[House Report 106-787]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-787
======================================================================
GUAM OMNIBUS OPPORTUNITIES ACT
_______
July 25, 2000.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Young of Alaska, from the Committee on Resources, submitted the
following
R E P O R T
[To accompany H.R. 2462]
[Including cost estimate of the Congressional Budget Office]
The Committee on Resources, to whom was referred the bill
(H.R. 2462) to amend the Organic Act of Guam, and for other
purposes, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Guam Omnibus Opportunities Act''.
SEC. 2. GUAM LAND RETURN ACT.
(a) Short Title.--This section may be cited as the ``Guam Land Return
Act''.
(b) Transfer of Excess Real Property.--
(1) Notice of availability.--Except as provided in subsection
(e), before screening excess real property located on Guam for
further Federal used under section 202 of the Federal Property
and Administrative Services Act of 1949 (40 U.S.C. 471 et
seq.), the Administrator shall notify the Government of Guam
that the property is available for transfer to the Government
of Guam pursuant to this section.
(2) Opportunity for acquisition by guam.--If the Government
of Guam, within 180 days after receiving notification under
paragraph (1) with regard to certain real property, notifies
the Administrator that the Government of Guam intends to
acquire the property under this section, the Administrator
shall transfer such property to the Government of Guam in
accordance with subsections (c) and (d). Otherwise, the
Administrator shall dispose of the property in accordance with
the Federal Property and Administrative Services Act of 1949
(40 U.S.C. 471 et seq.).
(c) Compensation.--A transfer of excess real property under
subsection (b) to the Government of Guam for a public purpose shall be
made without reimbursement or other compensation from the Government of
Guam.
(d) Conditions.--
(1) Restrictive covenants.--All transfers of excess real
property under subsection (b) to the Government of Guam shall
be subject to such restrictive covenants as the Administrator
determines to be necessary to ensure that--
(A) the use of the property is compatible with
continued military activities on Guam;
(B) the use of the property is consistent with the
environmental condition of the property;
(C) access is available to the United States to
conduct any additional environmental remediation or
monitoring that may be required;
(D) to the extent the property was transferred for a
public purpose, the property is so used; and
(E) to the extent the property has been used by
another Federal agency for a minimum of two years, the
transfer to the Government of Guam is subject to the
terms and conditions of those permit interests until
the expiration of those permits.
(2) Consultation.--In the case of real property reported
excess by a military department and in all cases with respect
to paragraph (1)(A), the Administrator shall consult with the
Secretary of Defense regarding the restrictive covenants to be
imposed on a transfer of the property.
(3) Other laws.--All transfers of excess real property under
subsection (b) to the Government of Guam are subject to all
otherwise applicable Federal laws, except section 2696 of title
10, United States Code. Any property that the Government of
Guam has the opportunity to acquire under subsection (b) shall
not be subject to section 501 of the Stewart B. McKinney
Homeless Assistance Act (42 U.S.C. 11411).
(e) Exemptions.--Notwithstanding that real property located on Guam
and described in this subsection may be excess real property, this
section shall not apply--
(1) to real property on Guam that is located within the Guam
National Wildlife Refuge, which shall be transferred in
accordance with subsection (f);
(2) to real property described in the Guam Excess Lands Act
(Public Law 103-339, 108 Stat. 3116), which shall be disposed
of in accordance with such Act; or
(3) to real property on Guam that is declared excess as a
result of a base closure law.
(f) Treatment of Guam National Wildlife Refuge Lands.--
(1) Notification of availability; negotiations.--The
Administrator shall notify the Government of Guam and the Fish
and Wildlife Service that real property within the Guam
National Wildlife Refuge has been declared excess. The
Government of Guam and the Fish and Wildlife Service shall have
180 days to engage in discussions toward an agreement providing
for the future ownership and management of the real property.
(2) Transfer and management under agreement.--If the parties
reach an agreement under paragraph (1) within the 180-day
period and the agreement is submitted to the Committee on
Energy and Natural Resources of the United States Senate and
the Committee on Resources of the United States House of
Representatives not less than 60 days prior to any transfer of
the real property under the agreement, the property shall be
transferred and managed in accordance with the agreement. Any
such transfer shall be subject to the other provisions of this
section.
(3) Effect of lack of agreement.--If the parties do not reach
an agreement under paragraph (1) within the 180-day period, the
Administrator shall provide a report to Congress on the status
of the discussions, together with recommendations on the
likelihood of resolution of differences and the comments of the
Fish and Wildlife Service and the Government of Guam. If the
subject property is under the jurisdiction of a military
department, the Secretary of the military department may
transfer administrative control over the property to the
General Services Administration. Absent an agreement on the
future ownership and use of the property, the property may not
be transferred to another Federal agency or out of Federal
ownership except pursuant to an Act of Congress specifically
identifying the property.
(4) Eventual agreement.--If the parties come to an agreement
prior to congressional action in response to a report under
paragraph (3) and the agreement is submitted to the Committee
on Energy and Natural Resources of the United States Senate and
the Committee on Resources of the United States House of
Representatives not less than 60 days prior to any transfer of
the real property under the agreement, the real property shall
be transferred and managed in accordance with the agreement.
Any such transfer shall be subject to the other provisions of
this section.
(g) Dual Classification Property.--If a parcel of real property on
Guam that is declared excess as a result of a base closure law also
falls within the boundary of the Guam National Wildlife Refuge, such
parcel of property shall be disposed of in accordance with the base
closure law.
(h) Authority To Issue Regulations.--The Administrator of General
Services, after consultation with the Secretary of Defense and the
Secretary of Interior, may issue such regulations as the Administrator
deems necessary to carry out this section.
(i) Definitions.--For the purposes of this section:
(1) The term ``Administrator'' means--
(A) the Administrator of General Services; or
(B) the head of any Federal agency with the authority
to dispose of excess real property on Guam.
(2) The term ``base closure law'' means the Defense Base
Closure and Realignment Act of 1990 (part A of title XXIX of
Public Law 101-510; 10 U.S.C. 2687 note), title II of the
Defense Authorization Amendments and Base Closure and
Realignment Act (Public Law 100-526; 10 U.S.C. 2687 note), or
similar base closure authority.
(3) The term ``excess real property'' means excess property
(as that term is defined in section 3 of the Federal Property
and Administrative Services Act of 1949 (40 U.S.C. 472)) that
is real property and was acquired by the United States prior to
the enactment of this section.
(4) The term ``Guam National Wildlife Refuge'' includes those
lands within the refuge overlay under the jurisdiction of the
Department of Defense, identified as Department of Defense
lands in figure 3, on page 74, and as submerged lands in figure
7, on page 78 of the ``Final Environmental Assessment for the
Proposed Guam National Wildlife Refuge, Territory of Guam, July
1993'' to the extent that the Federal Government holds title to
such lands.
(5) The term ``public purpose'' means those public benefit
purposes for which the United States may dispose of property
pursuant to section 203 of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 484), as
implemented by the Federal Property Management Regulations (41
CFR 101-47) or other public benefit uses provided under the
Guam Excess Lands Act (Public Law 103-339; 108 Stat. 3116).
SEC. 3. GUAM FOREIGN DIRECT INVESTMENT EQUITY ACT.
(a) Short Title.--This section may be cited as the ``Guam Foreign
Direct Investment Equity Act''.
(b) In General.--Subsection (d) of section 31 of the Organic Act of
Guam (48 U.S.C. 1421i) is amended by adding at the end the following
new paragraph:
``(3) In applying as the Guam Territorial income tax the income-tax
laws in force in Guam pursuant to subsection (a) of this section, the
rate of tax under sections 871, 881, 884, 1441, 1442, 1443, 1445, and
1446 of the Internal Revenue Code of 1986 on any item of income from
sources within Guam shall be the same as the rate which would apply
with respect to such item were Guam treated as part of the United
States for purposes of the treaty obligations of the United States.''.
(c) Certain Guam-Based Trusts Exempt.--The provisions of this section
shall not apply to any Guam-based trust formed pursuant to Division 2
of Title 11, Chapter 160, of the Guam Code Annotated.
(d) Effective Date.--The amendment made by subsection (b) shall apply
to amounts paid after the date of the enactment of this Act.
SEC. 4. IMPORTATION OF BETEL NUTS (``ARECA NUTS'') FOR PERSONAL
CONSUMPTION.
(a) In General.--Notwithstanding any other provision of law
(including sections 402 and 801 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 342 and 381)), Guam shall be deemed to be within the
customs territory of the United States in the case of importation from
Guam into the United States of betel nuts (also known as ``areca
nuts'') by an individual for personal consumption by the individual.
(b) Definitions.--In this section:
(1) Betel nuts.--The term ``betel nuts'' means husked betel
nuts grown in Guam.
(2) Customs territory of the united states.--The term
``customs territory of the United States'' has the meaning
given the term in general note 2 of the Harmonized Tariff
Schedule of the United States.
SEC. 5. COMPACT IMPACT REPORTS.
Paragraph 104(e)(2) of Public Law 99-239 (99 Stat. 1770, 1788) is
amended by deleting ``President shall report to the Congress with
respect to the impact of the Compact on the United States territories
and commonwealths and on the State of Hawaii.'' and inserting in lieu
thereof the following: ``Governor of any of the United States
territories or commonwealths or the State of Hawaii may report to the
Secretary of the Interior by February 1 of each year with respect to
the financial and social impacts of the compacts of free association on
the Governor's respective jurisdiction. The Secretary of the Interior
shall review and forward any such reports to the Congress with the
comments and recommendations of the Administration. The Secretary of
the Interior shall, either directly or, subject to available technical
assistance funds, through a grant to the affected jurisdiction, provide
for a census of Micronesians at intervals no greater than five years
from each decennial United States census using generally acceptable
statistical methodologies for each of the impact jurisdictions where
the Governor requests such assistance, except that the total
expenditures to carry out this sentence may not exceed $300,000 in any
year.''.
Purpose of the Bill
The purpose of H.R. 2462 is to amend the Organic Act of
Guam, and for other purposes.
Background and Need for Legislation
The United States acquired sovereignty over Guam from Spain
in 1898 as a result of the Treaty of Paris which ended the
Spanish-American War. Guam has remained under U.S. sovereignty
since that time, although Japan controlled the island for 31
months during World War II when Guam was occupied by Japan.
Nearly five years after the end of World War II, Congress
enacted the 1950 Organic Act of Guam, Public Law 81-630 (48
U.S.C. 1421), granting U.S. citizenship to the people of Guam.
While Guam's organic legislation also provided for a civil
government, which was during the period when the governor was
still appointed by the U.S. president. Congress subsequently
enacted additional measures to increase self-governance for
Guam including authorization for the direct election of
governor, a delegate to Congress, and a local constitution.
However, as Guam has yet to implement local constitutional
government since enactment of Public Law 94-584 in 1976, any
changes to executive, legislative, and judicial branches of
Guam or other provisions of the Organic Act of Guam must occur
by an act of Congress. H.R. 2462 contains various measures
affecting Guam requiring action by Congress.
Committee Action
H.R. 2462 was introduced on July 1, 1999, by Robert A.
Underwood (D-GU). The bill was referred to the Committee on
Resources. On April 13, 2000, the Committee held a hearing on
the bill. On June 28, 2000, the Committee met to mark up the
bill. Mr. Underwood offered an amendment in the nature of a
substitute with four provisions which provide Guam the ``right
of first refusal'' for the return of future lands currently in
the possession of the federal government, allows the government
to lower the withholding tax rates imposed on foreign investors
to equal that of the treatment of states under U.S. treaties
with other nations, provides a narrow interpretation for Guam
to be included in the U.S. Customs Zone for the purpose of
importing betel nuts (also known as areca nuts) by an
individual for personal consumption, and authorizes the
governors of the territories and the State of Hawaii to report
to the Secretary of the Interior Department on the financial
and social impacts of the Compacts of Free Association on their
respective jurisdictions. It was adopted by voice. The bill as
amended was then ordered favorably reported to the House of
Representatives by voice vote.
Section-by-Section Analysis
Section 1. Short title
The short title of the bill is the Guam Omnibus
Opportunities Act.
Section 2. Guam Land Return Act
With the exception of property reserved by then President
Harry S. Truman for use by the United States, the 1950 Organic
Act of Guam transferred ``title to all property, real and
personal, owned by the United States and employed by the naval
government of Guam in the administration of civil affairs of
the inhabitants of Guam,'' to the government of Guam. Under the
authority of Sec. 28(b) of that Act, President Truman issued
Executive Order No. 10178 which reserved nearly 45,000 acres,
or approximately \1/3\ of Guam's total land area for use by the
U.S. military.
Congress has, from time to time, transferred excess federal
land to the government of Guam since 1950; however, without
such authority, the disposal of excess federal property in Guam
is governed by the Federal Property and Administrative Services
Act of 1949 (FPASA, 40 U.S.C. 471 et seq.). The most recent
example of Congressional action to return excess federal land
to the government of Guam was the passage of Public Law 103-
339, the Guam Excess Lands Act, passed in the 103rd Congress.
That Act identified 3,213 acres of federal property, deemed
excess, for return to the government of Guam. Approximately
nine hundred acres have been returned to date.
In testimony before the Committee, the Administration
offered suggested amendments to H.R. 2462 for Committee
consideration. The Committee notes that many of the
Administration's suggested amendments have been addressed in
the reported version of H.R. 2462. The Committee views the
Administration's suggested amendments to clarify that excess
federal land transferred to the government of Guam will be for
a public purpose, under the authority of H.R. 2462, is
unnecessary. The Committee believes that the conditions set
forth in Section 2(d) of the bill is sufficient to ensure that
the U.S. can reassert an interest in transferred excess federal
property if restrictive covenants are breached. The Committee
also believes that under Section 2(i)(5), the definition of
``public purpose,'' which includes public benefit purposes
pursuant to Section 203 of FPASA and the Guam Excess Lands Act
is sufficient to ensure that transferred excess lands to the
government of Guam must continue to be used for a public
purpose.
Section 2 of H.R. 2462, as reported by the Committee,
establishes a process whereby the government of Guam is given
first consideration to acquire excess federal lands, for a
specified public purpose, before any other federal agency or
organization. Consideration is given to the impact of future
uses of the returned property on nearby military facilities. It
also provides for a process for the Government of Guam and the
U.S. Fish and Wildlife Service to engage in negotiations on the
future ownership and management of declared federal excess
lands within the Guam National Wildlife Refuge. This section is
similar to language in S. 1052, passed by the Senate in the
105th Congress.
The Committee recognizes that the issue of land is of great
importance to the people of Guam. The continued federal
ownership of land no longer needed by the federal government
prevents the government of Guam from fully utilizing its
resources. The existing process to dispose of federal property
does not completely recognize the historical circumstances of
Guam's sacrifice and contribution to our nation nor does it
take into account the island's limited resources to develop its
community.
Section 3. Guam Foreign Direct Investment Act
The Organic Act of Guam authorized the government of Guam
to implement a ``mirror-image'' tax system of the Internal
Revenue Code. The Internal Revenue Code imposes a withholding
tax of 30 percent on foreign investors, except that these rates
have been adjusted accordingly with treaty obligations
negotiated by the U.S. with other foreign nations. For purposes
of U.S. treaties, however, Guam is not included in what defines
the United States.
The Committee finds that the imposition of the withholding
tax of 30 percent on foreign investors reflected in the U.S.
``mirror-image'' tax system of the government of Guam hampers
the island's ability to expand its economy. The Committee notes
that if U.S. treaties included its territories in defining the
United States in negotiated treaties then Guam would be able to
benefit from economic opportunities afforded to the 50 states.
The Committee also recognizes that concerns expressed by the
Administration with regard to Guam-based trusts have been
addressed in the reported version of H.R. 2462, as well as with
the expected passage of a similar measure in the Guam
Legislature.
Section 3 of H.R. 2462 amends the Organic Act of Guam to
provide the government of Guam with the authority to tax
foreign investors at the same rates as states under U.S. tax
treaties with foreign nations since Guam cannot change the
withholding tax rate on its own under current law. Under U.S.
tax treaties, it is a common feature for countries to negotiate
lower withholding rates on investment returns. Unfortunately,
while there are different definitions for the term ``United
States'' under these treaties, Guam is not included. Such an
omission has adversely impacted Guam since 75% of Guam's
commercial development is funded by foreign investors.
Section 4. Importation of betel nuts (``areca nuts'') for personal
consumption
The betel nut or areca nut is the fruit from the areca
tree. It is found mainly in Asia and Pacific Islands and has
been consumed by their inhabitants for centuries. Though
prohibited from importation into the U.S., the areca tree is
grown in states, such as Hawaii, and the areca nut itself is
not prohibited from intrastate commerce. The Food and Drug
Administration (FDA) has an import alert for betel nuts from
foreign countries in place, which was last revised in 1992.
This includes an automatic detention of betel nuts by U.S.
customs agents when entering the United States. According to
the FDA ban, betel nut is considered ``adulterated,'' meaning
that it contains a poisonous or deleterious substance or
appears to be an unsafe food additive. Although Guam is a U.S.
territory, since Guam is outside of the U.S. customs zone,
betel nuts grown in Guam are subject to the FDA ban in the same
manner as foreign countries.
The Committee recognizes that the consumption of betel nuts
in Guam is a cultural practice. The Committee notes that while
the FDA alert on betel nuts is based in science, there are no
other federal laws or regulations which prohibit the
cultivation, consumption, or movement of betel nuts within the
U.S. Zone. The Committee also notes that the importation of
betel nuts from Guam has not been an agricultural issue since
prior to the import ban, only husked betel nuts were allowed
into the U.S. from Guam.
Section 4 of H.R. 2462 as reported will treat Guam as
within the U.S. customs territory for the purpose of
importation of betel nuts, from Guam to the U.S., by an
individual for personal consumption. This provides a narrow
exemption from the FDA ban for husked betel nuts (areca nuts)
grown in Guam and limits the exemption to personal consumption
usage.
Section 5. Compact impact reports
Shortly after the end of World War II, the United Nations
(U.N.) placed the Pacific island groups of the Carolines, the
Marshalls, and the Northern Marianas under the International
Trusteeship System. Prior to this designation, these island
groups were held by Japan. The U.S. became the administering
authority of these islands, known as the Trust Territories of
the Pacific Islands (TTPI), through a Trusteeship Agreement
with the U.N. Security Council. In the 1970s, four principal
island groups emerged from the TTPI, each with their sphere of
self-determination and desire to progress toward redefining
their relationship with the U.S. The Northern Mariana Islands
became the first Micronesian archipelago of the Trust Territory
to approve a new relationship with the U.S. The residents of
the Marianas voted overwhelmingly to come under American
sovereignty as a territory of the U.S. with U.S. nationality
and citizenship and local constitutional government as the
Commonwealth of the Northern Mariana Islands. The remaining
three other Micronesian island groups of the Trust Territory
U.S., the Republic of Palau (ROP), the Republic of the Marshall
Islands (RMI), and the Federated states of Micronesia (FSM,
composed of the four central Caroline islands of Pohnpei,
Chuuk, Yap and Kosrae), sought separate sovereignty and
separate citizenship in free association with the United
States.
Negotiations between the U.S. and the FSM and RMI,
respectively, resulted in a new internationally recognized full
self-governing relationship with the U.S. governed by a Compact
of Free Association. Congress approved the Compact of Free
Association agreement negotiated with the FSM and the RMI in
1985, Public Law 99-239 (48 U.S.C. 1681). Congress approved the
Compact agreement with ROP in 1986, Public Law 99-658, subject
to the approval of a Palauan plebiscite which eventually
occurred in 1993.
Amongst other benefits, such as U.S. economic grant
assistance and participation in federal programs, the Compact
Agreements provided citizens of the newly created freely
associated states, unrestricted immigration privileges to the
U.S. and its territories for education and employment
opportunities. By far, U.S. jurisdictions closest to the FSM,
RMI, and ROP, the State of Hawaii, Guam, and the Commonwealth
of the Northern Mariana Islands have borne the greatest
economic burden of compact migration.
Reports on the economic impacts of compact migration have
been conducted by both the impacted U.S. jurisdictions and the
Department of the Interior, respectively. Under Public Law 99-
239, the responsibility of reporting the impacts of Compact on
U.S. territories and commonwealths and the State of Hawaii
rests with the U.S. President. These reports to Congress,
however, have been irregular.
Section 5 of H.R. 2462 provides for the governors of the
territories and the State of Hawaii to report to the Interior
Department Secretary on the financial and social impacts of the
Compacts of Free Association on their respective jurisdictions,
which will be forwarded to Congress with Administration
comments and recommendations. The language found in this
section is similar to S. 1052, passed by the Senate in the
105th Congress.
Committee Oversight Findings and Recommendations
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Resources' oversight findings and recommendations
are reflected in the body of this report.
Constitutional Authority Statement
Article IV, section 3 of the Constitution of the United
States grants Congress the authority to enact this bill.
Compliance With House Rule XIII
1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the
Rules of the House of Representatives requires an estimate and
a comparison by the Committee of the costs which would be
incurred in carrying out this bill. However, clause 3(d)(3)(B)
of that rule provides that this requirement does not apply when
the Committee has included in its report a timely submitted
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974.
2. Congressional Budget Act. As required by clause 3(c)(2)
of rule XIII of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, this
bill does not contain any new budget authority, spending
authority, credit authority, or an increase or decrease in tax
expenditures. According to the Congressional Budget Office,
enactment of this bill could affect offsetting receipts from
the sale of surplus federal property, but this would be an
``insignificant'' impact.
3. Government Reform Oversight Findings. Under clause
3(c)(4) of rule XIII of the Rules of the House of
Representatives, the Committee has received no report of
oversight findings and recommendations from the Committee on
Government Reform on this bill.
4. Congressional Budget Office Cost Estimate. Under clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for this bill from the Director of the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 19, 2000.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2462, the Guam
Omnibus Opportunities Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are John R.
Righter (for federal costs), and Susan Van Deventer and
Marjorie Miller (for the state and local impact).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
H.R. 2462--Guam Omnibus Opportunities Act
H.R. 2462 would make several changes to laws affecting the
island of Guam, a territory of the United States. First, it
would give the government of Guam the right of first refusal to
certain federal lands declared as excess on Guam. Under current
law, the General Services Administration first offers excess
real property to other federal agencies, before either donating
it to an eligible entity for an approved public use or selling
it. Second, the bill would require the government of Guam to
tax the earnings of foreign investors at the same rates as
those applied by the 50 states under U.S. tax treaties with
foreign countries. Third, H.R. 2462 would allow individuals to
import betel nuts grown on Guam into the United States for
personal consumption. Finally, the bill would add to federal
reporting requirements concerning the economic and social
impacts on the U.S. territories and the state of Hawaii of the
United States' Compact of Free Association with the Federated
States of Micronesia and the Republic of the Marshall Islands.
Assuming the availability of appropriated funds, CBO
estimates that implementing H.R. 2462 would cost less than
$500,000 a year, primarily to cover the cost of the additional
reporting requirements. Enacting the bill could affect
offsetting receipts (a form of direct spending) from the sale
of surplus real property; therefore, pay-as-you-go procedures
would apply. But we think it is unlikely the federal government
would sell any excess property on Guam under current law.
Therefore, CBO estimates that enacting the bill would have an
insignificant impact on offsetting receipts.
H.R. 2462 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
Enactment of this legislation would result in both benefits and
costs for the government of Guam. One set of provisions, the
Guam Land Return Act, would benefit the government of Guam by
allowing it to acquire, for public purposes, certain excess
federal property at no cost.
Another set of provisions, the Guam Foreign Direct
Investment Equity Act, would amend the Organic Act of Guam to
change the rate at which income earned by foreign (i.e., non-
U.S. and non-Guamanian) investors is taxed under the Guam
territorial income tax. Those changes would allow income earned
in Guam by foreign investors to be treated the same way under
the Guam territorial income tax as foreign investment income
earned in the 50 states is treated under certain U.S. tax
treaties. In the short term at least, those adjustments would
result in a decrease in revenues from the Guam territorial
income tax. In the long term, however, those losses could be
offset to the extent that increased foreign investment in the
territory generates increased tax revenues.
The remaining provisions of H.R. 2462 would impose no
significant costs on Guam or on other state, local, or tribal
governments.
The CBO staff contacts are John R. Righter (for federal
costs), and Susan Van Deventer and Marjorie Miller (for the
state and local impact). This estimate was approved by Robert
A. Sunshine, Assistant Director for Budget Analysis.
Compliance With Public Law 104-4
This bill contains no unfunded mandates.
Preemption of State, Local or Tribal Law
This bill is not intended to preempt any State, local or
tribal law.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SECTION 31 OF THE ORGANIC ACT OF GUAM
Sec. 31. (a) * * *
* * * * * * *
(d)(1) The income-tax laws in force in Guam pursuant to
subsection (a) of this section include but are not limited to
the following provisions of the Internal Revenue Code of 1954,
where not manifestly inapplicable or incompatible with the
intent of this section: Subtitle A (not including chapter 2 and
section 931); chapters 24 and 25 of subtitle C, with reference
to the collection of income tax at source on wages; and all
provisions of subtitle F which apply to the income tax,
including provisions as to crimes, other offenses, and
forfeitures contained in chapter 75. For the period after 1950
and prior to the effective date of the repeal of any provision
of the Internal Revenue Code of 1939 which corresponds to one
or more of those provisions of the Internal Revenue Code of
1954 which are included in the income-tax laws in force in Guam
pursuant to subsection (a) of this section, such income-tax
laws include but are not limited to such provisions of the
Internal Revenue Code of 1939.
* * * * * * *
(3) In applying as the Guam Territorial income tax the
income-tax laws in force in Guam pursuant to subsection (a) of
this section, the rate of tax under sections 871, 881, 884,
1441, 1442, 1443, 1445, and 1446 of the Internal Revenue Code
of 1986 on any item of income from sources within Guam shall be
the same as the rate which would apply with respect to such
item were Guam treated as part of the United States for
purposes of the treaty obligations of the United States.
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SECTION 104 OF THE COMPACT OF FREE ASSOCIATION ACT OF 1985
SEC. 104. INTERPRETATION OF AND UNITED STATES POLICY REGARDING COMPACT
OF FREE ASSOCIATION.
(a) * * *
* * * * * * *
(e) Impact of Compact on U.S. Areas.--
(1) * * *
(2) Annual reports and recommendations.--One year
after the date of enactment of this joint resolution
and at one year intervals thereafter, the [President
shall report to the Congress with respect to the impact
of the Compact on the United States territories and
commonwealths and on the State of Hawaii.] Governor of
any of the United States territories or commonwealths
or the State of Hawaii may report to the Secretary of
the Interior by February 1 of each year with respect to
the financial and social impacts of the compacts of
free association on the Governor's respective
jurisdiction. The Secretary of the Interior shall
review and forward any such reports to the Congress
with the comments and recommendations of the
Administration. The Secretary of the Interior shall,
either directly or, subject to available technical
assistance funds, through a grant to the affected
jurisdiction, provide for a census of Micronesians at
intervals no greater than five years from each
decennial United States census using generally
acceptable statistical methodologies for each of the
impact jurisdictions where the Governor requests such
assistance, except that the total expenditures to carry
out this sentence may not exceed $300,000 in any year.
Reports submitted pursuant to this paragraph (hereafter
in this subsection referred to as ``reports'') shall
identify any adverse consequences resulting from the
Compact and shall make recommendations for corrective
action to eliminate those consequences. The reports
shall pay particular attention to matters relating to
trade, taxation, immigration, labor laws, minimum
wages, social systems and infrastructure, and
environmental regulation. With regard to immigration,
the reports shall include statistics concerning the
number of persons availing themselves of the rights
described in section 141(a) of the Compact during the
year covered by each report. With regard to trade, the
reports shall include an analysis of the impact on the
economy of American Samoa resulting from imports of
canned tuna into the United States from the Federated
States of Micronesia and the Marshall Islands.
* * * * * * *