilowatt-hour.
So all of these projects that we're talking about, we aim
to have them either finished or significantly started before
the end of the year. That means that we're already pushing
forward that agenda.
And within the scope there are 25 other projects I would
love to discuss with your staff as well that we have in the
pipeline whether it be conversion to gas or renewable projects
such as a virtual power plant. This is one of the projects that
I'm mostly excited about, using public housing, for example, to
use the rooftops and then redirecting energy where it's needed.
Puerto Rico can be a model showcase to do that.
And lastly, I would add, Madam Chairwoman, our commitment
to incorporate nanogrids and microgrids that will be grid
independent and that would be probably run on natural gas or
CHP, at least the commitments that we have seen, so that the
consumer has choice.
So projects are already moving forward. What we need to
have is clarity as to where the resources for the rebuild, when
are they coming and what the amount will be because that really
will depend on what we have? We have a plan. We have a
strategy. We're moving forward on many of these projects but we
don't want, as the construction is moving forward, it would be
a shame to have delays on federal resources and allocation be
the bottleneck toward this transformation.
The Chairman. Let me ask just a little on that because you
had mentioned in response to, I guess it was Senator Manchin
earlier, in discussing FEMA and probably other federal agencies
as well. What are you doing to align PREPA's needs and asks
with the requirements in the funding process of the federal
agencies, specifically changing the relationship that PREPA has
with FEMA, in order to access more of these FEMA dollars?
Mr. Rossello. Right.
So we recognize that there's always been, you know, when
you look at PREPA the memories that are invoked are the
memories of the past. We've put leadership in there in order to
make those changes.
One of the changes was to establish a precise office with
FEMA so that everything would run through, would have
visibility and we could----
The Chairman. That has been established?
Mr. Rossello. That's been established.
What we're expecting now is since we are committed to
working under the 429, 428 section, where we can get the damage
estimations for the sector. What we want to do is see how we
can move that forward quicker because many of these projects
which is the game changer with that 428 section, instead of
having just to put the old poles back up, we can reinvest in
the sector.
And we already have a damage assessment. We already know
what we would need in order to create this new energy grid of
the future. I can give you some of the estimates that we have.
It looks, it's at about $17.5 billion for the transmission and
distribution, complete process that we're seeing. And it's
about $6 billion for the generation part now.
We need to see which one of those projects are eligible for
FEMA, which ones would be eligible for CDPD funding and which
ones would be private sector and local government enacted. But
that conversation needs to be had because at the current state
we're only talking about putting up the old grid which is
unsustainable, and we really need to be pushing harder into the
new grid and to the new model.
The Chairman. This is so much of that conversation we had
in this Committee shortly after Puerto Rico and USVI had been
hit by both of these devastating hurricanes. It was how do we
make sure that we do not spend the money multiple times?
Mr. Rossello. Right.
The Chairman. That the goal here is to do it right the
first time and use those dollars wisely.
My last question to you and this, again, is directed to
you, Governor Rossello, and this is in reference to the First
Circuit Court panel's ruling that I mentioned in my opening. In
your view, what is the immediate impact of that ruling in that
the members of the oversight board were appointed, that that is
unconstitutional? Does this have any impact on the day-to-day
interaction with the oversight board? What does it do to you on
the ground right now, if anything?
Mr. Rossello. Well, there's certainly some uncertainty that
has been established. And I would propose that we use this
moment and this juncture to address some of our concerns with
the oversight structure that we have in Puerto Rico.
There are many things that we can talk about but I would
like to focus mainly on one, and it is the notion that an
oversight board oversteps its boundaries and starts trying to
work on the policy-making decisions of the government of Puerto
Rico and furthermore intruding into the day-to-day aspects of
operations in government. This has been an unfortunate outcome
of the PROMESA bill, and what we're looking for is clarity
within this.
We recognize that there was a spirit of the law created
with PROMESA that we can attend to the debt crisis, that we
could push forward and have open, vibrant economy, moving
forward. But the spirit of the law was not to control the
policy of Puerto Rico and was not to get involved into the day-
to-day workings of government. So, you know, our legal team is
assessing what just happened, and we'll take steps in moving
forward into the future. But having this conversation now, it
is important that we realize if we want some sort of experiment
to work, it cannot be an undemocratic type of system that every
day oversteps its boundaries and limits what the policy and
decision-making prowess of the elected government of Puerto
Rico is in charge for.
And I would likely, last, would like to reiterate, this
only happens in Puerto Rico and potentially in the territories
because we are not a state. This structure cannot happen in a
state. It is inherently unequal. It is inherently undemocratic.
I have opposed it from the get-go.
But you know, there are challenges. And I'm willing to
work, and we've had results on that path forward. But in order
to have results, we can't be overstepping the boundaries of the
elected government of Puerto Rico. We need to work toward a
solution. And we have a clear path forward on what we want to
do. We just need all of the stakeholders to be aligned. And if
we do so, I think the future of Puerto Rico and of the
territories is going to be bright.
The Chairman. Governor Bryan?
Mr. Bryan. Senator, I just want to say one thing before we
wrap up.
I want to assure you and the American taxpayers that the
money that you're spending to rebuild our islands, our
territories, are being used wisely and are creating resiliency.
If you were to--this is the fourth total disaster that I've
faced in my entire lifetime. If you look at, and all of them
have been hurricanes. I'm not counting in the minor ones that
were in between.
But if you were to take a census of the buildings and the
damage that you see on the islands, they're the facilities and
homes and residences that were built way before 1989 and our
first initial disaster. Our public facilities, our public
housing, they're 60 years old, they have seen four or five
disasters.
The building codes we have imposed and have enacted, the
bearing of the cables, the hardening of our aerials using
composite pole, the things that we are doing now to make sure
that we are more resilient is money well spent.
We have over 60 percent of the people who live on the
islands have invested in some sort of generator. It's a little-
known fact that we manage our own water systems. There's about
2,000 to 3,000 gallons of fresh water underneath for almost
every Virgin Islander's home in a cistern.
We want to be able to have the same kind of energy
independence by equipping our residents with whether they be
generators, battery systems, solar systems, so that in the
event of another storm and an unfortunate event that our grid
system is damaged, everybody would have their own power. This
is a move that we have to move toward on islands, not only
because of global warming, but also because power is very
expensive.
So trust that we are doing the things that will make our
territories and our island resilient. But you have to give us
the opportunity to do it without the morass of federal
bureaucracy and the skin in the game that people keep talking
about.
We can't get on a bus and drive to the next state when we
face a hurricane. The skin in the game is our residents who
face down these storms, every single year and do so without
much complaining. When the power goes out in a U.S. city for
two hours, it's on CNN. We didn't have power for three months.
Thank you for your time and your patience here today.
The Chairman. Well, Governor, you clearly strike a chord
with this Senator. We can get on a bus, but we have to go
through another country.
[Laughter.]
And it takes about a week to get there. So we can relate,
most definitely, to what you have outlined.
We just went through our own disaster with a 7.0
earthquake. We have had some 9,000 aftershocks. We are dealing
with FEMA right now. So we can kind of feel your pain as far as
that goes.
But it is interesting when we talk about resilience. Alaska
is the most earthquake prone state in the United States. So we
have learned from this, and what we saw with this strong
earthquake was a resilience that we had not seen before because
of the 1964 earthquake and the subsequent earthquakes. We have
learned to build to standing code, just to building codes that
have really helped. And we certainly see greater resilience as
you all have done what you have done for tens and hundreds of
years out on these islands because you get weather out there
and you have to be resilient, you have to be independent, you
have to, kind of, figure it out on your own.
I hear very clearly the plea for ``give us some
flexibility'' because the way that you do it here in the Lower
48 is not necessarily how it is going to work in Tinian, in
Guam, in Puerto Rico. It is just not going to be that way. So
the conversation that we are having here today is very, very
important.
I know that in the Omnibus appropriations bill a couple
years ago, we established these energy action teams for each of
the insular areas to help move you toward greater independence,
if you will, from imported fuel, to work on your own domestic
fuel source, to increase energy efficiency.
The whole concept of the microgrid is just so perfectly
suited to our islanded territories and in that regard--Alaska
is also viewed as somewhat islanded in that we are cut off from
the rest of the Continental 48. And we have been pioneering and
leading with how you integrate these small, little microgrids.
We want to be able to share what we are doing in a cold, large
place and share that with you in, perhaps, warmer and smaller
places. Much of it is the same, but again, you need the
flexibility to be able to adapt it as you will.
I will follow on Senator Manchin's ask. I know you are busy
while you are here in Washington, DC, but any time that you and
your teams can give the Committee this week to help build out
some of the issues that were raised here or things that we have
not raised.
It was brought to my attention, Governor Torres, that in
Alaska we have a couple different energy projects that we have
been trying to get help on.
We had an opportunity when we were in Tinian to look at the
potential for partnering with our Alaska aerospace and launch
facility.
So there are more things for us to talk about that we have
not taken the time to raise here. I think it is important that
we continue to work on just the aftermath of the emergency
response, even though it is now two years after the fact or, in
the case of CNMI, just months ago, how we are able to help
there, but to deal with some of these issues that you all have
addressed relating to healthcare, specifically Medicaid, how we
tackle some of these very, very significant conversations. But
know that within this Committee we do not forget you. You are a
long ways away, but we do not forget you.
I really appreciate the effort that you all have made when
visiting delegations come through that you take the time to try
to educate us on the issues that are pending or that have been
pending for quite some time.
Oftentimes in this Committee we focus on the energy and the
natural resources side of our Committee's jurisdiction, but the
health and well-being and economies of your territories is
equally, equally, significant. So know that that is one of our
many, many priorities.
Again, I thank you all for making the long trip back here.
I wish you well in all of your meetings, and please let's keep
working on all of these issues that you have raised.
With that, the Committee stands adjourned.
[Whereupon, at 11:54 a.m. the hearing was adjourned.]
APPENDIX MATERIAL SUBMITTED
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