[Congressional Record Volume 148, Number 122 (Tuesday, September 24, 2002)]
[House]
[Pages H6518-H6519]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1700
   CLARIFYING TAX TREATMENT OF BONDS AND OTHER OBLIGATIONS ISSUED BY 
                      GOVERNMENT OF AMERICAN SAMOA

  Mr. HANSEN. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1448) to clarify the tax treatment of bonds and other 
obligations issued by the Government of American Samoa, as amended.
  The Clerk read as follows:

                               H.R. 1448

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. CLARIFICATION OF TAX TREATMENT OF BONDS AND OTHER 
                   OBLIGATIONS ISSUED BY GOVERNMENT OF AMERICAN 
                   SAMOA.

       (a) Exemption of All Bonds From Income Taxation by State 
     and Local Governments.--Subsection (b) of section 202 of 
     Public Law 98-454 (48 U.S.C. 1670) is amended to read as 
     follows:
       ``(b) Exemption of All Bonds From Income Taxation by State 
     and Local Governments.--
       ``(1) In general.--The interest on any bond or other 
     obligation issued by or on behalf of the Government of 
     American Samoa shall be exempt from taxation by the 
     Government of American Samoa and the governments of any of 
     the several States, the District of Columbia, any territory 
     or possession of the United States, and any subdivision 
     thereof.
       ``(2) Exemption applicable only to income taxes.--The 
     exemption provided by paragraph (1) shall not apply to gift, 
     estate, inheritance, legacy, succession, or other wealth 
     transfer taxes.''.
       (b) Effective Date.--This Act shall apply to obligations 
     issued after the date of the enactment of this Act.

  The SPEAKER pro tempore (Mr. Bass). Pursuant to the rule, the 
gentleman from Utah (Mr. Hansen) and the gentleman from West Virginia 
(Mr. Rahall) each will control 20 minutes.
  The Chair recognizes the gentleman from Utah (Mr. Hansen).
  Mr. HANSEN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise today in support of H.R. 1448, a bill to clarify 
the tax treatment of bonds and other obligations issued by the 
Government of American Samoa. This bill, introduced by the gentleman 
from American Samoa (Mr. Faleomavaega), permits interest earned on 
bonds issued by the American Samoa Government to be exempt from both 
State and local taxation. Passage of H.R. 1448 will provide American 
Samoa parity in the tax treatment of their bonds with all of the other 
U.S. territories.
  The bill was considered by both the Committee on Resources and the 
Committee on the Judiciary, which both reported out the identical text 
which is before the House today. I thank the gentleman from Wisconsin 
(Mr. Sensenbrenner) for his cooperation in scheduling this bill today, 
and I ask Members to support this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RAHALL. Mr. Speaker, I yield such time as he may consume to the 
gentleman from American Samoa (Mr. Faleomavaega) to explain the 
legislation, and commend the gentleman for his leadership.
  (Mr. FALEOMAVAEGA asked and was given permission to revise and extend 
his remarks.)
  Mr. FALEOMAVAEGA. Mr. Speaker, this legislation has taken a 
roundabout journey through our committee system, particularly because 
the issue involves the issuance of bonds. As such, the bill was 
referred concurrently to the Committee on Ways and Means, as well as to 
the Committee on the Judiciary. But I am extremely happy and gratified 
that H.R. 1448 has received the approval and referral from the 
Committee on Ways and Means and the Committee on the Judiciary to the 
Committee on Resources, and I thank the gentleman from California (Mr.

[[Page H6519]]

Thomas) and the ranking member, the gentleman from New York (Mr. 
Rangel), for their approval and referral of H.R. 1448 to the Committee 
on Resources.
  Mr. Speaker, I also thank the gentleman from Wisconsin (Mr. 
Sensenbrenner) and the ranking member, the gentleman from Michigan (Mr. 
Conyers), of the Committee on the Judiciary for their support and 
referral of this legislation.
  In particular, Mr. Speaker, I want to thank the gentleman from 
Georgia (Mr. Barr) and the gentleman from North Carolina (Mr. Watt) of 
the Subcommittee on Commercial and Administrative Law for the 
comprehensive work they have done to ensure that H.R. 1448 will not 
conflict with other Federal laws relative to bond issues.
  I want to commend these gentlemen and their staffs for all of the 
work that they have done to bring this bill not only before the 
Committee on Resources, but now for House consideration.
  Mr. Speaker, under U.S. law, the territories of the Commonwealth of 
the Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico and 
the U.S. Virgin Islands currently 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 
District of Columbia government.
  However, the U.S. Territory of American Samoa also has the authority 
to issue bonds, but the interest earned from American Samoa bonds is 
subject to taxation by State and municipal governments. H.R. 1448 
amends U.S. law and provides parity and equity for American Samoa by 
allowing interest earned on bonds issued by the American Samoa 
Government to be exempt from State, local and territorial taxation. In 
other words, H.R. 1448 will grant to American Samoa the same authority 
already held by the Northern Mariana Islands, Guam, Puerto Rico and the 
U.S. Virgin Islands. This legislation will make American Samoa bonds 
more attractive to investors, and can provide an additional source of 
funds for the American Samoa Government.
  The Governor of the Government of American Samoa has indicated that 
the local government could have saved hundreds of thousands of dollars 
in interest costs if the interest on the bonds the government issued in 
2000 would have been tax exempt.
  The local power authority, a semi-autonomous government agency, would 
also like to sell bonds to purchase new diesel generator sets to 
accommodate the territory's growing population and utility needs. This 
legislation will lower the interest costs of these prospective sales, 
and will enable the local government to address deficiencies in its 
current infrastructure.
  Mr. Speaker, H.R. 1448 is an early step toward providing the 
Government of American Samoa with additional assistance in improving 
the government's financial condition, which will have a direct and 
positive impact on the people of American Samoa.
  Mr. Speaker, this legislation deserves support of this body, and I 
ask my colleagues to vote in favor of this legislation.
  Mr. Speaker, we have an expression on the islands, and this may be 
the last time I have a chance to say a few words in this body, and the 
saying is ``aua e te seluselu mai a'u,'' which means do not try to comb 
my hair or do not try to butter me up. I realize that this may not be 
the last piece of legislation that the gentleman from Utah (Mr. Hansen) 
will be chairing or managing on the floor of the House, but I want to 
say to my colleagues, for almost 14 years, serving as a member of the 
Committee on Resources, it has been my privilege and personal honor to 
have known the gentleman from Utah (Mr. Hansen). The gentleman from 
Utah served previously as the chairman of the Subcommittee on National 
Parks and Public Lands, and having served as the ranking member at that 
time, I enjoyed tremendously not only the gentleman's outstanding 
leadership qualities, but also that he was always fair with me on many, 
many series of hearings and deliberations that were held when the 
gentleman served as the subcommittee chairman.
  Even in the gentleman's capacity as full committee chairman, I want 
to say that the gentleman from Utah has always been willing to assist 
members with their proposed bills, and his demonstrated leadership in 
this institution will certainly be missed, certainly by this Member, 
and I am sure that the same feeling exists among all Members.
  Mr. Speaker, I am sorry that I have no more alumni from the 
University of Utah to pick on, especially when Utah always loses to the 
BYU Cougars. I want to say on behalf of this Member, Mr. Speaker, we 
are certainly going to miss the gentleman from Utah (Mr. Hansen).
  Mr. HANSEN. Mr. Speaker, I yield back the balance of my time.
  Mr. RAHALL. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Utah (Mr. Hansen) that the House suspend the rules and 
pass the bill, H.R. 1448, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________