[Congressional Record Volume 147, Number 49 (Thursday, April 5, 2001)]
[Extensions of Remarks]
[Page E541]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  TAX TREATMENT OF BONDS AND OTHER OBLIGATIONS ISSUED BY THE AMERICAN 
                            SAMOA GOVERNMENT

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                       HON. ENI F.H. FALEOMAVAEGA

                           of american samoa

                    in the house of representatives

                        Wednesday, April 4, 2001

  Mr. FALEOMAVAEGA. Mr. Speaker, I rise today to introduce legislation 
to clarify the tax treatment of bonds and other obligations issued by 
the American Samoa Government.
  Under current federal law, the territories of the Commonwealth of the 
Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, and 
the U.S. Virgin Islands, have the authority to issue municipal bonds to 
foster a broad range of economic activity. These bonds are exempt from 
income taxation by the federal government, state governments, 
territorial governments, municipal governments, and the government of 
the District of Columbia. This is known as triple tax exemption. In 
American Samoa, on the other hand, only industrial development bonds 
receive triple tax exempt status. The income from all other bonds is 
subject to taxation by federal, state and municipal governments.
  The legislation I am introducing today will give to American Samoa 
the same authority already held by all other states and territories.
  The legislation deletes the current reference to Section 103 of the 
Internal Revenue Code which excludes interest on qualifying bonds from 
income, as that cross reference is not necessary. It is the intent of 
the legislation, however, that interest on qualifying bonds issued by 
the Government of American Samoa or any of its agencies be exempt from 
taxation. As with other jurisdictions, the bonds would not be exempt 
from federal, state or local gift, estate, inheritance, legacy, 
succession or other wealth transfer taxes which may at any time be in 
effect.
  The legislation uses new language in describing the bonds to reflect 
changes made to the Internal Revenue Code in 1986.
  Finally, this bill repeals current law on this subject--Section 202 
of Public Law 98-454 (48 U.S.C. Sec. 1670). Any bonds issued after 
enactment of the new provision would be subject to the new law; any 
bonds issued before that date would remain valid and be subject to the 
current Section 1670 of Title 48.

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